You Can Change Your Finances in 3 Months (Here is How!)

Get the Free Automate Your Money Checklist here. Join the community built to help you master your money, stay accountable, and reach financial freedom. 👉 Join Master Money Academy today! In this episode of The Personal Finance Podcast, Andrew reveals how to transform your financial life in just three months by mastering six simple steps, knowing your core numbers like income, burn rate, and savings rate, optimizing housing costs, automating your investments and bills, investing in low-cost index funds, calculating your freedom number using the 25x rule, and spending intentionally on what you actually value. Listen to The Business Show here. Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Partner Deals Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Get 50% Off Monarch, the all-in-one financial tool at www.monarch.com/PFP Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/ Policy Genius: Go to policygenius.com to get your free life insurance quote. Wayfair: Shop outdoor furniture, grills, lawn games, and WAY more for WAY less DeleteMe: Go to https://joindeleteme.com/PFP20/ and Use Promo Code PFP for 20% off! Resources Mentioned Your Net Worth Audit Checklist Here is the Total Cost of Ownership Calculator Link of the Episodes Mentioned: The 6 Numbers You Must Know to Build Wealth (The Financial Scorecard) Boost Your Savings Rate to 20%+ in 5 Easy Steps (Money Q&A) The Bucket Method For Managing Your Savings (Master Multiple Savings Goals) Why Index Funds Are King (Plus My Favorite Index Funds!) Connect With Andrew on Social Media: Instagram TikTok Twitter Master Money Website Master Money Youtube Channel Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Giancola?

  When I started the Personal Finance Podcast, I had no idea how big it could become. I just knew I had something I wanted to share, so I started putting it online. And looking back, I definitely wish I would have started a decade earlier. One of the horror parts about building something online, though, is making it look professional. A website used to mean hiring a developer, figuring out design, and potentially spending thousands of dollars. In fact, on my website, I spent tens of thousands of dollars. That's what impressed me when playing around with Hostinger's AI Website Builder. I told it what kind of website I wanted, and I built the first version in minutes. No coding, no designer, or developer needed. And Hostinger doesn't stop at launch.

• 0:44Andrew Giancola?

  Their AI can help with SEO, website copy, email marketing, and more. Plus, your domain, website, email, and marketing can all live in one account, with plans starting at just $3 every single month. Hostinger builds your vision step by step. Create your website today. Go to hostinger.com/pfp and use code PFP for 10% off now. Now, if you watch this podcast on Spotify, Apple Podcasts, or YouTube, you've probably noticed the wood slat walls behind us. We wanted this podcast set to look professional, but also not be a project that was overly complicated. And I found these slat walls on Wayfair, and it completely changed this space. And it's now basically the background that you see in every single podcast

• 1:29Andrew Giancola?

  or piece of content that we record. And that's one of the things that I love about Wayfair. You can shop thousands of products across different styles and budgets, use customer photos and reviews to see how things actually look in real homes, and find something that fits your space. They also have Wayfair Verified Products that are hand-vetted by product specialists using a 10-point quality inspection. And with more than 20 million verified 5-star reviews, you can feel a lot more confident about what you're ordering. I've used Wayfair for this studio and our home, and I absolutely recommend them for your space. So transform your space with pieces that hold up to real life. Join Wayfair Rewards today and get 5% back on every single purchase.

• 2:14Andrew Giancola?

  Head to wayfair.com or shop the Wayfair app for all things home. That's W-A-Y-F-A-I-R.com. Wayfair: Every Style, Every Home.

• 2:28Andrew Giancola?

  On this episode of the Personal Finance Podcast, you could change your entire financial life in just three months, and I'm going to show you exactly how.

• 2:46Andrew Giancola?

  What's up everybody and welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of MasterMoney.co. And today on the Personal Finance Podcast, I'm going to show you how to change your financial life in just three months. If you guys have any questions, make sure you join the Master Money Newsletter by going to mastermoney.co/newsletter. And don't forget to follow us on Apple Podcasts, Spotify, YouTube, or whatever podcast player you love listening to this podcast on. And if you want to help out the show, consider leaving a five star rating and review on Apple Podcasts, Spotify, or your favorite podcast player. And don't forget, if you want direct help from me, you can join Master Money Academy. And in Master Money Academy, we do weekly

• 3:28Andrew Giancola?

  coaching calls, helping people just like you. And we have hundreds of people in Master Money Academy who are learning so much and really, really excited for the future of Master Money Academy and some of the stuff that we are doing there, because that is your financial roadmap. And that is going to take you step by step on what to do with your next dollar. Now, today, we're going to be diving into how you can change your financial life over the next three months. Now, most people think they're not good with money. And if you have been the type of person who has been living paycheck to paycheck for a long time, or you feel like you have just never caught up with money, then you may feel stress or anxiety around money. And the thing is, most people aren't bad with money. They just don't have a financial system in place. And not having a financial

• 4:11Andrew Giancola?

  system is how you go backwards with your money. You need to have a system set up in order for you to be able to build wealth. Because what is our entire goal? What is our ultimate goal when it comes to building wealth? We want to achieve financial freedom. And my goal for every single person listening to this podcast episode is I want you to achieve financial freedom. I want you to have clarity with your money. I want you to reduce and feel that stress around money melt away. The only way to do that is to make sure that you have a plan in place. Because when you don't have a system in place, every bill feels stressful. Every time you spend money, it feels stressful. Every time that you go out and spend money, you feel regret. Do you feel regret when you go out and make some frivolous purchases that you did not plan on?

• 4:55Andrew Giancola?

  Or do you feel regret when you make a big purchase of something you've been wanting for a really long time? You should not feel that around money. And so what we're going to talk about today is we're going to teach you exactly how to manage your money. So that you do one thing and one thing alone. You are intentional about money. Now, there is power in that word intention. There is wisdom in that word intention. Why? Because when you are intentional with your money, all of a sudden, your money is doing exactly what you want it to do. You're spending more on the things that you actually love, the things that you actually value. You're spending more on things that bring you joy. You're spending more on things so you can spend more time with your family. And instead, you're spending less on things that you could care less about.

• 5:40Andrew Giancola?

  In addition, we're getting ourselves out of debt. We're making sure our net worth is increasing and we are doing so many cool things with our money. That allows us to live the life we actually want. See, money is just a tool. It is a tool to get you the things you want in life. That's what we do all of this for, is we are trying to get the things that we want in life. Money is not there so that you just spend it frivolously, so that it is a stress point in your life. No, instead, we're going to take the stress out of money this year. We're going to take the stress out of money in your life and it's up to you to become intentional with your money. I'm going to show you exactly how to do that today. So remember that word intention and say to yourself, I am intentional with money.

• 6:22Andrew Giancola?

  I am a person who is prudent with my money and I am going to build wealth. I am going to get very wealthy this year and I am going to start by building the right systems. And boy, are we going to show you the systems today. I am really excited to go through this with you. Now, if that's something you're into, let's get into it.

• 6:44Andrew Giancola?

  All right. So step number one, we're going to get right into this is I want you to know your numbers. Now, if you skip this step, nothing else is going to work. You need to make sure that you understand your specific numbers when it comes to your finances. Now, you would be amazed at how many people that I go up to and I ask them questions about their finances, knowing their specific numbers, and they have no idea how much money they make. They have no idea how much money they spend or what their burn rate is. They have no idea how much even comes in when it comes to debt. They don't even know how much debt they have added up. They don't know what their interest rates are. There are so many different areas of your money that you need to understand. And once you understand these numbers, you're going to realize money isn't that hard anymore. And I'm going to show you just a few key numbers that once you get these numbers down, you can create

• 7:27Andrew Giancola?

  what I call a financial scorecard. Now, these are numbers. These are six numbers that every single person needs to know. And once you have this financial scorecard in place, then you can start to look at this and start to improve some of these metrics. But if you skip this step, if you don't do this, this is going to be a huge, huge problem for you. Now, number one is income. Now, income is the engine. It is the catalyst that allows us to build wealth. And for a lot of people out there, income might be their biggest problem. And there's a number of different ways to figure out if income is your biggest problem. But I want you to know exactly how much money you make. You'd be amazed how many people I ask, "How much money do you make?" And they have no idea. Maybe they know their gross income. They know what their base salary is because they were in

• 8:10Andrew Giancola?

  negotiations when they took the job. So they know how much money they make when it comes to their gross amount. But they have zero idea how much they take home every single month. Now, some people know what their take home pay is, but they don't really know what the impact is on their bottom line or where their dollars are. I need you to know what your household income is. Why? Because there's a couple of different things we want to do here. One, we're going to look at your household income, and then we're going to look at your burn rate in a second. And we're going to say, "Hey, how much extra money do we have left over to build wealth? How much of that tool do we have left over so we can put it towards things that we actually value? So we can melt away your stress and anxiety around money." But we need to know how much money you make first. Two, once we know how much

• 8:52Andrew Giancola?

  Money you make, we can also build on this because I want you to increase your income over time. Newsflash, income is actually the most important metric to help you build wealth. And when you know how to manage that income, when you know how to manage the money that is coming into your life, all of the sudden, every single opportunity is going to open up for you. But first, you have to know how to manage your money. So I want you to know how much you make gross, number one. I want you to know how much you make net, number two. Not just you, if you're in a relationship, I want you to know how much is coming into the household and how much you make net every single month. So if your gross income is $80,000 per year,

• 9:33Andrew Giancola?

  and for some reason you have a bunch of taxes, you have health insurance, you have all these different things that trickle down. And so you're making a few thousand dollars every single paycheck. And let's say you're making 3,000 a paycheck, 6,000 a month, I want you to know that. And if you have a spouse in the house who makes another $2,000 a month, I want you to know that. And so your household income is going to be $8,000 net. That is your take home pay, okay? I also want you to know when these hit your account. Do you get paid biweekly? Do you get paid monthly? Do you get paid once a week? Every single person has a different financial situation and the frequency of when they get paid is very, very different. Sometimes we will do episodes talking about, okay, well, if you get paid biweekly, then this is what you need to do. And people will come in and say, well, I get paid every single week. What do I need to do?

• 10:18Andrew Giancola?

  You need to know when your paycheck is hitting because this is going to be very important when we look at automations and how to automate your money. And then you need to know if your income is fixed or if it's variable. See, a lot of people out there, you get commissions. If you get commissions, there are things that we can do to help you with those commissions so that we can maximize those dollars. And so we got to look through all of those different things. So I want you to know those numbers. Those metrics are very, very important. Your income is so incredibly important. Ask yourself right now, do you know exactly how much your net income is? Right now, at the top of your head, if you don't, I want you to memorize that number because this is going to be very, very important as we go through this. The second part of your financial scorecard is going to be your burn rate. Now, your burn rate is just a fun way to say how

• 11:02Andrew Giancola?

  Much money do you spend every single month? And we're going to make you do a little homework here. You're going to have some action steps when it comes to this. If you don't know what your burn rate is, and you should know around what your burn rate is, then we're going to do a few different steps in order to find this out. Now, if you haven't done this in a while, I want you to do this anyway. Even if you think, now I know close to what my burn rate is. No, I want you to do this if you are going to go through this process. Now, if you have a tool like Monarch Money, you can go back and look at how much you spent over the course of the last couple of months. But if you don't have a tool like Monarch Money, I'm going to show you how to do this for free. So you're going to go and you're going to look at your bank statements over the course of the last three months. Now, you can go back four, five, and six months if you want to get even more accurate. But three months is the minimum.

• 11:45Andrew Giancola?

  If you only go back one or two months, it's not going to give you an accurate depiction. So I want you to just go back and pull all your bank statements for the last three months. I'm talking about your checking account. I'm talking about your savings account, if you spend money out of that. And I'm also talking about your credit cards. Every single place that you spend money, I want you to pull those statements out. And I want you to add up over the course of those three months, how much you spent, okay? Then divide that number by three. And you may be saying to yourself, yeah, but my vacation was mixed in there. I don't care. You may be saying, you know, I just had a weird month and a bunch of surprises happened. I don't care. I want you to take those three months and divide it by three. If there's a lot of variables that happen over the course of the last three months, then stretch it out to six months and pull the last six months of bank statements to do this. Okay, I want you to add all those numbers up.

• 12:31Andrew Giancola?

  And I want you to figure out what your burn rate is every single month. Now, you can pull out bank statements over the course of the last 12 months if you want to. Pull them into a CSV or a spreadsheet. Add up the total amount and then divide that number by 12 if you want to do it over the course of last year. But I want you to figure out what the average is that you spend every single month. This is very, very important. Most people don't know what this number is. And I think for most, it is much higher than they actually think it is. Now, I have had people do this for a number of different things. First, they've done it with their total spend. And then we start to identify, okay, well, what are some of the areas that we don't care as much about? And we'll talk more about this later in this episode. But you may be able to identify, oh, my goodness, I spend $4,000 a month on groceries. I'm just throwing out a random number.

• 13:16Andrew Giancola?

  Well, if you've overspent on groceries and that doesn't bring you value, you can rein in some of these areas and we will be able to figure out exactly how to pinpoint and fix your financial situation if you feel like you're living paycheck to paycheck, or you feel like you're strained. Now, if you don't like what you see when it comes to your burn rate, I don't want you to panic because your boy is here to help you fix this. So we're going to fix this in a second, but I just want you to look at your burn rate and understand exactly where you are. This is not a reflection of your character. This is not a reflection of your discipline. This is not a reflection of how good you are with money. This is not a time or a place to beat yourself up with money. Instead, we're going to empower you with your dollars. We're going to give you hope because that is the key when it comes to wealth building is understanding that you can do this.

• 14:01Andrew Giancola?

  But what we are going to do with this number is we're going to make some informed decisions. We're going to attack certain areas to make sure that we are optimizing these areas. Now, you may be spending just the amount that you want to spend. That is A okay. And maybe you want to spend a little more in some areas because you're a little too frugal. I know you frugal weirdos. There's a bunch of you out there who listen to this show and maybe you're trying to improve your relationship with spending. I know how that was. When I was in my twenties, I was very frugal. I didn't want to spend a lot of money. I didn't want to spend too much. And so I had to learn the skill of spending. And so now this is something where I am very good at it because I spent time and energy thinking about it. We're going to talk about that here in a second. Next is net worth. So if you haven't heard our episode that we had recently,

• 14:43Andrew Giancola?

  it is how to do a net worth audit. We dive deep into net worth and how to do your net worth audit. We also have a net worth audit checklist that you can download. We'll link it up down in the show notes below, but this is something where understanding where you stand currently financially is your overall scoreboard. Your net worth is, hey, that is the score. That is what's going on right now. And we need to understand exactly where we stand. So your net worth is just your assets minus your liabilities. And so you can use a free tool like Personal Capital that helps you set up your net worth automatically. A tool like Monarch Money also will help you set up your net worth automatically. Or you could just utilize a spreadsheet and add up your assets and add up your liabilities. And so you just list your assets and add those up and then list your liabilities,

• 15:27Andrew Giancola?

  any debts that you have, you know, a car loan, a mortgage payment, any of those different liabilities, and you add those up and your assets minus your liabilities equals your net worth. Now, tracking this over time is what's going to help keep you motivated and you're going to know if you're on track, where you stand financially and a number of other metrics are going to help you with this. But your net worth is the overall scoreboard that I want you to track. Do you have to track this every single day? No, and this is something where for most of us, we could track it quarterly or once a year and we are AOK. So this is not something you have to track constantly, but you need to understand where you stand with your net worth if you have not done it over the course of last year. All right, the next one is a really big one is we want to make sure we are tracking our savings rate.

• 16:08Andrew Giancola?

  So if you didn't know already, your savings rate actually can dictate how long it's going to take before you retire. And so when you understand your savings rate, you can understand the micro adjustments that you need to make in order to get closer to retirement. And financial freedom comes from your savings rate. Your income and increasing your income is what is going to be the fuel to that fire. But how much of that income you keep is the key component to making sure that you actually achieve financial freedom. And so we want to make sure we understand how much we save. Now, what do I mean by savings rate? Is this the money that I set aside for a wedding that I'm going to spend next year? Or is this the money that I set aside so that I can put a down payment on my next car? Or is this the money I'm setting aside right now so I can buy a brand new watch for my girlfriend next year for Christmas?

• 16:53Andrew Giancola?

  No, this is your savings rate for future you. So what I'm talking about is two different areas here. Number one is your emergency fund. If you were in the process of building up your emergency fund, which is very, very important, then part of that is going to be your savings rate. And number two is your investments. So your investments are the key component here where we want to be saving as much as we possibly can in our investments so that we can retire as fast as possible if retirement is a big goal for you. If it's not, you can have a standard savings rate and ensure that you still get there. At a minimum, we want most people to have a 20% savings rate. But really, I want that 20% savings rate to start to creep up over. Over time, so that you get between 20 and 30% and you can go way above that if you want to, if you want to retire way faster.

• 17:38Andrew Giancola?

  But having that high enough savings rate is going to allow you to build wealth and retire at a very young age. And so when you do this, this is going to allow you to have flexibility, but also have the ability for financial freedom. Your savings rate is the catalyst. This is where everything begins and this is where everything starts. So I highly, highly encourage each and every single one of you to focus on your savings rate. Now, we have done a few episodes talking about savings rate and how impactful this can be and how fast this can help you retire. So if you're interested in that, we will link those episodes down below in the show notes. Now, one thing I want you to know is if you're not saving much at all yet, I want you to just get started. You don't have to worry, you don't have to stress yet. I just want you to get started. Tell yourself that I am a saver.

• 18:21Andrew Giancola?

  I am a person who takes money and they put it aside and saves money. Because this is something where a lot of people are stressed and they're worried and they're like, I could just never save money. No, we're going to change that dynamic. We're going to change and rewire your brain function to believe that you can save money. And so the first step in doing that is just taking action. I don't care if it's 20 bucks. I don't care if it's 50. I don't care if it's 100, but start to save money and put it aside so that you know I can save money if I want to. And getting started is the key and then we'll make tweaks to increase that amount over time. Because the problem with savings and for most people is they think they can't do it. But savings isn't something really you do. Savings is something that you set up and automate over time where you don't have to think about it anymore. And we're going to teach you how to automate your money in a second.

• 19:05Andrew Giancola?

  All right, the next number you need to know on your financial scorecard is your debt. And so the way that we're going to think about debt is we want to make sure that we pay off high interest debt and that we manage low interest debt. And so we're going to talk through what that means here in a second. So any debt above a 6% interest rate outside of your mortgage, we consider high interest debt. Meaning that is debt that we want you to pay down aggressively over time. Any debt below a 6% interest rate, then you're okay to look at that and say, I'm going to pay this off over time and this is something that I'm going to prioritize investing over paying down this debt. And so the key is visibility. The key is understanding where you stand with your debt. You would be surprised at how many people I ask. Where they stand with their debt, or what their interest rate is, or how much debt they have, and they have no idea.

• 19:49Andrew Giancola?

  I ask people all the time, "When will your debt be paid off based on the payments you're making right now?" They have no idea. And so this is something where, once we have an idea of where we stand, we can make adjustments based on our goals to ensure that we are actually going to achieve those goals. And so that is why this is so incredibly powerful. So what I want you to do is just list out a piece of paper, you can pull out a spreadsheet, whatever floats your boat. If you're one of those folks who likes to do it the old-fashioned way, you can take out a note card, it doesn't matter what it is, and I want you to write and list out all of your debts. Maybe it's your student loans, maybe it's a mortgage payment, maybe it is credit card debt, maybe you have a personal loan, those buy-now-pay-laters are getting you, even if it's 0% interest. I want you to list every single debt that you have.

• 20:33Andrew Giancola?

  Then, I want you to put next to it the interest rate of that debt, and I want you to put the minimum payments and the remaining balance. Those are the four numbers that I want you to know, and I want you to list them out and have an understanding of where you stand. Because then, what you can do is create a debt repayment plan in order to figure out, "Do I need to prioritize some of these? Do I need to pay some of these off faster than others?" So that you know where you stand, and so that we can master our debt. Because understanding how to get your debt paid down faster is very, very important, and we want to make sure that we get rid of it. Now, if you have something like overpriced vehicles, where you have really high interest rates on them, or if you have credit card debt, those are higher priorities than something that may have lower-interest debt, and we just want to identify that.

• 21:17Andrew Giancola?

  Now, the last one that I want you to know when it comes to your financial scorecard is your retirement number. And your retirement number is a very important metric that we need to know, and we need to understand. We're going to get deeper into this later on in this episode, but I just want you to know that you need to know what your retirement number is. Now, what is a retirement number? This is your financial freedom number. This is the number that if you have this amount invested in your investment accounts, you don't have to work anymore. This is your F-U money. You can say, "I'm out of here, I'm done, I'm not going to do this anymore." And this is the number that we are trying to prioritize and hit. This is your North Star. And it is the thing- That once we figure out what this number is, oh, boy, your entire financial life is going to change. And all of a sudden, your perspective around money is going to change because you

• 22:00Andrew Giancola?

  know what that metric is. And now you can start attacking and making sure that you have a plan in place to achieve that goal. So we're going to talk more about that later on in this episode. So those are the six numbers I want you to know. I want you to know your income. I want you to know your debt. I want you to know your savings rate. I want you to know your burn rate. I want you to know your retirement number, and I want you to know your net worth. Those are the six core metrics that once you understand these metrics, you're going to be more financially educated about your own personal finances than most people in this country. You can walk up to anybody, any of your friends right now, and ask them those six metrics, and they will not know. But once you know those six numbers, you're already one step ahead of the game. And now, we're going to get

• 22:42Andrew Giancola?

  into the other steps that you need to take to get way ahead of everybody else over the course of the next three months.

• 22:49Andrew Giancola?

  So number two, I want you to look at your housing costs, because I think most people need to understand where they stand when it comes to housing. Now, this is something that a lot of people will get all up in arms about when you talk about housing. In fact, a lot of times, we will compare housing costs to a bunch of other expenses, and people get up in arms when you talk about housing costs. But really, housing costs are the thing that are robbing a lot of Americans of their ability to build wealth. Now, let me say this upfront, because in our current times, it is very hard to keep housing costs low. I know that affordability is a huge issue. And I know that we need to find ways to get more affordable housing, whether it

• 23:32Andrew Giancola?

  is building more housing, which I think is the number one metric, if you look at any economic report, it's building more housing so that we have more housing, so that we can reduce the prices of housing. This is one of the keys to making sure that we have a thriving economy, is having affordable housing. And so because of this, and because the situation that we're in, I know how difficult it can be to hit some of these metrics that I'm about to talk about. But we have to find a way to do so in order to master our finances, because if we don't, that means we are just giving up, throwing Our hands up and surrendering. And so guess what? We focus on the things that we can control here. And we are looking for some of the areas that we can master in order to ensure that our future is secure.

• 24:14Andrew Giancola?

  And so I want you to understand that housing is one of the biggest costs and usually the biggest line item for most people. And most people never run the numbers when it comes to housing. But that's okay, because I'm going to show you exactly how to do that today. So what I want you to do is I want you to figure out how much you spend on housing every single month. I want you to take every expense associated with housing. So if you rent, this is going to be your rent. This is going to be your utilities and any other costs associated with your rent. Maybe you have some renters insurance. Maybe you have some additional expenses that you pay. Maybe you have some additional expenses that you pay for a parking spot. Whatever costs are associated with you living and existing in that place that you rent. That is number one. Okay? So add all those costs up.

• 24:57Andrew Giancola?

  If you're a homeowner, boy, oh, boy, do you have a lot more costs to add up. So we have this thing called a total cost of ownership calculator that you can go check out. If you go to mastermoney.co/resources, the total cost of ownership calculator will help you go through this process. But what I want you to do is add up every single expense associated with owning your house. And homeowners, you know how many additional expenses you have. So I'm talking about your mortgage payment. I'm talking about your insurance. I'm talking about utilities. I'm talking about maintenance. Now, maintenance is the big one. How much do you actually spend on maintenance? When you did your last three months, how much were you spending on maintenance every single month? And/or you can look at the last year and see how much you spend on maintenance every single year. This is the lawn care. This is the pool care. This is the shrubs.

• 25:41Andrew Giancola?

  This is you going out and buying tools. This is your Home Depot runs. This is a Lowe's runs. All of these things are going to add up. Those are part of the maintenance items. Then I want you to look at repairs. How frequently do you have to repair items? How much do you spend every single year on repairs? Add all those up. And any other costs associated with the house. If you renovate the house, if you add things to the house, all of your housing costs all added up into one. And I want you to know what this number is. Then I want you to take your gross income, which you now know from looking at your gross income. And I want you to figure out what 30% of that gross income is. If you're spending more than 30% of your gross income on housing, then that means you're spending too much on housing. If you're spending less than 30% of your gross income on housing, then you are AOK.

• 26:26Andrew Giancola?

  Now you may run these numbers and say to yourself, well, I spend 32% on housing currently. Then maybe there's some minor tweaks that you can make, or maybe you can't. But I can tell you right now, if some of you are spending 34, 35% of your income on housing, 40% of your income on housing, because you live in a high cost of living area, you are also probably very stressed with money. And if you are in a relationship or you're married, you and your spouse, most likely, maybe have some micro arguments about money. And you're having conversations about money and blaming each other for certain things that aren't actually the problem. Maybe you're blaming each other because you went out and made an Amazon purchase, or somebody else went on a Target run and spent a little too much. But instead, the real problem is, look straight up. It's the roof above your head.

• 27:10Andrew Giancola?

  Because if you overspend on housing, it is very hard to catch up in every other area of life. And so housing is a huge one that I want you to add up. This could be the problem, and this could be the place that we just need to course correct. Now you could course correct in a number of different ways. One is you can spend less in other areas. So housing, food, transportation are the big three, where if you focus on those areas and you can spend a little less in one area, then you could spend more in another area. So transportation is one, for example, that if you have two brand new cars in the driveway and you overspend on housing, then you are most likely living poor right now. If you have a $70,000 truck and a $50,000 SUV in your driveway, that is most likely a huge, huge problem for you. And so for folks in this situation, if you got yourself into this situation,

• 27:54Andrew Giancola?

  let's just focus on spending less in some of these areas if you need to spend more on housing. Now there's other ways you can course correct. You can downsize your house. You can get a roommate. You can house hack, meaning you can buy something with multiple units. Maybe it's a house with a mother-in-law suite. Maybe it's a duplex and you live in one unit and then you rent out the other one to reduce your housing costs. Or it's just consciously reducing expenses in other areas. But noting that if your housing cost is above that 30% number, it is going to be much more difficult to build wealth than someone who keeps it below that 30% number. Again, we recognize how difficult it is right now to do this, but this is what you have to do as a wealth builder. For some people, they may even be wanting to move to a lower cost of living area if you are in a very high cost of living area.

• 28:38Andrew Giancola?

  Places like California, New York City, all these different areas are very difficult to keep your housing cost below that number. But maybe you don't spend as much on transportation as someone else, and so you can figure out how to make that work. And so this is another big key area and why it's step number two, is understanding where your housing costs stand and to look at your housing costs so that we know what we need to do next. Now, we're going to learn how to automate our money.

• 29:05Andrew Giancola?

  If you've heard any recent episode of Health Corner, you know that I have spent the last few years trying to optimize my sleep. I've tried sleep trackers, cooling my room, changing my nighttime routine, all the different things, but nothing really matters as much as having the right mattress. And that's one of the reasons I love Leesa. A great mattress is one of those things that you use every single night and you spend a third of your life sleeping. And it can make a huge difference on how you feel the next day. Leesa has mattresses designed for different sleep positions and comfort preferences. And their sleep quiz can help you get matched in less than two minutes. Plus, they're designed and they're assembled in the USA,

• 29:47Andrew Giancola?

  and they come with free shipping, easy returns, and a 120-night free sleep trial. So go to leesa.com for up to 30% off mattress plus and get an extra $50 off with promo code PFP. Exclusive for my listeners. That's L-E-E-S-A dot com, promo code PFP, for 30% off mattresses plus an extra $50 off. Let them know we sent you in the survey after checkout. Leesa.com, promo code PFP. If you've been listening to this show for a while, you know it's not just me anymore. It takes a great team behind the scenes. To make everything happen. And if I had to hire someone tomorrow, I'd want someone who could jump right in and make an impact.

• 30:32Andrew Giancola?

  That's why I'd use Indeed Sponsored Jobs. When workplace chaos hits, Indeed Sponsored Jobs helps you reach qualified candidates faster. Your job gets boosted in search results, so you're spending less time searching and more time interviewing the right people. Plus, you only pay for results, which I absolutely love. Sponsored jobs posted directly on Indeed are 95% more likely to report a hire than non-sponsored posts. That's a huge advantage when you're trying to grow your business. Spend less time searching and more time actually interviewing candidates who check all of your boxes. Less stress, less time, more results. When you need the right person to cut through the chaos, this is the job for Indeed Sponsored Jobs.

• 31:15Andrew Giancola?

  And listeners of this show will get a $75 sponsored job credit to help get your job the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed Sponsored Jobs. It's kind of amazing how much can change in just a single year. Every summer, the kids are a little bigger, a little more independent, and life looks a little different than it did the year before. And it reminds me that while we can't predict the future, we can prepare for it. That's one of the reasons I like PolicyGenius. See, PolicyGenius isn't an insurance company.

• 32:00Andrew Giancola?

  They're an online marketplace that lets you compare life insurance quotes from some of America's top insurers, side by side, for free. And their licensed team helps you compare coverage, prices, and terms, answers your questions, and even handles the paperwork so you can get the right policy without the hassle. For me, having life insurance isn't about expecting something to happen. It's about knowing my family is protected, so I can actually enjoy these moments together instead of worrying about what comes next. And with PolicyGenius, you can find 20-year life insurance policies, starting at just $276 a year. For $1 million of coverage. Head to policygenius.com to compare life insurance quotes from top companies and see how much you can save. That's policygenius.com.

• 32:45Andrew Giancola?

  One thing I've learned from running multiple businesses is there's usually a gap between how you think work is getting done and how it's actually getting done. And we've had times where we thought we knew the bottleneck, only to realize later, the real issue was somewhere completely different. That's exactly what today's sponsor, Scribe, helps solve. Scribe is a workflow AI platform trusted by 94% of the Fortune 500. And Scribe Optimize turns real workflow data into decisions your AI strategy actually needs. Automatically capturing how work happens across approved apps, surfacing inefficiency in opportunities, with no interviews and no manual discovery and no extra work from your team, which is the key.

• 33:28Andrew Giancola?

  And the live dashboard shows where work is happening, how much time it's taking and where the biggest opportunities are right now. It automatically discovers workflows across multiple tools, then highlights your biggest inefficiencies and gives AI-powered recommendations with estimated time-saving. You know I love saving time. It's also built with privacy in mind. It only runs across approved business applications, user-level data is anonymous by default, and sensitive information is automatically redacted and never leaves your firewall. To see optimization action, head describe.how/pfp and mention PFP for a 30-day risk-free trial. That's S C R I B E dot H O W slash P F P.

• 34:10Andrew Giancola?

  The other night while the kids were asleep, I had one of those moments where I sat back and thought, wow, this is the life I always wanted, not perfect, but meaningful, and it's full of life, growth and purpose. And it reminded me how important it is to protect the life that we are building. And that's where Policy Genius comes in. They make it simple to handle one of the biggest responsibilities that we face. Making sure our family is financially protected. And Policy Genius isn't a life insurance company. They're an online marketplace that lets you compare life insurance quotes side by side from top insurers. They're licensed experts. Don't work for one company, they work for you. They answer your questions, they guide you to the right coverage, and handle the paperwork so you don't have to stress.

• 34:53Andrew Giancola?

  Start the new year with clarity and security. Lock in your life insurance policy now. And with PolicyGenius, real users have gotten 20-year, $2 million policies for just $53 a month. Ease the weight of protecting a wonderful life. Head to PolicyGenius.com to compare life insurance quotes from the top companies and see how much you can save. That's PolicyGenius.com.

• 35:20Andrew Giancola?

  So next, we're going to automate our money. And money automation is the most freeing thing of all time. In Master Money Academy, we have students who have gone through our money automation courses there, and they have said back to us, "Man, I feel like I'm not doing enough with my money anymore." Because before, I was making spreadsheet tweaks all the time and messing with my budget, and now I don't have to do anything anymore. And that is the beauty of money automation, because you can focus on living your life, you can focus on building your career, you can focus on spending more time with your family, or just going and doing what you want to do day in and day out, instead of having to think about your money all the time. So instead, what I want you to do is I want you to learn how to automate your money, and I'm going to show you exactly how to do it right now. So the first thing when it comes to money automation is we want to make sure that we are paying ourselves first.

• 36:05Andrew Giancola?

  And so how do we pay ourselves first? One of two ways. Number one is we make sure that we are investing our dollars. And so we invest our money in a number of different ways. One, you can look at your company's 401k plan, and you could start to invest in your company's 401k plan. That's a great place to start. Remember, we want to have our savings rate at 20%. Two is you can look at something like a Roth IRA. And a Roth IRA is a fantastic retirement account to get more dollars in, because the money goes in, that has already been taxed, it grows tax-free, and you could pull the money out tax-free in a Roth IRA. Three is you can look at a taxable brokerage account, which is another fantastic account, just a standard old brokerage account that you can get anywhere to open up and start investing there. But we want to make sure that we are paying ourselves first.

• 36:49Andrew Giancola?

  Secondarily, we want to make sure that we are also contributing to our emergency fund if we don't have a six-month emergency fund built. Up yet. And so because of this, we want to make sure we put this in a high yield savings account. And we make automatic transactions towards our emergency fund. Now, when it comes to saving cash and having cash on hand, we have an entire episode explaining what we call the bucket method. So if you want to hear more about the bucket method, we will link that episode down below in the show notes. But this is where you save your emergency fund and any other savings that you have. Maybe it's a down payment for a house. Maybe you're saving up for a new car. All of those different savings goals are going to happen here. But we always, always, always pay ourselves first and then we spend what is left over.

• 37:29Andrew Giancola?

  It is very important to do that because when you pay yourself first, progress happens automatically. You don't get the crumbs that are left over. Instead, you make sure future you eats first and then everything else falls into line. Next, we're going to automate our bills. So when we are looking at automating our bills, this is going to be the place and time where we have a process and a system to do this. So for most people, you think about a checking account. And when you have a checking account, all that account really is, is a flow through account. And so for most people, the max they need in a checking account is about one month of expenses. And you can have less than that if you want to. I keep my checking account pretty lean. And the reason why I keep it lean is all this is, is a pass through account. This is going to be the funnel that flows towards everything else. So when you get paid, first thing you're going to do is set up those automations

• 38:14Andrew Giancola?

  so that you can get your money towards your investments. So you can set it to your brokerage accounts, wherever you have that set up, you can send those automations there. Secondarily, is making sure you set it up to where automatically goes towards your savings account. And then we want to pay our bills. And so you can set this up to look at this where, hey, any bills that need to come out of a checking account, usually things like a mortgage or someone paying rent or someone who is out there who has utility bills. Those are the types of bills that need to come out of your checking account. Cause typically you can't pay for those bills with a credit card. Then secondarily, when you have all of your bills set up and automatically being paid through your checking account, then we can look at the credit card and pay everything else. So I put as many of my bills as possible on a credit card.

• 38:57Andrew Giancola?

  Now, the reason why I do this is twofold. Credit cards are actually great tools if you know how to use them correctly. You can Earn points and miles and my family has taken tons of different trips by utilizing a credit card. Secondly, is you can earn cash back if that's something you value and I have family members who have utilized their cash back to buy all the holiday gifts for that given year. I have friends who have utilized their cash back and actually invested in their future and some of them have told me they have over $30,000 in that specific investment account that they use when they get cash back from their credit cards. So there are so many different ways that you can use the cash back on cards that are really, really powerful. Now, the stigma that credit cards are evil are because people who don't know how to use them correctly are gonna

• 39:41Andrew Giancola?

  go into debt and credit card debt is one of the worst things that you can ever do for your finances. So if you've had problems with credit card debt in the past, don't use a credit card, just use your debit card or use your checking account to pay for most of your bills. But if you have been responsible with credit cards in the past, I highly recommend using credit cards to pay as many bills as possible and then paying off those credit cards in full. Now, I pay off my credit card in full once every single week. Now, for some of you, you may be like, well, why does Andrew do that? Does it increase his credit score? Does it help improve something specifically? No. In fact, all it does is it keeps me on top of my balances and I want to make sure that they're paid off in full every single week. So I'm on top of those balances. All it is, is financial management. And so I try to make sure that we get those cards paid

• 40:26Andrew Giancola?

  in full every single week. In fact, I have this setup on automations now where my cards are paid in full every single week based on how much I spend. And so I understand exactly where I stand because I pay them off every week. So on Fridays, I'll call my wife and say, hey, go ahead and pay off your card. I'm gonna pay off mine or I'll shoot her a text so that we make sure that those are paid off on a weekly basis. But if you want to do bi-weekly or monthly, there's nothing wrong with that. But the key is that we never pay a cent in interest. We never, ever, ever go into credit card debt. We don't let it carry an extra week. We don't let it carry an extra two weeks. No. Instead, we are making sure we are on top of our money and getting those paid off in full. If you struggle paying off your card in full, get off the card because that's the key overall.

• 41:10Andrew Giancola?

  Now, the only reason why we spend money on a card is to make sure that you have cash on hand So if you don't have the cash on hand already, then you should not be spending money on a card at all. Instead, utilizing your cash would be the key. And so that is the caveat. You treat your credit card as if it is coming out of your checking account because it is. And so for most people out there, you do not spend any money that you do not already have that hit your bank account. Not any future money that's coming in. You only spend money that you already have. So automatically paying your bills on your credit card and your checking account and then paying those off in full every single month is the key to setting up your bills. Now, every single bill should be on autopay. I don't want you to have to think about and remember some of those bills and all those different things. Now, if you're

• 41:54Andrew Giancola?

  on a really, really fine, tight budget, and you are saying to yourself, well, I don't know, if I set up all these automations, I don't know if I'm going to be able to have enough money to pay these off. What I would highly recommend is figuring out when your bills hit. Then you can actually move those bill dates. You can call up those providers and say to them, hey, let's go ahead and move this date to the 15th every single month, the day after you get paid, or three days after you get paid, to ensure that you already have the money there to pay that off. The second thing that you can do, though, is work on building up that one-month buffer. Because then, you're paying for this month's bills with last month's money. And so when you do that, that's going to help you not get into trouble ever when it comes to automating your money. So for those of you who are living

• 42:36Andrew Giancola?

  paycheck to paycheck, or you're on a tight timeline there, then let's just make sure that we have a one-month buffer in our checking account, and we move and know when those dates are when our bills actually hit. Those are the two ways to make it most accurate. Again, it's all about intention with your money. And so this is how you automate your bills. So we've automated our investing. We've automated our savings. And we've automated our bill pay. And so now we see we have a money system running on autopilot. Now, again, if you want our money automation checklist, just go ahead and check the link down below. We will link it up down below in the show notes that you have that, so that you can utilize that as you go through and start to automate your money. Next, we're going to talk about investing.

• 43:19Andrew Giancola?

  Next, let's talk about investing because one of the biggest things that most people do is they will come to me and say, "Well, yeah, I can automate my investments, but I don't know how to invest. I don't know what to do when I invest, and I don't really know where my dollars need to go." Now, for most of you out there, just understanding investing is actually a lot easier than most people think. Wall Street tries to overcomplicate investing and make you think you have to buy all these individual stocks, or you have to day trade, or you have to understand charts, or you have to understand metrics. But instead, investing is actually very simple. Now, there are two things that I like for most investors to look into, and it's index funds and ETFs. And they do very similar things and are almost exactly the same. They just have a different way that they trade. And so, an index fund, when you buy an index fund or you buy an ETF,

• 44:03Andrew Giancola?

  you are just buying a bundle of stocks. Just think about a big basket, and a bunch of different stocks are placed in that basket. You know, during the end of the year, during holiday time, people put together those festive baskets that you can give away, maybe at corporate events, or you can give them away to your friends or family. Well, that's the same thing when it comes to index funds. People have put together these baskets of stocks so that you can just buy them in one trade and make it a lot easier. And so, index funds and ETFs work exactly that way. You can think of companies like Amazon, or Apple, Disney, Home Depot, Nvidia, all the biggest companies in the world, you can buy in just one big basket. And there's a bunch of different ones out there that I love. But investing doesn't have to be complicated. Instead of trying to beat the market, you can just buy the market.

• 44:46Andrew Giancola?

  You may have heard of terms like the S&P 500, or the Total Stock Market Index Fund, and these are just different funds that you can go out and buy and put together. And so, investing doesn't have to be complicated. The keys are making sure that you have a plan in place, you stick to that plan, no matter what the market is doing, and you continue on with that plan. And continuously investing every single month is one of the best things that you can do with your dollars. So, investing doesn't have to be hard. It doesn't have to be complicated. It doesn't have to be scary. You just have to understand a few simple things, and you'll be off to the races. Now, one other thing that a lot of people ask me is, "Where do I invest?" So, there are a lot of different places that are great to go out and invest. I like Vanguard, and I like Fidelity. Those are just two great places where I

• 45:28Andrew Giancola?

  Keep most of my money and those are brokerages that I've had for a very long time. They have low cost funds. They have plenty of account options and so they just give you the opportunity to invest in things that are great. Charles Schwab is another one that is absolutely fantastic that a lot of people love. I just don't have an account there, but a lot of people love Charles Schwab as well and they have low cost funds. So those are three great places to get started and get the ball rolling.

• 45:53Andrew Giancola?

  All right. So number five is we need to focus on our freedom number. Now, we talked a little bit at the beginning about your freedom number because there's one of these six metrics that I want you to track. This is also called your retirement number, but I want you to reframe this in your mind as your freedom number. Because once you hit this number, I want you to understand this and I want you to pay attention here. Once you hit this freedom number, work becomes optional. It is not something that you absolutely have to do. Instead, you can decide if you want to work or not. And once you hit that number, you can become financially independent. You can retire if you want to. And so this is a very powerful number to know. Now, I'm going to give you the quick, easy math on how to know what your retirement number is. But there's a lot more that goes into this number and then I'm going to talk about why we need to continue to track this number over time.

• 46:39Andrew Giancola?

  So the way that this works is that you can look and figure out how much do you want to spend in retirement every single year? Now, the first question that people ask me is I'll say, hey, how much you want to spend in retirement every single year? And they'll say, hey, I'm 32 years old. I have no idea how much I'm going to spend in retirement. And this shows a very key thing that we need to understand. We need to track our retirement number every year because life changes. Our priorities change over time. And so because of this, we need to make sure we are on top of this number. So here's the key is let's make sure first that we figure out how much are you spending right now? And you decide, okay, well, hey, I'm spending $80,000 per year. Let's just use a nice, easy, round, average number.

• 47:21Andrew Giancola?

  So if you spend $80,000 per year and you multiply that by 25, because we're going to use the 25x rule. Then that means you would need $2 million invested in order to be able to be financially independent. Now, why is that? Because when you have a portfolio built up, the 4% rule is a rule. That states, hey, you can draw down 4% of your portfolio every single year. And you have a very high chance of preserving your portfolio throughout your entire life. And so the 4% rule is actually a very conservative rule. That ensures that your portfolio is preserved. You can look into the 4% rule, we have episodes on them as well, which dive really, really deep into this. And so, once you have this set up, you can withdraw 4% every single year. So every million bucks is $40,000 that you can draw down in that portfolio. That's the easiest way to think about this.

• 48:07Andrew Giancola?

  But your priorities are going to change over time. And so we need to make sure, well, right now I'm spending 80. But what if I get married and I start to spend 100 or I have a couple of kids? And now we're spending 110 per year. And so you make those adjustments over time to your retirement number to get as close as possible to where you need to be. Now, in your early years, especially in the messy middle where you're married, you have kids and you have a lot of things going on, a lot of expenses. You may be spending way more during that timeframe than you would be in retirement. And so there are some things that you could do to look ahead to say, hey, will I have a mortgage? Do I plan on having this debt? Do I have to spend money on some of the things that I'm spending on for my kids right now? If not, then you can make those adjustments. But at the same time, things like inflation are eating away at your dollar every single year. And so if you make these micro adjustments year in and year out, you're not going to feel the pain.

• 48:53Andrew Giancola?

  You're not going to feel very different when you make those adjustments. And you're going to build up a fantastic retirement portfolio where you may be able to retire way faster than you ever thought you could. And that's why I like to do these micro adjustments every single year to my retirement number. So I don't have to think about this 10 years down the line where I have to make a huge adjustment and I have to scramble to catch up. And so making micro adjustments to your retirement number every year is really, really important. Now, you can get really granular with this, adding in things like your pension, adding in things like healthcare, adding in things like social security and what the impact of those will be on your retirement. And those are very important to add in, but we're just giving you the quick back to the napkin math that you can run to get the ball rolling.

• 49:34Andrew Giancola?

  All right, so once you do those first five things, the last thing I want you to do is number six. And number six is the part that I don't think you're going to expect from some financial expert telling you how to utilize your money. And I want you to learn how to spend your money, but not just spend your money. I want you to enjoy your money. See, being good with money doesn't mean you're depriving yourselves. It means you're being intentional about how you spend your money and you spend more on the things that you love. In fact, I want you to spend as much as you possibly can on things that you love. And so that's the entire goal of why we even start to build wealth is so that we can enjoy our life, so we can live our dream life. And you can do that right now, even if you're in debt,

• 50:17Andrew Giancola?

  even if you are still working to try to get yourselves ahead, you can still live your dream life now. You just have to be intentional with the way that you think about your money. So I'm going to actually show you how to do this line by line so we can find some money to utilize towards the things that we actually value. For me, I worked so hard in my twenties to try to get to where I am today. So I like to spend money on things that I enjoy. I enjoy playing golf. I enjoy spending time with my kids and taking them places. I enjoy spending time with my wife and actually going out to a nice dinner. I enjoy traveling with my family. So all of these things are really important to me and I want to spend more on those things and less on the things that I could care less about. So if you're the type of person that goes out and you just spend frivolously, not even thinking about it, and then you get home and you have these bags of junk

• 51:02Andrew Giancola?

  that you just brought home and you regret it, that is a big deal that we can make adjustments right now to help you fix that. And then all of a sudden, those dollars are going to be freed up to do the things you actually want them to do. So here's what I want you to do. I want you to go back and we're going to get intentional about this because intention is everything. So I want you to go back to your bank statements and go back and look at those three months that you looked at in step one. And I want you to say to yourself and go line by line and say, are there things on this list that I really wish I didn't spend money on? Flag anything that you spent money on out of convenience or just out of habit, or things that you just buy on autopilot that you really don't care about anymore. Then I want you to think about this for a second and let's get intentional. Do I want to? Keep this in my budget, or do I want to start to cut this out?

• 51:47Andrew Giancola?

  Because all of the things that you cut out are going to free up more dollars to spend on things that you actually value. Then, once you have that pile of money that you're cutting out of your budget, that you just were spending on frivolous things, maybe it's the extra random target runs, maybe you were just spending money because you're bored, maybe you're buying extra things at the grocery store. Then we can take all that pile of money and we can redirect it towards things that you value. Maybe you want to go on more vacations with your family so you can have more memories. Maybe you want to spend more going and doing the things that you love. Maybe you want to put more towards health and fitness because you've been neglecting those areas. Maybe you just want to buy more of a hobby you enjoy because it brings you joy. All of these are great reasons to spend money. And they're great reasons to actually learn how to get your money together

• 52:30Andrew Giancola?

  and become intentional with money so that you can spend it on the things that you love. And that's our entire goal here is to have you enjoy your money and have you use it as a tool to get the things you want in life. Listen, thank you so much for being here on this podcast. I truly appreciate each and every single one of you. If you want to learn more about how to spend money intentionally, how to be intentional with your money, I highly encourage you to join Master Money Academy. That is our community of people who are wealth builders. We're all working towards this common goal of financial freedom. And we give you the steps on exactly what to do with your next dollar so that you know what to do next. But in addition, I do weekly group coaching calls in Master Money Academy so that you can master your money in every way possible. Again, thank you so much for listening to this podcast episode.

• 53:15Andrew Giancola?

  I truly appreciate each and every single one of you. Again, join the Master Money newsletter. If you guys have any questions, you can respond to any of those newsletter issues that come out every single week. Thank you again for being here and we'll see you on the next episode.