The 3-highlighter method to help you get your financial shit together
This is the exact method I used to pay off $17k in debt + begin getting my finances in order.
It paid off! So well in fact that I afforded an 8-month sabbatical from work, used to take 8-weeks of vacation each year from my gym, and I make sure to travel several times each year.
rather watch the video version of this?
What you’ll need:
- 3-12 months of bank statements, printed
- 3 different color highlighters
- a comfy spot
- some patience & curiosity, and a will to get your $$$ shit together
- rescue pittie optional
Identify at least one financial goal you have for yourself. It can be anything!
Just like with fitness goals, your financial goals should be:
Some examples might be:
- pay off $3k in CC debt
- save $30k for a downpayment
- save $15k in emergency fund
- save $10k for island vacation
We’ll get into specifics of time later.
Identify which color highlighter is associated with the following 3 categories:
- Necessary, non-negotiable transactions and purchases.
Think: rent/mortgage, utilities, gas, groceries, etc.
- Discretionary but explainable.
Think: you bought a blender because you need a new one.
- WTF purchases.
Think: another. $300 at Target on more random shit that you don’t need/won’t wear
💡looking back at previous transactions is illuminating!
Loved that Target haul in the moment? How does it feel a few months later? Without self-criticism or judgement, get curious. You may notice it feels different looking back and easily falls into the “WTF” category.
Go through each transaction, paying little mind to the details or the totals.
Highlight each transaction with its respective color.
You now have a quick, visual snap shot of where your money is going!
Take a break here.
Refill your coffee.
We’re almost done!
Add up your WTF color.
You can take the average WTF color if using multiple bank statements- this is what I recommend. The larger the sample size of spending data, the better!
Revisit your financial goal.
You’re in the power seat now!
Let’s say your average WTF color was $1,700.
And let’s say your goal was to save $15k in an emergency fund.
Now you can play with the timeline.
You can really buckle down and get to your goal in as little as 9 months.
You can continue to give yourself grace in your budget for more WTF
spending (it is fun!) and plan to make it to your goal in 18 months, giving yourself $850/month in WTF money.
Bada-bing, baby. You’re now 6 steps closer to getting your financial shit in order!