Episode Guide

Exploring the concept of 1% improvements, listeners are provided with practical strategies to enhance their personal finances and overall quality of life. By focusing on small, incremental changes, individuals can experience significant benefits over time. Topics include decluttering, optimizing expenses, enhancing learning through reading and skill acquisition, and leveraging community resources. The hosts emphasize the importance of setting up systems that promote financial stability, such as using digital tools to manage bills, fostering healthier eating habits, and continually seeking educational opportunities. With actionable suggestions and personal anecdotes, the conversation encourages listeners to actively engage in their financial journeys and take control of their futures.

Episode Timestamps

ChooseFI Episode 318 Show Notes

Episode Summary

The episode delves into practical ways to improve financial habits by focusing on the aggregation of marginal gains—small, incremental improvements that compound over time. Listeners are presented with 100 actionable suggestions intended to help them become 1% better in various aspects of their financial lives. Key strategies include learning new skills, maintaining a disciplined approach to saving and spending, organizing bills, and leveraging digital resources effectively. The hosts emphasize the importance of community and ongoing education in the pursuit of financial independence, enhanced with personal anecdotes and expert recommendations, such as utilizing local libraries and exploring innovative financial resources.

Key Topics & Timestamps

Introduction to the Concept of Marginal Gains
- Discusses the idea of getting 1% better every day and its applications.
Overview of 100 Ways to Get 1% Better
- A list of strategies compiled for listeners to improve their financial lives.
Digital Tools for Finances
- Importance of using digital tools to simplify taking care of bills and finances.
Using Your Library Efficiently
- Tips on how to utilize local libraries for resources and savings on books.
Community Engagement
- The importance of engaging with local ChooseFI groups for support and resources.
Debt Management Strategies
- Discusses various debt management methods like the snowball and avalanche techniques.
Creating an Emergency Fund
- Recommendations for the size and purpose of an emergency or crisis fund.
Home Expenses Optimization
- Tips for DIY home repairs and decluttering to save money.
Transition to Healthcare Savings
- Discussion of healthcare savings options and tools like GoodRX and MD Save.
Travel Rewards Strategies
- Insight into maximizing travel rewards for financial independence.
Negotiating Discounts
- The principle that everything is negotiable and the benefit of asking for discounts.

Actionable Takeaways

Set up auto-pay for your bills.
Engage with your local ChooseFI group.
Create an emergency or crisis fund.
Use digital tools for managing bills and expenses.
Implement the $2 per person meal budget.

Key Quotes

"Improve your life by 1% daily for massive gains."
"Value your time; it's worth more than $15/hour."
"Never hesitate to negotiate; ask for better rates."

Discussion Questions

What small changes can you implement today to improve your finances?
How does being part of a community impact your financial journey?
Which strategies for debt management do you find most effective?

Final Thoughts

Listeners are encouraged to explore further by checking out the full list of actionable tips on their website and consider how these principles can be applied to their own financial strategies. For the complete article, visit chooseFI.com/1%.

Podcast Intro: You're listening to ChooseFI, the blueprint for financial independence...
Podcast Extro: You've been listening to ChooseFI Podcast, where we help middle-class America build wealth one life hack at a time.

Unlocking Financial Independence: The Power of 1% Improvements

In the journey towards financial independence, the concept of making small, incremental improvements—often referred to as the aggregation of marginal gains—can lead to significant changes over time. This article synthesizes actionable strategies to help you become just 1% better in various aspects of your financial life every day.

The Foundation: Understanding Marginal Gains

Marginal gains represent the pursuit of tiny improvements in every area, which can compound over time into substantial benefits. By focusing on getting just 1% better daily, you can build a solid foundation for long-term financial success.

Key Strategies for Incremental Improvement

Automate Your Finances

One of the simplest and most effective ways to improve your financial health is to automate payments and savings.

Set Up Auto-Pay for Bills: Automating bill payments ensures that you never miss a due date, which helps boost your credit score and saves you from late fees.
Create an Emergency Fund: Start with a crisis fund of at least $1,000 that is easily accessible. Once you reach that goal, you can build your emergency fund further.

Engage with Your Community

Financial independence is often enhanced by connecting with like-minded individuals.

Join Local ChooseFI Groups: Participating in local communities can provide accountability and shared resources. Consider attending meetings to learn and share experiences.

Optimize Expenses: Home and Healthcare

Home Expenses Optimization

Reducing your home expenses can lead to significant savings without compromising your lifestyle.

Declutter and Donate: Take inventory of your belongings. If you haven't used it in six months, consider donating or selling it. This not only creates a more peaceful environment but can also boost your finances.
Use Digital Tools: Leverage apps to track household expenses and find areas for improvement. You might be surprised where money is leaking.

Healthcare Expenses

Managing healthcare costs can significantly impact your overall financial health.

Utilize High Deductible Health Plans (HDHP): If your situation allows, consider a HDHP paired with a Health Savings Account (HSA). This can help you save for medical expenses on a pre-tax basis.
Explore Discount Apps: Use resources like GoodRx to find the best prices for medications, which can unveil significant savings.

Turn Towards Proactive Learning

Learn New Skills

Continuous education plays a critical role in ensuring you remain informed and capable.

Engage with Online Learning: Explore platforms like Skillshare or Coursera to pick up new skills that can increase your income potential or personal development. Aim to read at least one non-fiction book a month relevant to finance or personal development.

Budgeting Tips and Food Spending

Food can be one of the most significant expenses that can be optimized.

Implement the $2 Meal Budget: Aiming for $2 per person per meal can lead to massive savings. By focusing on cooking meals at home rather than dining out, you can enjoy healthier options while saving significant amounts of money over time.
Batch Cooking and Meal Planning: Plan your meals for the week ahead, focusing on bulk ingredients and fewer but nutritious recipes.

Travel: Making it Affordable

Travel doesn’t have to break the bank.

Utilize Travel Rewards: Focus on maximizing travel rewards points from credit cards to make travel affordable. Look into services and apps that help you manage and optimize your points effectively.
Negotiate Discounts: Always ask for discounts when booking travel or experiences. A simple inquiry can lead to savings—you might be surprised at the willingness of service providers to negotiate.

Smart Negotiations

Never underestimate the power of negotiation.

Negotiate Every Year: Review your insurance (car, health, etc.) annually, and don’t hesitate to switch providers or negotiate better deals with your current providers.

Final Thoughts: Continuous Improvement

The journey to financial independence is a marathon, not a sprint. By embracing the 1% improvement mindset, you can carve a path toward financial security and independence. Each small action accumulates, leading to substantial financial health and lifestyle freedom.

For those ready to take action, start today by selecting one strategy from this list and implementing it. You’ll soon discover how small steps can lead to remarkable changes in your financial journey.

Remember, the key is to keep learning, engaging with your community, and employing practical strategies to optimize every aspect of your financial life!

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What You'll Get Out Of Today's Show

After four years of talking about the aggregation of marginal gains and the idea of getting 1% better, ChooseFI has accumulated quite a lengthy list that you can stack together.
If you can invest a little bit of time to fix something, you'll never have to invest that time again. Brad recently decided to move away from paper files and bills to join the digital age, while Jonathan has been using a subscription service to stop the paper junk mail sent to him.
Chris Hutchins shared a final hack with Brad after the end of the last episode that didn't make it into the recording. Chris uses a browser extension to view book availability at his local library and borrow or place a hold on it.
Brad and Jonathan selectively pick from the list of 100 ways to get 1% better with your finances, starting with #3, Reading (or Listening) to One New Finance or Investing Book Each Month. Jonathan thinks this tip could be expanded to include non-fiction books that improve you in some way.
#4 on the list is to learn a new skill. It could be for obtaining background knowledge, gaining a marketable skill, or simply for interest's sake. Although complacency can be seen as a bad thing, don't mistake complacency for contentment.
Other tips include getting outside to exercise or try a new hiking or biking trail every week. Mix things up. There is a never-ending stream of free YouTube exercise classes to choose from.
Are you aware of your local FI group? While COVID has kept us physically apart, we are coming to the other end. You can invest in your local community.
As for dealing with debt, Brad says you need to sit down and be honest with yourself. Understand what you owe, who you owe it to, how much you make each month, and how much you spend. If you spend more than you make, you need to stop right now, and at least get to the point where you aren't adding more debt.
Once you get to that place, Jonathan says you can look for ways to optimize your debt payoff, such as zero balance transfers. And then work to improve your credit score by putting a system in place, like autopay, to ensure you never miss a payment.
If you do not have $1,000, you don't need an emergency fund, you need a crisis fund. You need $1,000 that doesn't have a bill attached to it that you could draw on in a crisis. Once you have that, then you can think about building an emergency fund. Use your tax refund to establish your crisis fund.
Next, don't give the government an interest-free loan and work it so that you don't get a tax refund. The opportunity cost of having the government hold your money for a year is potentially big. When financially responsible and on the path to FI, you don't want a big refund. You want to be saving and investing it all year long.
You can learn to do just about anything on YouTube, especially do-it-yourself home repair tutorials that will save you money. Even replacing your incandescent bulbs with LED is easy to do and saves on energy costs.
While lowering your hot water heater temperatures and adjusting the thermostat won't make you wealthy overnight, stacking these tips with others is the whole point of getting 1% better.
Declutter your home and donate or sell items to simplify your life.
Owning a car costs a lot. Trying to manage the payment for a new car every 5 years versus buying a car and driving it for 15 years can have a dramatic impact on your path to FI. The one decision to drive a new car for 15 years, made just three times over an adult's lifetime can result in a $742,000 difference.
If you can stack car ownership savings with other money savings hacks on food, or housing, it can mean a difference of multiple millions.
It doesn't need to be about deprivation but just doing a little better than average to end up with millions more than your counterpart who is drifting through their financial life.
#33 on the list is to shop your car insurance every year, which Brad extends as something to be done with all your insurance policies. Make it a yearly "to do" task.
Unfortunately, companies don't incentivize customers to stay, they incentivize customers to leave other companies to come to them. Even if you don't want to switch, at least try and negotiate a better price. There are even companies who will do this for you.
There are a few ways to optimize healthcare, such as using a high-deductible health care plan with an HSA, prescription discount tools, and locking in medical service prices with websites, such as MDSave.
The health benefits of focusing on exercise and healthy food choices can not be overstated. 80-90% of the treatment modalities would go so much further if stacked with a healthy diet and lifestyle.
To keep food costs in check, Brad and his wife, Laura, try to anchor themselves to a $2 per person per meal goal. Laura has even curated a series of healthy recipes that fall within that cost.
Everything is negotiable. When Brad had a recent medical procedure, he simply asked if there was a pay-in-full discount and received a 30% discount.
Saving puts money in your pocket, and so does earning more money. There's never been a better time for a side hustle.
CampFI's are back! Brad will be attending the mid-Atlantic CampFI over Memorial Day weekend.

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100 Ways to Get 1% Better
Episode 318