In The Personal Finance Cookbook, Certified Financial Planner™ certificant and celebrated social media creator Nick Meyer delivers a fun and engaging toolkit for a variety of personal finance tasks, including budgeting, investing, and buying a house. In the book, you'll find a cookbook-style collection of “recipes” detailing the steps you need to take to complete various common and important money-related tasks.
You'll learn how to avoid the “paralysis by analysis” that often traps people into doing very little about their personal finances before it's too late. You'll also discover how to take meaningful, concrete steps toward change and positive action.
The book includes: - Strategies for household budgeting and how to start investing your money - The best ways to start saving for your first home and your first car - The steps you should take before and while applying for your first credit card and strategies for building your credit rating
An invaluable resource for young families, new professionals just beginning their career journeys, and people starting to get ready for retirement, The Personal Finance Cookbook is the perfect book for everyone hoping to get a strong grip of their money situation once and for all.
Table of Contents
About the Author xi
Introduction xiii
Chapter 1: The Basics 1
1.1 How to Open a Checking Account 1
1.2 How to Open a High-Yield Savings Account 3
1.3 How to Build an Emergency Fund 5
1.4 How to Build a Bulletproof Budget 7
1.5 How to Calculate Your Net Worth 10
1.6 How to Calculate Your Financial Independence “Number” 12
1.7 How to Choose a Savings Rate Based on When You Want to Retire 15
Chapter 2: Investing in the Stock Market 19
2.1 How to Open a Brokerage Account 19
2.2 How to Open Roth and Traditional IRAs 23
2.3 How to Open a 401(k) 27
2.4 How to Change Brokers 29
2.5 How to Choose What to Invest In 32
2.6 How to Buy Your First Stock 36
2.7 How to Invest as a Kid (or for Your Kids) 39
Chapter 3: Credit 43
3.1 How to Decide When to Use a Debit Card vs a Credit Card 43
3.2 How to Open Your First Credit Card 47
3.3 How to Open Your Next Credit Card 51
3.4 How to Build Your Credit Score 54
3.5 How to Build Your Kid’s Credit Score Before They Can Even Walk 56
3.6 Travel Hacking: How to Use Credit Card Rewards to Travel for Free (or at a Steep Discount) 59
Chapter 4: Debt 65
4.1 How to Differentiate Between “Good” and “Bad” Debt 65
4.2 The Debt Snowball Method: The Best Way (Behaviorally) to Pay Off Debt 68
4.3 The Debt Avalanche Method: The Best Way (Logically) to Pay Off Debt 71
4.4 How to Lower Your Interest Rate by Consolidating Debt 74
4.5 How to Qualify for a Debt Management Plan 76
Chapter 5: Big Purchases 79
5.1 How to Not Get Scr*wed When Buying a Car 79
5.2 How to Decide Between Leasing and Buying a Car 82
5.3 How to Ensure Your Wedding Doesn’t Set You Back Years Financially 85
5.4 Pets: How Much They Cost and How to Save Money on Common Expenses 87
Chapter 6: College 91
6.1 How to Save Money on College While You’re Still in High School 91
6.2 How to Apply for Grants 95
6.3 How to Apply for Scholarships 98
6.4 How to Make College a Good Investment 101
6.5 How to Use a 529 Plan to Save for Your Kid’s College 105
6.6 How to Pay Off Your Student Loans 108
Chapter 7: Housing 113
7.1 Is It Better for You to Rent or Buy a House? 113
7.2 How to Tell If Rent/Your Mortgage Payment Is Too Expensive for Your Income Level 116
7.3 How to Buy Your First House 118
7.4 How to Decide Between a 15-Year vs 30-Year Mortgage 121
7.5 How to Reduce Your Living Expenses by House Hacking 123
Chapter 8: How to Make More Money 129
8.1 How to Negotiate Your Starting Salary and Signing Bonus 129
8.2 How to Ask for a Raise 133
8.3 How to Maximize Your Employee Benefits 135
8.4 How to Raise Your Salary by Job-Hopping without Ruining Your Reputation 139
8.5 How to Start a Side Hustle 142
Chapter 9: Taxes 149
9.1 How to Pay Taxes If You Have a Normal Job 149
9.2 How to Pay Taxes as a Business Owner, Independent Contractor, or Freelancer 154
9.3 How Investments Are Taxed 160
9.4 How Tax Extensions Work and How to File Them 164
9.5 How Amended Tax Returns Work and How to File Them 168
Chapter 10: Retirement 173
10.1 How to Begin Drawing Your Social Security Benefits 173
10.2 How and When You’re Required to Draw from Your Retirement Accounts 176
10.3 How to Determine How Much You Should Spend Each Year in Retirement 180
10.4 How to Roll Over Old 401(k)s to an IRA 183
Chapter 11: Charitable Giving 187
11.1 How to Report Charitable Donations on Your Tax Return 187
11.2 How to Open a Donor-Advised Fund for Tax-Advantaged Giving 190
Chapter 12: Insurance 197
12.1 How to Use an HSA as an Extra Retirement Account 197
12.2 How to Obtain Health Insurance When It Isn’t Provided by Your Employer (When Turning 26) 201
12.3 How to Use an HSA as an Extra Retirement Account 205
12.4 How to Obtain Homeowner’s Insurance 210
12.5 How to Obtain Renter’s Insurance 213
12.6 How to Obtain and Save Money on Car Insurance 216
12.7 How to Determine When You Need Life Insurance 221
Chapter 13: Passive Income 225
13.1 Why Passive Income Is the Best Form of Income 225
13.2 How to Earn Passive Income from the Stock Market 227
13.3 How to Earn Passive Income from Real Estate Investing 231
13.4 How to Earn Passive Income from Digital Products 236
13.5 How to Earn Passive Income from Affiliate Marketing 240
Index 245
