"Get Smart with Money" is a Netflix documentary that follows four financial professionals who raffle off one year of free financial coaching to a family or individual in need. All of the participants have their own unique financial situation and are seeking guidance on how to achieve their financial goals. While it is entertaining to follow them along their journeys towards financial independence, there are some lessons taught by these financial coaches that virtually anyone can benefit from hearing and implementing into their own lives. Here is a brief overview and some key takeaways from each of the four families and individuals who opened up their finances for all of the world to see:
Kim and John
- Kim and John are parents of two young children and are looking for financial freedom and early retirement.
- Kim’s career took off and she went from making $70k annually to $300k in 5 years. The only problem is that when they started making more money, they also started spending more.
- Their financial coach, Pete, focused on teaching them that income doesn’t really matter when it comes to saving, it’s all about your spending choices.
- Pete explained that everyone has the PJM, a Purchase Justification Machine, where you can throw in purchases and figure out ways to justify why you need it or deserve it.
- Pete helped them with some simple cost-cutting ideas, like buying in bulk and do-it-yourself home projects instead of hiring a contractor.
- They admitted that cost cutting caused some conflict in the beginning, but ultimately united them as a couple when they focused on the things that mattered to them.
- Pete’s mindset was the main takeaway for them. He taught them to be deliberate and responsible in their choices. They didn’t necessarily cut down on spending, but they cut down on waste.
- Ariana started her adult life by taking out huge student loans and has been drowning in debt ever since by racking up $45k in credit card debt.
- Growing up, money was meant to be spent in her family and she didn’t have a good sense of saving or budgeting.
- Her coach, Tiffany, helped her with reducing her spending and systematically paying down her debt.
- Tiffany encourages people to ask four questions before spending money:
- Do I need it? (Health and safety of your family)
- Do I love it? (What would you do or do more of if you had all the money in the world?)
- Do I like it? (Brings you joy for less than 6 months)
- Do I want it? (Not true joy, just temporary satisfaction)
- Tiffany explained that you live your best life when you focus on needs and loves.
- Tiffany recommended splitting your paycheck to automatically be deposited into different accounts before you even get it to help with systematic saving.
- Money is a tool that you can use to build yourself up or destroy yourself financially, but you are in charge and get to decide
- Teez is an ex-NFL player who had a big cash windfall from his signing bonus but doesn’t know what to do with it. He spent a lot of his money and now doesn’t have a weekly paycheck.
- His coach, Shareef, taught him how investing in index funds can put your savings to work and grow your account values over the long term.
- Black families own less than 2% of stocks in the US
- They discussed how finances are not talked about much or taught in the black community and that black families own less than 2% of stocks in the US
- Shareef encouraged Teez to set up an automatic monthly investment and explained how you are losing money by not investing because of inflation.
- Lindsey is a 27 waitress and bartender who lives paycheck to paycheck despite working 50 hours per week.
- She has a dream of being a fashion designer or artist but can’t save enough money to fully commit.
- Paula, her coach, explained that there are two different types of side gigs: One is taking advantage of the gig economy where you can make money immediately, but the other is slowly building up a business over time.
- Paula said, “In between cowardice and recklessness is courage.” Lindsey lived this out by quitting a dead-end job and using her extra time to pursue her dream.
- Paula recommended opening a new bank account for her side business in order to make her look more legitimate from a crediting and lending perspective. It also looks good to bill a client from a business account and it is easier to spot deductions for taxes.
- Lindsey’s employer for her day job was very supportive once they knew that she was trying to build her own business. They hired her to paint a mural and let her host art lessons where she could sell her art.
- Paula preached shifting your focus to what value you can bring into the world. Having a rare skill set will grow your income and earnings potential.