Disclaimer: This post is for informational purposes only. Please contact licensed financial professionals for your tax, investment, and other financial needs.

At this time of the year, we may find ourselves reviewing the successes and challenges of the past 12 months. When it comes to money, a regular review of your finances can help you stay on top of your goals whether it’s to build up an emergency fund, save up for a family vacation, or prepare for a home purchase. We are inundated with tools, apps, and software to help navigate today’s demands but many times we can reap the most benefits from mastering the basics & setting up our foundation.

I’m happy to share an article written by my friend and former colleague Warren Jocson. As an Operations Manager at Target, Warren spent time before and after his shift to advise team members on their retirement goals. He was surprised to learn that many workers near retirement age had not taken action to set themselves up financially, even after working a well-paying job for 10+ years. While quarantined in the depths of the pandemic, Warren decided to write down the advice he’s shared with people at all levels of their financial journey. Here are 9 tips from the son of a CPA.


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By: Warren Jocson

My dad had, by far, my favorite saying financially. “It’s not about how much money you make but how much money you can save!” This has been my motto ever since he had shared it with me. One thing that I will state as a fact is that it is not easy being the son of a CPA.

You learn things you don’t even bother truly understanding until you’re very much older and wiser. Like for example, it’s 1991 and you are 7 years old and you see your friends in the window across the street enjoying playing Nintendo. Meanwhile, at your house, your mom is sitting across the table from you teaching you T accounts and how to balance your savings account and checking account. Talk about a mood killer.

The irony in the whole thing is how much that time really means to me now. I look back at all of those lessons and think to myself they, my parents, did a great job sharing important financial advice that has led me to be better today.

Many people are often so caught up in chasing the paper and making money they forget the old saying, “save for a rainy day”. I find it really sad that a vast majority of Americans lead a life of paycheck to paycheck. In fact, let me share some cold hard facts before saying much more:

I am amazed that US consumerism has such a huge effect on how Americans spend their hard-earned money. I also am amazed that the teachings of financial responsibility are no longer the same as it was 50 years ago let alone 10 years ago. I see the new generation so engrossed in technology and nonsense with social media and they have strayed away from responsibility and financial well-being planning. We live in a day and age that instant gratification is more important than looking forward to retirement.

We live in a day and age that instant gratification is more important than looking forward towards retirement.

I am by no means a millionaire or ridiculously rich venting and chomping down on everyone else for their points of view on how they handle their money. But instead, I thought I’d actually try and help and give back to my community in my own way. To share tips on financial savviness and learn to put as much of your hard-earned money away for retirement, a rainy-day fund, or towards something meaningful to you in the future. Here are a few of my tips below:

1. It is not about how much money you make but how much you save.

How many of you remember playing the board game, “Game of Life”? It was a fun game, right? Everyone always wanted to be the doctor earning 100k a year. That’s what everyone in real life gets so caught up on. Making the most you can make. When the simple fact is that it doesn’t matter if you make 100k or 60k a year. It’s about how much of that income is saved.

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2. Set a budget for yourself and your family.

Maybe it’s getting less Starbucks a week or every month. Maybe it’s not always eating out and trying to cook more home-cooked meals. Every dollar counts! If I make $50k a year just doing simple math, I’d probably be safe to say that my net take-home pay would be about $32,500 yearly with a rate of taxes and welfare benefits at a 35% deduction. Broken down monthly that would be about $2,708 and change. With this information, I would recommend you look into a few things:

3. Once you figure out your budget, set a goal for savings!

In the same example, I am able to make the 50k a year and about $2708 net cash a month. My expenses ($2050) lead me to have a leftover of $658 left. I would suggest you save at least 50% of that amount! That’s only $329 to be put away somewhere and pretend it’s gone. Save it for a rainy-day fund or place it in an investment so you can let your money work hard for you!

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4. Banks are a place for holding or safekeeping the money that you instantly need.

It should not hold your hope for retirement. I often have shared with others that your bank savings should be an amount that would cover you scott-free for at least 6months to a year of fully paid bills. What I mean by this is if you unfortunately lost your job you don’t have that burden of immediately trying to find another job to get back on your feet. Having that rainy day fund or emergency fund, you are able to survive without worry and you will be able to still find the best job you would like rather than settling for an open vacancy.

An example of this is like our example earlier with making $2708 a month and having $2050 worth of expenses each month. I would take $2050 and use that as a baseline for how much I should have as an emergency-ready fund in a bank account. So, if I look at 6 months, I should have $12,300 ready at all times or if I wanted the full year safety net, I would be looking at having at least $24,600 in my account.

Having that rainy day fund or emergency fund, you are able to survive without worry and you will be able to still find the best job you would like rather than settling for an open vacancy.

5. So where should I put my money?

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Some people are often misled that all your savings should be placed in a bank account. That is so wrong. The bank earns you .01% return if you are lucky. Most of the time you end up owing them due to their fees and such. What is important to do once you have saved your rainy-day fund or emergency fund is to start looking at saving your money in a 401k or an IRA account. If you’ve already done that, consider maximizing each for the best possible savings. If you still have the ability to put more into a savings, consider a CD or Time Deposit or invest it in Real Estate or Money Market account. Save for retirement.

What is a 401k?

A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. Elective salary deferrals are excluded from the employee’s taxable income (except for designated Roth deferrals). Employers can contribute to employees’ accounts. (Per Google)

401K max amount $19,500

What is an IRA?

An individual retirement account in the United States is a form of “individual retirement plan”, provided by many financial institutions, that provides tax advantages for retirement savings. (Per Wikipedia)

IRA max amount $6000 (2021)

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6. Maximize your 401k or IRA if you can!

Not only is it a great savings per year but it is an immediate tax deduction from your income! Many use this as a tactic to shield their tax implications. Imagine earning 100k a year but because you maximized your ability to save for retirement, you shrank your earnings down by 25.5% immediately. Now your new taxable amount from your salary is only $74,500.

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7. Understand the difference between Assets and Liabilities.

Such an important topic. Let’s face it, everyone has a weak spot for material items. Whether it’s cars, shoes, watches or purses, or maybe just an expensive vacation getaway yearly; all of these will face the question is this an asset or a liability. Quality of life plays a major role in this topic because is it possible to have a cheaper thing that works the same? Or is the brand more important to you? We all have wants and desires but how often do you indulge in the want or how often do you hold yourself off and just be practical about the matter? Be vigilant in delaying gratification! Patience is a tremendous virtue that leads to good things in the end!

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8. Investing in Real Estate or Money Market account.

You work hard for your money so why not let your money work hard for you? Purchasing a rental property is not a bad idea if you have the extra funds. Let the rental income become a passive stream of income for you! But remember in real estate, location vigilant location! Location is every bit of importance for keeping and holding your property value but also keeping renters interested in your home.

As for Money Market accounts, using a user-friendly app such as Robinhood, E*TRADE, Ameritrade, Fidelity or Scott Trade are all great ways to do self-trading with stocks and stock options. The only thing with stock trading is the time you will need to invest into it to be successful. If you are on the fence start trading Exchange Trade Funds first as they are most similar to Mutual Funds and help you with diversification if you’re still a beginner.

The other craze at the moment for investing really is CryptoCurrency exchanges. Crypto is doing so well behind the leader of the pack, Bitcoin. If you have time to look into these ways of earning more money on your money, I highly recommend it!

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9. My last bit of advice is spending some of your hard-earned money is very important.

Your family enjoying that vacation you all deserve is important. Taking the kids to enjoy new experiences is important. Treating yourself from time to time to something nice is important. In life, everything must be a balance. Living a balanced life will help you tremendously when it comes to enjoying life.

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If you are reviewing your finances to buy your first home or preparing to sell and take advantage of the seller’s market, feel free to reach out at vivian.moon@exprealty.com or schedule a free consultation via calendly.