Melisa Boutin
We resume Money Meetings tonight on the topic of “The Ultimate Money Plan for a Year of Financial Success.” The things that we are going to be covering include the four building blocks of a money plan, what is involved in planning, and the routines that you need to sustain it so that you can reach your financial goals.
 
Melisa Boutin
So what are the four building blocks of the ultimate money plan to a year of financial success? It comes down to the first thing, which is your mindset. What is your outlook on your goals and your money? Your priorities, and then actually having a written plan—whether it’s written down in a notebook, in a spreadsheet, or in your notes app. Having somewhere where you actually detail what you want to do with your money and be very clear on your priority financial goals for yourself is essential. This is something that anyone can learn. A money plan is just giving what you earn a job to do. Of course, it covers your expenses, your daily life, and loans that you have, but really, your money is what fuels your overall life goals. The money plan is what puts that into motion.
 
Melisa Boutin
The first thing is you have to have income; that’s the first part of the money plan. Whether it’s from work, a side hustle, or a business, income coming in is the first part of your money plan. There are different sources of income. As I mentioned, you can work for an employer or have a side business. You can also get income from interest earned on any certificates of deposit or investments; that’s another type of income which is considered passive income. If you have rental property income, that’s another type of income that you can have. Or, if you get profits from a business that you invested in but you’re not actively working in, that is another type of income. Those are different sources of income, and whichever one you have is what you’re working with.
 
Melisa Boutin
The next part is having a goal-based budget where your goals are the main part of your budget. Then, you have routines and reviews. Once you have your goal-based budget in place, you actually implement the budget that lays out what you want to do with your money, how much you want to go to your primary goals, and what you need to cover your essentials. Putting the budget together around your goals lays out the plan, and then the routines make sure that you’re implementing your budget and staying on track. Those routines are part of the money plan.
 
Melisa Boutin
Now we’re going to talk about goals, and I’m going to also share my example. These are not just goals to save for a vacation or other short-term things; you want to think about the big picture when you’re figuring out what your most important goals are for you and your life. Think about it this way: if you had a magic wand and you could do anything you want and get anything you want, what would you change? What would be the main things you want to focus on?
 
Melisa Boutin
When I asked myself that question, I was looking at a lot of loans—over $100,000 in student loans. I was just starting my career and I didn’t own anything. The only thing that I owned at the time was debt. But if I had a magic wand, I wanted my debt to be gone. My other goals were owning a home, learning about investing, and investing for retirement. That’s what made up my primary goals. Once you have those goals in place—meaning the big vision to own a home, to invest your first thousand dollars in the US stock market and grow that to $50,000 USD, to have a year of savings so that you can take a year off from work and travel, or to be able to fund a college fund for your children—you take those one to three big goals and rank them. For me, the student loan debt was number one. Saving for retirement and learning to invest was number two, and owning a home was number three. Once you rank those goals, you build a budget around them.
 
Melisa Boutin
Now we have an example. Zoe makes $2,500 a month and she sets up a goal-based budget. She has monthly income, and then she has her goals for saving and investing, followed by her regular bills like transportation, utilities, and housing. Finally, she has “Wants,” which could be travel or entertainment. This is how you set up a goal-based budget. You have income coming in, and then your goals fall under saving and investing. Under the saving and investing category of my goal-based budget, making extra payments on my student loan fell under this section. The second thing in my saving and investing category was investing, which meant setting aside 5% of every paycheck until I could increase it over time into a retirement plan that had investments. The third thing in the saving and investment section for me was saving to own a home.
 
Melisa Boutin
Now, going back to Zoe, she had three priorities. She wanted to save $2,400 for her emergency fund, invest 5% of her monthly income, and pay off an outstanding vacation loan early. So these are the three priorities of Zoe under the saving and investment section of her goal-based budget. We know what “Needs” are and really what “Wants” are. Once that goal-based budget is in place, where you specifically outline the amount of money going to each goal under the saving and investing section, you have to actually set up a routine to execute and follow it. You fund your goals while you’re paying for your regular life. These routines include setting up a yearly plan and having a review of your finances once a year, alongside quarterly reviews, monthly reviews, weekly reviews, and payday routines. We’re going to go through them.
 
Melisa Boutin
Your yearly plan is basically making a goal-based budget for every month, from today to 12 months in the future. If you go back to Zoe’s example, she had her three main financial goals. She has an income coming in at $2,500 a month, and her goals are to save towards an emergency fund, pay off a vacation loan early, and invest 5% of her income. In order for Zoe to set up her yearly plan, she takes her goal-based budget and the priorities she’s already set, and she creates a budget for every month of the year, from June 2026 to June 2027. Her income is $2,500 per month for those 12 months. With the savings and investment section, she would put in the 5% that goes to investing. Then, she would put in $50 for paying extra on her vacation loan so she can pay it off early. For her emergency fund, she would put in $200 for each month, 12 months into the future.
 
Melisa Boutin
She would do the same thing for regular expenses and wants. If you take a vacation every year in August, then when you get to the August budget, that would be an extra expense under the category for vacation travel. If you know that you have to renew your car insurance in September, then when you get to the September budget, you make sure you put in that expense. You just put in the information that you have based on your expenses and plan it out for 12 months. Once you have that goal-based budget for every month, then you would have a review for every month as it comes.
 
Melisa Boutin
If Zoe is going to start her goal-based budget for each month starting from July of this year to July of next year, at the end of July, Zoe would look at her goal-based budget for July and see if she funded her goals as she planned. She would compare her actual spending to her planned spending. If some expense came up and she couldn’t pay the extra $50 per month on her vacation loan, then she would make adjustments and update the August budget. As the months continue, review the planned budget versus the actual spending.
 
Melisa Boutin
Next is having a payday routine. We already have our goal-based budget with the information that we have now and the priority goals that we want to fund from our income. But when we get paid, this is where you actually make sure that the money goes towards the things that you planned. When you’re setting up a payday routine, you decide on a day that you’re going to sit down and go over your finances. If you have salary deductions that are coming out, you look at your payslip and see where your deductions go to make sure they reach the institution. So, if you have a salary deduction for a loan, you make sure that the deduction on your payslip actually made it to the loan on time. If you have a salary deduction for a savings goal of 5% of your income, you make sure that money made it to that savings or investment account. It doesn’t mean that you’re going to keep on budget with everything that you plan, but having that routine where you’re always checking keeps you in touch with your finances. It keeps you aware of how you’re moving towards your goals; you are actually being mindful and following through. Use a scheduling app or a diary to say, “When I get paid on Friday, I’m going to sit down and go through all the salary deductions and check where I am allocating my money according to the monthly goal-based budget already set up.” Make it a routine, and you will see how there’s room for you to increase your savings or adjust your goals based on what’s happening with your actual spending versus planned. Keeping up that routine just keeps you in touch with your money. It could also show you that, listen, it’s not that the budget is not working; I may just need more income.
 
Melisa Boutin
The budget is a plan and a tool to tell you if you are not making enough, if you have too much debt, or if you may need to negotiate the debt to lower the monthly payment so that you can free up more money to go towards some of your primary saving and investment goals. Keeping up that payday routine is crucial. Then you have a weekly routine. If you get paid every week, you would be doing a payday routine when you get paid that week, and you would still be doing the weekly routine. But if you get paid twice a month or once a month, it still applies. Even if you have fluctuating income from a business because your income is based on your business earnings, you still have to have a weekly routine. Your weekly routine would just be checking in on what upcoming bills you have in the next week. You should check your bank accounts at least weekly, especially the ones tied to your debit card. Even if you know you’ve been spending and have the funds to cover whatever you spend on your debit card, there might be fraudulent activity or a fee that you were charged in error. Just checking in on your account as part of your weekly routine helps you stay on top of your money and make sure where the money is going as you’re spending week to week. Also, adding up your receipts can be part of your weekly routine if you use receipts to keep track of your spending categories.
 
Melisa Boutin
Now we’re going to talk about a quarterly review. A quarterly financial review happens every three months. You can set it in your calendar as well. Every three months, you check in on your progress with your goals and check the progress on budgets for the months that already passed. For Zoe’s 12-month goal-based budget, July has passed, August has passed, and September came to an end. At the end of September, that’s the first three months of her budget cycle, and that is when she would check in to see how the plan is actually working. Did a certain expense come up? Did she have a challenge saving because every three weeks there’s some kind of expense preventing her from saving? The quarterly review is where you check in on how it is going with your finances. At the quarterly review, you would also add up your progress on your saving and investing goals. For Zoe, in September she would look at whether she invested 5% of her income as planned, and if she did, what the total amount invested for the past three months is. One of her goals was paying off her vacation loan early by putting an extra $50 on top of her regular monthly payment. In September, did Zoe put in $150? Because three months have passed, based on her plan, she should have paid $150 extra towards her vacation loan. If she did put that extra money towards her vacation loan over the three months, then she would check to get a statement from her lender or the bank to see what her balance is now. She put in $150, but the ultimate goal is to pay off the loan early, so she wants to see how fast the loan is moving now that she put in that extra money over the past three months. You would do the same thing with any other goals.
 
Melisa Boutin
In the Zoe example, she has a goal to save $2,400 for her dedicated emergency fund. At the September mark, you would be checking to see if she saved $200 per month, making her $600 closer to her $2,400 goal. But if it happens that she missed that goal, it’s okay. You might recognize, “I was only able to save half towards my emergency fund in the three months that I planned.” So instead of $600 from July to September, she was only able to save $300. At the quarterly review, that just means evaluating what changes can be made or seeing if she should adjust that goal. Instead of trying to build up the emergency fund of $2,400 in 12 months, maybe Zoe needs to do it in 18 months if she sees that after three months she only saved half as much as she wanted. When it comes to your quarterly review, you do the same thing: how much money of what I planned went to certain goals? What’s the balance on my savings account that’s dedicated to this goal? What’s my balance on the investment account at the quarterly mark? Then, for the next quarter, which is the next three months, you do the same thing. The second set of three months is a second quarter review, the third set is a third quarter review, and the last three months is the fourth quarterly review. That’s a routine you just repeat.
 
Melisa Boutin
The last routine that you implement is the annual review. The annual review is basically just taking all those quarterly reviews and putting them together. At the end of 12 months, Zoe would look at how much went towards paying off her vacation loan in quarters one, two, three, and four. At the 12-month mark, she’s adding everything up to see the total extra payments she made towards the vacation loan because that was one of her priority goals. She would look at whether she saved 5% for investing over the 12 months, how much she invested total, and how much interest she earned. Not only did she put the 5% that she planned for 12 months, but if you’re investing, you’re investing to get back interest; you’re not investing just for the money to stay the same amount of principal. So she would look at both how much money she actually put towards the investing goal at the end of 12 months and what her return on investment or dividends amounted to. What is the total amount of extra money she got back from doing this investment at the end of the year? She would look at how much went to her emergency fund and how close she is to her $2,400 goal. Did she meet her goal at the end of 12 months?
 
Melisa Boutin
Other key things to do at the annual review include looking at all your financial statements for any loans and bank accounts that you have. You can download those statements or download the activity to review your progress for the past 12 months. If you had an account specifically for a savings goal, you would get that statement to review the balance and all your deposits. Then you do the same thing with loans. If you have a loan, get a statement at the end of each year to keep you in touch with your money and your goals to see how you’re progressing. It also allows you to find errors. Even if you’re sending a salary deduction towards your loan, maybe it was getting applied late and you didn’t realize it, or the money was actually received by the lender but they didn’t put it towards your account at the right time. You might even have payments missing even though you have them documented on your payslip, so you should be looking closely at that.
 
Melisa Boutin
Then, look at some estate planning items. If you have an estate plan—a legal will that you put in place—it gives instructions for where you want your stuff to go when you pass away, whenever that time comes. You would review your will to see if all the conditions and instructions still apply. For example, if you had a will and you have minor children, you had to assign a guardian in case you die when your child is a minor. They can inherit the assets, but they cannot own them outright without a guardian overseeing things until they turn 18. Coming back to the will, if my son is now 18, I can change my will to take out the guardian because it no longer applies. At the annual review, if you have estate planning documents like a will, you look it over. Other estate planning items that don’t have to do with a legal will include beneficiary designations. When you become a credit union member or open an account, there’s a section where it asks you who you want to be a beneficiary for your accounts. That’s one of the superb things about credit unions; they actually let you put beneficiaries directly on your account and state who you want this money to go to when you die. Whoever’s name you put down as the beneficiary on your credit union account, the credit union would transfer it to them upon your passing without them having to go to court or through a will process. You can have both a will and beneficiary designations, but I’m just highlighting that putting a beneficiary designation on accounts that allow it is an important part of planning. You want to keep checking on those every year. If you have life insurance that you bought for yourself or that you get through work, at the annual review you would look over that document as well to see who the beneficiary is and if you want it to remain the same person. For example, if someone was married and then got divorced, they would want to change their beneficiary designation, or their ex-spouse might want to change the beneficiary designation from the former partner’s name to their child’s name. When you have different life events, the annual review is where you update these different documents and beneficiary designations to align with the changes in your life.
 
Melisa Boutin
After you complete the annual review, you start this process over again. So in July 2027, after Zoe completes her annual review, she creates another set of 12 months of goal-based budgets from July 2027 to July 2028. She checks in on her goals again. If she met her emergency fund savings goal at the end of 12 months in 2027 and was able to get to the $2,400 mark, she can reevaluate for the next 12 months. She might want to use that same $200 she was saving for her emergency fund to increase it to $4,800, or she might want to increase her investing instead. She could shift that $200 to another goal or towards something else that she wants. That covers the routines.
 
Melisa Boutin
Now I’m going to share how this money plan helped me, why it was effective for me, and how it can be effective for you to reach your financial goals. At the beginning, I shared that my top priority was my student loan debt because it was a lot of money owed. I felt like it was hanging over my head. Even though I could pay the monthly payment scheduled over the ten-year plan set up for the loan, I didn’t want to have to pay the student loan for ten years. One of the reasons for that was a high interest rate—a 9% interest rate on a $100,000 loan means that if I follow the ten-year repayment plan, I’m paying a lot of interest over that time. One of the things I recognized is that paying off high-interest debt—whether it is 9%, 10%, 12%, or 15%—with extra payments saves you massive interest over time. It’s like giving yourself a guaranteed return on those extra payments equal to the interest rate of the loan. Stated a different way, when I’m looking at my goals, I do want to save money and I do want to invest. But when I’m saving in a regular savings account, I may only be getting 2% interest. If I save in a certificate of deposit, an accumulator, or a multiplier account—those accounts that give you higher interest—I may be getting 3.5% or 4% interest on those savings. But while I’m gaining 4%, I’m paying 9% on $100,000. Even if I save $10,000 at 3% interest, the dollar amount I gain is much lower than the 9% interest on $100,000 that I have to pay. That’s why making extra payments on your debt falls under the saving and investment category of your goal-based budget. This doesn’t mean that you don’t save, because before you get aggressive with any debt, you should have your emergency fund. You can still set up your monthly savings towards different goals.
 
Melisa Boutin
In my case, even though my student loan debt was the main financial goal to pay off early to save on all that interest, I still had the goal to invest and save for a house. So, I prioritized. If I know I’m going to save $500 a month towards my home downpayment and I have room for another $200, instead of making that total $700 go to the home downpayment savings account, I put the extra $200 toward the student loan. I still saved, but I made an extra effort to make additional payments on the student loan at the same time. And what were the results for me? By working towards these main goals while paying my regular expenses and prioritizing my student loan payoff, saving for a home, and investing, I was able to go from being $200,000 in debt to having $200,000 in assets over five years.
 
Melisa Boutin
The first step was deciding what my goals were: paying off debt, saving for a home, and investing a percentage of every paycheck toward retirement. I made a 12-month projection of what that budget would be. At the top of each month, after my income, I noted the amount of extra payment going toward my student loan and the amount going to my home downpayment savings. I also set up a salary deduction to save 7% of my income towards retirement. For 12 months, I made sure those top priorities were built-in, followed by my needs like rent, transportation, vehicle expenses, and the regular monthly payments for the student loan. After my regular expenses, I factored in my wants, like going out and traveling. I set that up over 12 months and did my monthly and quarterly reviews to track my progress and look at my statements. When I had insurance through my employer, I looked at those beneficiary designations. By implementing all these routines that we went over, it kept me very focused on my goals. Did I have setbacks? Yes. Were there some months that I wasn’t able to pay extra on the student loan? Yes. But for five years, following this plan where I identified my goals and made them a priority in my goal-based budget kept me moving forward. I laid out my budget for 12 months, and every month I looked at what my actual spending was. It helped me keep in mind what I said my priorities were. Yes, I have to pay my expenses and have some money for fun sometimes, but my primary goals for the money I worked for were those three. Every month I checked in to see if I put my money towards the priorities that I said were important to me.
 
Melisa Boutin
The thing that happens when you put this system into place—especially with laying out the plan and checking in at these intervals like the payday routine, your monthly routine, your quarterly review, and your annual review—is that because you have written down what your goals are, it keeps you motivated even when setbacks happen. When you are working towards big goals, whether it is paying off $100,000 or $10,000, each of us determines what a big goal is for ourselves. It might take more than a year, two years, or three years to achieve. When you’re checking in on your finances during these reviews, it might tell you that you need to get a second job, pick up overtime, or allocate extra money when you have a bonus or a windfall coming in. You will know exactly where to put that extra cash to fuel your goals. It was not always my regular income alone that was funding my goals. I was in the U.S. at the time, and when I got a tax return of something like $2,000, I didn’t just spend it all at once. I might say, “I’m going to take $500 from it to go on a trip that I wasn’t able to take because I was so focused on these goals,” but most of that extra tax return money went straight toward the goals I already identified. When I got a raise, I increased how much I put towards a goal. If my raise was an extra $3,000 a year, I didn’t go out and get a new car or a new car payment; I kept my old car, and that $3,000 was split between the three goals I identified.
 
Question 1
I have a question from the audience. “I don’t know if I missed this, but for me, I have more than one goal. While I can save—saving is not the problem—I have multiple goals. Should I open more than one savings account? Let’s say for retirement and for the home downpayment, should I have a separate account for each goal?” The answer is yes, but your first goal should always be to have an emergency fund, even if it’s $1,000, $2,000, or $500. That is an account you should have dedicated first. When you don’t have an emergency fund that you know you can turn to when unexpected things pop up, you are always going to end up dipping into the savings that you have dedicated to something else. If you’re saving for a home downpayment but you don’t have an emergency fund, when an emergency comes up, you’re going to dip into that house money.
 
Answer 1
To answer your question: yes, you should have different accounts, and one of those accounts must be an emergency fund where you have at least $500 to $1,000, with separate accounts for your other goals. Now, if you are just getting started on a new savings goal, you don’t need to open multiple accounts all at one time. But if you have three savings goals and you are already actively saving towards them, then yes, you should have three separate accounts.
 
Question 2
“Very wonderful presentation, by the way. Let me start off by saying that. Now, I have two questions, and they stem from retirement. When one is working, what would you say is a good percentage from the salary that one should put aside for retirement? Of course, we know no one size fits all, but what would you say is a good benchmark based on your experience? That’s number one. Number two: what financial institution or what kind of savings account should we look for to put that retirement money into?”
 
Answer 2
To recap the questions: what percentage of your income should you be saving towards retirement as a good rule of thumb, and what type of accounts should you look to put those retirement savings into? A general rule of thumb is to put 10% of your paycheck toward investing for retirement. However, if you’re not saving for retirement currently or you don’t have a lot of room in your budget, start with 1% of your income and increase it every month, every three months, or every six months—whatever interval is comfortable or doable for you. Start with 1% and increase it until you get to 10%. Another hack when it comes to saving for retirement is that if you start out with 1% or 2% of your income, every time you get a raise, you increase your savings percentage by the amount of that raise. You are basically taking that lifestyle increase and putting it straight toward your retirement. That’s another way that people build up to 10%—by starting with a lower amount, but then every time they get a raise, change jobs, or increase their income, they take some of that increase and allocate it to retirement. Start where you can, whether it’s 1% or 3%, and then as you’re going through these routines like we talked about, you set out your plan. If you set that goal at 3%, every month you’re going to be checking and making sure that 3% has been taken out of your income towards that retirement goal. In your quarterly reviews, you’re going to see the actual total that went to retirement over the past three months, and you may see areas where you can increase the goal you’re working towards.
 
Now, when it comes to where to invest, the highest interest I’ve seen locally in regular savings accounts is maybe 4% interest, which is a start. But when you’re growing your money for retirement, you want to be invested in a diversified group of investments—not just local Eastern Caribbean securities, but global securities, meaning U.S. securities. Some employers have a pension provider that is managing the pension for the employees. Those pension plans provide a system that benefits the employees using the money that the employer puts in, and if they allow the employees to also contribute, the provider is actually investing that money into stocks and bonds. Even the Eastern Caribbean Central Bank invests money in U.S. stocks and bonds, and if you listen to some of their reports or presentations, they talk about how much income the Central Bank gets from its investments in the U.S. stock market. Even insurance companies that take your premiums for auto insurance, house insurance, or life insurance invest those premiums to grow them through investing, allowing them to cover claims and still have money left over for profits. I’m saying that to highlight that the key to growing money for your retirement is investing that money into stocks and bonds from licensed providers. That means they are licensed by the Eastern Caribbean Securities Regulatory Commission for you to invest through their brokerage. You don’t want to just go to random people who say, “Oh, you can do an investment here or there.” You go with a regulated broker who can guide you on the investments you can make for retirement and give you the access to take your savings out of regular bank accounts—where you might get a maximum of 4%—and move them into investments that could give you a higher return, say 7%, over the long run.
 
The key about investing for retirement is consistently putting in money. It’s not about putting in $10,000 for retirement once and being done. You put in a percentage of your income every single time you get paid, with no breaks. Please note, this is general investment education, not personalized investment advice. The 10% figure assumes that you are contributing every time you get paid into a retirement account of stocks and bonds over the long run—meaning 10 years, 15 years, or 20 years—so it can grow. A major part of how I was able to go from negative $200,000 in debt to having $200,000 in assets was consistent investing. It wasn’t that I put in $1,000 and it magically grew to $10,000 on its own; it came from investing from my paycheck every time I got paid, and increasing the amount going towards those stocks and bonds whenever I got a raise. Keeping it invested allows compound interest to work, putting interest on top of interest. Putting a percentage of your income away every month or adding extra money over time is how you grow wealth for retirement. Licensed brokers in our region within the Eastern Caribbean Currency Union would be able to tell you additional options and help you get started.
 
Question 3
All right. Michelle mentioned that it’s very hard when you don’t have enough actual income and only have one income stream, asking if you have to start reducing expenses first. You really have to look at both reducing expenses and increasing your income. If you only have one income and that income is already not enough to cover your regular bills, let alone saving, cutting expenses is a good place to start, but you ultimately have to find ways to increase your income. You may not have total control over increasing your income in a massive way all at once, but you have to figure out a strategy. Whether that is getting a part-time job or looking at the skills you have to see if there’s a service or product you can sell—like babysitting or tutoring—increasing revenue is key. If you have debt, it could also mean seeing if your lender can extend your payments over a longer period of time to reduce your monthly payment, which effectively increases how much money you have left over in your budget each month alongside your efforts to increase your income.
 
End
This transcript was computer generated and edited for grammar and clarity.