Murphy’s Fund: The First Step to Financial Stability

Achieve Your First $1,000: Behavioral Finance Tips with Dr. Bryan Foltice

Welcome to the first episode of the Bryan Foltice Behavioral Finance Podcast! Dr. Bryan Foltice dives into the world of behavioral finance and personal milestones, focusing on how to save your first $1,000. Whether you're starting from zero or already have some savings, this episode is packed with actionable strategies to help you achieve this initial goal. Dr. Foltice also introduces the 'Money Strong' program and the importance of having a financial cushion to mitigate unforeseen expenses. Tune in for practical tips on cutting expenses, boosting income, and setting up effective savings plans.

00:00 Introduction to the Podcast
00:24 The Importance of Saving Your First $1000
03:09 Understanding the Murphy Fund
07:17 Practical Tips for Saving $1000
12:34 Where to Keep Your Savings
15:29 Conclusion and Next Steps

Transcript

0:04

Welcome to the Brian Foltis Behavioral Finance Podcast, where we unravel the mysteries of behavioral finance and unlock the secrets to making smarter, more informed decisions with your money. Now here's your host, Dr. Brian Foltis. Hello everybody and welcome to the Brian Foltis Behavioral Finance Podcast. Today, we are going to talk about one of our biggest financial milestones also one of the first small milestones. This is saving our first thousand dollars and that's what we're going to be talking about today. So whether or not you have that amount saved or you are working from building from zero up to that first thousand dollars, I think there's in it something in it. This episode for you. And so what we're going to try to do here is this is our very first step of our money strong program and what I'm aiming to do this year with this podcast. And you're starting to see some of the topics where we're flowing from behavioral finance. And that's what I like to talk about. That's what I like to teach. But I also like to talk about personal finance and help tie behavioral concepts into making better financial decisions in order to live a richer life. And that's where we're going to be bouncing back and forth between losers curse and winners curse and saving your first thousand dollars with the super bowl effect. And so just to give you a pattern on how this is looking, but today. Trying to get that first thousand dollars is the first step whether you are Trying to get out of debt or whether you are debt free this first little milestone of the first thousand dollars is going to be relevant and important to you and we have We always think that a thousand dollars, some of us go, Oh that's too easy or way beyond that. Others of us go, that sounds really impossible. I don't even know how to start. And that's where we go, man, just if we could all get to that first thousand, then let's move on from there. And we've talked about people who see some of the headlines saying I need 2. 8 million dollars in order to retire comfortably. I can't even save a dollar. And so quickly that thought process leads to inaction. I'm just going to continue to do what I'm doing and never leads to any improvement. And in our Money strong program that will be rolling out soon We are have all of the videos ready and I am constructing it online This will be a thing here in the next month or two that will be rolling out really excited Anyway in this money strong program when we're trying to prioritize some of our savings goals. We see We have it, it's called the Murphy Fund. Murphy's Law, anything bad that can happen, will happen. When you are financially in dire straits, living paycheck to paycheck, Murphy comes in and starts popping some of your tires on your car. And, or Murphy's Law will have a sick child needing to go to the urgent care room. And, these are the things that If you don't have money set aside, can send you into credit card debt, paying high interest on that. Sometimes a payday loan. This is where we start getting into trouble with our money, taking it backwards with some of these it's essentially just Murphy. Murphy doesn't interfere. We know how much we're going to pay on groceries and different in different bills. We know what our rent is. Murphy's likes to step in at those inopportune times when somebody gets sick or the heater goes out, something like that. And that's why we say, let's just try to figure out a way to set aside. 500 to 1, 000 and just get that first 1, 000 out of under your belt. So we have this little cushion that time comes, we can withdraw that money. Let it pay for that urgent care or for the new brakes on your car and then Replentish that and now we have that little bit of buffer that gives us just a first whiff of freedom that we can have with our money and So we have this it's just a little safety net that we would have set aside when that first thousand dollar comes There's also a mental aspect around that first thousand dollars, which can give us this small sense of confidence that we can move our money forward and have money set aside at the end of the day, week, or month. And that builds that confidence going, okay, now at least the ball is moving in the right direction and we're able to save a little bit. And I'm starting to get this feeling of. Oh there's still money left over. I have this money still set aside if I ever need it. There's a lot of confidence. There's a lot of boost of in mental health that goes around that. And again, it's prevents you from going into debt. turning to the wrong people or the wrong sources to get you out of this situation when Murphy's Law comes around. Furthermore, you, if you save just a thousand dollars and have that set aside in the U. S., do you know that you have set yourself apart from over half of U. S. households. The ability to just have that 1, 000 puts you ahead of over half of U. S. households. Now, that's a very scary statement to say, but it is true. And we've checked a lot of different sources to see what the numbers are, because I always think, surely, they must just have a really small sample bias that is causing these percentages to be really high. But the more sources I keep checking the percentage of households in the United States living paycheck to paycheck, unable to come up with a 400, 500, thousand dollar emergency range from 54 percent to 78 percent based off of the survey being taken just by having that thousand dollars set aside, puts you in the minority of us households and starts you on your path to being different than everybody else. With their money. Cause after all, if everybody else is broke we're going to be different. I'm totally okay with being different from that standpoint. So trying to come up with ideas to save a thousand dollars. If we're breaking this down, you can set out a timetable just like we would for longer term. But if you want to set 100 for 10 months, you can set out that monthly plan. First 100, when I get a paycheck, it's going to go to a separate account. And we're going to talk about Why that separate account is going to be helpful. So that basically removes the temptation or the fact that the idea that it's all together and it's still there, just creating that one additional step of separation. And we do this in our lives. If you think about this and it's very effective, if you have a bunch of shit in your. and you want to eat better, get the shit out of your pantry and start having better options in front of you. You don't want to drink alcohol, don't keep the alcohol in your house to be there for you. Same thing with our money, sometimes just setting it into a different account gives us enough separation where we're not tempted to, to use that. So same thing here we're going to first set a clear goal and timeline. Then if you want to do. 10 a day for a hundred days. And there's a number of different ways you can allocate that and think about what you can do to carve out that 10 a day or 20 a week. There's a lot of ways to do that. If you can try to automate it. And this kind of goes to paying yourself first, making sure you take that money out first, not wait until the end to see if you have anything left over and paying yourself first gets that money. Out of your way, this is an out of sight, out of mind kind of thing, and it just has it separated. Now, if you're really trying to look at some of the, how am I going to get to that 20 a week, 10 a day, there's some real easy cuts that you can make if we're looking at Eating out less one less DoorDash. You know what that would do in my life, about per week? That would save quite a lot of money. And even if that's just once or twice a month, that could easily, quickly get me to that thousand dollars saved. Take a look at your subscriptions. There's a lot of different apps out there that can help you realize that you have two Spotify subscriptions that you're paying. 16 for each month or some of the other subscriptions that you're paying for that you haven't used in a number of months. This just lays it all out and just get rid of them. A lot of these now here in 2025, you can. subscribe back again fairly easily. So they're starting to make the barrier hurdle to get in and out of these subscriptions a little bit easier. So try to lean into that and definitely take a look at some of those subscriptions that you're not using. You'll get there pretty quickly. And then if you are an online shopper like I am, then 24 hour rule or. Sleep on it before you buy and put it in your cart. But before you pull the trigger on that, just make sure you sleep on it and ask yourself if. You still really need it still really want it or if that was just a an emotional decision either way we can do all these little things just to get ourselves to that 1, 000 and we're not trying to deprive ourselves or starve ourselves in any way We're just making a little cut to make things more efficient but then at the same time have that first thousand dollars and quickly realize that wasn't that bad and so We talk about, there's two ways to increase your savings. And I have my PhD in finance and I've thought about all the different ways. And it really simply comes down to two ways. You can cut expenses or the other part is increase your income, even if it's slightly. So this is where we can sell stuff on Facebook marketplace, on eBay, do it safely. But. Sell your stuff that you don't use. This is where side hustles can come into play and we're going to talk later in a future episode about gig economy and side hustles, where do they fit in and how does that fit into what I am perceiving as a rich life and we're going to learn later that. There's a season in your life for side hustles when you're trying to get out of debt and when you're working on building that first amount and then there's a time to really enjoy the fruits of your labor where you don't need to be working all those hours in order to continue to build your wealth. Now your wealth is working for you. So we'll talk about that later, but man, if we're trying to get that first thousand, that first three to six months, we'll talk about here in a little bit. Side hustles will propel you. They will expedite that process. And let's see, what else? Next, if we get that thousand dollars, or when we have this, where we put this is going to be important. I mentioned this before. But if we keep it all together in our checking account, it's just like having terrible food in your house when you're on a diet or if you're cutting back on alcohol to have that sitting there every day, we're just going to put it a step away and that usually means we're going to try to find either a high yield savings account to put this in or we're going to find a money market account to put this in and you can go to any Thank you so discount brokerage firm that Fidelity or Vanguard There's a number of other ones that will let you open up a brokerage account for free and they have money markets So you just send it over it sits in your money market won't Lose any money and that in theory is not supposed to lose any money and it will earn about four point five percent Or four five at this point Each month it'll accrue So it'll start earning money. So you'll actually get a taste of what that feels like. And knowing that not lifting a finger is going to earn you 40 or 50 a year from just letting it sit there. And once again, That's going to be your best way, the high yield savings account or your money market account, just to have that cash set aside. And when I say cash, it's not actual cash, because if we have actual cash, it's going to be tempting to use. And it also will not grow in value. If we hold the actual. And that's where we want. That's what takes us right back to that brokerage money market account, high yield savings account. And then what happens once you get past that thousand dollars and you start looking into other areas of future growth, you already have that account set up and it's going to serve you well to do that first step. And now you're set. We've already done the automatic settings. And now it's just gonna the system is going to start working in your favor, and we are going to For this particular one. This is not your investment account So this is not the thousand dollars that you are going to put into penny stocks or even into the stock market This is just going to remain solid. We don't need to see it going up and down at this point. This is just your it's there as a cushion. It's there to provide you some confidence and some flexibility. And we will talk about investing afterwards because now once we have that thousand dollars, we need to determine a, if we have debt. How are we going to start attacking that after we have that thousand dollars set aside? Or, if we don't have any debt, what is the next step of our savings goals? And so that's what we'll talk about next time when we come back. And we'll talk about if you're getting out of debt, where to go. And when you're out of debt, what's the next step? And that talks about, we don't call it an emergency fund, that sounds too negative. It's called a flexibility fund. So we'll talk about that later. If you have any questions or want to contact me, please don't hesitate to reach out. I would love to hear from you. What is your biggest challenge when it comes to saving? If it's that first thousand dollars, please let me know. DM me on Instagram or you can find me on Yahoo or YouTube or any of the podcast platforms that you'll find me on if you are there and have something nice to say Thank you very much This helps grow the audience and any good feedback that I get from you definitely assists in expanding This platform here. So please let me know if this is helpful for you, send it to a friend. If you think it's going to be helpful for them, I would love to see this number of 54 to 78 percent of people with a thousand dollars saved decrease on my watch. So hope you have a wonderful day. Thanks for listening and we'll see you on the next episode. Thank you for tuning in to another episode of the Brian Foltis behavioral finance podcast. We hope you found our exploration into the fascinating world of human behavior and finance, both enlightening and thought provoking. Be sure to subscribe for future episodes. And until next time, stay curious and financially savvy.