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Struggling to save money and manage your finances? If the answer is yes, TikToker Seema Sheth’s “30-day financial cleanse” may help you.
In 2023, the vlogger and Federal Reserve Bank employee introduced 30 daily video clips lasting no more than a few minutes each via her TikTok channel @bobeema. The objective was to offer easy-to-understand, engaging advice on how to “live in harmony with your money.”
Keen to learn more? Here are the main tips she provided.
Key Takeaways
- TikToker Seema Sheth says abiding by the 50/30/20 rule is the best way to approach your finances.
- That means spending a maximum of 50% of earnings on non-negotiable expenses, 30% on things you want, and saving the remaining 20%.
- Achieving that goal requires being familiar with all the money coming in and out of your accounts, minimizing non-essential expenses and/or increasing income, and not paying for everything with credit cards.
- Building an emergency fund, automating payments, and identifying how much to put aside each month to achieve objectives also improve financial well-being.
Categorize Expenses
To maximize your finances, you first need to identify all your income and expenses. Sheth recommends breaking expenses into three categories (fixed, variable, and discretionary), writing them down, and comparing them to your income. The target, she says, is to spend 50% of earnings on fixed, non-negotiable expenses, 30% on wants, and save the remaining 20%.
Minimize Costs
Saving 20%, which includes contributions to a 401(k) or other retirement account, may require serious spending cuts. Tips to cut non-essential expenses include assessing each one and asking yourself if you can live really without it; expressing its cost as a percentage of your monthly spending allowance, which helps demonstrate how much it eats into your finances; and shopping for better deals. Sheth says housing costs should not exceed 30% of your income.
Pay Off Debt
Sheth recommends taking on as little debt as possible and not taking for granted you will have more money in the future. In terms of current debt, she urges people to prioritize paying back the more expensive ones first. She’s also a fan of automating repayments, as well as keeping bills in a folder and choosing a day each month to address them.
Emergency Funds
Sheth says you should automatically put aside three to six months’ worth of living costs just in case things go sideways. The exact amount you choose depends on personal circumstances, such as whether you have dependents and other incomes in the household.
Goals into Timeframes
Once you’ve paid off debt, minimized expenses, and filled your emergency fund, it’s time to pursue that 20% savings target. Sheth recommends writing down your goals, such as a down payment for a home or vacation, separating them into four separate timeframes (one to two years, within the next five years, in 10 years, and 20 years plus) and then dividing each of their estimated costs by the number of months the goal needs to be achieved by.
This makes it possible to identify how much you need to allocate to each saving objective each month and whether to put the money in an easy-access savings account or invest it in stocks.
Other Tips
Other tips offered by Sheth:
- Familiarize yourself with how to get a better credit score
- Ask a good friend to track your progress at reaching your financial goals
- Create a will to ensure that your assets go where you want them if you die
- For couples, open separate bank accounts
- To make more money, ask for a raise, change your job, get a side hustle, or sell things
The Bottom Line
TikTok is full of tips from so-called experts about how to become wealthier and live a better life. Not all of them are useful or even practical. But Seema Sheth’s “30-day financial cleanse” is an exception.
In a series of short and easy-to-understand videos, Sheth explains simple strategies to reduce unnecessary spending and make important financial goals achievable. Most of what she says isn’t groundbreaking. However, it’s well-presented and engaging, which are characteristics financial education often lacks.
