The Personal Finance Cookbook

NICK MEYER is a Certified Financial Planner™ certificant and the most followed Certified Financial Planner™ certificant on social media with 1.6 million+ followers across platforms. He’s on a mission to increase financial literacy by making personal finance fun and engaging. He has over one million followers across a variety of social platforms and has appeared on NBC, CBS, Yahoo! Finance, and Bloomberg.

About the Author xi

Introduction xiii

Chapter 1: The Basics 1

1.1 How to Open a Checking Account 1

1.2 How to Open a High-Yield Savings Account 3

1.3 How to Build an Emergency Fund 5

1.4 How to Build a Bulletproof Budget 7

1.5 How to Calculate Your Net Worth 10

1.6 How to Calculate Your Financial Independence “Number” 12

1.7 How to Choose a Savings Rate Based on When You Want to Retire 15

Chapter 2: Investing in the Stock Market 19

2.1 How to Open a Brokerage Account 19

2.2 How to Open Roth and Traditional IRAs 23

2.3 How to Open a 401(k) 27

2.4 How to Change Brokers 29

2.5 How to Choose What to Invest In 32

2.6 How to Buy Your First Stock 36

2.7 How to Invest as a Kid (or for Your Kids) 39

Chapter 3: Credit 43

3.1 How to Decide When to Use a Debit Card vs a Credit Card 43

3.2 How to Open Your First Credit Card 47

3.3 How to Open Your Next Credit Card 51

3.4 How to Build Your Credit Score 54

3.5 How to Build Your Kid’s Credit Score Before They Can Even Walk 56

3.6 Travel Hacking: How to Use Credit Card Rewards to Travel for Free (or at a Steep Discount) 59

Chapter 4: Debt 65

4.1 How to Differentiate Between “Good” and “Bad” Debt 65

4.2 The Debt Snowball Method: The Best Way (Behaviorally) to Pay Off Debt 68

4.3 The Debt Avalanche Method: The Best Way (Logically) to Pay Off Debt 71

4.4 How to Lower Your Interest Rate by Consolidating Debt 74

4.5 How to Qualify for a Debt Management Plan 76

Chapter 5: Big Purchases 79

5.1 How to Not Get Scr*wed When Buying a Car 79

5.2 How to Decide Between Leasing and Buying a Car 82

5.3 How to Ensure Your Wedding Doesn’t Set You Back Years Financially 85

5.4 Pets: How Much They Cost and How to Save Money on Common Expenses 87

Chapter 6: College 91

6.1 How to Save Money on College While You’re Still in High School 91

6.2 How to Apply for Grants 95

6.3 How to Apply for Scholarships 98

6.4 How to Make College a Good Investment 101

6.5 How to Use a 529 Plan to Save for Your Kid’s College 105

6.6 How to Pay Off Your Student Loans 108

Chapter 7: Housing 113

7.1 Is It Better for You to Rent or Buy a House? 113

7.2 How to Tell If Rent/Your Mortgage Payment Is Too Expensive for Your Income Level 116

7.3 How to Buy Your First House 118

7.4 How to Decide Between a 15-Year vs 30-Year Mortgage 121

7.5 How to Reduce Your Living Expenses by House Hacking 123

Chapter 8: How to Make More Money 129

8.1 How to Negotiate Your Starting Salary and Signing Bonus 129

8.2 How to Ask for a Raise 133

8.3 How to Maximize Your Employee Benefits 135

8.4 How to Raise Your Salary by Job-Hopping without Ruining Your Reputation 139

8.5 How to Start a Side Hustle 142

Chapter 9: Taxes 149

9.1 How to Pay Taxes If You Have a Normal Job 149

9.2 How to Pay Taxes as a Business Owner, Independent Contractor, or Freelancer 154

9.3 How Investments Are Taxed 160

9.4 How Tax Extensions Work and How to File Them 164

9.5 How Amended Tax Returns Work and How to File Them 168

Chapter 10: Retirement 173

10.1 How to Begin Drawing Your Social Security Benefits 173

10.2 How and When You’re Required to Draw from Your Retirement Accounts 176

10.3 How to Determine How Much You Should Spend Each Year in Retirement 180

10.4 How to Roll Over Old 401(k)s to an IRA 183

Chapter 11: Charitable Giving 187

11.1 How to Report Charitable Donations on Your Tax Return 187

11.2 How to Open a Donor-Advised Fund for Tax-Advantaged Giving 190

Chapter 12: Insurance 197

12.1 How to Use an HSA as an Extra Retirement Account 197

12.2 How to Obtain Health Insurance When It Isn’t Provided by Your Employer (When Turning 26) 201

12.3 How to Use an HSA as an Extra Retirement Account 205

12.4 How to Obtain Homeowner’s Insurance 210

12.5 How to Obtain Renter’s Insurance 213

12.6 How to Obtain and Save Money on Car Insurance 216

12.7 How to Determine When You Need Life Insurance 221

Chapter 13: Passive Income 225

13.1 Why Passive Income Is the Best Form of Income 225

13.2 How to Earn Passive Income from the Stock Market 227

13.3 How to Earn Passive Income from Real Estate Investing 231

13.4 How to Earn Passive Income from Digital Products 236

13.5 How to Earn Passive Income from Affiliate Marketing 240

Index 245