The language of finance is intimidating to many, but it doesn’t have to be, says money expert and author Nicole Lapin.
When women ask Nicole Lapin, bestselling author and money expert, for financial advice, she often starts by saying, “a man is not a financial plan.”
Since launching her online financial courses, The Money School and The Boss School, Lapin has helped hundreds of women take control of their financial futures. “It’s about knowing the language of money, which is sometimes the biggest barrier for women,” she said “I think that money is just a language like anything else, we just don’t have a Rosetta Stone for it. My mission is really to empower through breaking down the language in a jargon-free way.”
Lapin was initially intimated by the world of finance. “My boyfriend at high school said he wanted to be a hedge fund manager; I thought he wanted to be in gardening,” she said. “I was so clueless. I hated money, I hated business talk, I was super overwhelmed.” She learned to talk money on her first job out of college as a reporter for First Business Network. “I wanted a job on TV, and they asked me if I knew anything about business news, and I lied,” Lapin said. “I faked it till I made it, until I actually realized that it’s not that complicated.”
The first step to any successful financial plan, Lapin said, is to first think about the life you want to live. “I talk about goal-setting and then reverse-engineering to figure out how to get the money towards the goals,” Lapin said. “When people at events will say to me, ‘Nicole, I want a million dollars,’ I say, ‘What do you want to do with the million dollars?’ First figure out the type of life you want and then figure out how to get the money to live the life you want.”
Knowing your life goals will then help you outline how to finance those goals realistically, Lapin said. “I break down goal setting into the three F’s: family, finance, and fun. They all have to be compatible. In the job space, you can’t be a stay-at-home mom and an on-call emergency room doctor. You can’t be a teacher and have a fun goal of flying around in private jets. Those goals are not compatible.”
Once you’ve outlined your goals, you can make an effective budget. “I break budgets down into the three E’s (can you tell I love alliteration?): essentials, endgame, and extras. Essentials would be about 70 percent of your overall budget: food, housing, transportation. The endgame would be at least 15 percent: your investments, your insurance, your retirement. Then the extra 15 percent is for extras: the lattes, the mani-pedi, anything you want to do for fun.” These extras are important for people to feel rewarded for keeping to their budget, Lapin said. “A financial diet is a lot like a food diet, if you allow yourself small indulgences you won’t end up binging later on.”
As COVID-19 continues to impact the global economy, many Americans are increasingly concerned with their finances. “I think if you were able to get an emergency fund, now is the time to use it,” Lapin said. “It’s raining. So your ‘rainy day’ fund — you should use that right now. Don’t feel guilty about it, that’s what it was intended to do.”
The financial downturn may be particularly worrisome for investors, but Lapin is optimistic that markets will recover, and encourages investors to stay the course. “When it comes to investments, in theory we all know to stay on the rollercoaster. Don’t get off in the middle, that’s not how rollercoasters work,” she said. “This is what markets do. They will come back up.”