Money Honey: 7 Strategies for Your Finances
Discover Rachel Richards' proven 7-step guide to mastering your money, building wealth, and achieving financial freedom at any age.
The Author of ‘Money Honey’ Shares 7 Strategies for Your Finances
Rachel Richards, a 27-year-old senior financial analyst, has achieved what many dream of: paying for college with scholarships and cash, saving 50% of her income, living virtually debt-free, vacationing annually, and owning over 30 rental properties for passive income. Her book, Money Honey: A Simple 7-Step Guide for Getting Your Financial $hit Together, distills these successes into an accessible guide for millennials struggling with financial literacy.
“Adulting is hard,” Richards writes, but her approach makes finances approachable and even fun. Drawing from personal experience and conversations with young people, she addresses the disconnect between generations on money matters. This article breaks down her philosophy and the seven core strategies to help you take control of your finances.
The ‘Money Honey’ Approach to Personal Finance
Rachel Richards’ financial journey began with a pivotal book that revealed ‘a big secret’ to wealth-building. Applying those lessons, she created Money Honey to empower others. Unlike rigid financial advice, her method is flexible, rejecting one-size-fits-all rules like a fixed savings percentage.
She emphasizes: TL;DR There is no hard and fast savings-percentage rule, because each situation is different. You must save a significant portion of your income. Ten percent won’t get you anywhere. Up your savings game by increasing your income or decreasing your expenses. Richards advocates smart credit card use for rewards—like free flights—provided you pay off balances monthly to avoid debt traps.
Challenging conventional wisdom, she insists on never pausing retirement contributions, even with debt. “It comes down to the time value of money,” she explains. “$1,000 invested today is worth so much more than next year over 30 years”. Her modifiable blueprint tailors to individual needs, prioritizing living within your means as the foundation: “If you are spending more than you are making, you will never be financially independent”.
7 Strategies to Help You Get Your Finances Together
Richards’ book culminates in seven actionable strategies. These steps move you from learning to doing, covering goals, savings, debt, and reviews. Here’s how to implement them:
- Determine your goals. Paying off debt? Six months’ expenses in savings? Define priorities to craft a plan.
- Grow your “golden number.” Calculate after-tax monthly income minus expenses. The remainder is your golden number—maximize it for progress.
- Fill up Savings Bucket No. 1. Start with an emergency fund. Aim for $1,000 first in this short-term bucket.
- Fill up Savings Bucket No. 2. Medium-term savings for vacations or big purchases within a year.
- Fill up Savings Bucket No. 3. Long-term savings for expenses beyond one year but pre-retirement, like roof repairs or trips in 2-5 years.
- Determine your minimum contribution to Savings Bucket No. 4. Retirement fund—contribute consistently for compound growth.
- Prioritize and achieve your goals. Tackle highest interest rates first, whether debt payoff or high-yield savings.
- Complete your annual review. Assess progress, adjust what works, and refine your plan.
These buckets create a structured yet adaptable system. Emergency first, then layer in other goals while automating retirement savings.
Understanding the Savings Buckets in Depth
Richards’ four savings buckets prevent common pitfalls like dipping into retirement for emergencies. Bucket 1: Emergencies covers unexpected costs—car repairs, medical bills. Build to 3-6 months’ expenses eventually, but $1,000 kickstarts it.
Bucket 2: Medium-term funds planned spends within 12 months, avoiding credit card debt for that dream vacation. Bucket 3: Long-term handles 1-10 year horizons, like home improvements. Bucket 4: Retirement leverages time—never skip contributions.
This system promotes discipline. For example, allocate your golden number: 50% to Bucket 1 until full, then distribute across others based on goals.
Maximizing Your Golden Number
Your golden number is the engine. Track every dollar: income – expenses = surplus. To grow it:
- Increase income: Side hustles, raises, rentals like Richards’ 30 properties.
- Cut expenses: Audit subscriptions, negotiate bills, cook at home.
- Automate: Direct deposit splits paychecks into buckets.
Aim high—Richards saves 50%. Even 20-30% accelerates freedom.
Smart Debt and Credit Strategies
Richards doesn’t demonize debt or credit cards. Pay high-interest debt aggressively (Bucket prioritization), but use 0% balance transfers or rewards cards wisely. Always pay in full monthly. Continue retirement savings—compound interest outweighs short-term debt focus.
| Debt Type | Strategy | Priority |
|---|---|---|
| Credit Card (20% APR) | Payoff avalanche | High |
| Student Loan (5% APR) | Minimum + extra | Medium |
| Mortgage (3.5% APR) | Invest surplus | Low |
Compare rates to savings/investment returns; prioritize accordingly.
Building Passive Income Like Rachel
Richards’ 30 rentals exemplify scaling. Start small: high-yield savings, then index funds, real estate. Her book details tax-advantaged investing and scaling income streams for FI (financial independence).
Tools to Support Your Money Honey Journey
Enhance strategies with apps. Rocket Money tracks spending, subscriptions, and negotiates bills—ideal for golden number growth. Offers envelope, zero-based, 50/30/20 methods. Honeydue suits couples for joint accountability.
- Rocket Money: Custom budgets, savings goals ($0-$12/mo).
- Buddy: Manual entry, shareable ($0-$9.99/mo).
- YNAB (You Need A Budget): Detailed zero-based budgeting.
Frequently Asked Questions (FAQs)
What is the Money Honey approach?
A flexible 7-step plan emphasizing high savings rates, savings buckets, and living within means for financial independence.
How do I calculate my golden number?
After-tax monthly income minus essential expenses. Maximize by boosting income/cutting costs.
Should I stop retirement savings to pay debt?
No—time value of money makes ongoing contributions essential, even with debt.
What are the four savings buckets?
1. Emergencies, 2. Medium-term (1 year), 3. Long-term (1-10 years), 4. Retirement.
Can credit cards help build wealth?
Yes, if paid in full monthly for rewards; avoid carrying balances.
How often should I review my finances?
Annually, plus monthly checks to adjust goals and track progress.
Start Today: Your Path to Financial Freedom
Richards proves it’s possible young: scholarships funded college, aggressive saving built empire. Tailor these strategies—define goals, fill buckets, review yearly. Live within means, and financial independence follows.
References
- The Author of ‘Money Honey’ Shares 7 Strategies for Your Finances — The Penny Hoarder. 2019-approx. https://www.thepennyhoarder.com/budgeting/money-honey/
- The 5 Best Budgeting Apps to Get Your Finances Together — Money Talks News (orig. The Penny Hoarder). 2023-approx. https://www.moneytalksnews.com/slideshows/the-5-best-budgeting-apps-to-get-your-finances-together/
- Best Personal Finance Tools for 2025 — Purdue University Global. 2025-01-01. https://www.purdueglobal.edu/blog/student-life/budgeting-apps-personal-finance-tools/
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