Upgrade These 10 Things Immediately Once You Make Real Money, According To Humphrey Yang
Written by
Rebekah Evans
Edited by
Amen Oyiboke
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Around 67% of Americans are living paycheck to paycheck, according to a recent financial wellness report. When you’re struggling with cash flow, it’s sometimes hard to think about a time when you can actually start spending. Even when you get to a point where you’re no longer fretting over every dollar, you might still hesitate to spend money when you could’ve otherwise saved.
But in Humphrey Yang’s new YouTube video, he brings up 10 things you can (and should) upgrade as soon as you start making real money. Here’s what those things are and why they’re worth the expense.
Remember, these upgrades should ideally be made only once you’ve also gotten a handle on your savings and investments.
Desk Setup
If you work at home, upgrade your desk setup. This could be a standing desk, a second monitor, an ergonomic desk chair or keyboard.
Yang especially suggests the standing desk since they have some proven health benefits. According to Healthline, a standing desk could reduce your blood pressure and blood sugar levels, reduce lower back pain, boost your mood and even lead to great productivity. This can all lead to better overall health.
Want to keep even more active? Consider a treadmill desk that keeps you moving while you work.
ExperiencesÂ
As Yang pointed out, experiences are often more valuable than material goods. Once you have a little extra spending money, why not take a trip somewhere with a loved one?
This could be something as small as an overnight getaway to the beach. Or it could be a cooking class with your college best friend. Choosing something you enjoy can be fulfilling and memorable.
Investments
Ideally, you’ll already be investing at this point. Maybe you’ve got index funds or a 401(k). Or maybe you work for yourself and have an IRA.
Keep investing. But also, consider making a few changes here if it makes sense for your income and goals.
Yang specifically suggested using a backdoor Roth IRA if you already have a Roth IRA but make too much to qualify for contributions. For individuals, the income phase-out range is $165,000 for individuals and $246,000 for couples.
Be careful here, as the backdoor Roth IRA strategy can be tricky. You may want to consult a professional before making any major moves.
Accountant
Yang said getting an accountant, or CPA, can be a smart money move if you’re making over $150,000 or have a complex tax situation (beyond the standard W-2).
A qualified accountant can help with tax structuring. They can find you the most tax breaks (tax credits, deductions, write-offs), get the largest refund and avoid errors. They can also save you the hassle of having to file taxes yourself. This also means less anxiety and more time for you.
Of course, tax software is likely to be cheaper. TurboTax, for example, costs anywhere from $39 to $159 with expert assistance. But if an accountant ends up saving you thousands on your taxes, it’s well worth the price.
Quality Food
As per the Bureau of Labor Statistics’ latest data, the average annual food expenditure is $9,985. That’s $832 a month.
Food is one of the biggest monthly expenses people have. But while it makes sense to stick with cheap options while money’s tight, you might want to loosen the budget strings once you start making more.
Why? As Yang pointed out, quality food may be more expensive, but it tends to be better for you. What you eat can impact your health and your life in a big way. So, don’t be afraid to spend a little more on the things you eat.
Convenience and Services
The average cost of a gym membership ranges from $40 to $70, as reported by GoodRx. The average cost of food delivery is $118 a month, according to Empower.
When you’re living paycheck-to-paycheck, you might be better off skipping these extra services. But when you have some wiggle room, Yang suggested upgrading your life with a few conveniences that make your life easier, like food delivery or housekeeping. In this case, spending a little extra can also free up valuable time.
Health
The CDC estimates that 90% of the U.S.’s annual health care spending (totaling $4.9 trillion) is due to chronic and mental health conditions. You can’t avoid everything that might go wrong with your health, but making a few changes now can help.
Yang suggested upgrading your health, starting with sleep. This might mean getting a better quality bed or pillow, blackout curtains, or even a white noise machine. From there, either join a gym or upgrade your home exercise equipment.
Other ways to upgrade your health include preventative physical therapy and regular check-ups.
Financial Advisor
A financial advisor can help with things like investing, college planning, family planning or other major life decisions. So if you’ve got the money (and especially if your finances are complex), Yang said to consider investing in one. If you’re looking for one to help with your investing decisions, go with a flat-fee fiduciary.
EducationÂ
Education isn’t cheap. The Education Data Initiative estimates the average yearly cost of tuition at a public, four-year university is $9,750. This is for in-state students.
Even if you can’t stomach the cost of a full degree program, Yang said it’s worth investing in skills that can boost your income. Consider professional training, certificates, or bootcamps — anything that makes you more valuable in your industry.
Be sure to consider the cost of the training or course against your anticipated salary increase. If it’s likely to pay for itself within two years, it’s probably worth it.
Hobbies
Spend a little on your hobbies, too. This might mean upgrading your tennis equipment or splurging on a better pair of running shoes. Whatever the case, you’re likely to find yourself more satisfied with your life when you’re investing in something you truly enjoy.
Yang pointed out that hobbies may also turn into something more lucrative down the line. Perhaps that amateur photography skill could develop into a paid freelance position. Or maybe your 2D animations could get you a job at a media company. You don’t have to pursue the hobby in hopes of making more money, but if it happens, you might want to embrace it.
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