Build Your Financial Foundation: Budgeting, Emergency Savings and Getting Out of Debt

HorseGrooms Financial Educator RoseAnne Spallone-Nagle joined the community for the first session of our three-part Build Your Financial Foundation series. RoseAnne brings an unusual combination of experience to these conversations: she works in financial services today, but she started her career in the horse industry as a groom, later working as a trainer, assistant trainer and business owner.

That experience matters.

RoseAnne remembers working her way up in the horse world, paying for her own lessons and not having anyone teach her about money. Looking back, she wishes someone had talked to her as a young groom about the financial basics she now helps other people understand.

That is one of the reasons the Financial Corner exists.

Financial education can sound intimidating, especially if you feel like you are not making enough money to even begin thinking about saving or investing. But this first session was not about complicated investments or becoming wealthy overnight. It was about building the foundation first: a budget, an emergency fund and a plan for dealing with debt.

Start With What You Actually Bring Home

Before you can decide what to do with your money, you need to know how much money you actually have to work with.

That means knowing your net income, not simply your salary or gross income.

Your gross income is what you earn before taxes and other deductions. Your net income is what actually reaches you after those deductions.

For a groom, figuring that out is not always as straightforward as looking at an annual salary.

You may be paid weekly or biweekly. Your income may change depending on the show season. You might receive bonuses or end-of-circuit tips. You may braid, clip, ride, freelance or do other work on the side. Some months may be considerably better than others.

If your income varies, RoseAnne suggested looking at several months rather than relying on one paycheck or one particularly good month. The goal is to get a realistic picture of what is actually coming in.

Then Find Out Where Your Money Is Going

This is the part many of us would rather skip.

Go through your bank accounts and credit card statements and look at what you actually spent.

Not what you think you spend.

What you really spent.

RoseAnne shared that when she went through this process herself, she was shocked by how much she was spending on coffee. The point was not that nobody should buy coffee. The point was that she had discovered an expense that was much larger than she realized and could then decide whether it was important enough to keep.

That is what a budget is supposed to do.

It isn’t there to punish you for buying something you enjoy. It gives you information so that you decide where your money goes instead of wondering where it went.

For grooms, it is especially important to look across different times of the year. Your expenses during a multiple week horse show series like the Winter Equestrian Festival or the Sunshine Tour, for example, may look very different from your expenses at home. You may travel more during one part of the year, drive more during another, or have seasonal income and expenses.

Go back several months if you can. The more realistic the picture, the more useful your budget becomes.

Grooms Already Know How to Budget

RoseAnne made a comparison during the webinar that we particularly liked.

Grooms budget all day long.

You know how much time you have before feeding. You know how long it takes to muck your stalls, tack up, get a horse ready for the ring, wrap, organize equipment and prepare for tomorrow. You constantly decide what needs to happen first and how much time you can give each task.

Budgeting money is not completely different.

You are taking a limited resource and deciding where it needs to go.

The 20/50/30 Framework

Once you know your net income and your expenses, RoseAnne introduced a simple framework for organizing them: 20/50/30.

As a general target:

• 20% goes toward savings, investments and paying down debt.
• 50% goes toward needs, such as housing, groceries, transportation, your phone and insurance.
• 30% goes toward wants, the things you enjoy but could live without.

Importantly, RoseAnne presented these percentages as a framework, not a reason to judge yourself if your finances look nothing like this today. The idea is to see where you are and then determine what changes are realistic for you.

For example, someone bringing home $3,500 per month would have a target of $700 for the 20% category, $1,750 for needs and $1,050 for wants.

But groom finances often require adapting the framework.

Your Grooming Job May Change the Numbers

One of the interesting parts of the live discussion was how different a groom’s budget can look from someone working in a more conventional job.

Perhaps housing comes with your job. Maybe your employer provides a vehicle. Perhaps housing is provided during part of the year but not during another circuit. Some grooms own or rent a home elsewhere while living in employer-provided housing at shows.

And some expenses that might look like “wants” to someone outside the horse industry may be genuine work necessities for you.

Good waterproof clothing, safe footwear and appropriate riding or work clothes can be part of doing your job. A groom traveling extensively may need to budget for trips home to see family. Health insurance can also look completely different depending on where in the world you work.

There is no single groom budget.

The framework has to fit your actual life.

And if your employer provides something expensive, such as housing, that can create an opportunity. Instead of automatically allowing that “saved” money to disappear into other spending, you may be able to give some of it another job, such as building savings.

Give Your Money a Job

One of the strongest ideas from the session was very simple:

Give your money a job.

If money comes into your account without a purpose, it is very easy for it to disappear.

This can be especially relevant for grooms who receive bonuses or tips. A good end-of-circuit tip can feel like extra money. But before spending it, decide what you want that money to accomplish.

That doesn’t mean you can never enjoy it.

You might create your own rule. Save part. Use part for something you enjoy. Put some toward debt. Add some to an emergency fund.

The important part is that you decide before the money disappears.

Your Budget Does Not Have to Be Perfect

A budget is not something you create once and then fail if you don’t follow it perfectly.

Life changes.

Show schedules change. Jobs change. Housing changes. Your truck needs repairs. You travel more. You move. Your income increases or decreases.

RoseAnne recommends reviewing your budget regularly, particularly when you first start. That could be weekly or monthly. Once you understand your spending habits and your life becomes more predictable, you may not need to review it as often.

And if you discover that your budget isn’t working, adjust it.

Changing your budget is not failing at budgeting.

It means you are paying attention.

The Emergency Fund: Your Financial Safety Net

The second major subject of the webinar was one that may be particularly important for grooms: an emergency fund.

For many grooms, employment and housing are closely connected.

Lose the job, and you may lose your income and your home at the same time.

During the webinar, we talked about how quickly that can become real. One groom shared having previously lost groom jobs where she had only a day or a few days to leave employer-provided housing. In a place like Wellington, suddenly needing a hotel or temporary accommodation can become extremely expensive.

An emergency fund gives you options.

It isn’t only there in case you loose your job. Maybe you get injured. Your truck breaks down. You have an unexpected medical expense. Or perhaps the job becomes a situation you genuinely need to leave.

RoseAnne described the emergency fund as something that can help make an unexpected expense an inconvenience instead of a crisis.

For someone whose housing comes with the job, that safety net can mean something even bigger: the ability to leave a bad situation without immediately wondering where you will sleep.

How Much Should Be in Your Emergency Fund?

How Much Should Be in Your Emergency Fund? RoseAnne’s guideline is to work toward at least three months of essential expenses, with six months as an ideal longer-term target.

But the right number depends on your situation.

How stable is your income? Is there another income in your household? How flexible are your expenses? Could you be faced with large unexpected costs? Is your income seasonal? What happens if you get hurt and cannot physically work?

For grooms, RoseAnne suggested leaning toward the higher side when estimating expenses because the profession is physical and income can change with the seasons.

Start by calculating your essential monthly expenses, the things you would still have to pay if your income suddenly stopped. Then multiply that number by the number of months you want your emergency fund to cover.

You do not need to have $8,000 tomorrow. You need somewhere to start.

One Month Is Already an Accomplishment

A three- or six-month emergency fund can sound impossible if you currently have very little saved.

So don’t dismiss the goal because you cannot reach it immediately.

Start with one month. Then two. Then three.

Even $20, $50 or $100 at a time is movement in the right direction. If you receive an unusually good tip or bonus and don’t already have another purpose for it, you may decide to use some or all of it to move closer to your emergency-fund goal.

At three months, RoseAnne explained, you have built a meaningful cushion. From there, you might continue building toward six months or begin dividing your savings between the emergency fund and longer-term goals.

Where Should You Keep an Emergency Fund?

An emergency fund has a very specific job. It needs to be there when there is an emergency.

RoseAnne emphasized that that means three important characteristics: the money should be safe, liquid and accessible.

An emergency fund is different from long-term investing. If the money is invested somewhere that can lose significant value just when you need it, it may not be doing its emergency job. Likewise, money that is locked away and difficult to access may not help when you suddenly need to pay for a hotel, repair your vehicle or cover another immediate expense.

Depending on your situation, that could mean keeping some money somewhere you can access immediately and another portion in an account that may take a few days to transfer.

The important question isn’t only, “Where can my money earn the most?”

For emergency savings, also ask: “How quickly can I get to this money, and will it still be there when I need it?”

Debt: Take the Shame Out of the Conversation

The final part of the webinar focused on debt.

RoseAnne started this section with an important point: having debt is not a character flaw.

Avoiding the numbers because they make you uncomfortable doesn’t make the debt disappear. Understanding what you owe gives you the information you need to make a plan.

For every debt, write down four things:

1. The total balance
2. The interest rate
3. The minimum payment
4. The term, if there is one

Credit cards, car loans, student loans and other debts can work differently, so putting everything in one place allows you to see what is actually costing you the most.

Pay particular attention to promotional credit cards. A 0% introductory rate may eventually change to a much higher interest rate, so you need to understand the terms rather than looking only at today’s rate.

Two Ways to Tackle Debt

RoseAnne discussed two common approaches to tackle debt: the avalanche method and the snowball method.

The Avalanche Method

With the avalanche method, you focus extra payments on the debt with the highest interest rate first while continuing required payments on the others. Mathematically, this generally saves the most in interest.

The Snowball Method

With the snowball method, you start with the smallest balance. Paying one debt off relatively quickly can create a psychological win and motivate you to keep going.

Which is better?

The mathematically cheapest option may be the avalanche method, but RoseAnne made another important point: the method that works is the one you will actually stick with.

If seeing debt disappear keeps you motivated, the snowball approach may work better for you. If you are comfortable waiting longer for that feeling of accomplishment and want to minimize interest, you may prefer the avalanche method.

Minimum Payments Can Be Expensive

One example from the webinar showed why interest rates matter so much.

RoseAnne used a hypothetical $3,000 credit-card balance at 24% interest. In her example, making only the minimum payments took about 56 months to clear the balance and resulted in roughly $2,000 in interest.

Adding $150 per month reduced the payoff period to about 15 months and brought the interest to under $500 in the example.

The lesson there wasn’t that everyone can suddenly find another $150 every month. It was that, once you understand the numbers, you can see what an additional payment actually accomplishes.

When One Debt Is Gone, Keep the Money Working

Suppose you have been putting $120 every month toward a car loan and finally pay it off. Congratulations. Celebrate it.

But then consider giving that same $120 another job instead of quietly absorbing it back into everyday spending. Put it toward the next debt. Add it to your emergency fund. Eventually, direct it toward a longer-term goal. You were already living without that $120.

Keeping it working for you is one way financial progress can begin to build momentum.

High-Interest Debt May Come Before Investing

It is tempting to jump straight from “I want to improve my finances” to “What should I invest in?” But RoseAnne encouraged participants to look at expensive debt first.

If a credit card is charging close to 30% interest, the question becomes whether it makes sense to invest extra money while continuing to pay that very high rate on debt.

Lower-interest debt can be a different conversation. At some point, you may compare what the debt costs you with what your money could potentially do elsewhere. That leads naturally into the next stage of building a financial plan.

But the foundation comes first.

Start Where You Are

Perhaps the most important message from this first Financial Corner session was that you don’t have to fix everything at once. You also don’t need a large salary before learning how to manage money.

• Start by finding out what you actually bring home.
• Look at where your money has been going.
• Build a budget that reflects your real life, not somebody else’s.
• Give your money a purpose.
• Start an emergency fund, even if the first contribution is small.
• Write down your debts and learn what they are actually costing you.

Then keep going.

The habits matter at every income level. As RoseAnne explained during the webinar, she sees the same fundamental issue with people earning relatively little and people worth millions: if income grows but financial habits do not change, spending often grows right along with it.

For grooms, there is another reason to start now. Your career may include irregular income, seasonal work, physical risk, frequent travel and benefits such as housing that are tied directly to your employment. Building your own financial foundation can give you something important that belongs entirely to you: more choices about your future.

Continue Learning in the HorseGrooms Community

Everything from Lesson 1 of the Financial Corner is available in the HorseGrooms Community, including the webinar replay and all the additional resources. We have created a downloadable workbook that brings the lesson together with seven recommended educational articles covering budgeting, managing different pay cycles, emergency savings, credit, and debt, plus a lesson summary and practical homework. It is a seriously valuable resource designed to help you actually work through your own finances, not just watch a webinar and forget about it. 

There is also a shorter Lesson 1 Cheat Sheet + Homework that summarizes the most important takeaways and gives you practical steps to review your income and spending, create or update your budget, calculate an emergency fund goal, and understand your debt. It even includes considerations specifically for grooms whose housing, vehicle, or other benefits may be connected to their job. 

Thanks to the HorseGrooms Foundation, all of these resources are available for free in the HorseGrooms Community, which is also free to join.

Join the HorseGrooms Community here and access the Financial Corner resources here.

Next Webinar

This was the first session in the HorseGrooms Financial Corner’s three-part series with RoseAnne Spallone-Nagle.

The next live webinar is October 13 at 7 PM ET and will move into what to save for, how to invest, and saving for retirement. The third session, on November 10 at 7 PM ET, will help bring the pieces together and include live questions and answers.

All webinars take place in the online HorseGrooms Community, which is free to join here. And while grooms remain at the heart of it, other equestrians who value their work are welcome to learn alongside us.

The Financial Corner is a program of the HorseGrooms Foundation created to make practical financial education, resources and access to experienced professionals more available to grooms.

Do you find resources like these valuable and want to help us create more education, tools, and opportunities for grooms? Please consider making a tax-deductible donation to the HorseGrooms Foundation and help us continue building resources that support grooms in their careers and lives.

Donate to the HorseGrooms Foundation here.

More From the Financial Corner

This webinar series is only the beginning of the HorseGrooms Financial Corner. We are building the program with more practical resources and education to help grooms create a healthier financial future.

Also part of the Financial Corner is Jenny Schwartz’s Rein in Your Finances: A Personal Finance System in 8 Weeks, a comprehensive personal finance course covering budgeting, irregular income, saving, debt, investing, retirement and more. The course is valued at $997, but HorseGrooms Community members receive a substantial discount, while HorseGrooms Insiders get the entire course FREE as part of their $97 annual membership.

Join the free HorseGrooms Community to access the Financial Corner, member discounts and resources.

This article is for educational purposes only and does not constitute individualized financial, investment, tax, or legal advice. Individual circumstances differ, and readers should consult an appropriately qualified professional when making decisions about their own finances.