“Your health and happiness and that of your family is much more important than spending money you don’t have to boost your social status.” -Jessie
Money is an interesting topic for many of us, whether we are well off or super duper broke. Even if we have a lot of it, money can be a touchy and stressful topic. Growing up with modest means taught me the value of money from a young age. I also knew that it took hard work to have it. I’m still working the logistics, but I plan on having a lot someday. Details. Interestingly, how people manage their money can be vastly different from the neighbors next door. Also, money is rarely discussed so there is no telling what really happens behind the scenes for each person, couple, or family, financially.
We quickly transition from adolescents to adults. During this time, a LOT of financial damage can be done, if we aren’t careful. Unless we know better, we may sign on the dotted line, adopt a few bad habits and land in a terrible upside down position with rotten credit and bankruptcy in our future. It actually happens often, especially because many people in their late teens and early twenties want to live life well and present themselves like they are adults. This often means shopping for nice clothes and household items. Also, this is generally when the decision to buy a car comes around. Scary stuff. If you don’t know better or aren’t naturally money smart, you could end up in financial turmoil. Whether you are making next to nothing or have hit the ground running and are bringing in lots of money, it’s super important to create good habits from a young age.
Some tips on money.
- Credit cards for baby adults. If you are just starting out, think about whether you can pay back your debt before committing. It can be tempting to get credit cards but it’s not worth the stress. Try making money and saving for a while first. Managing is a learned skill, and shouldn’t be taken for granted. Later, if you want to build your credit, take out a very small credit card. $500 tops.
- Plan ahead for bills. By the first, you should have saved enough for your entire next month’s bills. That way, you are always ahead, and not late on ANY payments. Late payments cause late fees and prove you not credible. It should not be the norm.
- Round up when planning. If you know your electric bill can be as much as $100, plan for it monthly. If you end up paying $75, LEAVE THE REMAINDER in the bills account. Do this for every bill you have.
- Separate bills checking. Speaking of bills, you should have a separate checking account to pay your bills out of. That way you don’t have to meticulously plan how much you can spend. Also, it doesn’t leave you short. Before you know it, your expenses account will have a nice little buffer.
- Plan your paychecks. If you need two thousand dollars for May’s bills, break that amount up over the amount of paychecks you will have in April (the month prior). That way you don’t have two weeks of broke joke agony and two weeks of extra spending during April. It’s good to distribute to create a consistent money flow for yourself. It will cut down on stress.
- A penny earned. I often think, “I don’t have enough money”. Then I realize that there are many things I overspend on. I have to remind myself that I don’t always have complete control of how much I make, but I do have an awful lot of control of how much I spend. Think through each purchase, and then ponder how long you have to work to make the amount you are about to spend. The harsh truth may make you back away slowly from the submit button. Start saving slowly and commit to a reasonable and doable amount. Save it and watch it grow.
- Allow for a big-ticket item here and there. Saving can be tedious but if you have something you want to splurge on, it may be just the incentive you need to tighten up on spending habits. If you want the shoes, make a plan. When you have enough and buy them, stay on the same track. It’s good to have a nest egg for the unforeseen expenses that often come out of nowhere.
For those of you who are already over your head, try out the same habits. It will take longer and will be a big change, but when you get ahead, you will be so super happy. Also, think about whether consolidating or refinancing makes sense. Perhaps it does. Rates and terms are important factors, but know what it means over the long run. Know what the final amount of interest means. Sometimes extending for too long isn’t the answer. Importantly, know that spending money you don’t have for silly reasons is never smart. Your health and happiness and that of your family is much more important than spending money you don’t have to boost your social status.