I think we all hate talking about finances. We either have them completely in order, or we avoid our credit score like the creepy guy at the bar. While we can always improve our financial situation, sometimes it can be rather difficult to know where to start. I have broken down a few easy steps to get started on the path of financial security, or to motivate you to keep heading in the right direction. Trust me, it won’t be scary, and you will be able to understand it!
Write out a budget, this should be the one thing you take away from this.
We all hate the word budget. A budget usually means that you should not buy those designer heels, even if they are on sale. What a budget actually is, is knowing what you daily needs are, and allowing you to eventually get those heels. A budget is different for everyone, and that is the most important thing to remember. What your best friend makes is not going to be the same as what you are making. Budgets depend on where you live, what your lifestyle habits are, and various other differences.
Most bank apps have a budget calculator which allows you to see exactly how much of your money is going to what costs. If you are more of a writer, then you can grab a notebook and dedicate that to keeping up with your costs. Budgeting does not mean that you cannot splurge every once in a while, but it does mean that you will have your necessities paid first.
Create a savings account, and follow one simple rule.
50/30/20! I have been hearing about this rule since I have been in control of my finances, and probably before that. 50% of your income is for necessities, 30% is for random purchases/expenses, and the last 20% need to go directly into your savings account. My savings account is protected by two different passwords. One of those I have, the other I have with a friend. Why? This keeps me out of that savings account unless it is an emergency, or something expensive that I have been saving for.
However much you want to keep in your savings at all times is up to you, and it is different for everyone. A standard amount is two to six months of living expenses. This is a safety net, because you really never know what will happen in our society, and especially in our economic situation. You can also save for some more exciting purchases. New handbags, new car, and vacations are also excellent goals to achieve.
Educate yourself, it’s cheaper than you think!
Remember that post about podcasts recently? Well, you can also find some great podcasts about finances as well…check these out!
“Afford Anything” by Paula Pant
“Martinis and Your Money” by Shannon McLay
“Profit Boss Radio | Women and Money” by Hilary Hendershott
If podcasts are not your thing, then there are a couple of books that can lead you on the right path too, plus, these are great to read on your lunch break!
Prince Charming Isn’t Coming: How Women Get Smart About Money by Barbara Stanny
The Total Money Makeover by Dave Ramsey
Worth It: Your Life, Your Money, Your Terms by Amanda Steinberg
Set some REALISTIC goals
It can be as small as saving $20 bucks a week, or it can be as much as $1000 a month. It really depends on your personal income, your personal expenses, and your personal goals. I definitely do not suggest going full blown saving goddess, but set little goals! Reward yourself after the first few goals, or just enjoy all of that extra money you have piling up.
You can also set out to achieve real goals instead of just saving money. You could pay off those pesky student loans we all have, pay off that Victoria’s Secret credit card they coerced you into signing up for, or save up for that amazing condo they just built on the waterfront.
Keep an eye on your most important number, and no, it is not your weight or age.
We are all afraid of credit scores. Especially with Equifax just having potentially messed up yours and mine. Credit scores will impact your life. They are easy to mess up, but pretty difficult to fix, especially if you have no idea how bad it has gotten. I check mine via Credit Karma, and they email me anytime there is a change in my credit score, which helps me stay on top of it.
Trust me, you will need a good score when it comes to buying that brand new car, or that incredible home in a few years. Keep paying off those credit cards and student loans, future you will than you for it.