The fact is, being an adult is mostly about Googleing every little task. In our #Adulting series, we cover everything a grown-up needs to know. You can find all the help you need here, no matter what your needs are–whether it’s how to tackle laundry or how to develop a savings plan. Continue checking back to learn what skills we will be upgrading next.
Financially, I was not my strongest suit throughout my 20s. Almost every day, I would buy Starbucks and go thrift store shopping with my savings. I didn’t realize how terrible I was with spending until I lived with my parents.
To gain more knowledge of financial matters, I began reading all the books that had been gathering dust on my shelves. My next step was to call everyone, including my older siblings, parents, and grandparents to ask how they manage their finances.
I noticed my spending habits had changed after a few months. I stopped buying $15 salads for lunch. Instead of crying over having less than $10 on my account, I took the time to review my statements. It is true that if we figure these out in our 20s, we will be set for life. Why not begin now?
Let me share the five money habits that have already saved me a lot.
1. Put away about 20-30% as savings:
Using the 50-30-20 rule is a good idea. Choose the rule as a starting point, then adjust it to meet your specific needs. Your monthly ‘needs’ should be no more than 50% of your after-tax income. And your ‘wants’ should not exceed 30% of your income after taxes. Last but not least, save or pay off debt with the remaining 20 percent of your after-tax income. However, I have been saving 30% and putting 10% into an emergency fund.
Credits@Google
Let’s say you spent $4.84 on coffee. You can save 16 cents on that. Savings are a no-brainer!
2. Calculate your monthly accounts:
The book You’re So Money was invaluable. As instructed in the book, review your statements monthly. A “needs versus wants” scale is used here.
Enter everything you need to survive in the “needs” column. It includes bills, groceries, gas, and other necessities. Among “wants” is everything from shopping sprees to coffees to takeout to all the amenities. I have also included my maintenance and supply charges in one column. Organize everything in one place. Prepare a list of each of your incomes, payments, interest rates, loans, and assets (retirement accounts, savings accounts, cash, home, car, etc.). It sets the groundwork for taking action and helps you measure your progress.
After putting them into columns, you can see where your spending is going. Due to this, I found myself spending at least $250 on gaming zones every month. Taking this approach makes you think about what you need to cut out and how you can save for the coming months.
Credits@Google
3. Establish a weekly budget:
All of us attempt it, but few do it. This time, let’s get it right. First, determine whether you get paid weekly or bi-weekly. Then, separate your weekly expenses by bills, food, transportation, and wants.
Budgeting: Securing your finances:
- Keep your financial goals in mind: buying a house, traveling, and retiring.
- Reward yourself for staying within your budget.
- Cash-out your debit card enough to cover your bills and keep it in the freezer until next week.
Being kind to yourself is the key to doing this right. Show compassion to yourself when you make a money mistake. We should not fall into the doomsday spiral of “I can’t keep my budget!” Use the setback as a learning opportunity. Ask yourself, “What if I looked at that money mistake with compassion?” For example, “What led me to overspend on clothes last month?”
Credits@Google
4. Monitor monthly subscriptions:
There’s nothing more frustrating than having an amount taken out of your account without your consent. If, for example, you forgot to cancel a beauty box subscription and $30 deducted from your account. Unfortunately, some months you cannot afford it, yet are unable to pause it.
Manage your monthly subscriptions.
- Write the subscription amount.
- The date on which the withdrawal occurs.
- What subscriptions entail.
From unnecessary subscriptions to lifestyle decisions, consider everything. You can boost your cash flow and savings by saving funds on recurring expenses. Begin by taking time to evaluate your spending patterns. The simplest way to control your budget is by tracking your subscriptions.
Credits@Google
5. Food savings:
The amount we spend on food is ridiculous between takeout, groceries, and meal kits. Savings seem nearly impossible but nearly is the keyword here. Food savings are vital for the future. Signing up for restaurant newsletters and getting a grocery membership card are the best ways to accomplish this.
By doing so, you save on food prices as well as gas prices. Step one is to find your local grocery store, and step two is to sign up for a membership. Once you’ve done that, you can save on a basic necessity like food.
Restaurants have so many deals that only subscribers to their newsletters find out about them. Get those deals, even if you have to make another email.
Credits@Google
The time has come to spring clean your finances. I hope you came away with a clear understanding of how to master your money habits without sacrificing your daily cup of coffee. Check this page to get a better idea of how to create a budget spreadsheet.
