1.) Budgeting: listen, this is a game changer. After a few months of tracking what I spent, I was able to develop a realistic budget. This means, I factor in my rent, food, entertainment, utilities, transportation etc. and set a financial limit per month for each expense. The goal is to not exceed the budget for each expense. Because of this I write down every SINGLE expense. If I pay $4 to get a cart at the airport, I write it down. If I get a $4 white chocolate mocha at Starbucks, I write it down too. I’m almost anal about it. And at the end of the month, you know what you earned, what you spent, and the rest can go towards your financial goals: saving, investing, paying back debt etc. So basically, money management.
2.) Reading books and getting financially literate: umm, I have read many money books and contrary to what you might think, many of them are actually fun; think Broke Millennial and The Financial Diet. I also watch YouTube videos. Dave Ramsey is really good, but he can be too intense and somewhat unrealistic. I mean, you want to be good with money, but not at the expense of actually living or glorifying it. Important or not, many other things surpass paying debt, and tracking your expenses. I also read Refinery 29’s Money Diary series. I want to say I read it to see how other millennial women in America spend, but really I am a nosy person who likes to feel good about not spending so egregiously like the rest of America. Bite me. Seriously though, Money Diaries give you the full spectrum: from the twenty-something-year-olds that earn middle six figures per year (and make me think of my life and inadequacy LOL); to the ones that earn $20,000 per year and spend half of it on a stupid boyfriend; to the one that granpa left a hefty inheritance for. Wild. Biggest lessons from that series are: people are hella privileged; many Americans can’t survive not being coupled up; and many, many girls wouldn’t survive if their boyfriends weren’t footing [at least half] their bills. Yeah, I said it.
3.) An emergency fund: I haven’t completely nailed this but I am onto something; meaning I am building it. The most concern here is so you don’t lose your safety net if anything happens; say, you lose your job or something. And let's just say my faith in God comes to play here (HAHA), plus I am somewhat privileged to not be afraid of becoming homeless. That said I am working on it. One huge lesson you will learn from becoming responsible with money is that it is not a one-size-fits-all thing; different lifestyles, different goals, but a few basic and fundamental principles: like an emergency fund is compulsory.
4.) Buying investment pieces: I was never a big shopper. Don’t get me wrong, I like the fine things of life but I can do without them. I also really like to look good (sometimes) so yea I buy clothes. Now though, I am learning to buy things that will last forever even if they [sometimes] come with hefty prices: like a good winter coat, a nice pair of boots etc. I am not going to be bougie and say never buy fast fashion. Meh. Buy what you can afford, but consider buying things that last and staples rather than every single thing in fashion at the moment. I mean there is also the conversation about the ethical standards of some of your favorite clothing stores, but that's conversation for another time.
5.) Treating my credit card like a debit card: ooh this one. One time many years ago, young
Ife had no job, but had a new credit card and totally forgot that APRs kicked in after a year or so. Long story short, I tanked my credit score from not understanding when minimum payments were due and completely ignoring the credit card (I just kept on spending lmao). Now though my credit card is like my debit card, so I buy only and only what I can fully pay back at the end of the month. That way I am building my credit history but also being responsible. Now, once in a while of course you will have needs that you can’t afford, so you may need to use your credit card. Do it, but try to pay back quickly. P.s: these kinds of needs are why emergency funds and savings are important.
6.) Building my credit score: Enough said. Many of the aforementioned principles have contributed to my success in this regard.
7.) Thinking about retirement: Not in the sense of wanting to stop working, more like in the sense of thinking about my future. Before I didn’t even know what IRA meant (individual retirement account), stocks were like rocket science to me. But now, and again this is due to consciously willing to learn, I have a better understanding and know where to begin with investing in my future.
It's like Chelsea Fagan says, this is all basically like taking care of future you. You will probably not regret it. Listen, pick one thing to do to get better with money. And to be fair, for a lot of people the solution to their money problems is to earn more. However, for a WHOLE LOT of others, it's superfluous spending: shoes, clothes, natural hair products you and I know you will never use, gym memberships that you don't need, trips you can do without because traveling is NOT and will never be that big a deal, expensive cars, and all of that lifestyle creep you allow just so you can post on Instagram or compete with your friends in a passive aggressive manner. Do better in 2019. Okay? Okay. Haha
I promise this is not in any way a criticism of people's lifestyle but mostly to say there are benefits to getting better and having a better relationship with your money. There truly is.
Love,
I
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