Living your best life is expensive. This is a known fact that becomes extremely apparent once you become independent and are mindful of bills, expenses and your social life. I’ve taken investing courses and read countless dull finance articles and truthfully a lot of information has gone in one ear and out the other. So for this post I tried to make the topic as straightforward, beneficial and interesting as possible.
- BUDGET – This is the most time consuming task on my list and a task I’ve avoided until apps did it for me. If you can’t tell from that sentence; I am slightly lazy and writing and organizing where I buy items would be slightly depressing. Luckily; there are now apps like Mint or You Need A Budget (YNAB). I haven’t tried YNAB yet, but since Mint is connected to my debit and credit cards it will send an email when I spend too much on entertainment, hair, travel etc. so I can quickly get myself in check.
- SAVINGS – We’re always told to save money. However, with all things considered like bills, rent and having a successful social life that can be pretty hard. I recommend setting up a recurring transfer with your bank the day after your pay day so you never really see the money.
Also…although retirement is years away for most Millenials it is best to start now. If you are lucky enough to work for a company that matches your contribution that is a perk that should definitely be taken advantage.
- EMERGENCY – Did you know most American’s will struggle paying an unexpected cost that is 1,000? I used to always think “that will never happen to me” but as I see natural disasters and tragic accidents happen I now know an emergency fund is a necessity. Financial advisors recommend getting a six month “oh shit” fund that you slowly build up.
- PRIORITIZE– Ironically, when I was fresh out of college and working a low paid job I was spending the most money. I was going out all the time, multiple bottomless brunches over the weekend and purchasing designer accessories I had no need for and would lose. Once I deleted my Postmates app and cut back on alcohol my bank accounts were heavier and I even lost some weight so a win-win.
- HAVE GOALS– Identify something you really want; whether it be a car, house, dream vacation etc. and start saving. Having a goal in mind will help encourage you to keep saving.
- INVEST– I was told if I put my money in a savings account and not touch it I will earn interest. After a couple years I decided to check on that interest and it was a whopping .77 cents. My mouth dropped. So rather than keeping it in a standard savings account I would recommend investing it so there is a greater return. Investing sounds intimidating but with the Internet there are a lot of articles to help simplify the process. For starters, I’d recommend an index fund or an ETF. The benefits are:
- Lower management and transaction costs than actively managed funds.
- They typically do not have sales charges (loads) that many mutual funds have.
- They offer broad diversification of investments within their given indexes, which helps to lower risk.
- They have lower portfolio turnover than actively managed funds.
With all these tips combined, my bank account is the best it’s ever been. Hope some of this can help 🙂