Are you a Young Adult, recently graduated college, starting your first real job, maybe all of the above?? And you also have NO idea how to manage your money, right? I feel ya.
I graduated from college in May of 2015 and in that last semester I became extremely interested in finances. I realized quickly that I was about to be shoved out into the real world with NO CLUE how to manage my money. They just don’t teach you about that in college, unless you are a finance major or something. I personally think it should be a pre-rec to have to learn basic skills on managing your money.
Here are a few astonishing facts about Americans:
- One third of Americans have $1,000 in retirement savings
- 19% of Americans have $0 saved to cover emergency expenses
- 31% have less than $500 in emergency savings
- About half of Americans plan to work until they die
- Student loan debt is in the trillions
- About 30% of Americans have more debt than savings
- Only about one third of Americans have a household budget
- 49% of Americans are “concerned, anxious, or fearful about their current financial well being.”
Here’s the deal, I took some time to write out a few of the main tips for finances I can give you. This is based on the Dave Ramsey Financial Peace course I took back in 2015. If you want to take the full course, visit his site:
The best Financial Advice I can give you
1. Write or type up all of your monthly bills including minimum debt payments.
We use this document as a monthly budget template and each pay period (we get paid bi-weekly), we go in and copy/paste that into a new document and adjust it based on our needs for those two weeks.
2. Set a number for how much you will allow yourself to spend on obligatory things like gas, groceries, eating out, and straight blow money.
We add this into our specific budget for each pay period and this number we set does not change! It may take a few months to figure out what numbers work for you. We also pull out this money and use a cash based system for these things so we don’t go over budget. Using cash for things other than bills is a smart move to keep good discipline and live within your means.
3. Subtract all of that from what you make in a month and see what is left.
From here you can assign every dollar to something. Don’t just leave an extra $50 or $200 in your checking account because it will get spent by you eventually. Based on your needs for that pay period you can assign it to things you NEED like a hair cut, oil change, new shoes, etc.
4. SAVE WHAT YOU CAN or PAY OFF DEBT!!
If you have a little bit of extra money after your main necessities from the budget, save it or use it for debt. If you have no debt, then great! Build a savings. I recommend starting out with $1,000 for an emergency fund. You can also save for things that you know will come up in the future, like a maintenance fund for your vehicle, a Christmas fund for presents, a vacation fund, etc.
5. Use the debt snowball method.
If you are drowning in debt, I highly recommend this to get you going on the road to financial freedom. Basically you decide on a number of extra money you can commit to paying on debt each month. This is on top of your minimum payments. Then you start with a target loan. Dave Ramsey recommends starting with the loan with the smallest dollar amount. This helps you achieve paying it off fast and then you feel accomplished and want to continue the process and trust me YOU DO. Lets say your first targeted loan has a minimum payment of $50 a month. Lets pretend your debt snowball amount is set to $100 a month. You will pay $150 a month on that targeted loan total until it is paid off. Then you use that $150 on the next targeted loan, plus it’s minimum payment until it is paid off. You get it, right??????????
6. Stay away from credit cards.
Credit can be a good thing, but it is smarter to build credit through things like paying student loans, a car payment, a mortgage, etc. Do’t go buying everything on a credit card if you don’t have the discipline or money to pay it off that month.
7. Tithe. Get into the discipline of it out of your love for Christ.
Don’t just do it as a duty. Do it because you know the sacrifice God made for you and you know how great his mercy is. Do it because you trust Him fully with your finances and believe He will provide for you and your family. Do it because you know without God’s goodness, you wouldn’t have a job, a family, a house, or ANYTHING. So you know that everything you have belongs to God our almighty creator, and giving back only 10% is just your surrender to God, saying “I trust your plans and will for my life and know you will provide for me at all times.”
To watch my full video on this content, watch it here:
