Growing up, I always felt that money was a taboo subject that should not be discussed. However, when I graduated from college, started full-time work, and my student loans kicked in, I felt so clueless and overwhelmed that any reservations I had about discussing money evaporated.
I remember having a great conversation with my aunt who opened up to me about her credit card debt in her early 20s, and how she clawed her way out of it to eventually become a homeowner. Hearing her story helped me feel better about my situation, and was also a helpful reminder about the importance of establishing good financial habits early.
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That conversation blossomed into conversations with friends about what was working (or not working) for them, how they tackled their loans and began saving for retirement, and the financial perks their companies offered… like reimbursing grad school tuition or offering free breakfast and lunch each day. Gradually, my cluelessness started to shift into tentative confidence as I established methods and tips to help me keep my finances in check.
Give every dollar a job
Some of the best advice I ever got about budgeting was to “give every dollar a job.” This means taking stock of your savings and checking accounts and assigning a purpose to every dollar. Whether it’s student loan payments, an emergency fund, new gym sneakers, or your phone bill… make sure you have a plan for every dollar to your name.
Before implementing this approach, I used to feel like I was floating in the abyss each time I got paid. My finances seemed fine (question mark), but I was never really sure, and would occasionally cross my fingers when swiping my debit card. I never thought I’d say this, but now that my dollars have “jobs,” I look forward to paying bills!
Keep a list of “wants”
Once I got comfortable with my budget, I blew through my shopping money within a few days of getting paid. Often, the items I purchased were impulse buys and not things I truly wanted. I can’t tell you how many silly little tee shirts or lip balms I racked up in that first year or two after college. I started keeping a list of products that caught my eye and letting it sit for 24 hours before making a purchase. This turned out to be super helpful— many of the things I thought I wanted desperately ended up just being a moment in time.
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Pay yourself first
Whenever possible, set up your accounts to withdraw funds automatically for things like retirement, savings, utility bills, and student loans. I’ve found this approach helpful because I don’t “miss” that money since it gets automatically deducted before I can even appreciate its presence in my bank account.
I view this approach as paying myself first, in the sense that I’m taking care of financial commitments that are important to me and align with my goals. After those payments are made, the leftover funds can be used for fun or discretionary spending… like Taylor Swift merch, or iced chai lattes, of course.
Log into your accounts (no, really!)
Sometimes ignorance is bliss, but it’s important to have your finger on the pulse of what’s going on in your personal finances. Logging into my accounts daily helps me stay on top of my budget and ensure nothing is amiss (like the time my gym charged me twice in one month for my membership)!
The same applies for checking your pay stub each time you get paid. You don’t need to comb over it like a detective, but a quick once-over is helpful to check if anything sticks out. For example, making sure your retirement distribution is as intended, health insurance didn’t change, commuter benefits are being applied, etc.
One of my friends actually got into a sticky situation by never checking their pay stubs. They had been advocating for a raise at work and had no idea the raise went into effect. The increase had been modest, and they also started paying for health insurance at the same time. This resulted in some ruffled feathers and an awkward conversation with their manager, which could have been avoided if they checked their pay stubs. Lesson learned!
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Developing good financial habits will look different for everyone, and what works for you today might change in a month or year from now. But hopefully, these four tips will provide a starting point or foundation to put your own spin on things.