I used to be young and carefree, then I looked at the balance for my student loans. A good education is worth the investment, but you can be smart about it. Checking my account turned on a magical switch in my brain that compelled me to pay more attention to my finances. Here are the little bits of knowledge I’ve gained so far.
1. Say no to the little purchases
This is a great way to start. A $4 latte doesn’t seem so bad. If you’re buying five latte’s a week, it will cost you $20 a week. This ends up to be $1040 a year. That’s just the beginning. Think about the little impulse buys that seem okay in the moment. A $10 shirt here, a pint of Ben & Jerry’s there and you have the answer to where it all went. I would buy little things like this all of the time and wonder why I couldn’t stick to my budget.
2. Set both long term and short-term goals
My long-term goals are definitely related paying off my loans. Decide what fits your life. Maybe you’ve been a good saver your whole life, but never looked into investing. Maybe school is paid off, but you want to start thinking about your first car or home. However, short term is important too. Think about what needs to happen in a day, week or month. Then, plan accordingly.
3. Fun can be free (or just cheap)
Find out what’s in your area. Lots of parks, museums and other places offer free or discounted admission. Invite friends over to hang out instead of going out. Plan a movie night at home or go hiking. Nature is free. Being social really doesn’t have to be that expensive.
4. Save
If you don’t have a savings account, start one and commit to putting away a minimum amount every month. Next time an emergency comes up, like a flat tire or hospital visit, you’ll be prepared. You can also take this a step further and consider investing. Make sure to do your research though.
5. Plan every purchase
Knowing where your money goes is essential. You should start your budget with necessary things (like rent, utilities and gas), and then you can decide what to do with the rest. Make sure to plan out little rewards, not impulse buys. Write everything down afterward too. If you end up underestimating or overestimating how much you need for a category, you’ll be able to make changes.
6. Work
One of the key components of my budget is keeping track of money in and money out. I wasn’t getting “money in," so I got a part time job. In addition to my part time job, I started babysitting. Work can also be very rewarding. Find something that interests you and will contribute to your future career. Even if it doesn’t have anything to do with your plan, still put in 100%. A great work ethic will take you far in life whether you’re a barista or a doctor.
Don’t stop living your life or feel like you have to miss out on fun in order to be frugal. Just make the necessary changes you need in order to improve your life for the better. I am currently in this process. I make mistakes often, but I never let them stop me. It has been so encouraging to start seeing the benefits, so don’t quit. Remember your goals. Remember why you started. Remember that life is made up of priceless, beautiful moments.
