Money can't buy happiness. If I had a nickel for every time I've heard this phrase I probably wouldn't have to worry about money anymore. It's true...money can't buy certain things, but a lack of money can cause a lot of unhappiness. An article by CNBC states 85% of Americans report at least some money-related stress. As a young professional you are probably in that 85%. Today's emerging workforce is at a huge disadvantage. Student loan debt in the U.S. alone is $1.5 trillion.
Let's set the scene...you've obtained a degree, but you may or may not have work experience, so you will more than likely start in an entry-level position. You receive your first paycheck and once you subtract income taxes, social security, medicare, health insurance, 401k...your new salary isn't as much as you planned. Now you are expected to pay rent, utilities, student loan payments, car insurance, groceries...the list goes on. And don't forget to save! Welcome to the 85%.
Everyone manages money differently. And here's the thing - it's your money so manage it how you see fit. Save it, invest it, travel with it. I know people who are very frugal with their money - that's their choice. Me - I try to land somewhere between I can't take it with me and not totally stiffing my daughter out of an inheritance. I love the pictured quote from Dave Ramsey...I think striking a balance that works for you and your money is what will make you the happiest. And it may not happen when you're 20ish, but 30ish gets better (I promise).
Here's a few tips that have helped me:
1. Set up an automatic weekly transfer of a small amount from your checking account to a savings account (ex. $10 per week = $520 per year).
2. Grocery pick-up. I am the worst at impulse buying. By ordering online and not going inside I buy only the essentials. Bonus savings - look for deals & apply coupons before checking out.
3. Get a credit card with benefits. This is a slippery slope, but here's the trick. Pay the card off each month! This one takes self discipline and controlled spending, but the card I use gives 1.5% cash back so I make money on all my purchases. Once a quarter I credit my bill with the money I've earned.
If you'd like to learn more about money matters plan to join us for a free workshop with MontVue Capital on March 5. Details are on our events page.