I used to think I was good at managing money, but it only took a few bumps in the road to reveal that I actually needed to get my shit together. Here’s how I learned to live like my friends, who all make more money than me, and not feel broke — despite having a salary that impresses no one.
1. I keep track of every penny.
Using an app like Mint that syncs to your bank accounts can be great for tracking spending, but I use a good old-fashioned spreadsheet. Even if you have zero Excel skills, it’s simple to set this up: just make rows for each spending category (“Rent,” “Gas,” “Utilities,” etc.), and assign a month to each column. For me, the spreadsheet is effective for tracking and curbing spending. Having to manually type in every dollar somehow interrupts my impulse to whip out my wallet. (I won’t mindlessly drop $200 at a LuLaRoe pop-up if I know I have to enter it into “The Sheet” later.)
2. I have ONE credit card for REAL emergencies only.
This may seem obvious, but it took me a long time to realize that a sale at Neiman Marcus is not an emergency. Neither is my well-to-do friend’s birthday dinner at the priciest restaurant in town, even if it seems like it. Most months, I don’t add any balance on my credit card. When there is a real emergency (like, when I rear-ended someone on the highway, and had to pay my insurance deductible), I’ve got it covered.
3. I have a plan for my money…and pay in cash.
At the beginning of the month, after I pay rent and bills, I take out the amount of cash I’ve budgeted for daily living. This cash then goes into an accordion file with tabs labeled “grocery,” “gas,” “dining out,” “shopping,” and “miscellaneous.” When I know I need money — to go out to eat, for instance — I take the amount I can spend for that occasion out of the file, and put it in my wallet. By not using my debit card, I force myself to stick to the budget, even after I’ve had a glass (or two) of Pinot Grigio.
4. When I treat myself, I choose quality over quantity.
When I first realized I was getting in over my head financially, I went cold turkey on my two spending vices: fashion, and the fancy cheese counter at the grocery store (don’t judge me). Living without these indulgences made me realize just how much I was spending on stuff I didn’t need. Now, if I want to treat myself, I save up until I can buy something of good quality that feels special. For example, I have exactly four purses, all of which are investment pieces: a Longchamp tote, Coach crossbody, Furla shoulder bag, and Kate Spade clutch. They’re all in great shape, despite being used for years, and I still get complements on them all the time. Even better, I know I’m carrying fabulous accessories — not credit card debt.
5. I prioritize paying down debt and beefing up savings.
For most people, being a 20-something is equivalent to being broke. Some of the circumstances that got us here feel outside of our control. (Looking at you, student loans.) But, at the end of the day, we are the ones responsible for our own financial situations. I only really started “adulting” when I stopped ignoring my debt. I took the money I wasn’t spending on Camembert and started exceeding the minimum payments each month. At the same time, I began building a savings safety net. As my debt decreased, the amount I could put toward savings grew. Plus, any “extra” money I get — birthday checks, tax returns — goes straight to the savings account. This may not be much fun, but I sleep better at night knowing I’ve got the “Fuck It Fund” to fall back on.
With all of this said, I know I’ve been really fortunate. I got a job right out of school (I qualified for food stamps, but still), and went several years without any major life catastrophes. Not everyone starts off so well, or has such an easy time of it. But I also believe that fortune favors the prepared. If you have some solid financial habits in place, you might just start feeling fortunate, too.
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