How To Start Mastering Your Finances!

I wish I started doing this in my earlier twenties.

I hate how schools don’t make it a priority to teach financial literacy.

Everything I have learned about financial literacy, I’ve sought out via the Internet (taking everything with a grain of salt, of course), and people whom I see are doing well.

What’s worse is our frontal lobes don’t finish developing until 25 to 28 years of age, and by that time, we may have made some dicey financial decisions that could negatively affect our future.

I’ll give you my example — singing off on $60,000 worth of student loans at the age of 18, having no idea what most of the writing on the paper meant.

Fortunately, I’ve had good examples in my youth of people who were and still are fiscally responsible.

This taught me at a young age to think twice about what I spend my hard-earned money on — did I always do this? No, hence the $60,000.

But now that I’m older and wiser, I’ve learned a few simple steps that have helped me tremendously in getting my financial house in order.

The first step to mastering your finances is knowing exactly how much you make and how much you spend on a monthly basis — track everything!

I cannot emphasize to you how tracking every single dollar increased my awareness of my spending.

Being able to look at the numbers on the page really opens your eyes and tells you exactly where you are and where you’re headed — good or bad.

I’ve written a blog about my budgeting method. If you want the details, I suggest you read it here:

Even if you don’t do exactly what I do, I still highly recommend that you track your spending.

Whether on an app or a financial journal.

But don’t fool yourself into thinking you can track your money mentally. You can’t.

Have your daily, weekly, and monthly expenses written out in front of you. It will tell you exactly what you need to do to move forward with your finances.

Whatever you spend, make sure you have the money already in your bank account.

Too many people rack up insane amounts of credit card debt — this is the way to avoid it.

If it’s not in your checking account, don’t buy it yet.

Don’t let FOMO get in the way of your financial goals.

I’ve been wanting to go on a vacation for years. But because I have my financial goals in front of me (I have post-it notes all over my desk with the numbers I want to hit), I’m able to remind myself that the vacation will always be available, I just have to wait a little longer.

If I spend money before reaching my goal, I will only set myself up for failure in the long run.

And worst, I will get into the habit of letting my wants get in the way of my needs and responsibilities.

The reality is no one is going to take care of your finances. You’re the only one who can take the reins of your life and make it the best it can be.

This leads right to my next point.

Be disciplined, and if you want to purchase something that’s on the expensive side, don’t tell yourself you can’t.

Instead, create a savings plan. Once you reach your goal, feel free to spend that money on what you want.

Telling yourself you can’t, or you’re not allowed is a sure way to increase your FOMO tenfold. Therefore the temptation you feel will go through the roof.

Which makes the odds of you giving in to your urges exponentially higher.

Don’t tell yourself you can’t. Instead, come up with a savings plan based on the cost of what you want to purchase.

This advice doesn’t work for everything, though. I’m aware that if you want to purchase, for example, a car, most likely you won’t be able to do this.

It will take years and years to save up the total amount. And by then, there will be newer and better models that will also cost more to buy.

This is a pretty good rule of thumb for things like a mattress, furniture, laptop or computer, etc. — items like these can cause you to rack up a lot of credit card debt if you purchase them all at once.

Don’t do this — don’t get into the habit of thinking that because it’s on credit, you can always pay it back later. You may not be able to.

Lastly, if you want to make progress and keep more money in your pocket, make it a habit to take whatever money you haven’t spent at the end of the month and throw it into your savings or investment account.

You don’t have to spend every spare dollar you have. Use those extra dollars to move forward with your financial goals.

Whether it’s $500 or $20, throw it at least into your savings account. Make it a rule not to touch any of the money you put away.

Do this consistently and watch the magic happen.

I finally reached my savings goal of 6 months of expenses. I tracked my spending and gave myself a savings goal for each month.

The sad truth is most Americans do not have even one month of expenses in their savings account.

They’re just one emergency away from bankruptcy. How terrifying is that?!

I want to be prepared for the worst-case scenario.

Right now, if I were to lose both of my bartending jobs, I have enough to pay rent, groceries, and all my bills for the next six months while I look for another job.

Set yourself up for long-term success, not long-term failure.

I’m not a financial professional. This information is for entertainment and informational purposes only. If you want financial advice, please seek out a financial professional.