Being a young person in your twenties is both fun and exhilarating, yet at the same time overwhelming and confusing. It is at this age that you’re either graduating from college, finding employment, or both, as well as making your way in life. You’re getting your first taste of true independence; and while that’s what you’ve been looking forward to your whole life, it can also be terrifying at times.
One of the aspects of life, or adulting, that can be overwhelming and confusing to many is getting your finances in order. This is especially true if while searching for ways to balance what you’re spending, you also find yourself with large amounts of student loan debt. When facing the reality of life as an adult, with bills and other finances included, it’s easy to start panicking and automatically assume that your life as you knew it is over. However, with some control over the situation, you can get a hold of things early and find a life-finance balance.
Make a Wish List
When you have your whole life in front of you, it’s easy to envision everything you want from it. The words “wish list” probably bring back memories of Christmases past, but it’s also a very useful tool in prioritizing what’s important to you as you start this next phase in your life. It’s important to remember that what you include on your list is completely personal and will depend on your unique situation.
As you start to think about what you want out of life, consider it in stages. Where do you want to be and what do you want your life to look like in five, ten, fifteen years? Try not to let family, friends, or overall society impact what you write down. The more genuine this is to you, the better it’ll help you start to visualize these goals. Once you know what you’re working toward personally, you can start financing properly.
For example, if you want to be able to go on some sort of vacation every year, you can have it in your head that you need to start saving for them at some point, or you can start to plan one big trip every few years with smaller, less expensive trips in between.
You can also use your wish list to make career-oriented goals. This can be especially helpful in making sure you’re where you want to be when it comes to your job and how much you’re earning. If in five years you want to be making $5,000 more than you are now, you can start coming up with ways to make that happen and learn how to negotiate your salary.
Remember, your wish list is composed of your goals. These are by no means mandatory and you shouldn’t feel like a failure for not meeting them by the year you have set. Life is a fluid thing and your wants, goals, and financial situation will change often as time goes on.
Chart Your Debts
Once you know what you want to work toward in life, you can start figuring out how to get your finances in line to help get you there. The most important step you can first take is to lay absolutely everything on the line. Utilize a monthly expense chart to track your month-to-month spending.
Be sure to include everything. Including your rent/mortgage payment, loan payments, housing or personal bills, credit card payments, grocery spending, and an average of what you spend on nights out and shopping. Being as honest and accurate as possible is crucial to helping you get a handle on how much you spend, what you’re saving, and where you can try to cut back. You should also update your chart as your expenses change.
Charting this information helps you get a clear visual of your personal finances and the situation you find yourself in. It’s easy to start a job and feel like you can spend your money on a whim. In reality, your independence comes with very real consequences if your finances are left unmaintained, and you’ll find those goals on your wish list even harder to reach.
Educate Yourself
Now that you know what you want to work toward and your current expenses, it’s time to start learning about ways you can help control and maintain your finances. For opportunities to learn more about managing your finances, take advantage of convenient online classes to teach you some tricks of the trade. These opportunities for virtual learning are even more important in the age of COVID-19, so you’re able to gain the knowledge you need while still staying safe.
For times when you’re tired of looking at your computer screen, there are always good old fashioned books to help you out. Financial help books are available in every topic you could ever want to learn about. One area that many people don’t know much about, but would like to learn to help their financial portfolio, is investing. Reading some of the best books on investing can help you get a basic understanding while also recognizing areas in your life where investments can be beneficial to your finances.
Asking for help is never a bad idea. When you have questions or just don’t understand something relating to your finances, look to a professional. Contact your bank to go over your account and meet with an expert in the financial services field. They can help you understand what you can do to reach your goals, identify services that can help you, and tell you what you qualify for already.
Begin Budgeting
After all of the planning and learning, it’s time to put everything into practice and start taking control of your finances. Utilizing your wish list and monthly expense chart, you can track how long it will take for you to reach some of your goals and how much you’ll need to save to get there.
If, for example, your goal is to buy a home, you first need to determine how much house you can afford. After that, you can start putting away a portion of your earnings to get to that goal. If that means you need to limit something else you’re spending money on, your expense tracker will help you figure that out. The same goes for paying off outstanding debts. Setting a budget and sticking to it will ultimately help you achieve all of your financial goals. Budgeting can be tricky and an adjustment, but once you’re used to it, you’ll find you have more control over your finances and can make smarter spending decisions. By taking advantage of the resources available to you, you’ll feel some of the overwhelming financial anxiety begin to lift. With the right planning, preparation, and education, gaining financial control as a young person can appear effortless, just like your transition to adulthood.
Resources
Article titled “How To Negotiate Salary With A Candidate” written by Andrew McDermott.Â
