AHH!!! I AM SO SO SO EXCITED FOR THIS!!!
I reached out to my Gal Pal Malia AKA Little Miss Finance, so that she could provide us guidance on something that is so hard to talk about = MONEY!!! How to save money, how much money to save, how to limit spending money, just all of the money questions AND answers!!
MALIA, A FINANCIAL COACH, RECOGNIZES THE UNIQUE OPPORTUNITY WE HAVE IN OUR EARLY – MID 20’S TO SIGNIFICANTLY SHAPE OUR FINANCIAL WELL-BEING FOR THE REST OF OUR LIVESSSS !!!
She loves to help recent college grads and young professionals to take the steps to ensure financial security – CAN I GET AN AMEN!!!???
CHECK OUT THESE FAQ AND LEARN HOW TO SET YOURSELF UP FOR SUCCESS WITH OUR FINANCIAL QUEEN, MALIA!! !!!
PS – AS A HUGE THANK YOU TO ALL THE MAE WE ALL READERS, RECEIVE 30% OFF THE COLLEGE GRAD PLAYBOOK UNTIL AUGUST 8TH, WITH COUPON CODE MAEWEALL AT CHECKOUT! HTTPS://PAYHIP.COM/B/VGP4
THE COLLEGE GRAD PLAYBOOK ENCOMPASSES ALL THE INITIAL STEPS YOU NEED TO GET ON TRACK WITH YOUR FINANCES & FEEL COMFORTABLE AND CONFIDENT WITH YOUR MONEY! INSIDE ARE 10 CHAPTERS + ADDITIONAL RESOURCES, INCLUDING DETERMINING A DEBT PAYOFF PLAN, MANAGING CREDIT CARDS, SHIFTING YOUR MONEY MINDSET, TEMPLATES, BOOK RECOMMENDATIONS, CHECKLIST, + MORE!
MAE WE ALL… GET BETTER – WOOOO!!!!
Saving rule of thumb
Always strive to save 10% of your gross (before tax) income! Even when you are paying off debt. It is SO crucial to pay yourself first and save for your future. 10% should be a bear minimum.. Strive to live well below your means and shoot to save 30%, 50% or MORE! Your future self will thank you:) Not to mention, it is completely possible to spend on things you love & save massive amounts, you just need to have your priorities straight.
Actionable Step: set up an automatic transfer from your checking account (or where you paycheck is deposited) into your savings account, in the amount of 10% of your gross income. Set up this automatic transfer to happen on the same day that you are paid in order to prioritize this savings & stay accountable.
How can you stop frivolous spending?
Impulse spending will be the death of me, I swear! Maybe you’ve thought that same thing before 🙂 Curbing impulse spending is all about being more intentional and conscious about your decision making. A couple tips I have for managing impulse spending are as follows:
If shopping online & you find yourself mindlessly shopping, leave your items in the cart for a few days or a week. Return to the cart at a chosen later date & decide if you still need them, if you’re still unsure tell yourself to wait another week. Often times I find that I forget about it or after stepping away I recognize I do not actually need it
The same goes for instore shopping, tell yourself “I’m going to put this back on the shelf & I am allowed to come back and get it tomorrow if I am still thinking about it”
Create a wishlist on your phone- I have a list in my note app that I write down and desires of items I have. I am not telling myself no you can’t have it, instead I am saying sit on it for a few days and decide. When I return to my list I realize there are things I can cross off that I no longer want. For the items that I do still desire, I simply work them into my budget for the following month in order to make sure I am still on track for my financial goals with this purchase. Ultimately I feel completely guilt free about my purchase because it was no longer impulse AND it was planned for!
Fun with friends – what if budgeting stops you from friend experiences?!
It can be hard when you are focused on our finance goals, but still want to have a social life! I get that, I have been there & I hear you! Here are a couple of tips to ensure that you still get to have a life, while simultaneously making massive strides with your finance Journey.
Suggest to friends to hang out & enjoy free experiences around you instead of spending money
- Bike rides
- Search for Free Facebook events nearby Potluck at home
- Wine night + popcorn & movie!
Practice Conscious Spending – take a look at where you are all spending your money & then decide which purchases bring you long term fulfillment & happiness as well as which purchases you realize didn’t bring that long term gratification. Once you have identified these items / buckets you can always prioritize that type of spending & cut back everywhere else.
Renting – ANY ADVICE?! IS IT A WASTE?
Strive to keep your housing costs at no more than 25% of your gross income. Example- I make $50,000 dollars. 25% of $50,000 = $12,500 for the year. Per month that equals $1,041. Therefore I can say that my monthly rent & utilities should be below $1,041.
Many individuals are quick to think that renting is just throwing away money, and that they need to quickly buy in order to have a good investment, but I caution you to slow down and think more critically about this!
When you buy you incur closing fees, you now pay the maintenance in your home, you pay property taxes, you are now locked in locationally with a home instead of having the freedom to up and move easily.
Renting is not wasting money. There are many hidden costs with owning a home that people do not realize. Point being is that it is not stupid to rent. However if you are renting, you should strive to make saving for a home in the future a priority!
How much should we be saving?
10% minimum, strive to save 50% or more! 50% may sound impossible to you as you’re reading this, but just take it one step at a time.
Start with 10%, as you get on the financial literacy train you will get motivated and feel challenged to save more, you will realize your priorities and money will free up.
Not to mention, saving is not always about “cutting back”, think about ways that you can MAKE MORE!
Apps for financial tracking?
I personally live by and love the budgeting app EveryDollar.
I created a monthly budget in this app that helps me prioritize my spending & saving and keeps me on track and accountable with my goals.
Within the app I track my spending throughout the month so it keeps me aware and conscious of where all of my money is going.
Does it get easier? What motivates you to stay the path?
Personal Finances & managing my money has gotten easier as I have continued to educate myself and learn more. It has also gotten easier as I have learned to automate my systems (like transferring to savings & investing) instead of having to remember to do things manually.
However, I think a lot of people think that they will start their personal finance journey when things “get easier”, for example: When I make more money, I’ll be able to pay off my debt. The reality check is that it will never get easier, you just have to start with where you are at. Until you have a solid foundation and habits around your money, making more money will never make things easier.
I stay motivated by recognizing that although retirement or financial freedom (having enough money to not work) may feel far away, it is so crucial to start now, and start young saving, because a little bit can go a long way! I don’t think of it as postponing my life & fun for retirement because I prioritize spending on things I love now, AND saving.. Everything else that I realize doesn’t bring me joy and abundance is where I cut back & find that money to save.
STUDENT LOAN HELP PLEASE!!
Develop a plan to pay them off as quickly as possible after graduation! DO NOT stick to the standard repayment plan that you are given by your student loan company, you will end up paying massive amounts in interest when you could accelerate your timeline & begin building wealth more quickly.
Building wealth begins with becoming debt free, so we should knock out our student loans as quickly as possible.
Reverse engineer your goals & create a timeline. For example you want to pay off your student loans in 3 years… take your total student loan balance divided by 36 months to see roughly what your monthly payment will be. Then determine if that payment is feasible inside your budget. If not revise your timeline and repeat the process, continue with this guess and check method until you have come up with an accelerated timelines and goal to pay off your student loans.
Many students, depending on their field of work & studies rely on student loan forgiveness programs. If you are familiar with this, I would highly urge you to continue forward with a repayment plan that does not consider the forgiveness.
Why? First of all, these are government sponsored plans and the government can really at any time change the rules or revoke their promise, so you should be skeptical on relying on them. Secondly, some of these programs require 10 years of service in a field before forgiveness, that is a very long time to have this debt hanging over your head in hopes that the government will still keep true to their word.
Instead focus on how YOU can take control of your financial situation, get out of debt ASAP and begin building wealth.