If you’ve been here before, you know how I feel about money. My relationship with money has been strained for some time, and the massive amounts of debt I’ve incurred over the last 5 years have changed how I live my life. I’m not upset about it. It’s been a good lesson, but you can bet that I’m tackling my debt with complete fervor.
Now that I’m 25 years old, I’ve got some serious money advice for millennials. Not because I know it all, but because I have been through it and it’s hard! I hope and pray that whoever reads this will take these words to heart and change the way they think about their money.
1. Pay yourself first.
You’re never going to feel like you have enough money to save. Never ever. That’s why you must always pay yourself first. Whether it’s $10, $25, or $50 a week, take time to set that money aside in a safe fund. If you don’t, you’ll always find something to spend it on.
2. Build a small emergency fund.
I know that as a broke twenty-something, an emergency fund seems like the last thing you can afford, but you must make it happen. Even if you can save just $1000, you’ll feel a lot more secure. That amount will cover most repairable car issues, new tires, and a really bad-luck day. You’ll be thankful you have it when an emergency does hit.
3. Live cheap.
I know this seems broad, but even when you’re out of college, you still need to live with less for a while. You can upgrade from Ramen noodles, but you still can’t go out and blow through cash by purchasing new clothes, a car, and furniture. This is still thrift store time, unless you have absolutely no debt.
4. Make your own meals.
There are few bigger wastes of money than eating out for every meal. Learn to cook and make your own food, including lunches! Eat leftovers. Whatever you have to do, making your own food is the easiest way to save money.
5. Don’t buy a new car.
Even if you can afford the payments, buying a new car is such a total waste of money. In one year, it will be worth $5k less than when you bought it. The insurance will be stupid high. There’s no plus side. Buy something a year or two old so someone else can deal with the immediate depreciation.
6. Get a credit card.
If you don’t already have one, apply for a credit card today. I’m not saying you need one, but they sure are helpful for building credit and dealing with emergencies. Plus, they’re a lot safer to use than a debit card. Just remember to pay off your balance every single month!
7. Know your credit score.
Once you get a credit card, check your FICO score. This number is your life in the financial world. Find out what it is and work towards making it better. Create an account on CreditKarma.com to get a free general idea about what’s happening with your credit.
8. Check your credit report.
You can access your credit reports from Experian, TransUnion, and Equifax once a year for free. You can also see your reports on CreditKarma (above). This has all your financial history rolled into one. If you see something wrong, you need to call up the company reporting and fix it. Again, this is like your report card in the financial world. Eat, breathe, and drink this information.
9. Get a second job or side hustle.
Here’s the truth. You can cut expenses until you’re all dried up, but the number one way to build wealth and pay down debt is to earn more. Whether you have to get a second job or start a side business, making more money is the fastest way to financial freedom.
10. Shop at Aldi.
This goes back to making your own meals. You’ll find that when you start buying groceries, food is a lot more expensive than you thought. If you were embarrassed as a kid to be seen in Aldi, get over it. You can save nearly 50% on groceries every week just by shopping at this cheap grocery store.
11. Stop purchasing clothes.
I understand that you need a few business outfits if you finally got your dream job, but besides that, stop buying clothes. Just stop. You’ll find once you start working in the real world, there’s little time for wearing anything but work clothes. You don’t need new shorts for summer. Wear your old ones. There’s no bigger regret than looking in your closet and realizing you didn’t really want or need half the stuff you bought.
12. Work out at home.
If you have a gym membership, cancel it now. It’s pointless and wasted money. I don’t care if it is only $10 a month. You could be saving that money or putting it towards debt! You can run outside, do yoga in your home, and watch videos online showing you how to work out without equipment. You don’t need the gym. Plus, it’s grody and fungi abounds.
13. Live with roommates.
If you refuse to live at home, or it’s impossible, find a roommate or two, or three. The more people you live with, the less money you’ll spend on rent. Even if you only do it for a year, think of how much money you can save and put towards paying down debt!?
14. Throw all your money at your debt.
A lot of people don’t like this idea because it kills the “fun factor” of your twenties. But you wanna know what’s less fun? Living in denial and realizing 10 years later that you could have been debt free if you’d just sacrificed a bit in your twenties. Put the extra cash towards becoming debt-free and play later.
15. Set up automatic savings.
Almost every bank account now has the ability to set up automatic savings plans. As I said in #1, the best way to save is to pay yourself first, and an auto savings plan is the easiest way to do it.
16. Cut out TV.
It’s so ridiculously expensive and wasteful. I don’t even recommend having Netflix or Hulu since the internet is such a wild and free place. However, if you must, go with Netflix or Hulu. It’s better than paying for U-Verse or cable.
17. Make your own coffee, mixed drinks, etc.
Why people waste money at Starbucks is beyond me. Even if you use K-Cups, you’re still saving like $2-3 a day! Alcohol… don’t be ridiculous. You probably can’t afford it. Stop drinking it. If you must, make your own cocktails and sangrias at home.
18. Think about your purchases in terms of hours worked.
There’s this nifty little trick you can do to make your money stretch further. When you go to purchase something, look at the price and think about how many hours you’d have to work to afford it. For example, if you make $10/hr and go out to eat for your work lunch break and spend $12, one hour you just worked was wasted on your lunch. How does that make you feel? Think about how many hours you’d have to work to pay for those new shoes you desperately want? Are they really worth it when you realize you’d have to work a full day to afford them? Probably not.
19. Open a Mint.com account.
If you haven’t heard of Mint, you’ve probably been hiding under a rock. Mint.com is a place you track all your expenses, income, and debt. It will set up reminders for when you should pay bills, helps you establish a budget, and gives you a credit score update every 3 months.
20. Look at your money, debt, and net worth every day.
If you open a Mint account, looking at your money every day becomes second nature. They have an app for smartphones and it’s accessible on tablets and computers too. Check it every day to be reminded how much you are worth, or not.
21. Create a financial vision board.
You’ve probably heard a lot about vision boards lately. They’re kind of a big deal. A financial vision board would be a beautiful, visual reminder of your financial goals, whether they be 1, 5, or 10 years down the road. It helps you stay focused and motivated.
22. Use StraightTalk etc. for your phone.
Why are you using a major carrier for your phone plan when you could pay $50 a month for unlimited everything and still be on a major network? We use StraightTalk and have never had an issue. We’re saving around $60 a month by using this option.
23. Keep record of your purchases.
Seems simple, right? It actually takes a lot of dedication. Track your purchases and you’ll realize just how much money you’re wasting.
24. Stop smoking.
Don’t argue. Calculate the savings for one month without cigs. Stop being a damn fool. Quit today.
25. Stop trying to keep up with your friends.
Sure, your friends may have it all, but if you look close enough, you’ll probably find that their life is lacking in one area or another. I’m not saying you should want your friends to be unhappy, but remember that everyone is always upset about something, even if they don’t show it. Don’t get into money trouble now just because you want to look like you’ve got it all together. Fifteen years down the road, it will be one of your biggest regrets.
Heed my words friends. These tips will help you stay on the right path financially. Don’t act stupid like I did!