So we’ve already established that we suck at money. But what can we do about it? If your answer is: “Just tell my parents to dip into my trust fund!” Congratulations! You’re an assh*le. (But one that we’re very, very jealous of. Enjoy Coachella worry free, friend.)
For the rest of us, we need to get our collective acts together. Because we can sink further into debt or we can actually start making some smart financial decisions. In the words of Paula Cole as immortalized in the television classic, Dawson’s Creek…. ”I don’t wanna wait for our lives to be over” (before we can buy a house, or go on that vacation to Spain we’ve been dreaming of, or be able to go one f*cking month without running out of money a week before payday).
And with some simple life changes, we can become more financially secure. Because until you’re hitting that 80% income percentile, money really does buy happiness.
STOP IGNORING IT.
Oh, I look silly with my head in the sand like an ostrich?? Well at least my head isn’t up my own ass, Ted.
For many of us, it is really hard to go past this step. We throw out credit card statements and avoid opening up the gas bill. But until you’re realistic and clear about how bad it is, you’ll never be able to improve things. Plus, getting in the habit of keeping track of your bills will actually help you spend less. Rather than avoiding bills until the last minute (making your bank account look better than it is), pay them right when you get them. That way you’ll actually have a realistic idea of how much you have, and how much you can spend on incidentals and fun things. And speaking of not ignoring things…
Know Your Credit Score.
I’d feel way better about my credit score if the Craigslist Killer wasn’t standing directly behind me.
This terrifies me. So I just went ahead and checked. And you know what? My score is not GREAT but it wasn’t as bad as I thought! So check your credit score. It’s a great way to know if you’re going in the right or wrong direction. And it’s better to know that it’s bad than to be surprised when you go to rent an apartment and get denied. Because if you know your credit score isn’t good, you can prepare and figure out why. Do you have medical debt? A student loan that you weren’t able to pay for awhile? You can give landlords a heads up ahead of time that your credit score isn’t great (because of x,y, and z) and they’ll respect your honesty. Then you can tell them that they can call previous landlords as references. Because you’re a wonderful tenant, right? (Let’s hope, because if you’re a bad tenant and broke, we can’t help you.)
Keep Track of All Your Spending For 1 Month.
So I’m spending a thousand dollars a month on rose petals. Hmmm. Well, can’t cut anything out there!
One of the biggest problems with balancing a budget is that most of us have no idea what we’re spending. And believe me, every coffee you buy, every happy hour glass of wine, every top hat you order for your cat…they may seem like small purchases, but they add up. So spend a month with an app or notebook and write down every single thing you buy. It’s going to be rather embarrassing to see how much you’re spending in certain areas, but becoming aware of your spending habits will help you: A) change them, and B) prioritize.
Make a Budget.
90% of all young married couples have receipts plastered to their heads and covering their faces right this second.
So now that you know you spend entirely too much at Starbucks every month, it’s time to make a budget. Right off the bat you want to make sure you’re putting at least 15% of your income into savings. That’s going to seem like a lot. But how great will it feel the next time you get a flat tire to just pay cash, and not rack up more credit card debt!? Then be realistic. One sure fire way for a budget to fail is for you to be overly ambitious. If you currently spend 500 dollars a month on Precious Moments figurines, you’re not going to be able to stick to a budget where you only buy one figurine a month. Nor can you cut out fun things all together. So figure out what you can realistically manage. Maybe you still want your skinny vanilla latte every morning, but can cut out the cheese danishes. Set small, achievable goals with your budget. Every bit of fat you can trim will make a huge difference.
Talk To Your Partner and Hold Each Other Accountable.
Who has two thumbs, spent 300 dollars on sushi, and is sleeping on the couch tonight?? This guy!
It’s difficult to have two people sharing the same budget. One little splurge out of budget won’t make TOO much of a difference, you tell yourself. But unfortunately, now there are two of you both sneaking in little splurges and before you know it, you’ve run out of money for rent once again. So keep each other honest, and actually stick to your budget! One easy way to keep track of your spending is a shared financial app. You can both track your purchases and see in real time how your “lunch out” budget is looking (and change your habits accordingly). And then you can yell at each other later, fun!
Unsubscribe From Any and All Promotional Emails.
This won’t just unclog your email, but will keep you from buying unnecessary purchases. How many times have you bought a Groupon that sounded really good (like 70% off teeth whitening), but then never used it? And I know, you can’t possibly miss out on that two for one sweater deal at Ann Taylor Loft…But seriously, this will cut down your online spending habits by a lot. When you actually need to buy something the sales will still exist. I promise.
Learn How to Cook
Oh burrito, you’re in for the most passionate night of your life.
Eating out eats up a huge amount of your money (see what I did there?). This one is super difficult for me because I love eating out and hate cooking. But there are some easy things to do to help you get into better habits. Like: plan your meals ahead of time and cook in bulk. If you HAVE to cook (and you do, you’re poor!), you might as well make enough for the whole week. Make a couple of different things that you can reheat throughout the week and bring to work for lunches. And start with simple recipes! You’re going to give up if you start off with crazy, complicated things with a thousand ingredients. Get stuff for sandwiches. Make crock pot meals. Ask your mom for that casserole recipe you loved as a kid. Who knows? Maybe you’ll start to love cooking eventually. Maybe….and finally….
Have Fun Goals.
See right there? That’s the nightclub where Mommy felt alive and young for the last time. Fun, huh?
Try not to set unrealistic goals that will leave you disappointed. You’ll just get frustrated and give up! Rather than tell yourself you’ll never eat out again (which is a lie). Maybe try to eat out one less time a week. Rather than tell yourself you can pay off every single credit card in three months, concentrate on one at time (I mean make your minimum payments on ALL of them though). Set goals that you can achieve and then celebrate your accomplishments. And while you don’t want to deplete your savings entirely (that’s what got us in this problem in the first place), you can set up goals that will allow you to do fun things. Put away some money towards savings, use some to pay down debt, and then put some money aside each month for a trip you’ve always wanted to take. It will be easier to save when you know a small part is going toward something really amazing and tangible.