Whoever says "money doesn't bring you happiness"... clearly doesn't know how to SPEND! Before I start this post a little disclaimer is due; I'm not the most wealthiest person on the planet no, and I'm definitely not where I want to be with my financial goal. This post is in no shape or form going to tell you how to make your first million at 20. This post is more for those who need some guidance on where to begin when it comes to finances. These are my personal tips that have helped me over the years.
I have been funding my self every since I left secondary school- so that's purchasing any necessities, money to go out with etc. I had an advantage during uni as I was still staying at home. I had and still have ups and downs when it comes to saving and it's not easy. I love seeing the money going into my savings account but I hate budgeting!- How does that work?
1.Find out where your money is going
Firstly, I would suggest you start a colour coordinated spreadsheet. Note down how much you get on a monthly basis. That will be on the top of your page. Next a couple of columns later add the words monthly outgoings- These will your monthly bills e.g. phone bill, car insurance etc. a set amount that goes out as a direct debit on a monthly basis. Add the total then minus this from your monthly outcome. This shows the amount that goes on your NECESSITY. This amount has to go without a doubt.
Next you'll have a list of EXTRA things you've bought such as, make up, outings etc. These are your splurging items that you probably could have done without, but you wanted it, so you got it. At the end of this list, add the total. Take the total away from the amount that was left after your monthly necessities. If you've been naught that month you'll be shocked at the amount you've spent. Once you go over this list you'll realise what you could have gone without and saved.
2. Open another account
Now you can either decide to create another bank account with another building society or even open a savings account under your same bank. Basically the objective is to create another place where you'll be saving your money. Some people question saving accounts due to their confusion with ISAs etc. I am not going to go in and explain this as I won't be doing a good job. If you go on your bank's website you'll get all the information you need. Every month you will transfer part of your salary in this account. If you have no self control, choose a set amount and then create a standing order- this means this amount will go out directly from your salary every month without you even thinking about it. Don't worry though you can always get into this account when your really want to
3. Emergencies only
From my previous point, just because you know you have money in another account, doesn't mean you need to get into it. Just tell yourself that, that account is non existent, forget about it and don't keep checking it. Only go into it when you're literally in dire need!
4. Start small:
I first started off saving money for smaller things, things like shoes, bags etc. This was when I was a lot younger, before my 20s. I feel like once you've conditioned yourself to know how to save for smaller things, it will make it easier for you to set bigger financial goals in the future.
5. Have realistic goals:
At a certain age you need to start settling down and think about what you actually need rather then want. Everyone's goals may be different but a lot of 20 year olds usually have similar goals such as; a wedding, house and investment. Now these aren't small amounts of money and therefore, it won't be quick to save for this
6. Don't mention it:
Nobody needs to know how much you make, what you're doing with your money and how much you're saving. This is personal information and anyone that requests it is highly intrusive of them. I found that once you mention how much you're making, people instantly judge and think wow that's such a good amount, I wonder what you're doing with all that money. Also when people find out what you're doing with your money, they have the cheek to judge it and say things like you shouldn't be spending on that or wow you must be comfortable if you can splurge on such things.
7. Cut back on your luxuries:
Now you can either decide to create another bank account with another building society or even open a savings account under your same bank. Basically the objective is to create another place where you'll be saving your money. Some people question saving accounts due to their confusion with ISAs etc. I am not going to go in and explain this as I won't be doing a good job. If you go on your bank's website you'll get all the information you need. Every month you will transfer part of your salary in this account. If you have no self control, choose a set amount and then create a standing order- this means this amount will go out directly from your salary every month without you even thinking about it. Don't worry though you can always get into this account when your really want to
3. Emergencies only
From my previous point, just because you know you have money in another account, doesn't mean you need to get into it. Just tell yourself that, that account is non existent, forget about it and don't keep checking it. Only go into it when you're literally in dire need!
4. Start small:
I first started off saving money for smaller things, things like shoes, bags etc. This was when I was a lot younger, before my 20s. I feel like once you've conditioned yourself to know how to save for smaller things, it will make it easier for you to set bigger financial goals in the future.
5. Have realistic goals:
At a certain age you need to start settling down and think about what you actually need rather then want. Everyone's goals may be different but a lot of 20 year olds usually have similar goals such as; a wedding, house and investment. Now these aren't small amounts of money and therefore, it won't be quick to save for this
6. Don't mention it:
Nobody needs to know how much you make, what you're doing with your money and how much you're saving. This is personal information and anyone that requests it is highly intrusive of them. I found that once you mention how much you're making, people instantly judge and think wow that's such a good amount, I wonder what you're doing with all that money. Also when people find out what you're doing with your money, they have the cheek to judge it and say things like you shouldn't be spending on that or wow you must be comfortable if you can splurge on such things.
7. Cut back on your luxuries:
I know this will be tough but just think of the bigger picture... There are many alternatives to products out there. So many good dupes which sometimes work better than the original item. Cutting back on your luxuries doesn't mean you are letting go of what you need. You're still getting it but just minus the the price tag.
8. Eat the food that's at home
8. Eat the food that's at home
We all love getting all dolled up and going out for a meal or even getting a takeaway in the comfort of your own home.. it's just one of those things. You can still enjoy this but just simply cut back. It honestly does add up. Maybe go out for dinner once a month and limit takeaways to twice a week if anything. Another good way to save is to make your self lunch at home rather than getting that meal deal. It tastes better and you can make a lot to last you the week.
9. Say no to loans:
9. Say no to loans:
Loans are a big no no in my book. I used to hear stories of my colleagues saying they once took out a loan to fund a night out... this is ludicrous to me only because the fact that you risked your financial state for a night out? Anyways each to their own but for me, a loan is a no no. Loans come with so many small prints and it's easy to get lost in them. Instead get a credit card and learn to build your credit rating using that. I'm not a financial advisor so can't go further into this topic.
10. Don't go without:
10. Don't go without:
This is the last but the most important point from me... I've always told my self to never go without. If I want something I would get it. When you start depriving yourself life gets dull. So you need to find a good balance. Yes save save save away but every now and again remember to LIVE!