Save Yourself the Hassle: A Woman's Guide to Financial Stability
The art of saving money, why can this concept feel so difficult to understand? After studying business finance in college and, since graduating, working for a financial advisor... I feel as though I am starting to get a better grasp on this topic. The problem with being a young adult is that we generally have a mindset of “have fun now, work later”. I see this far too often; what I also see is adults who don’t have enough savings in their retirement to sustain themselves. As young gals, we need to get it in our heads that getting our finances in order now is more beneficial than struggling later . It’s simpler than you think too, trust.
When people find out I bought my first house in Orange County at 23 years old, I’m often looked at in complete shock. .. "Wait, like, a real house?" "Completely by yourself?" Yeah girl! To me, this doesn't seem too farfetched. Mind you, it’s probably because this has been my goal for so long now it’s become a habit to save up. Although, I should warn you I’ve made some pretty big sacrifices in order to achieve this goal; i.e. where to go to college, whether or not to study abroad, working two jobs, the list goes on...
Now, I am completely aware not everyone is in the situation to do the same, nor would many young women want to be this drastic when it comes to saving. Although, I do know that many young people get down on themselves when it comes to their finances because it seems like a lost cause. Well, it's time to change that mindset. Your finances deserve a little TLC and you deserve to finally be at peace when it comes to your bank account. You just need to keep a few things in mind and you'll be well on your way!
1. Start small
Have you ever run a marathon? Me either. Although, I imagine if you were to train for the big day you wouldn't start by running all 26 miles. Maybe you would start training by running 3 miles, and eventually work your way up to 6, and 10, and so on. Have that same mindset when it comes to your finances. Of course, you won’t see that desired number in your bank account overnight. Start small with your financial goals, and make sure to be practical with setting targets. Do you want to see an extra $600 in your account by the end of the month? Work backwards. That means you need to save an extra $150 every week. Is that realistic for your lifestyle? If so, go for it! Learn what you can live without and get into the habit of saying "no". I'm sure the Starbucks barista will understand when you stop visiting every. single. day. Once you start seeing that number grow you will be motivated to keep going. The finish line is on the horizon, I believe in you!
2. Love what you do
This one is pretty simple. I know you've heard the cliché "love what you do and you'll never work a day in your life."Well, that version is a little dramatic but it's getting at something. Of course, saving is more rewarding when you work hard for your money. And hard work is important, but quality of life is important too. If you are miserable at your job, saving up is going to be that much drearier. Maybe it’s time to get out there and figure out what makes you tick. Add your passions and your talents and the world is yours, darling.
3. Work with what you've got
Oh, this one drives me nuts. Girl, you have got to stop spending outside your means. Set a budget, and stick to it. I know how hard this can be, especially in a world with a "treat yourself" mentality. But let's get real, if you don't make it don't spend it. Let me give you a little math equation to live by, because I know how much you love math: it's called the 10-10-80 budget. Set aside 80 percent of your income to live comfortably. Spend this portion on rent, utilities, food, etc. Next, set aside 10 percent to your savings. This is the part many people choose to "forget" but it is ultimately the most important part of the budget. Speaking of your “savings,” a good rule of thumb here is to always try and have at least 3 months of rent saved up. Keep this number in mind as a minimum in your savings to have as a cushion in case of an emergency. If you don’t have this much in savings yet, maybe adjust this 10-10-80 a bit until you get there. Once you start practicing these good habits, the last 10 percent is to do with what you please. Tradition says this 10 percent is to be used as a tithe, but if that's not for you, go crazy. Use this portion to reward yourself, but do make sure you only use the 10 percent. Put the extra pair of shoes down. You'll thank me later.
I know taking these steps might not be easy at first, but you’re going to feel so relieved once you do. Because when it comes down to it, we really don’t need an extra thing to be worrying about. If you do it right, money can actually be a source of relief in your life. Building your savings might not seem like the most “fun,” but I can guarantee you it’s worth it. And you know I only want the best for you. So years down the line, when you have more money than you know what to do with, come visit me, Lauren Zuniga, CFP.
Written by: Lauren Zuniga | @laurenzuniga