As someone who’s naturally creative, the thought of dealing with numbers makes my skin crawl. This coming from someone who hated math in high school and flunked college level math twice before I passed it. Math and science have never been my strongest subjects and I was one of those kids who would say things like, “I want to be a writer, when will I ever need math?” Welp, now in my late 20’s I realize that I needed math a long time ago. It wasn’t until I turned 24 a year ago that I began to learn financial responsibility for myself.
I signed my first lease to an apartment in downtown Newark which wasn’t inexpensive. That meant that I added more bills to my mailing list. I went from being responsible for a measly cell phone bill to rent, utilities, internet, phone, groceries, transportation and entertainment costs. I was so overwhelmed. The struggle was real and I had a hard time fighting for my social life and being responsible because I just was not making enough money at work to be able to afford everything that I wanted to do and needed to do. Here are some of the things I learned about financial responsibility:
Always have an emergency fund! I learned that living paycheck to paycheck is not fun at all especially when you’re making just enough to pay bills and that it. God forbid an unexpected expense comes up and you have to scramble or figure out to pay it because you made just enough to cover the usual expenses. Story of my life in 2014. Always have a saving account that you don’t touch ever except in the case of an emergency, hence why it’s called an emergency fund. Whether you’re tackling some debt, saving up to move, or just saving you should have at least $1000 in emergency money. I learned the hard way, but I got the hang of saving eventually.
Budget and then budget again! When payday came, I just knew that I had to pay rent and utilities, but then would find myself overwhelmed when other expenses started to pop up. I learned how to calculate my hours and know exactly how much money I would be getting each pay. I began to sit down and write out a budget. I would write it starting with how much money I had and then little by little deduct my expenses to make sure I can afford everything and possibly have a little left over for some fun. After I did that I would budget again to make sure everything is accurate, but this time I would start by adding up my expenses and subtracting that total from the amount of money I had. I also learned how to set money aside for important fees.
Know the difference between good investments and unnecessary spending. Splurging on things like clothes, shoes, accessories, electronics, etc is considered unnecessary spending when you’re living paycheck to paycheck. Good investments would fall under the category of any expense that is related to starting a business, investing in educational advancements, networking opportunities because these things can potentially help you make more money. With these investments come sacrifices.
Finally I learned that making sacrifices is okay! If you have to skip your friend’s party or club night with the crew then so be it. There will be plenty more of those nights in the near future. If you can’t buy that outfit you really wanted because you need a little groceries to hold you over until next pay then it’s okay. Who knows the outfit might be on sale the next time you want to buy it. If you can’t afford a birthday gift for a friend or family member, they will understand.
I was a late bloomer in terms of being financially stable, but I guess it’s better then not knowing at all. I’m still saving and budgeting my way into a comfort level, but I have found a few book that have helped me and may help you too.
- Get A Financial Life: Personal Finances in Your Twenties and Thirties by Beth Kobliner
- The Money Book for the Young, Fabulous and Broke by Suze Orman
- The Minimalist Budget: A Practical Guide On How to Save Money, Spend Less and Live More with a Minimalist Lifestyle by Simeon Lindstrom
Financial responsibility also begins in the mind as well. If you live reckless and just spend money as if you’re ballin then you’ll forever be broke. A part of being financial responsible is growing up mentally and learning how to prioritize. It’s cool to want to be the life of the party, and pop bottles on Saturday nights, but if that means you’re tapping into your rent money then you’re not doing it right.