Realizing you need better personal money management skills is the first step for most young adults, especially after four college years of nabbing pennies off the sidewalk just to immediately blow the whole wad on beer and fast food tacos. Doesn’t sound right? Our apologies if you were the odd duck who grasped the idea of control from the beginning. Most of us still don’t get the importance of telling our money where to go and not vice versa.
A post-graduate real job entails regular income. Great! But what if you still treat your paycheck like free money found on the sidewalk. Disaster! You’re eating out every meal for a week and now the money’s gone ? with rent due tomorrow. Trust us, kiddies, it happens. To avoid this troubling scenario, you need to learn personal money management skills, a concept likely skipped over at every institution of education you attended. Just like Adam Lambert didn’t learn to sing in a day, you shouldn’t panic at your lack of control over finances and put yourself on an ironclad responsibility regimen all at once.
If you can do it cold turkey, that’s great. For many, it’s a recipe for failure. Most need to ease into the adult life of budgeting slowly, to get acclimated. The first step (we’ve been here before, people) is to write down every single cent you spend for an entire month and then, at the miserable end, pull it out and analyze the bloodbath. You might well discover that 95% of your income goes to video games and shaken green tea from Starbucks. What’s left for rent, gas, insurance, and emergencies? Ring ring…?Hello, Dad? Mikey here. I’m a little short this month…?
Get started on the journey to real personal money management by creating a realistic budget and sticking to it. When you fall off the wagon at some point during the month, get right back up and recalculate your budget from what you have left. If the damage is bad enough, like an impulse purchase of The Lord of the Rings box set ? the extended versions, you might have to start from scratch again with your next pay day.
Remember, no matter how bad it gets, no matter how embarrassing, keep trying. This is important stuff.
The Young Wealth Team
Flickr / playadura