Most people are overwhelmed by the state of their finances. You know you need to do something, but what? This is the bare-bones basic post to get you started.
- READ A BOOK ON PERSONAL FINANCE! – I wonder why people are so averse to reading these days. There are so many books out there by such a wide variety of authors that you will undoubtedly find someone you can relate to. Go to the library, it’s free! Peruse the aisles and pick one. Commit. READ IT! I promise you will feel so much better.
- START A BUDGET – No, this will not have to be perfect. Just grab a piece of paper, open up your banking apps and start writing down all the bills you pay each month. Line up the due dates with the closest pay period. Some will be fixed like rent, insurance, and your car payment. Some will be variable, like food and gas. Come up with an average and use that. Take the amount in cash each payday and stop using your credit cards. Each week review your spend. Each month make adjustments so that your budget is realistic. Do you have any money left over? Move it to savings on payday and pretend it doesn’t exist.
- INVESTING – Let’s say you haven’t read that book yet. You have a 401k at your job and you don’t know what to pick as your investments. You will normally see something called target index fund XXXX year. Pick the one that aligns closest to your retirement age and just use that. The fees will be higher, but it will get you started. Once you do some self study go back and adjust it. For now, it is an easy place to start. If you do not have access to a 401k at your job, you can open an IRA. Pick a brokerage like Vanguard or Fidelity and create an account. Then do the same thing, pick a target date index fund. Put whatever you can each paycheck on autopilot. Boom, you started.
- Budget or not, you are still broke – You have to increase your income and decrease your expenses. Time to trim the fat and eliminate all the things you don’t NEED. Yes, you may think you need all your subscriptions but you really don’t. Drop them for a few months, you can always sign back up when you’re in a better place financially. Time to look for a new job. You will make the most money by job hopping vs. staying loyal to any company. If you are in a dead-end job, you have to invest in learning a new skill. Udemy.com is amazing for cheap training that will get you a better job. Dedicated your weekends to self-study and get certified in a new skill.
- GO NUCLEAR – Can you move back home with your parents? Get a roommate? Trade your car in for something less expensive? Move to a lower cost of living area? Sell anything you don’t need? How desperate is your situation? You may want to blow your life up for a little while and come back stronger.
Still scared? I am here to help you. You can schedule a free 30-minute goal setting session and I will hold your hand. You would be suprised how much I can accomplish in mere minutes. Have faith in yourself. You can do this!
