In a previous post I gave my thoughts on debt as the norm. Today, I’m talking writing about what to do now that you’re already down that debt rabbit hole. Although I am a little more focused on my Neverland status (growing up is hard) this post is going to deal with the not-so Wonderland of beginner finances. Let’s face it; the biggest part of growing up is financial independence. Of course we learn how to take care of ourselves, what kind of dishwasher detergent to use, remembering when to pay our bills, and getting the oil changed, but our primary goal in getting an education is financial success. Ironically, student debt hinders the very success it is designed to promote.
When I write about financial success I don’t necessarily mean becoming a mogul. I think I should be one before I can tell you how to become one. Financial success means being in the black at the end of each month (money in your account). It means that you aren’t waiting until your next paycheck to eat, or using your credit card to pay for your utilities. It means that you are able to save up money each month and still enjoy your life without the constant weight of money on your shoulders.
I am not going to show you how to get more; this is about cutting back and being happier for it.
And so here it is, the dreaded b-word; Budget.
It’s not just about making one, but how to make it smaller. Think about how you spend your money. Really think about it. Did you give it some thought? What do you buy that isn’t a necessity?
There are things you can do to help shrink your monthly budget. How much do you pay for your cellphone? Considering trying to convince family members that a family plan will help all of you save. If you have trusted friends, propose the idea to them if family isn’t an option. The first thing we think of when we grow up is having our own place. If you can save $600 or more on rent and utilities by living at home, stick it out for a year or so (this option is only okay if your parents agree to it). That’s $7,200 or more a year you’re now able to put towards your debt!
Most of us feel embarrassed or ashamed when we admit being in our mid-20s and still living with our parents. Now I tell myself that not only will I be debt-free but I’ll also be able to afford my first home sooner without the burden of credit cards or car payments.
The point is to eliminate as many monthly expenses as possible and put it towards paying off your debt. Write down everything you spend. Be honest with yourself. Are you being as frugal as you could be? Don’t think that I’m telling you to stop having fun. Try finding cheaper ways to do it. Use your student ID if it doesn’t have an expiration date; learn how to make a decent cup of java at home instead of paying $5 a day for a mocha (so guilty on that one); pack your lunches; etc.
Don’t think of your bank account as having a revolving door. The “I can make more” excuse for excessive spending is only going make that hole deeper.
Think I’m mad? I say have a cup of tea, and join the party.