Moola, dough, dinero, mammon—whatever you call it, money is a hot topic. Getting my sh*t together financially is definitely at the top of my list of “adulting” things that I wish I’d put more energy into in my twenties!
Don’t get me wrong, I didn’t do terrible, but there are a lot of thing I only learned later on that would have been much easier if I had known/practiced them earlier! Some of these things only came up for me once I decided I wanted to buy a house in 2017, and trust me, sitting in a realtor’s office looking at paperwork for your dream home is not the place to first realize you need cash assets and a good credit score to make it all come together.
In no particular order, here are ten tips to help you get smart about money.
Define your long-term money goals.
You may not 100% know what they are yet, which is fine; but I have a suspicion you have some small inkling of what you want to do, or not do with your life—and once you know that, all that’s left is to understand how money affects those goals. The obvious example is imagining that you’d like to settle down with a family someday; you’ll probably be looking into buying a house, which means you need to clean up your credit score and begin saving for a down payment.
But it can be less obvious. Want to spend your time traveling the world? It’s time to start building a “f*ck it” fund (see below) and figuring out how what you’ll do to generate a paycheck that will allow time for all that travel. (Freelancing isn’t a job to jump into overnight, y’all!)
Make a budget.
Figuring out how much money you make each month and what you need for bills vs. what you’re actually spending can be a rude shock. One of the best lessons my dad taught me was to track your monthly expenses! Set up categories and limits for each (clothing, entertainment, food, etc.). You’ll be surprised by how much spare money you can find to save and/or pay off existing debts. I also keep a separate savings account and use direct deposit to siphon off part of my biweekly paycheck so I’m not tempted to spend it.
Understand your credit score, and credit in general.
A credit score can determine not only your potential ability to someday buy your dream home, but your ability to buy a car, rent a decent apartment, or take out a decent credit line to finance your wanderlust. I plan to write more about this in a separate post since it’s fairly involved, but I’ll say here that there are great free resources like NerdWallet that take the mystery out of building a good score, using credit cards to your advantage, and generally negotiating the world of credit and loans without getting soused.
Build a “f*ck it* fund.
A lot of money experts will tell you to sock away three to six months worth of living expenses in event of job loss, but if that seems unattainable, start small: even $20 or $50 from each paycheck stacks up quickly. (Ideally, obviously, you would save more, but the point here is simply to start.) A f*ck it fund helps cover you if you lose your job, health, housing or vehicle unexpectedly, but it also provides a small safety net for the times when you might need to voluntarily walk away: from a bad job, toxic living situation, or anything else that has become more hazardous than not.
Write out a debt management plan.
I’m going to admit that this is 100% not fun…but I update mine at least once a month to hold myself accountable. For the past two years it seems our debt keeps piling up higher and higher with unexpected vehicle repairs, vet bills, and more…and it’s frustrating to look at the amount left to be paid on something and feel like you’re making no headway.
I recommend tracking everything you owe in a notebook and crafting a plan to start paying it off. You can start with the smallest, easiest bills (the snowball approach), or you can do my fave and start with the bills that have the highest interest rates on them and begin knocking them down. Also remember to pay extra where you can so you pay less interest in the long run! (P.S. This is where budgeting helps you find extra cash to put toward your existing debts!)
Take advantage of your employer’s 401k match.
It’s free money toward retirement, and I deeply regret not taking advantage of this sooner.
Get a side hustle. Or just work overtime.
I have my days where my finger is hovering over the “log out” button at 1:29 PM because I can’t wait to go home. But I work a lot of overtime and have taken a lot of side gigs over the years, from freelance copy-editing to donating plasma to one actual part-time job (which I ended up hating, but I digress). It’s not fun, but I do it to help offset major expenses like Christmas presents.
Know your worth.
I read constantly in money advice columns that women need to be more aggressive in negotiating their salaries. And you know what? That is awesome advice that 100% does not apply to me, or to most of the women I know. If you’re working for an hourly wage it can be much tougher to fight for a livable paycheck, since many of us get “take it or leave it” offers.
I will say this, based on over a decade in that type of job: if you feel you aren’t being paid what you’re worth, no matter how scary it is, get out there and look for something better. I’m not saying quit on the spot, but don’t let the fear of change prevent you from hunting for a better offer. Keep your resume polished so employers can see your experience, which often affects hourly pay. And if you’re setting your own rates as a freelancer, chat with others in your field so you don’t undersell yourself.
Coupons, people! They’re not just for Grandma. I rarely shop without taking advantage of at least one sale, coupon, or other discount offer (like a loyalty program at a particular store). Most times, I combine all three. It’s how I just hauled roughly $450 worth of goodies from Ulta and plunked down a whopping 34 cents on my credit card. Beat that! (This is probably another tip that needs a separate post of its own!)
I’ll add here that I only get sale alerts via email from a few stores that I absolutely love, and I unsubscribe from any other company sale alerts that pop up. No “hot buy” email = no temptation to overspend.
Learn to DIY, crowdsource, and find things for free or cheap.
There are so many things you can learn to do at home much more cheaply than “out and about”—learning to cook vs. eating out, learning basic home repair vs. hiring a pro, etc. You may also find good luck with trading off jobs with a friend based on your respective skill sets, or crowdsourcing help from friends for a large project. I also recommend getting acquainted with local networks like Groupon and NextDoor for free or discounted goods and services in your neighborhood. That’s how we found free river rock for our garden last summer!
Finally, learn where to find free or cheap entertainment in your local area. Check out movies from the library, visit a park, see free or cheap concerts through community colleges and local coffee shops, attend hobby workshops at retailers, etc. And ask other locals for their favorite free or inexpensive sources of fun!