Money Advice from a Money-managing Newbie

Well hey, hi, hello my friends!

I hope your 2017 has been treating you well; I can’t believe we are already 2/3 of the way through January.

Let’s talk money. I’m bad with it. I used to be embarrassingly bad with it. That being said, I have learned a lot over the last couple of years about how to manage money like a grown-ass adult. If you’re a young person just stepping into the waters of real responsibility and money management, these penny-pinching, strategic spending tips and tricks are for you. I make absolutely no promises that you’ll be a millionaire by 30, but this advice may help you get to a point where your bank isn’t regularly emailing you about falling below $50 in your checking account.

First things first- ditch the word budget. Budgeting often has the connotation of being restrictive, annoying, difficult, and limiting. If you find this to the case for you, use a term like “spending plan” to create a more empowering connotation- you are not slave to a budget, but the director of your monetary life. You are in control.

Figure out your monthly take-home pay and your expenses. This is where you’re going to need to get both creative and serious. Your expenses cannot exceed your take-home pay, and your expenses are going to vary from the expenses of others based on your situation. I am in a situation right now where I can put my money towards things other than housing, which frees up quite a bit for me to reallocate and to loosen the reigns slightly on my monthly plan. Every month on the day before payday, I take 10 minutes or so to assess my projected expenses for that month and allocate my expected pay based on my needs and goals. Below is an example of my monthly spending plan:

budget-screenshot-2016
Use tools to help you manage variable expenses. Some of my expenses like groceries, gas, and my “fun money” are estimates, and I may spend more or less during the month. if I spend less, awesome! If I spend more, I may need to review my spending history and adjust for the next month accordingly. My favorite tool for this is Pennies, which I was able to download for free (thanks, Starbucks Rewards!). I enter my monthly limits and then track what I spend for each category, and the color coded graphic shows me the length of the month, my balance, and if I can spend freely or carefully.

pennies-app
Find a penny, pick it up. It might seem tacky, but if I am walking and notice that there is a penny or other coin on the ground, I will pick it up and put it in my wallet. All the change I accrue goes into a mason jar, and once the jar is full I take it to a CoinStar and exchange it for a gift card to Amazon or elsewhere! FYI- when you choose to turn in your coinage for a gift card or as a charitable donation, there is no percentage deducted. If you exchange for cash, the machine will charge a percentage for counting and converting your change.

Carry cash in your wallet (or don’t). Figure out which medium is best for your spending habits. While there are studies suggesting that the physical and visual act of handing someone paper money makes you more aware of the consequences of spending money, I know that I tend to spend cash when I have it but think more carefully about how swiping my debit card will affect my checking account. I try to carry a little cash for emergencies but use my debit card for most purchases. I don’t carry or use credit cards, ever.

If you shop at Target, go red. I signed up for the Target red debit card and every time I shop, I save 5% you also get free shipping for online orders and an extra 30 days to make returns.

Use Ebates for online shopping. If you haven’t started using it yet, YOU NEED TO. The site gives you a portion of the affiliate payment it receives from the associated retailers. If I spend money at Sephora, Ebates will give me usually about 4% of what I paid. It might not seem like much, but it adds up! You’re getting small savings that you otherwise wouldn’t, so why not go after them? Pro tip: when you get your check from Ebates, put it in your savings account. No matter how small the amount, it adds up and helps you save more without really feeling like you’re sacrificing.

Coupon and sign up for rewards programs- but only if you’ll use them. I coupon only for products I use regularly and only when it is convenient for me to do so. I don’t hunt down newspaper inserts and I won’t clip a coupon for 25 cents off three boxes of cereal. Jut because it’s money off, doesn’t mean it’s money you should spend. The same goes with reward programs. I am a Starbucks Gold member, Barnes and Noble member, and an Ulta Platinum member, but only because they are already regular expenditures for me. The B&N membership gives me 10% off each purchase I make and the points I earn at Starbucks and Ulta I can redeem for free coffee and huge savings. Like with Ebates, I only take advantage of these rewards programs when I know I would be spending the same amount of money anyways.

Start a side hustle. I babysit for friends and family. Some people start Etsy shops, some write E-books, others pick up part-time jobs. If you have the time and energy for it, starting a side hustle can be a great way to add a little extra cash to your wallet.

Reduce, reuse, and recycle. Be minimalistic. Challenge yourself to reduce your energy bill each month, or to turn your daily Starbucks habit into a once a week treat. Buy cloth towels instead of paper. Keep glass jars and use them for storage or as a tupperware alternative. Save your cans and bottles and recycle them- you will probably earn a couple bucks doing so.

Give back and invest in yourself. Give back to your church or your favorite charity. Be intentional about how and when you treat yourself. As much as you can now, do yourself a favor and SAVE. In addition to throwing as much money as I can into savings, I set up a Roth IRA and a wealth building account with Betterment, which makes investing an absolute breeze.

My last tip: stay inspired. I read financial planning articles online to see what other tips and tricks I can pick up. I also LOVE listening to related podcasts, such as Gaby Dunn’s Bad With Money. Her podcast not only addresses the basics of how to manage money, but also how various other factors (such as gender, race, upbringing, mental health, etc.) come into play. She’s relatable, she’s funny, and for being bad with money she has certainly taught me how to be better with it.600x600bb

I know there really isn’t anything groundbreaking about my advice, but I encourage you to put at least a few of these tips into practice; I think you’ll be surprised at how much they will help you manage your money. Before I did these things, I had a habit of spending myself into the red. Since I instituted my spending plan, my savings have grown, as well as my confidence.

What advice do you have for money management? Share it in the comments section!

 

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