I am horrible with the checkbook. I fell into the same trap as many twenty somethings did back in their teens when the credit card companies made them a member of their mass mailing club. I received my ‘You’ve been pre approved!’ envelopes containing persuasive letters from the big guns of the credit world. Visa, MasterCard, and the pro of all marketing ploys: American Express. It is tantalizing to a 16 year old, you spend like the plastic doesn’t represent real money, and then you get the bill. Ow, reality hurts.
Now I am twenty four and still cleaning up my mess. My credit is shot and despite my carefree outlook on life, I have realized that I need to start learning how to be financially responsible so I can hope to buy a home and be successful with my income in the future.
Being your own financial analyst means realizing that what you earn is not necessarily what you can spend. While I am fully supportive of the idea of blowing that first celebratory paycheck at the mall, I do also want to stress that I have learned the importance of savings and cutting out what it is in life that causes expenses that you don’t really need.
A great first step is to find a bank that offers direct savings programs. Many, if not all banks, will set up a joint checking/savings account for you, which automatically deposits a percentage each month from your checking into your savings. It is usually a small enough of an amount that you don’t even miss it, and at the same time you have accomplished a brainless way to save money. This can add up, and when you get your monthly statements, you will be pleased to realize that you have managed to save some cash without suffering during the process.
Secondly, draw upon your bank statement to make an itemized list of what you spend your money on each month. What will you simply die without and what can you manage to kiss goodbye? A night out at the movies is an average of $9.50 per person. Blockbuster is 4 bucks. Which movies can you turn away from until they arrive onto DVD? A meal out can average anywhere from $4 for a fast food lunch to $15-20 a person for a median priced sit down. Grocery shopping and cooking at home saves the average family more than you probably realized. And you hone a new skill at the same time.
Next make a budget and consider it the unbreakable law. Find out how much you are able to spend & save, and stick to it! Don’t impulse buy. Walk away for a few hours from items that you see, and then come back to the situation later on to decide if you really do want to purchase it. Surprisingly, you will find that there are many things you don’t really want or need.
Lastly, consider hiring a real financial analyst to help you take the steps to become your own. Though costly, they are a money saver in the long run. Do what you need to do to achieve self control. You will thank yourself later.
It is easier than you think to financially analyze your own situation. Everyone has the opportunity to be successful in money and in life. Give yourself the chance that you deserve.