It’s official! You’re making money moves, right? You’re on your grind, holding it down, working hard for that money, and making those “money moves.” If you are about that life, never stopping and taking it upon yourself to elevate your finances, than bravo! If you’re not, then don’t get too comfortable. We are going to find out what you need to do to get those “expensive shoes.”
If you haven’t already figured out by now in the first paragraph we are using Cardi B’s song lyrics from “Bodak Yellow,” to express the all day; every day, all hours of the day grit and grind. If you want something bad enough, you must work as hard as you can to achieve it. Setting realistic goals and expectations for yourself, business, and relationships are the first moves that you need to make. Get serious about what you want. If that is writing it down and making things happen, creating a vision board, or a daily to-do list… then do it.
If you don’t feel that sense of relief, that feeling of being comfortable with all the choices that you made in your life especially when it comes to your finances before you lay your head down for the night; then you probably don’t have financial freedom or even know what it feels like. Not having to worry about paying your bills, putting food on the table, wondering if your utility bill is too high to pay this month, paying your rent, or worrying about your car sitting in the same spot you parked it in because you haven’t paid your car note yet. If you sit around worried about these things in your life then it is time for a change.
Young Finance 101 wants to get you to the point where you don’t have to worry about unexpected bills, emergencies, or other expenses that leaves stress and anxiety trying to figure out when will it get better and what must change. We are going to make sure that you have the financial freedom to make the decision to quit a job that you have to do what you love because you have money set aside. You’ll also have financial independence as well as options.
After you have realized your goals and expectations for your life we want you to write down some of the money mistakes that you made over the years. The reason for this is so that you can learn from them and not repeat the same mistake. For example, not investing in your job’s 401K plan, getting a new car that you can’t afford, taking out student loans to pay for a lifestyle rather than for your educational needs. We are all guilty of making some financial mistakes. It’s like the saying goes, “don’t count your chickens before they hatch.” If you can’t afford what you want right now, it doesn’t mean in the future that you won’t be able to. Some things take time and patience. If you could do it all over again, we are pretty sure that you would not make those same mistakes if you knew what your future told. Don’t regret your decisions that you made because otherwise, you would not learn from them. If you fall off a horse you would not stop riding, correct? You would jump back on and make sure that you hold on tighter.
Learn to manage your money wisely. We have said it before here on Young Finance 101 that budgeting is essential. You need to know where your money is going. We are talking about breaking down everything. This includes: your bills, food, gas, utilities, entertainment, and other miscellaneous expenses. Look to see if you are in the red (negative) each month with your expenses and bills. If you are, then more than likely you are living paycheck-to-paycheck and living off your credit cards or other means.
Before you can move forward you have to clean up your finances. Start cleaning up the mess you made with the debt that you have accumulated before you can build your wealth. If this means that you have to get a second job after work or on the weekends just to bring in some extra MULA (cash), then do it. Even freelancing (side hustling) your skills could bring in cash. The faster you can tackle your debt the better off you will be, and your future self will thank you for it.
Once you have your goals, expectations, budget, and second source of income then it’s time to work on savings. According to the New York Post, the median American household only has $11,700 in savings. This was a new analysis that was conducted by the Federal Reserve and Federal Deposit Insurance Corp. Savings is so important. Anything and everything that you can think of could happen ultimately causing financial damage. Losing a job, getting injured, medical bills, your car breaks down. If you can name it, it could happen. Even having as small as $1K in your savings could help when times get tough.
This brings us to the money moves that you need to make and setting up bill automation. If you have never heard of setting your bills to automation, then where have you been. Make life simpler for yourself and set up your accounts and bills to be automatically withdrawn from your bank account. Most if not all bills that you pay, from your car note, credit cards, furniture accounts, student loans all have a feature where you can set a due date for money to be pulled out from your checking or savings accounts to pay your bills. This way you won’t forget to pay your bills on time and screw up your credit and have to pay a late fee. Do the same thing with your IRAs, savings, and money market accounts. Every time that you get paid have the money move so when you are taking care of the other things that you need to take care of in life, paying bills before the end of the day and moving money to your savings and retirement is not one of them because it’s automatically done for you.
While on the topic of accounts and savings, these seven accounts are very important to have if you want to succeed and build wealth. By the way, before we list them, don’t put all your eggs in one basket. Something could go wrong and you could end up screwing yourself having your money at one financial institution especially if the bank’s systems go down and you can’t access your money. This does happen, believe it or not. Diversification is key. The must-have accounts include: a 401K, IRA, money market account (high-interest savings), checking (for bills), savings (a purpose-driven account), emergency fund (rainy day fund), and a brokerage account (investing). Don’t forget that you should set up all of these accounts to have funds transferred automatically the week you get paid. Figure out how much money that you want to go in each account. This can be a percentage or a dollar amount. You’ll be able to figure this one out once your budget is on point and you know how much money you have left over after paying all of your bills. Also, pay your bills first, food budget second, and savings last after you realize what you have to spare. This applies if you don’t want to start automatically having your bills paid and savings accounts funded. If you would prefer, test how things go for a few months before organizing weekly/monthly transfers and bill automation.
While we can go on-and-on about making money moves, Young Finance 101 will stop here so that you can take in all that we wrote. If you want to read more about making money moves then leave a comment below and we will write you back or better yet, write a part two “Making Money Moves in Your Sleep.” Yes, that is possible. Remember, here at Young Finance 101 class is always in session.
Are you paying yourself first before you pay your bills? You might want too. Visit our web article Paying Yourself First and see why it is as important as.