Tuesday, May 17, 2016

Young, Dumb, and Broken Finances

It seems almost inevitable to be broke as a younger person in America. With the internet brimming with cool items and experiences to spend money on. The expensive fun nights out with friends and relatives. It's just to hard to pass up sometimes because it feels like the "GOOD LIFE."

If you're fresh out of college there's the average $25-$30k in student loans. Add in some credit card debt, a car loan, and the troubles can seem insurmountable. You might not get a good job immediately which compounds the problem. You might not have the luxury of living in your
parents home so you have rent and other bills to pay.  Even I had to laugh at that last sentence. Who really thinks living at home with parents is a luxury? Not many of us want to do it in our early 20's. The aroma of independence is so strong. But life is about sacrifice  and sometimes your parents come with it.

Reality is reality and you don't have a dime to your name. The odd thing is this might put you in a mind-set to spend even more money on objects to make you happy. The house parties and concerts make the idea of digging yourself out of that hole even more undesirable. You could be dead tomorrow so Carpe Diem! At this point in life it seems silly to save. The stock market is "risky", and there are seemingly better experiences to spend your limited cash. Yet the higher your debt load is the lower your overall happiness will be. So the easiest way to happiness is getting your finances under control, and choosing to live a happier life. The reality is it's not a simple task to live up to past uninformed decisions or mistakes. Especially ones that are fresh in our memory.

The first step is to realize you can control the situation with zest and fortitude.  Having a game plan early opens up way more doors for your life than you realize right now.  Having solid finances can allow you to retire by 30(plenty of people have done it), open up any business you dream of, and allow you the freedom to live and travel anywhere.  If you don't stay focused and committed you can easily find yourself mired in old problems. Once you garner the strength you can confidently apply this new found skill to other areas in life with much success.

So what exactly is the freshly graduated student with college degree in hand to do?

1.You need to start tracking where your money goes. This doesn't mean you need an Accounting degree. Although I have one, it certainly helps. Young 20 somethings have a variety of solutions that did not exist a decade ago. One is the use of Apps to track your finances. A free and awesome one is Mint.com*.  Just be careful of the advertising that comes with a free service. It will help you track your finances and categorize your spending so you can see where all those dimes are going. Afraid of getting hacked or don't like the idea? Then contact us so we can provide you with another solution.

2. You need to get serious about paying off your debt.  Don't even think making the minimum payment is a good thing. You annihilate the sh## outta that master promissory note each month.  Who wants to be paying for college 10 years later? Yeah not me, nor should you.  You might not be your own boss yet, but you can sure start bossing that debt around.  Maybe even put it on a resume that you bossed the sh## outta your debt. Who knows someone might get a good kick out of it and hire you.

3. You maximize your income.  You might say "Yeah Mr. MAD Consultant, sounds good but I'm working entry level in some crap sales position so easier said than done". No, it's not easy, but suck it up since no one likes complainers. If that's the only job you could get then get another one.  Either as a side gig or a completely new position.  I highly recommend the side gig since it can lead to other infinite opportunities.  Whatever you do keep working.  Don't just sit around after working 40 hours. Being young means you have way more energy and ideas. You should be taking laps around your bored and cookie stuffed co-workers. Plus if you decide to have kids you can kiss your free time goodbye so work hard while you can.

4. Start coming up with a plan. Literally any plan. It doesn't even have to be about money. Just plan something for your life. A goal you'd like to reach, a milestone you'd like to achieve. Whether it be physical or mental, tangible or intangible- just get one! Having something to focus on will help you stay committed in other areas of your life. It's a synergistic bonus derived from being focused so how awesome is that.

That should be a good start, and keep you occupied while you embark on a new chapter in life. Coming soon will be a full frontal assault on college costs and student debt problems.

*I only recommend since they are one of many financial tools I use, and I am not taking any money in return for mentioning them.

No comments:

Post a Comment