It’s ’s crucial to stay financially responsible, save our money and use it wisely since. But how do we do we remain financially responsible when there’s always a sale at the mall going on? We’ve got a few tips to help keep us on track.
We have to start off making a budget. This is probably the easiest thing we can do. We need to take a look at how much income we have coming in, and then figure out how much of the income has to go to necessities (and, no, going to Starbucks everyday is not a necessity). The leftover money is for us to save, invest, or spend in treats.
…But it’s best to save at least a bit of that money. Harvard bankruptcy expert Elizabeth Warren – named by Time magazine as one of the 100 Most Influential People in the World – coined the “50/30/20 rule” for spending and saving. You should spend no more than 30% of your check on wants and 20% on repaying debts and saving money in your emergency fund and your retirement accounts.
And doing all of that takes discipline. Most of the time, we end up mismanaging our money because we don’t have the discipline to stop spending on things we know we don’t need. Stores know this, and that’s why they plaster “SALE!” in the front windows for us to see every time we walk by. It can be tempting to buy things, even when they’re on sale, but we have to stop and reflect on if we really need it.
That’s why only using credit cards for emergencies is a good idea (and maybe even debit cards, too). Having access to instant cash can be alluring. We think to ourselves, “Hey, it’s okay. We’ll pay it off. It’s only $7. We deserve it.” But then that $7 becomes $100 and then that $100 becomes $400 dollars. Adding interest, we’re looking at $475+ because all we had to do was swipe and forget. Carrying cold, hard cash on us allows for us to really assess what we’re spending on so we don’t get addicted to the swipe.
But none of these trips help if we’re not protecting ourselves. We need to start using insurance. No, seriously. We think we’re saving money because we’re not actively using it all the time, but in reality, we’re not. For example, we might think we’re saving money if we don’t pay $150 for a year’s worth of phone insurance, but if we crack/break our phones 3 times in 12 months, we’re spending $300 dollars in repair fees. Not protecting your money and having insurance is like driving a car with no breaks – and what’s the point in living like that close to the edge?
Look, we get that this isn’t the most fun thing to do. I mean, who has the time to do all these calculations and babysit our funds this way? But trust us – being smart with our money is really rewarding ourselves for how hard we’ve worked to get it. And what better way to treat ourselves than to finance our future and feeling stable, specially when things go unplanned!
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One more thing! Remember… go out there and be Fearless! No matter what you set your mind to, YOU CAN DO IT! Did you download my free e-book yet? I know that you’ll love it!
Much love,
Rayven – Team #SheBecameFearless