Consider this your beginner’s guide to financial stability.
We have a little problem over here at Coveteur HQ that we’ve resolved to, if not completely fix, at least pay a little bit more attention to this year. The problem manifests as spontaneous lunchtime Net-A-Porter sprees, daily matcha lattes, and multi-cocktail ordering (how can one not sample a drink named Flannel Pants?), among a myriad of others. Yes, we have a serious problem with budgeting. And when the first of the month rolls around (rent due makes it about the worst time no matter what), the sum of all parts usually ends up being, well, a little less than expected.
Not this year, friends. This year, we resolve to actually manage our money and stick to a budget. And just how will we do this? Well, we’ll try our very darndest to adhere to the tips of Holly Perez, who works over at Mint, the personal finance app that keeps track of all your spending and saving. Let’s just say she knows a thing our two about saving her shekels...and here’s hoping some of it will rub off.
1. Don’t make the same mistake everyone else makes. SAVE
“One of the biggest financial mistakes a young woman can make is to spend her entire income and not set aside savings for tomorrow. Sometimes this is by choice—impulse shopping, food, and fun—but usually it’s out of necessity, on things like rent, student debt payments, and commuting. But even if your salary is on the low end, you can always save at least a little bit. In fact, the best way to start saving is with really small amounts that will eventually add up big-time. For example, stash away $25 a week, and in six months you’ll have saved $650. In a year, your cash pile will grow into $1,300. Plus, starting out slow and having small successes will reinforce the habit.”
2. Plan ahead
“There are tons of smart ways to cut back while still having fun and looking fabulous without spending your entire budget. If you are a big spender when it comes to socializing and eating out, planning for the week ahead is a great way to avoid those last-minute decisions that could empty your wallet. Penciling in your social activities in advance or cooking in bulk and freezing dinners for the week are great ways to help you stay on top of your budget. Discounts on shopping from places such as Asos.com or Zara, finding restaurants that let you BYOB, and dining deals from Groupon.com or LivingSocial.com are some other great low-impact ways to enjoy life in your twenties and not break the bank!”
3. Cut corners (it’s not as hard as it sounds)
“Look at your discretionary spending, and identify areas where you can cut corners. Are you spending way too much on your morning Starbucks run? Why not opt for your own coffee ritual at home… You’ll not only save money, but you’ll probably save a few calories, too! Consider ‘no frills’ shopping. Sometimes a brand name is just a brand name, and having an open mind when you are shopping is key to staying within budget.”
4. Start a savings plan
“Set up an automatic savings plan that deducts money from your paycheck and directs it into the appropriate savings account—you will have slightly less money to spend, but you’ll adjust to new spending habits while making progress on your saving goals.”
5. Spend on what you love, just don’t go overboard
“Budgeting doesn’t have to be about deprivation. You can still have fun and spend to feel good. Whether it is a new pair of shoes, the hottest new technology, or even a good book, we all enjoy getting something new. There is absolutely nothing wrong with this, as long as you don’t go overboard. Plan ahead, and set aside a ‘fun budget’ each month. This is a great way to feel good about these types of purchases, and will keep you on the right path toward your financial goals.”
6. Start now
“If you are not tracking your spending and staying on top of your finances, now is the time to start. Sign up for a free personal finance or budgeting tool ASAP. These days, most are mobile-friendly, which allow you to track spending on the go so you can get immediate insight into where your money is going and make smart financial decisions on the fly—like whether or not you should join that after-work happy hour! The beauty of budgeting is that it is flexible—you can always re-prioritize and save some of those wants and needs for next month.”