Whether it’s a new car, the latest fashion trends, or a luxurious vacation, it can be tempting to spend money without thinking about the future.
Young professionals today face a unique set of financial challenges. Unlike previous generations, you have to contend with all sorts of new expenses, from student loan debt to the ever-increasing cost of living. Add in the pressure to keep up with your peers and live a “perfect” life on social media, and it’s no wonder so many of us are struggling to make ends meet.
Yes, it’s bad—but we’re here to tell you that it doesn’t have to be all bad! Staying on top of your finances now, while you’re still young, can help set you up for success down the road. Here are five finance management tips so you can clear all the pesky financial hurdles between you and your dreams!
1. Conquering Budget Phobia
For many young professionals, the joy of watching the numbers in your bank account go up can quickly turn into anxiety when you see them start to drop.
We get it. Instead of marveling at all that cash, you’re now thinking about all the ways you could potentially spend it. And before you know it, your hard-earned money is gone in a puff of smoke.
If this sounds familiar, don’t worry—you’re not alone. Budgeting can be one of the most difficult things to master, especially when you’re just starting your career.
The first step to getting your finances under control is to face your budget phobia head-on. That means taking a hard look at your spending habits and understanding where your money is going each month.
Once you have a clear picture of your expenses, you can start setting limits for yourself. For example, if you know you tend to spend too much on nights out with friends, try capping yourself at two drinks instead of four.
By learning to control your impulses, you’ll be well on your way to conquering your budget phobia for good!
2. Create a Savings Plan
One of the best things you can do for your financial future is to start saving money now. We know that saving is hard, especially when you’re still working on paying off your student loans or credit card debt. But remember that having a good financial standing can help you get a loan easily—a loan you can use for your first real investment, like a house or a car.
The first step is to create a savings plan that works for you. Decide how much you want to save each month and make sure to put that money away in a separate account.
If you’re struggling to stick to your plan, consider setting up automatic transfers from your checking account to your savings account. It may sting a bit at first, but you’ll be thankful when you have a nice nest egg to fall back on.
3. Invest in Yourself
Investing in yourself means more than just putting money into a 401k or IRA. It also means taking care of your physical and mental health, investing in your education, and building your brand. Think about it this way: if you’re not healthy or happy, you won’t be able to work to your full potential.
Actively look for ways to make your life easier and happier.
Hate doing laundry? You can actually save money when doing the laundry by finding a bulk laundry service that will do it for you. Does thinking about money give you anxiety? Seek the help of a financial advisor to get you on the right track while you focus on your career. Tired of transcribing your meeting notes? Hire a transcription company so you can focus on being productive instead of worrying about minutiae.
Learning to invest in yourself now will pay off tenfold down the road. Making small changes like these can have a big impact on your overall well-being—and your bank account!
4. Live Below Your Means
Living it up now may seem like a good idea, but it’s not always the best choice for your future self. If you want to be able to retire comfortably or buy a house one day, you need to start living below your means now.
That doesn’t mean you have to give up your coffee habit or cancel your Netflix subscription. But it does mean making smart choices with your money and being mindful of your spending.
One easy way to start living below your means is to cook at home more often instead of eating out. You can also save money by cutting back on unnecessary expenses, like that gym membership you never use.
Remember, it’s not about depriving yourself of the things you enjoy. It’s about making smart choices with your money so you can have a bright future!
5. Don’t Forget to Have Fun!
You can follow all the tips we gave above to a tee, but if you’re miserable, what’s the point? Not only does that defeat the purpose of having money in the first place, but without a little fun, you’re likely to burn out quickly.
Trudging through life just to save a few bucks is no way to live. Make sure to set aside some money each month for things you enjoy, whether that’s going out to eat or seeing a movie. You can also look into low-cost or free activities in your area, like hiking or visiting a museum.
The key is to find a balance between being responsible with your money and enjoying your life.
Taking the time to manage your finances now will pay off tenfold down the road. Remember, the goal is to have a healthy relationship with money. That means being mindful of your spending and saving, but also enjoying the fruits of your labor. If you can do that, you’ll be on the path to financial success!
Sophia Young