That 30% of my budget is dedicated to these values, so I get to enjoy life and still set healthy boundaries on my spending. For example, my three are dining out, traveling, and nesting. In values-based spending, you choose three categories that are meaningful to you. I am also a staunch believer that just because you have debt, it doesn’t mean you can’t spend money on things that make you happy –– you just have to decide what those things are and not spend on things that don’t. If this is the case, as you begin paying debts, saving more, and adjusting your income, you’ll be able to work your way closer to a balanced budget! These numbers won’t always work out exactly, especially if you have higher debt. I personally love using the 50/30/20 method, a popular technique where you break your budget into three categories –– 50% goes to needs (think: food, water, shelter), 30% goes to wants (fun things like travel, dining out, and hobbies), and 20% goes to savings and debt. It’s especially important, however, because a good budget sets healthy boundaries around your spending and helps you cultivate the kind of life you want. Even if you live for spreadsheets, budgeting takes time, effort, and energy. Create a budget that works for youīudgeting is a pain, no matter how you look at it. It’s important to give yourself the space you need to really dive into what makes you tick, and you’ll be amazed at how much more confidence you’ll have while setting your financial goals. Working through your beliefs and emotions about money helps you see yourself and your spending through a new lens. Take your time, tune in next time you’re out shopping or faced with an unexpected bill –– what feelings come up? And how can you work through them?įor those of you who don’t have a positive money memory, this exercise may be challenging the first time through, but it’s also incredibly cathartic. What beliefs did it instill in you about money? How do those beliefs affect your day-to-day spending? How can you counter this belief if it’s negatively impacting you? So, step one in managing your finances is to sit down and journal out that first money memory. Overwhelmingly I find that most people don’t have positive memories, and this exercise can be difficult –– nonetheless, they almost always come back to me within a few days, having noticed where their early money beliefs are affecting their financial lives today. If you want something –– you have to save for it. Of course, my parents being the wonderful people they are, paid for my ticket (and truth be told, I didn’t even have enough saved), but the memory stuck. I tell the whole story on the podcast, but a quick version is that I saved up all of my money for a ticket in an Altoids tin that I accidentally left at home when it came time to see the production. Mine was a memory of seeing Annie at a local community theatre. The prompt begins with writing about the first time you remember hearing or thinking about money. When first working with someone to work through their money story, I take them through a journaling exercise that helps them work through the subliminal messages they received about money growing up. Our childhood messages around money aren’t always bad –– heck, they can even be really great! Either way, it’s important to tap into what kind of money beliefs you were raised with. Was money a source of stress? Was money considered evil? Was there never enough money? Were you told to save, save, save or spend, spend, spend? Take into consideration what the conversations around money were like in your childhood. By the time you’re learning basic multiplication, your view on money is solidified. Your beliefs around money are cemented by age 7. Tori Dunlap of Her First $100K Recognize your money beliefs The more you can do to set yourself up now, the easier it will be in the long run. When it comes to money, time is your biggest asset. Here’s the deal –– getting over your financial fears isn’t easy, but it is one of the best things you can do for yourself as a young adult. Trial and error is the name of the game with your personal finances. You’ll likely try something and either fail or love it. In fact, getting your financial life together as a young adult is going to take time. Sure, you always knew you’d have to pay rent someday or take out a car loan, but actually doing it? That’s anxiety-inducing stuff.įortunately, there’s a roadmap to follow for young adult finances, and the better news is that it doesn’t all have to be done at once. Whether you’re a fresh out of high school or a college grad, the next chapter might feel like the looming shadow in your room–– is it friend or foe? It’s normal to feel overwhelmed by all of the new rules you’re learning firsthand. Written by Tori Dunlap of Her First $100k
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