Student loans, credit card debt, mortgages etc. seem overwhelming enough and that is even before you consider the interest that you pay on top of what you owe! Life is not as simple as we thought. Some of us grow up with our parents being the bank of unlimited withdrawals. So it’s no surprise that our concept of how much things cost and how to save is limited. Some families only have one reliable income and that might seem too small to handle growing financial worries. Other families might be expecting their first baby and wondering where the money will come from to support their growing family. But, in any situation it is important to understand that families are still in control and can change their financial present and thereby their future. This can be done if they are willing to put in the hard work.
As a student myself, I decided to do some research on the topic of family and individual financial planning. I found out that I do not need to be a banker to get my finances in order. Thank goodness since I am an English Major!
Documenting how much you make, spend, give and lose, was the first thing every article I read informed me to do. Easy enough! Next thing is to make sure my expenses and spending don’t exceed my income. This can be hard when starting out, because how often do we pay attention to how much that coffee we bought was? For me, the answer is rarely. Being conscious of your spending at all hours of the day is like giving up sugar; easy to forget because temptation is everywhere, but so healthy for you. This might mean creating a budget and allocating 2% of your earnings to costs outside your primary bills.
Another piece of common advice is SAVE. It’s hard to save when you have student debt and bills, but I read it’s important to save at least 10-20% of your income for the unexpected moments in life. If you do this, I guess you are on your way to ruling the world, but if you are like me, good luck and see you on the other side in a few years.