6 Ways To Regain Control Over Your Personal Finances

Sometimes I feel like everyone I know could use a good lesson in personal finance. Here’s my advice to all of you who claim you are “poor”:

1. Stop buying shit you don’t need.

Self explanatory. Oh and also don’t buy shit you can’t afford.

2. Stop spending so much money on eating out and booze.

I know this one is tough because eating out and drinking are social activities that are fun to do with friends. Set a monthly budget and stick to it.

3. Go without.

Do you really need cable? Do you really need all the movie channels? Do you really need the highest speed internet? Do you really need a new car? Do you really need a home phone? Do you really need a fancy smart phone? Etc. Etc. Etc.

I really think that people in my generation have no concept of how much money they will need to retire or that there could come a time when they will need a serious chunk of money because of long-term unemployment, disability, illness, etc. Maybe I only understand this because I used to work for a large financial services company?

When I first started running retirement reports for clients I was shocked at how many retirement dollars were needed in order to have X dollars per month until death. To maintain your lifestyle at retirement till death (for fifteen to twenty years to even longer), you will need hundreds of thousands of dollars. Depending on how you would like your lifestyle to be, you could need millions (not an unrealistic number). MILLIONS. Why aren’t you saving now?!

This is on my mind today because I finally met with our benefits guy and set up my retirement fund. I’m happy to finally have this set up as opposed to just having my personal savings account. The money is coming out of my pre-tax salary and I’ll never even miss it or have a chance to blow it on clothes for my dogs. Plus my employer contributes a percentage as well. So excited.

Anyways, here is some more of my two cents:

4. Take a good look at your bank statements.

Determine what your fixed costs are and how much discretionary income you have. Take a good hard look at how much you are spending on what. Yes, they even have apps for that (I’ve used http://www.mint.com before, pretty sure they have an app). Are you okay with what you see? If not, set a budget and then stick to it.

5. Don’t live beyond your means. 

Don’t let your poor spending habits get you into a ton of debt. Just don’t do it. It will come to bite you in the butt one day. Not to mention your credit score…

6. Start saving now.

Or if you are not in a position to save now, at least start thinking about it and understand that you don’t have to spend every penny you make. This is all about what your priorities are and whether you can handle delayed gratification. You could be happy now with your nice vacation but don’t you want to own a house or at least a car? Do you wanna get married? Well let me just tell you engagement rings don’t come cheap. Oh and did you know the average wedding in the U.S. costs $22,000? Do you want to have kids? Ha, I bet those things are little money gobblers. Do you want to work when you’re old???? I sure as hell don’t.

I know different people spend money differently, and that if you are too conservative with money you will make yourself miserable worrying about every little penny. But people, you need to wake up and realize that one day you will wish you had started saving earlier. You will.

So, Generation Y, consider this your wake up call.

You’re welcome. 🙂