Here’s an article I did for our company’s newsletter. Lets just say this is the first article to appear in this newsletter by anyone under 40, so its a bit of a departure and I had 500 words or less in a financially minded publication:
The expectations and dreams you have when graduating from college don’t always match the reality of being young and new in the workplace. The transition from classrooms and professors to cubicles and bosses is a difficult one. The change may be environmental, but it’s fiscal, too. Did you know that fifty-percent of college graduates have student loans with an average debt of $10,000? These days, young people get in the hole before they get out of the gate.
After a few years, twentysomethings find themselves frustrated by jobs they don’t love, with paychecks much smaller than they expected, and debt that seems to grow rather than shrink. Quarter-life crisis sets in and young people search for answers.
Here’s a word to the wise: you can do something about it. There’s nothing like seeing that first paycheck with numbers larger than you’ve ever seen before, but that’s the easy part. What’s difficult is deciding what you should do with your money. How do we maximize our wages to best handle our debts, bills, and since we’re young and single, our entertainment expenses? Here are eight steps to help you use your paycheck effectively:
- Learn to cook: It seems simple enough, but cooking at home and bringing your lunch to work will save you almost $1,000 a year. The average young person spends almost $2,276 a year to eat out.
- Live Frugally: Of course you want to feel like an adult and have a nice apartment or house of your own, but it would save you much more to stick with roommates and lower-budget housing until you’ve paid your debts.
- Buy used: Isn’t it the trendy thing to do anyway? Consignment stores, online auctions, and thrift stores can be valuable places for great buys on clothes, electronics and more.
- Sell Your Junk: Still have those concert posters and bean bag chair? Have a garage sale and get rid of items you don’t need anymore.
- Quit Your Habits: Do you really need that fancy cup of Mocha Caramel Frappa-Joe from the upscale coffee shop? Did you know that a good cup of home brew coffee cost mere pennies? Other habitual purchases, such as CDs and sodas, should be tamed without mercy.
- Pay Off Your Debt First: Cut all your costs first through the steps above, and with whatever you have left, work at paying off your debt. Every day that goes by, you suddenly owe more, and it won’t just disappear if you don’t pay attention to it. “The violent (unrighteous) son…does not return what he took in pledge” (Ezek. 18:11-12). Paying off our debt is part of our calling as ones who have been declared righteous.
- Cut Up Your Credit Cards: It’s vital that you no longer accumulate any more debt than you already have. If you don’t have the money to spend on that new skirt or jeans, don’t. It takes discipline, but you can do it. I believe in you!
- Start Investing Now: If you’re lucky enough to be debt-free and have some extra income leftover after paying necessary expenses, start saving. Statistically, people who start saving in their 20s do very well for themselves. If you do the same, you’ll well on your way to true financial freedom. Even if you’re in your twentities, it’s not too early to start thinking about your sixties.
Your current financial situation may look meager and bleak, but getting out of debt and starting to save in your twenties is possible. The biggest concept to grasp is this: stop spending. Once you’ve got that step down, you’ll be doing very well. And after all, this may be exactly the lesson God wants to teach you.
