Currently one of the biggest problems among young adults is their ongoing struggle to get a handle on their fiances. With Student loan debt crippling budgets, people are waiting longer to do everything that younger generations have done. In this generation we are seeing slower starts in marriage, having kids and buying a house.
Who can blame them? It’s hard to think about life events when you come out of college straddled with over $24,000 in debt.
Achieving success in your finances is key to winning your financial freedom and enjoying those big life moments without the crippling fear of breaking the bank. However, it’s a marathon and not a sprint. There are a few things that are crucial if you want to beat the norm and get out of debt as soon as possible.
START BUILDING A BUDGET
Budgeting is the foundation to financial success. Making money is great, but that is all in your offense. You also need a great defense to win. This is where budgeting comes in. Budgeting not only allows you to see exactly where your money is going but let’s you tell your money where it needs to go. Laying out all of your expenses from start to finish gives you a solid number. When building your budget do forget to:
- Comb through your credit card and bank statements to see what you’re spending money on.
- Remember to total in all of your subscriptions such as Netflix, and Hulu
- Remember to add in annual expenses
- Have everything separated into categories for a better visual
Once you have everything separated, really dig into your expenses over the previous year. Ask yourself how you can cut back, what you no longer use and where you are over spending.
By taking the time now to build out your budget you can get a clear idea of how you need to be spending in accordance with your financial goals.
CREATE YOUR EMERGENCY FUND
Mistakes, accidents and unforeseen circumstances are a part of life. You need to plan for them as if they are going to happen because they will. By putting away a small emergency fund you are safe guarding yourself from their small situations throughout the year. If you don’t plan for them and they do happen there’s a good chance you won’t have the cash on hand to combat them.
What does this mean? More than likely it means pulling out your credit card and going into more debt. Build a small $1,000 emergency fund and save yourself the trouble down the road.
START ATTACKING YOUR DEBT WITH AGGRESSION
Your debt is and will continue to be a problem as long as you let it carry on without any plan of action to eliminate it. Studies show that the average American currently holds more than $38,000 in debt which is $1,000 more than the average taken in 2017. This tells us one very alarming fact…it’s growing.
Contrary to popular opinion there is no good debt. There is debt that can help you in the long run such as student loans which can be your ticket to a high paying career or a car which is your ticket to getting to your job everyday but it’s all still counted against you. How can you combat this growing pile of debt?
- List out every piece of debt you owe as of today from smallest to largest
- Now take into consideration the interest rate on each piece
- Find out which is your lowest chunk, this is your starting line
Now that you have your starting point, you need to throw every piece of extra money at this debt and get it paid off immediately. A huge problem with people’s debt pay off goals is they try to spread out their payments to every student loan, credit card, and misc debt they have. By paying only the minimum on multiple-piece odds are the interest is catching up to you and you aren’t even making a dent in the principal balance.
Start small and work your way through your list.
GET CLEAR ABOUT YOUR GOALS
Studies show that people who write down their goals are 50% more likely to achieve them. Getting clear about your vision brings it to life, it becomes a reality when you make it known to the world. Don’t sit and just hope for your goals this isn’t a wish list, it’s your most realistic and unrealistic expectations for what you want your life to look like.
Take the time to write out every goal that you have. Then get clear about them, break them down into a time frame. If it’s a money goal, get a clear number. IT’s not enough to just say I want to make more money. You need to say exactly how much more money you want to make and then write out your path to success on how you’re going to get there.
No one just magically ends up in Arizona, it just doesn’t happen. It was too planning, travel, and mapping out the journey before they arrived. So here’s some questions to ask yourself:
- What do you want your life to look like in 6 months, 1 year, 5 years and 10 years?
- What is it going to take to get to that point?
- How much money will I need?
- What resources will I need?
- What’s my first step?
- Now what’s my next 5 steps?
MANIFEST IN YOUR MIND ALL YOU WANT TO BE
If your goal is to make 6 figures over the next 5 years then you need to start behaving as if you are making 6 figures. This means losing your bad habits and adopting a mentality of focus and drive. Our minds are extremely powerful and resourceful, but also terrible at blocking success when we let them. By understanding that you are in full control, you will give yourself all of the permission in the world to be successful.
- Visualize yourself where you want to be
- Write out EXACTLY what your life will look like
- Hang it up somewhere that you will see it
- Think on that vision in the morning when you wake up and right before you go to sleep.
GET OUT OF YOUR OWN WAY
Eliminating your negative mentality and your bad habits and major factors in why you can not achieve financial success. Get out of your own way. Change up how you view money, start small and grow from there.
- Stop doubting yourself and your abilities
- Start investing in…Continue reading…@https://dearyoungprofessional.com
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