When I learned about compound interest and how it grows exponentially, the world of finances which once seemed so nebulous, finally made sense. Years later, I have a comfortable handle on my finances after taking small steps and then graduating to bigger steps. It's the beginning step that is the hardest, and every small step matters, so here are a list of 5 things I've learned that will help you get a bold start on handling your finances.
Start small with savings to build an emergency fund.
Many people think that if they are going to save money, it has to be a substantial amount right off the bat, and many financial experts will preach to save 40-50% of your monthly income. This can be very hard and intimidating at the beginning. Instead, first start saving $20-30 a day to train your mind to save and focus on bigger goals; get your mindset used to feeling abundant and secure about having extra cash in savings, and then build up from there. For example if you save $27 a day, you will have saved close to $10,000 that year. So don’t feel intimidated, start small, but just start. As Tony Robbins says, “motion creates motion” so if you start saving a little, you’ll be inspired to save some more. Then slowly add more as you get comfortable, and then eventually fully build up that emergency fund, snowball and pay off debt, etc. You'll be surprised at how motivated you can feel by that shift in mindset, and you'll want to focus on the next goal. So, start this week, even with a small amount of money. It truly does make a difference— nothing is too little to make a big impact!
Pay off credit card debt right away.
With the exception of an emergency fund, the BEST financial move to make is to pay off all high interest credit card debt. It has happened to all of us, we went a little wild with Christmas shopping or Mother’s Day and we were too weak to disengage the strong marketing deals and now the bill is hounding us down every month with statements and notifications. Many people spend a large part of their twenties making small, equal monthly payments on debts, before realizing that they could save a lot more money by simply putting all that money towards cards with a high interest rate. Every month, the card with the higher interest rate is costing you the most money. Also, many people don’t know that it is possible to negotiate a lower credit card interest rate with your card or bank, all while keeping the same benefits, so don’t forget to call and negotiate. If you pay off your credit card debt first, it will help you with savings, investing and wealth in the long run.
Clear out your subscriptions.
All right, it’s been over a year, and you are barely using that subscription you have signed for. Review all of your subscriptions and make sure you are actually using it and it’s adding quality to your life. There are some things that are hard to give up — like an exercise app or your ad-free music service, but other subscriptions however, should be cancelled.
Buy and sell on Craigslist for earning and for the environment.
Craigslist is still one of the best places to sell and buy things, and I’ve personally used it many, many times successfully (I’ve also used OfferUp and Letgo one time each). On Craigslist, I’ve sold a lamp, electronics, Aladdin tickets (couldn't make it to SF that night and had to sell them in a few hours), and drumroll please……my car! (More details on the car for a later post). And most recently I purchased a microwave for $50 a few weeks ago. Why, even though I could afford a brand new one? It seemed like such a waste to buy a new one when I know tons of people are moving and selling theirs and also for the environment, it would be one less item going to the landfill. Also, it was a newsflash for me early on, that a ton of the stuff people sell online is actually new. Remember to stay safe, meet in public place, and as Marie Kondo says… Keep it only if it sparks joy – or else sell it!
Need a little extra cash? Consider a side hustle on online sites.
While those unpredictable survey sites may not help you, there are many reputable store hosting sites — such as Fiverr, Upwork or Etsy — that can get you cash based on your hobby or niche area of expertise. If you are crafty, you can sell anything on Etsy – from cookies to face masks to jewelry, you name it, it’s all possible. If you’re not particularly crafty, there are many options for you on sites like Fiverr or Upwork — creative or copywriting, SEO, social media curation, proofreading, voiceover — the possibilities are endless, and there are buyers for every sort of job. Take a look and get inspired!
Bonus tip: make sure you are signed up for Ebates (it gets installed on your computer) or a similar program so that when you shop online, you automatically save on your purchases without looking for coupons. Also before you purchase something, do a quick search on RetailMeNot or a similar site to see if a ongoing coupon is available for your purchase.