3 Financial Principles for Busy Young People
I am not much of a TV person, but I recently watched a new TV show with my girlfriend and it made me think about how busy we are as young professionals. We don’t have the luxury of 40hrs a week, and if we do we sometimes have to get a side hustle or side job to make ends meet. When I graduated college I went straight to the bottom of the totem pole and worked 50-60hrs a week. Before I get crushed with millennial entitlement emails, I know, starting at the bottom builds integrity and work ethic. However, being busy is not an excuse for having poor finances.
Here are 3 things you can do right now to ensure your financial success in the future.
Having a budget is the key to my success. Being a busy young person too, I know that it is easier and more convenient to stop and grab dinner, then it is to cook it at home, especially after a long day. I know that going out with friends is a social experience and that we are “young, wild, and free”. This does not mean that you can spend all your money and look back in 10 years and ask, “Where’d it all go?” Creating a budget that matches your goals and fits your lifestyle is the young person life hack. This is actually the whole reason I started this blog, to share my budget template with everyone because we don’t learn this stuff in school.
If your employer has a 401k, please set it up and do at least what the employer matches. If you are debt free a good contribution amount is 15%, when I was paying off debt I only did my employer match of 3%. You can read this blog post about my One-Step Millionaire Life Hack for more on what I did. You can also invest in other things like stocks, bonds, or even side hustles. For example, I started this blog and invest my time and money into making it awesome for you! I recently started using the Stash Investing App to do some stock investing on the side too.
Related Post: Quick Guide: Investing
So you graduated, now you are done learning?!? No. This is the common misconception that we fall into. We get busy and enter into the rat race of life chasing the promotion, pay raise, or “The Jones’s”. As a result, we forget to develop ourselves personally.
Hopefully you learn a thing or two from this blog, but there are also other ways to learn. I have "My Library" where I put together my all-time favorite books that changed my life and shaped my thinking, you can see it here. There are also plenty of podcasts that will motivate and teach you for free. And you can listen to them on your own time. (Two of my favorite are Rich Dad Poor Dad and How I Built This)
Stay out of Consumer Debt
Consumer debt is credit card debt, financing plastic surgery, financing furniture, a car, etc. This debt is out of control. If you want to instantly inflate your lifestyle and build a facade, consumer debt gives you an easy way to do that. Getting into unnecessary debt forces you to spend your monthly income paying people back instead of paying yourself as mentioned before in the investing section.
If you can ingrain this principle into your head and evade consumer debt like the plague you will be miles ahead of your peers. You know we all want the lifestyle we see on TV, but for most of us hard work, self-control, and perseverance is the way to get it, not short term consumer debt. Don't show me what you have, show me what you owe.
As I reflect on what I have done since graduating college in 2012, these 3 principles are the foundation to my success. Do not buy in to the hype of keeping up with your peers, control your money, and continue to develop. Do you have any other principles you would recommend?