If there’s one piece of advice that Web Watch is always trying to give to our younger acquaintances, it’s that it’s always better in the long run to save as much money as you can for the future. A while back, we recommended to try to have $10000 in the bank by the time you’re 30 years old, and that’s still a good rule of thumb to live by (call it your “emergency fund”, it still represents about 3-to-6 months take home pay for the average young adult that financial experts recommend keeping available for emergency purposes).
And Krystal felt the same way when she found herself a 20-something with over $20,000 in debt that she decided she wanted to get rid of. It was an albatross keeping her from future successes.
Krystal started a personal finance blog entitled GIVE ME BACK MY FIVE BUCKS where she outlined exactly what she wanted to do to climb out of debt and get her finances under control. It’s a simple plan — pay yourself first, maximize payments to eliminate debt, and keep unnecessary expenses to a bare minimum.
She sold her car for a scooter, saving on gas and insurance payments. She moved to a less-expensive location. She worked on advancing to higher-paying jobs and taking on additional part-time work to supplement her income.
Keeping a budget isn’t always easy, but if you’re trying to eliminate debt it’s a requirement. Say no to going out with friends, eat rice and beans every day. While it sounds drastic on paper, Web Watch has always said that everyone can do anything for a year, and if after that year is up you find that things aren’t working out you can make an adjustment then.
Hate your new job? Try it for a year. Worst case, you leave after 12 months. Hate your new apartment, house, city? Give it a year. Hate your boyfriend/girlfriend? Well – in that case, maybe waiting a year is too long. You may want to cut bait on that sooner.
Krystal even set extremely specific personal goals for herself:
- Save (lots of) money
- Stay out of debt
- Keep in mind “needs” vs “wants”
- Travel everywhere
- Become financially independent
- Retire early
You don’t have to use Krytal’s goals for yourself, but it’s a good start to have something to focus your financial activities. Every year, she has even set specific, measurable challenges to meet. Some of those are:
- Make an additional $25,000, over the full-time job salary. Freelance work, part-time jobs, anything that can pay additional money will be considered.
- The Lunch Challenge: not to spend any money on lunches, snacks, or coffee during the work week. Web Watch used to work with someone who ate lunch out every day, and not just at the corner sandwich shop. No, he would eat at fancy sit-down places every day – spending $10-$15 for each meal. He was single, didn’t have kids, had a reasonably good job — wasn’t an issue of whether he could afford to do this or not, but Web Watch just couldn’t stomach spending $50-$75 per week on lunch. This would work out to be about $2000-$2500 (or more!!) per year on just lunches. We know, that sounds crazy to us too! We tried to keep our lunch budget to a much more reasonable $5/day for those days we didn’t bring our lunch to work. And even then, we felt like that was too much money.
One piece that Krystal wrote about was how BEING SINGLE COSTS MORE THAN YOU THINK. Web Watch certainly can see the point being made.
But at least Krystal recognizes the issue. When Web Watch goes out with some friends that include both singles and couples, on occasion those at the table just say, “we’ll split the bill evenly” and divide it by the number of households present. Some of those who are single pay their share, while others are more verbal about how they’re paying twice as much as they should since they don’t have a date with them that night.
We can see their point – but nothing was stopping them from bringing a date that night, in which case their out-of-pocket expenses may have been slightly higher due to covering for the extra meal. Would they complain about that? Or would they turn to their date and ask them to go dutch on their share?
It’s all about taking responsibility for your financial situation. If Krystal can do it as a 20-something, you can do it at whatever age you are. You can never be too young or too old to start.