For most of us, our twenties are the first time we’ve really ever had to manage our own money. It’s one of those real life skills you don’t learn in college, but rather have to figure out for yourself. Many of us don’t really take it seriously until we have to. With New Year’s resolutions on the mind, why not rethink the way you manage your finances as well? I’ll make it easy for you. Just follow these five steps:
1. Sign up for an online money management tool.
Why reinvent the wheel when there are already money management tools out there? Start by creating an account on Mint, my go-to finance app (it’s FREE!). They make it incredibly easy to get started and to link your other accounts so everything is in one place. They even help you budget, save, pay your bills on time, and more. Being able to see your finances in a clean, easy-to-use interface makes the process a lot less daunting.
2. Calculate your monthly cost of living.
Once you’ve created an account with a money management tool, the next step will really open your eyes to the reality of your finances. Calculating the exact amount you spend each month is essential in order to get a better understanding of your finances. When I sat down and did this, it finally felt like I was taking control of my finances, which is a great feeling. This amount includes all those monthly expenses like rent, cable, food, pilates, haircuts, shopping — everything that you consistently spend your money on. From there, you can compare what you spend each month to what you make and adjust accordingly.
3. Keep track of monthly bills in one place.
The most difficult part of managing your own money? Keeping track of all those monthly bills. It feels like I have different logins & passwords on hundreds of sites, with bills coming in the mail and online, and I just can’t keep track! I recently started using Mint’s bill tracking & payment tools and it’s been life changing. Mint allows you to connect to your other accounts directly through their tool. You can login to your bank, your cable company, and more right through their site. You can also enter offline bills manually. They then compile all of your monthly bills into one place and let you know when each is due, what’s been paid, what you owe, etc. You can even pay your bills through Mint as well. It’s SO helpful to be able to track & pay it all in one place! I now feel like I’m in control of my finances instead of constantly worrying about missing a payment.
4. Put money away every month.
Once you’ve figured out your cost of living and are on top of your monthly bills, it becomes much easier to start saving. You can then calculate how much you can afford to put away each month, rather than just assuming you don’t have enough money to save. If you want to save up for a specific purpose, like a trip or a new car, you can also use Mint’s Goals tool, which makes it super easy! Knowing you have some cushion in your bank account to lean on just in case can really give you peace of mind.
5. Start investing.
Once you’ve become a pro at saving, it’s time to start growing your money. Now, let me be clear, I know next to nothing about investing. But my family has always made it a priority, so I’m just starting to get into it myself. And guess what surprised me most? You don’t need to be making a ton of money in order to invest. There are plenty of online tools that allow the layman to invest on their own, without having to hire an expert. You can even start directly through your Mint account. If investing sounds too daunting, just start the process of learning about it. Do some research and familiarize yourself with the concept and soon enough you’ll feel ready.
Thank you to Mint for sponsoring this post.
Photography by Andrea Posadas.