Personal Financial Plan Example (Manage Your Money…

Who else wishes they were taught about financial responsbility in school? I wish someone pulled me aside and not only explained to me how important credit is but also how to manage my money. I’m in my mid 20’s and I’m having a lot of anxiety with all of this.

So today, in hopes to lift my spirits and anyone else who may find themselves in a financial black hole, I’d like to share some of my mistakes and lessons.

  1. Establish a savings early. When I was younger, my parents had a small, pink, plastic piggy bank for me. I can’t recall how my parents did it, but I remember putting money in that piggy bank being extremely exciting and fun! I always felt so accomplished and proud every time I put some money in there.
  2. Live within your means. This is what I’ve struggled with most of my adult life. It is indeed easier said than done. When I received my first job, I opened a credit card. To establish credit, I’d use that credit card for lunch, gas, and a few wants BUT I was so good at never spending over $200/$300 every month. Why? That’s because my paychecks during that time were only about $600/$700 and I’d always pay the entire balance off by the end of the month. This helped control my spending knowing that I wouldn’t want to spend my entire paycheck paying off my credit card.
  3. Save a siginificant amount every paycheck. I’d recommend this especially when you first start to work. It’s important to establish this saving habit as early as possible. I had an ex-coworker that said with every paycheck, he’d pay his bills, only pay for the neccessities (gas, groceries, etc), then put whatever is remaining into his savings account right before his next paycheck. I thought that was genius. I haven’t done that yet but that’s a habit I’d love to get into!
  4. Be careful with opening credit cards!! This was a big one for me and a hard lesson to learn. I know it’s tempting with all of the offers we get in the mail, online, etc. Please think about the long-term effects first. Research each credit card offer. The best cards are to get a secured credit card through your bank. This helps you regulate your spending because it’s your own money that you’re using. I wish someone told me to have two credit cards max  and to only spend 20% of your limit. You have to remember credit cards isn’t your money, you’re borrowing it. You don’t want to rack up your credit card bills and bury yourself in debt. Trust me, this can happen in a blink of an eye.
  5. Always be in a ‘I’m saving just because of an emergency’ mindset. I never realized how important it would’ve been for me to start saving as soon as I started working at 18 years old. Imagine the amount of money I would’ve had by now!! I follow a blogger and she recently purchased a home, planned and paid for a wedding, and a honeymoon. She was frequently asked if she and her husband paid for everything themselves and she said yes. She explained when she was younger she was taught to always put money in her savings. It didn’t have to be for a specific reason. I don’t know why reading her response sounded like such an ‘ah-hah!’ moment. Like she was some sort of genius or something. This is something I’m definitely going to teach my childrent young. Not only teach them about but to get them excited about!

I know it’s tempting to just spend, spend, spend. Most of us live paycheck to paycheck and we put in countless hours at our jobs. Instead we should change our habits and set ourselves up for greatness and prosperity. Any time I find myself in a tough financial situation, I start to reflect on the countless times I should’ve been more responsible with my money. Financial competence is important and should be priority in planning our futures. So this #motivationalmonday, I want you to think about how can you become better at educating yourself and improving your financial situation. We can do this!