By Jamie Lindsey

Pink Floyd once sang, “Money, get away; Get a good job with good pay and you’re okay.” 

Listening to “Money” on repeat while growing up, I didn’t realize the significance of the song until I was much older. You really do need a good job with good pay to be okay. And Pink Floyd really didn’t give us much money advice past that. Other than later in the song they point to the fact that money is the root of all evil. 

Unfortunately, in our society and economy, many people do see money as evil. Something people need, but can’t have. There are millions of people who can’t relate to “good pay and you’re okay.” In fact, many people are not okay. 

Given that fact, I wanted to share some money advice to people of all income levels. Now, I am no economist, but I have been teaching personal finance the last five years, and I have learned a lot about money management. Some of those things that I have learned I’ve put into practice, and they have actually worked for me. Simple things like having a budget set out every month for expenses can really prevent someone from overspending. Having an emergency fund has eased my stress about unexpected situations popping up. I own three dogs, and anything could happen. If I didn’t have the money to help them, I wouldn’t know how to live with myself. 

One thing that we must remember is that every person’s money situation is different, so these tips will apply to everyone differently. However, they also apply to everyone! Anyone that makes money can live by these simple solutions to make your financial situation a little less stressful. 

Budget

First, let’s talk about budgeting. Budgeting is HUGE and is necessary for any person who makes an income. If you do not have a budget, it’s time to start now! The most important thing about doing this is that you have to stick with it! Many people express bitterness towards budgets because it “doesn’t work for them.” But a budget will never work for you if you do not continue to have one. Listing out all of your expenses can really open your eyes to a lot of things in your finances that you don’t pay much attention to. 

This kind of planning definitely takes sacrifice. Unless you put it in the budget, there can’t be any coffee stops, convenience store snacks, or casual outings. Unless you put it in the budget, no boutique shopping, online shopping, or exciting thrift store finds of any kind!  You have to live by your budget. If you live on minimum wage or you have a high monthly income, you need a budget regardless. Take your monthly income and subtract all your bills (and pay your bills first when you get paid). What you have left is what you have for the month. Some may have a lot left over, some may have very, very little. But what you have is what you have, and now you need to budget what’s left. 

Allow yourself money for entertainment, groceries, shopping, eating out, etc. Remember though, if you can’t afford, don’t buy it! Once you spend your allowed amount, you can’t spend anymore until the next month! Some people also take it a step extra and put their allowances in envelopes. This is called a zero-based budget, and assigns every dollar you make to something. 

Budgeting is important for anyone who makes money. It helps you manage your income and prevent overspending while also allowing you freedom with your money. It’s an important part of your financial well-being. 

You can make a free budget online here: 

https://www.nerdwallet.com/blog/finance/nerdwallet-budget-calculator/

There are many other free budget websites & apps that make it easy to manage your finances!

Emergency Fund

The next thing you need to do for yourself or your family is having an emergency fund. This is so incredibly crucial for any person who has a car, children, pets, or anything else that can cause unexpected expenses. So, basically everything. If you do not have an emergency fund you are threatening your future finances. 

Do any of these situations sound familiar?

“Something is going on with my dog, I can’t afford a vet bill!” 

“My tire blew out while driving. It’s so expensive to get a tow and a new tire.” 

“My son has a fever and I have to stay home from work and am going to miss hours.” 

The list goes on…unfortunately. Every person has had to deal with unexpected, sometimes very expensive situations. I thought turning 18 and having access to “credit” was such a fantastic thing! I could almost get any service or any product with little income. What I didn’t realize is that the little income I did receive would all go to pay off those nice services and products. And I wouldn’t have any money left after paying those bills, resulting in being flat broke and not having any emergency savings. I bit off more than I could chew with my finances and ended up being in that situation where I needed money I didn’t have. Therefore, forcing me to go to a payday loan service which was the worst things I could possibly do. Meaning, I had to pay back more money for this one emergency than I would have had paid with an emergency fund. 

I know it can be difficult to save for an emergency fund. Trust me, it seemed like all my life anytime I tried to save money, I failed miserably. Especially when you do not make a lot of money or spend all of your money on bills. It is possible. Dave Ramsey himself will tell you the same thing. That’s why it’s important to have a budget, and even if you only allow yourself $5 a month at first to save for an emergency, you are still doing it. Which is your goal! Set yourself a goal of $500 first, and save what you can from there. When I first started saving my emergency fund, I was literally putting nickels and pennies in a jar and refusing to allow myself to spend it. Once it was full, I put it in a savings account. Then I’ve added $20 here and there and kept it growing! It even collects (a very low amount) of interest quarterly. 

A little adds up eventually. Save what you can. Protect your future income. 

Credit

Speaking of protecting your future income, let’s talk about credit. Credit can be bittersweet. There are many great things to say about getting things financed or having credit cards but also a lot of negative things. I know plenty of people in my life that will forever say credit is necessary.

But while teaching personal finance curriculum, I learned a lot about credit. According to Dave Ramsey’s website, only 35% of people pay their credit card bills every month, resulting in Americans being over $1 trillion in credit card debt. One thing that was repeated over and over again by Dave Ramsey is that you don’t need credit. Crazy, right? As his words kept melting into my brain, I started to realize that maybe he was right. You won’t need a credit card for emergencies if you have an emergency fund. You won’t need a credit card for shopping because you’ve budgeted for that. It started to make so much sense. This prevents you from overpaying for everything. In the way that you aren’t paying interest on anything if you pay with cash. You don’t have to pay interest on a car if you pay in cash. You don’t have to pay interest on gas, clothing or food if you pay with cash. The credit companies make a profit off of your interest. You are losing money and borrowing against your future income. If you don’t pay those bills, you now owe debt collectors which affects your credit. You don’t have to live your life in credit card bills. Akon said, “Cash rule everything around me.” He wasn’t singing lies people! 

I could go on and on about financial well-being. My finances aren’t perfect and I am still learning and applying some of these basic concepts to my everyday life. Money can be very difficult to manage to many people, but it doesn’t have to be. It’s crucial in our economy to know where your money goes and how much. Don’t be afraid to stick to a budget. Make sacrifices for your future self! 

 

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