So much about being an adult is mixed with how we deal with money.Earning money and managing it all by yourself? Adult. Given money and managing it by yourself? Almost adult
Despite what phase you are in, being an adult is exhausting. It comes with responsibilities, especially around money. I started this phase in college. I was in a different city, and although my family funded me for most parts of it, there were things I simply couldn’t ask money for. There were quite a few months where I’d run out of money much before the month ended and had to cut corners and make excuses for a bit more. I’ve been on a personal mission to create better money habits since then, and it's safe to say that I have been failing consistently. What this has taught me though, is how important and subjective money habits are. And if you don’t already have one, it’s high time to start it.
Let’s face it, parents, schools, or any adults around us rarely taught us how to have a good relationship with money. We did learn that spending less is good, but we never learnt how to sustain it. In the long run, we need financial habits to plan our financial lives and enjoy a quality life, while being prepared for uncertainties. Emergencies like job losses, or a two year pandemic are things you can never fully be prepared for. Outside of your necessities, you too have dreams, goals, or bucket lists. A good money habit will make it all easier for you.
The first step is always making the decision to get started, so it’s great that you tapped onto this. Here are a few pointers to start off with, so that you don’t run around like a headless chicken trying to figure this out.
Try to keep tabs on where your money goes and how much you usually spend on different things like groceries, rent, travel, weekends, etc. If you're from Bangalore like me, you know most of our money goes into travelling. So try to keep a tracker, even for the cash you spend. One habit I’m trying to take ahead from my very Indian parents is keeping an expense book. How does this help? Once you see your expenses in front of you, you know where you can spend less, and where you should focus. Once I started keeping track of my expenses, I reduced snacking and random Zomato sprees. I figured that saving that tiny amount everyday made a huge difference by the end of the month!
I’ll admit, I have a deadly dark chocolate obsession, so I do spend more on them. But I’m not very picky about my beverages, so I spend far less on my tea or coffee. You see, you'll be putting aside money for savings for most of your life, this shouldn't stop you from indulging. That said, you’ll need to balance somewhere, so take a second to reevaluate and seperate your needs from your wants, and segregate further. I don’t care as much about drinking instant coffee, so I blindly buy the cheapest. But that isn’t the case with my dark chocolate. A good principle is to have a balancer for each indulgence you have. It isn’t bad to buy what you want, the idea is to just do it responsibly.
Now this one is tricky. Do it at your own risk. I found a great way to cut down on my usual expenditures by just window shopping. As a recovering online shopping addict, I try to make my aimless scrolling on online apps just that. If I do like something, I add to my wishlist and leave. Why? Because I know most of the time I’m just there to scroll and see if there’s anything I’d like. The only time I do buy is when I know exactly what I want, and the need behind it.I’m no expert at it, but it’s a great way to start. I also like to plan ahead.Once I know what I want, I'm aware there's no rush to buy it. I wait for a flash sale, some coupons or discounts and buy it for cheaper. Instead of spending money impulsively, try making efficient plans. This might sound like a small habit but it goes a long way...only if it’s done right (there are multiple ways for it to go terribly wrong).
Try to ensure that you take care of basic necessities the minute you get your paycheck. Have your list of things to spend money on ordered in terms of highest priority. First, take care of bills and payments, after which you can pay any outstanding dues or debts, and then spend on basic necessities and groceries, and then spend money on frivolous things. Consider taking advantage of automatic debits from a checking account or bill-pay apps and sign up for payment reminders (by email, phone, or text). This is also a great way to build savings. Have a savings goal (for example, a down payment for a home) and then figure out how much you’d like to contribute towards it each month. Then, you can automate that amount to your savings account every time you get your paycheck.
Let’s say you really want to buy a new phone. You don’t have an immediate need for one, but you’re just tired of your old one. There’s a flash sale on phones and the simplest thing to do is to just buy one then, right? Oops. While this can work for you, a healthier take, would be to wait it out till a target time. Delaying your gratification won’t just make you happier when you get that one thing you want, it will also help you build a solid backing before a major expenditure. It’ll also give you the space to evaluate your choice.
The earlier you start working on these money habits the better. Personal finance is a huge part of our lives and knowing how to manage your money is key to enjoying it to the fullest. A healthy money habit will ensure that you are secure, that you are building wealth, and that you are having fun with your money. Your lifestyle is the best foundation you have to start with.Change what you need to, and remember to do your own thing.