Adam is a 24-year-old from Birmingham, AL, who has built himself a monetary foundation from the ground up, independently. Here is how!
A Word From the Wise
"Earning a lot of money is not the key to prosperity. How you handle it is."
— Dave Ramsey
Tip #1: Grow Up
When I had my "GROW UP!" moment, I was in the middle of working on my monthly budget (we will get to budgeting later). I realized that I had let myself spend four times the amount of Entertainment money that I had planned for myself. Working off of a $10.50/hr job, I was spending almost $500 in Entertainment alone. Can you imagine the shock I was put in when I saw the numbers at the end of the month? Where was my money going? Was I really spending THAT much? To put it frankly, yes. I was spending way too much and I am glad that I noticed it when I did because I was able to make a lifestyle change for myself that would not only benefit me financially, but also emotionally.
Realizing the problem that lay before me, it was easy to see that I needed a change. But, there was more to assess here. Why was I spending so much? I had convinced myself that I wasn't happy for so long, that I figured spending money would make me feel that little burst of joy every time I swiped my debit card. Swiping the card had become the unhealthy habit. Thankfully, I had taken a "Financial Peace" course through Dave Ramsey that helped me to understand the dangers of credit cards. Even so, it did not stop me from using the debit card like a mad man. How did I pull myself out of the unhealthy habits? That is where I began Tip #2.
Tip #2: Make the Sacrifice
I wanted to save money. But with all things that we want, there is a price. We've heard it said all of our lives, "There is nothing in this world that is free." Everything comes with a price. If not by money, then by time. We have to make sacrifices to get the things we want. If you want to become financially secure and independent, you have to realize that financial pain is temporary when you are taking correct action.
I bowled in a league for 26 weeks before deciding that I could no longer financially support it, given that it cost me $100/month. That means that over the course of roughly 6 months, I had spent $600+ bowling. That doesn't include the cost of practice games to maintain my bowling skills weekly. By making the sacrifice of dropping the league, I saved myself over $100 monthly just on the sport of bowling. That's $100/month that will be pumped into my Student Loan debt.
If you want to save, you have to stop spending and you have to start investing. Invest your time and your money towards the things that actually matter. Don't sacrifice your happiness, though. I still bowl, I just don't bowl in a league. I still invest about $40/month practicing with friends, but I don't throw money out the door just to feel committed to something.
If you want to be committed to something, hammer out that student loan debt as fast as you can! Make the sacrifices that you have to make. Only YOU can tell yourself no!
Tip #3: Work Your Budget
Working a budget is extremely important to financial success. It is the map that gets you to the pot of gold at the end of the rainbow. That begs the question though, "I've got all of this money coming in, but how do I know what to do with it all?" Budgeting your money out on a zero-based scale is going to show you where every single dollar bill is going to end up once you get your paycheck.
It will feel a little strange knowing that as soon as you get your paycheck it goes from $300+ to $0.00. That is OK! The whole point of the budget is that you don't have this lump sum sitting in your bank. Having that giant lump sum laying around is what makes you want to touch it. You'll end up telling yourself, "It's fine! As long as I don't take too much from it, it'll all be fine." By doing that, you will realize at the end of the month that you spent four times the amount of money in Entertainment. Trust me on this one. I know what I'm talking about.
If you're wanting to truly become independent, don't forget about the cellphone bill, insurance, retirement (that's right I said it), and your emergency fund. This is where the whole "growing up" tip comes in handy. Budget your money so that at the end of your paycheck, you know exactly where every dollar is headed upon arrival. If you don't know how much you are making ahead of time. Just do the budget the same day you get your pay stub. It's that easy! Don't give up on the budget. It will keep your finances in check and help you to build healthy habits.
Tip #4: Build an Emergency Fund
I decided to go to Goodwill to have a look around before work one afternoon. I found a used Dave Ramsey book called "The Total Money Makeover" for a few bucks, so I picked it up and read it on my walk to work (I walked to save gas money). One of the first tips in the book was for people with an income of less than $20k/yr to have a beginner's fund of $500 in case of some kind of emergency. Using my own personal methods, I had already saved $1k as an emergency fund and I made less than $20k/yr. IT CAN BE DONE!
Building yourself an emergency fund is not only a great safety net, but emotionally it is invigorating. Knowing that I had something to fall back on made me feel like I was on top of the world. I'm no Bill Gates, but when my car breaks down (as it has done many times, since I drive a car from the 80s) I always have enough money saved up to handle whatever is thrown my way.
The responsibility of an emergency fund is not only building it, but maintaining it. After an emergency, you have to replenish that which you take out as soon as you can. Why? In case of another emergency, silly! Cut back on entertainment and have the joy of knowing you are safe once again because you had enough self control to save!
Tip #5: Give a Little From the Heart
What's the point in saving if you can't share your success with people that you care about? Remember that the blessings you receive from the fruit of your labors can be used for good. I'm on my path to success, and saving money is very important. But, the relationships that we have with people are more valuable than a dollar sign. Giving from the heart as you grow little by little, will change your life.
There was a couple that I ran into at the bowling alley. They were "not dating" at the time, but had no idea how to bowl. I had been working at the bowling alley for a while and I served them their lunch. They left me a $15 tip. I was ecstatic, but more importantly, I saw an opportunity to do some good. I allowed them to use my new bowling ball that I had spent too much money on. They were getting strikes left and right after I gave them some helpful tips. After I got off work, they asked me to bowl with them. I bowled a few games and enjoyed a few laughs and then we were all ready to leave. I ended up throwing their $15 tip towards their tab. Why? Because at that point, it wasn't about the money. It was about the experience.
Giving from the heart has provided me with greater opportunities to earn more than I ever gave. I may be out a few bucks, but I gain true happiness from giving to others.
If you can't share your success with the people around you, what good is the money in the first place? Just be sure you stick to your budget and follow through with your gameplan. Leave a little wiggle room for random acts of kindness. You never know whose life you might impact.
© 2020 Adam Roberts