How to Stop being a Broke B*&$% and be “That Girl” When it Comes to Finance

“Broke Bitch!” That’s what you might hear in the break room at work or when you’re out with your friends. You’ve been living paycheck to paycheck for so long that every time someone mentions money, it feels like a punch in the gut. It’s not just about being broke though; it also means that there is no safety net when something goes wrong.

Do you want to be “that girl?” The one who has everything together? The one who can afford anything she wants because she planned ahead and saved for herself? If yes, then read on!

I spent the first half of my twenties making all the money mistakes. Racking up debt, not contributing to retirement, and not saving for the future because I figured that future me could figure it out while I just worked on surviving. That treading water broke bitch mentality was not uncommon. Everywhere I looked others were doing the same thing. But that’s the thing, if you do the same thing everyone else does then you end up just like everyone else. Stressed. Feeling like I could not get ahead. All my goals were adding up. I wanted to be able to afford the life I wanted, but could not get my savings account balance to add up. Something had to change.

If you’ve been in this situation then keep reading to see how I went from a paycheck to paycheck to funding my goals and dreams!

Identify where you are now.

It’s hard to move forward on your journey towards your financial goals if you have no idea where you are? You have to know where you are on the map to figure out where you need to go and this is no different. Pull your bank account up and look at your purchases. Write down every single transaction and put it into a category. Every purchase gives you insight into your spending habits. Once you have the month’s transactions into categories add up the totals. How much are you spending on groceries, fun, take out, gas, utilities, rent/mortgage, and every other thing you spend money on? Now that you know where you are it’s time to find out . . .

Where do you want to go?

This is the fun part. This is the part where you dream and set goals. When I did this I decided to change my phone background to photos that represented my goals to motivate me and encourage me to work toward those goals every day. You can do this too. Be specific and intentional in what you want.

Small changes can make a big impact.

You now know where you are and where you want to go, but that big goal is pretty intimidating. It is such a change from where you are now and it feels like you will never get there. There’s so much that needs to happen for you to get there that you convince yourself you can start tomorrow or next week and then next week rolls around and you say the same thing.

Sound familiar?

I know it did for me. I had so much time and I could start anytime, so why now? Because that mentality is exactly what got you where you are now and not at the place you want to be. Well, that’s easy enough, but how do you prevent it? By starting small.

Now that you know where you stand, it’s time to set some goals and figure out a plan of action. With a bit of effort, you can start building up your savings and be in a much better position come the new year!

Making big changes all at once can be daunting, so start small instead. One way to do this is by making tweaks to your daily routine. For example, try packing your lunch for work instead of eating out every day or biking to the store instead of driving. These small changes can add up over time and help you save money without too much effort.

Open a savings account that you will not look at every day and be tempted as the balance grows. Make your direct deposit from work transfer 1% of your paycheck to this account. Chances are you will not miss that 1%. I spent $1-$5 minimum from any given paycheck on an impulse purchase. That coffee break in the afternoon, a candy bar, a smoothie. There’s always something we make room in our budget for. These purchases all add up, but you can use that same impulse toward saving. You will not notice the savings and can adjust the percentage from 1% to 2% every 6 months or year and before you know it you will have a healthy savings that you can use to accomplish those money goals.

Be mindful of your spending.

Another way to start saving is by being more mindful of your spending. When you’re out shopping, ask yourself if you really need that new dress or pair of shoes. Also, think about where you can cut back on spending to free up more money for your savings. For example, cancel subscriptions like Spotify or Netflix that you aren’t taking advantage of and start cooking at home instead of eating out all the time.

Automate your finances.

If you find it hard to stick to a budget, automating your finances can be a helpful tool. There are a number of apps and programs that can help you do this, like Mint or You Need A Budget. These tools will help you keep track of your spending and make sure you’re staying on track with your budget.

I have some savings, now what?

You cut some expenses, got fewer lattes, and boosted your income with a side hustle. You worked hard and are really proud of yourself, but you are not sure what to do with this savings. First of all, congratulations on flexing that saving muscle and building a healthy savings account. Having a savings account is an awesome first step in your financial journey, but it is not the only step.

At some point you should consider investing those savings or splitting your savings from all to one savings account to some in savings, some for investing, and some for retirement. Retirement planning is so important to pay future you and capitalize on the time value of money when you invest. Investments for retirement and investing for shorter term goals (5-10 years out, 10-20 years out, etc.) are different. Your risk aversion is generally different depending on the time horizon. By splitting your savings amount between savings, investment, and retirement you cover yourself in the shorter term for emergencies and financial goals in the next year or so, you pay your future self for financial goals in the next 5-10 years (maybe that house you have had on your list?), and you pay the future you that is retired.

You are in control of the decisions you make and small changes in your decisions can add up. One less latte may lead to packing lunch and eating healthier. The habits and behaviors you change slowly are more likely to stick than throwing out all your junk food, cutting up every credit card, and putting 15% in savings off the bat when you did the complete opposite before. Humans do well with structure and routine. Creating one that aligns with our dream life takes time. Be patient with yourself.

I know I beat myself up every time I had a set back and you know what that got me? Disappointed and online looking for my next Amazon purchase. When I was kind to myself and focused on how I could do better in the future I got to the point where I cancelled my Prime membership. I’m not saying you need to cut ties with Prime to succeed, but you might find that thing you thought you couldn’t live without was not as important as you thought. I also cut out soda through small deliberate changes and when I look back, I am glad that I did.

I am proud of myself for learning from my mistakes and not letting them take the reins and de-rail my progress. If you feel like you’re stuck and cannot figure out how you can get out of this rut, leave me a message or a comment.

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