First things first I’m going to be super transparent about my experience and how adopting better money habits will dramatically improve your financial situation. As a millennial woman, I think it’s safe to say that for many of us, understanding the importance of financial literacy was just not a priority. It’s like, you make money and just spend it on whatever you want at the moment.
The moment I knew my mindset around money was severely skewed was when I doubled my salary and was still living paycheck to paycheck. I couldn’t understand how I was making so much more money and was still not seeing the difference. Of course, you can blame inflation and all that, it’s valid, however, even with inflation, you should still be able to adjust and handle your finances accordingly.
There was even a time where I moved in with my man for about 9 months and didn’t have to pay any bills and STILL I couldn’t see my money. I didn’t have any major financial responsibilities outside of my cute little white Audi A3 car loan, insurance and warranty.
It wasn’t until I hit rock bottom and experienced the shame of asking for help while I make a 6-figure salary and I don’t have children, that I grasped the severity of my situation. I needed better money habits.
Better Money Habits: Start Today
1. Know where you stand financially.
Next, write down your monthly income. Maybe you have a 9-5 or you’re an entrepreneur or both. Either way, write down the amount from all of your income streams to get a full view of what you’re bringing in.
Knowing where you stand is the first step to getting on the right track.
2. Establish your lifestyle goals.
Don’t think about money, think about lifestyle. Consider hobbies, fitness, beauty, location, relationships and everything else that embodies the future you.
3. Be realistic about what you can afford right now.
Additionally, if your debt-to-income ratio is approaching 50%, girl… just stop whatever you’re doing. Take a moment to be real with yourself about the path you’re headed towards. As millennial women, we’re in that critical phase of life.
Every single decision we make can insanely affect our mental health and overall self-confidence. Yes, money and finances play a huge role in your confidence. And the dollar amount doesn’t matter.
I don’t care if you make $70k or $170k per year, the ability to manage whatever you make is most important.
After you’ve reviewed your finances and you can see what’s going on, it’s time to start seriously budgeting. It’s a good practice to spend 75% or less of your total income on all your necessities (housing, utilities, transportation, food). Also, I’m not a financial advisor, but these are things that have helped me manage my finances with ease.
4. Stop the frivolous spending.
And let’s not even talk about the king of convenience [AMAZON] that impressively delivers items to your doorstep within hours after purchasing. Just delete the app until you have better self-control.
Also, living above a super target…… (I know, the horror) enjoying my daily walk to browse the aisles to find random cute things that I didn’t need was like therapy for me. I made it make sense in my head because, I make good money, and this cowboy hat is only $10, so why not.
The problem is… those little things added up every month to something equivalent to a car payment. I also noticed all of the subscriptions I was signed up for that I didn’t use; pay close attention to those, they add up and it’s easy to lose track.
Stop unintentionally spending money on things just because it’s cheap or on sale. That’s a trap.
5. Spend more intentionally on things that enrich your life.
Self-care, education, investments, savings, certifications and charity/donations/tithes are other things that significantly enrich your life. Be intentional about spending money on those things instead of things that don’t matter.
Better Money Habits: 6-10
6. Adopt the mindset that holidays are for spending time with family, not overspending.
I was also guilty of looking high and low for gifts that would impress people and not make me look cheap. This is also a trap that you don’t want to fall into.
It’s okay to spend on kids if you have them, just don’t go broke doing so. (I don’t have children so maybe there’s another layer to wanting to give to your kids beyond your means that I don’t understand, so parents please don’t shoot).
Also, overspending on food during the holidays that no one is going to finish is also a terrible money habit that you should avoid. Bad for your finances and health – but that’s a whole different post.
7. Don’t obsess and check your account everyday.
8. Maintain an abundance mindset.
- I’m broke
- I can’t afford that
Instead, you can say something like, “I have just enough money to cover my bills this month”. It takes the sentiment from negative to positive. Because what a blessing it is to have all that you need to maintain a roof over your head and food on your table. Be grateful at all times.
9. Create a financial plan to tackle your debt and increase your income.
HA!! You thought it wasn’t coming right?…. You got to the end of the post without me talking about planning this and planning that; but, here it is.
I cannot stress this enough! Planning ahead is the thing that is going to level up your financial life and upgrade your confidence levels times 10.
Either hire a financial planning consultant or DIY that thing and use common sense. Start by writing down your financial goals, your income and planning your paydays accordingly to achieve those financial goals. If you’re looking for a dope planning software to assist, use this link to sign up with Notion today! Here’s a link to the template I use to track my expenses every week.
10. Set strong boundaries with yourself and those around you.
And most importantly, don’t cross your own boundaries, if you have to tell your current self no to protect your future self, you need to do that and be unwavering in your decisions.
I hope this helps you in your journey to better money habits and financial well-being!