Money matters are quite possibly at the end of your to do list and understandably, being responsible is hard. Do you eat out more nights a week then you should? Yes, but so what. Do you find yourself particularly skint come the days before pay day? You’re not alone. Putting pen to paper or even tapping your way through a budget app is one thing, but putting it into practice is a whole other beast. Here’s the shortcut to adulthood, well at least as far as your cheque account is concerned. And if you’re not sure what a cheque account is, you need this even more.
Have A Good Look At Your Spending
It may be terrifying but is has to be done. Once you’ve indexed your actual spending patterns rather than the idealistic concept of where your money goes, you’re on the fast track to responsibility. Well not entirely, but it’s certainly a step in the right direction. Log into your banking app and note your incoming and outgoing down to the very last cent, it’ll make you think twice before you part with your hard earned dollars for extra guacamole. If you’re old school then even get your statement sent to you on paper, it may be just the wakeup call you need to see your salary evaporating each month on impulse buys.
Check Your Score
Like a private set of leaderboards by which banks evaluate their users, your credit score is more important than you think. Sure, now you’re living within your means and paying your bills on time but what about that cheeky credit card you took out to fund an overseas adventure? From the personal loan you borrowed with the intention of buying a nicer car, even your late paid phone bill or missed gym membership direct debit, the credit score sees it all. Think of it as a fiscal big brother of sorts, peering over your money habits from an eagle’s perspective. You can check your score for free, don’t be reeled into paying for the information when it’s readily available. Log onto Dunn & Bradstreet or CreditSavvy to see for yourself.
If you think you’ve just burned one institution with your financial mismanagement, think again. Creditors share the information, so be careful how you manoeuvre your way around the borrowing game now, in case you plan on applying for hefty sums of cash in the future. It’s not like you’ll be buying a house anytime soon, but it’s still worth a thought.
Set firm goals for your money, a trip, a snazzy toy – whatever tickles your fancy. Even if it’s a certain amount of savings in the bank, that’s a really grown up thing to do. By setting firm goals you’re holding yourself accountable and quantifying your financial progress. If you feel like having an extra night of take out one week, your goal of a trip cascading through the Amazon jungle is likely to make you pause; or forgo the spring rolls at least. Get a budgeting app, a calendar, plaster your goals to every wall, your desk at work – whatever visualisation tactic you need to put a little restraint on your spending. All in the name of a greater good, a prize for your hard yards.
Bring Your Debt Together
All that borrowed cash deserves to be in the same place, in hell. Hey, that’s no way for an adult to behave. Instead make your debt a little more comfortable to bare, all under the same roof subject to the same interest. It may be horrifying to see just how much your treating yourself moments have cost you, but it’s simpler and cheaper in the long run. Forget leaving this issue for future you to deal with, this is future you.
Plenty of cards have great balance transfer rates so you can lump all that debt into the same place. Look for something with a low entry level rate and do it all in one go. That way you’ll be staring one dollar amount down at the end of each month and chipping away at it will be easier.
Make It Automatic
Grown ups are incredibly time poor, how often do you hear *responsible* people on the train nagging about their busy lives?Always. Even though the thought of direct debiting may scare you, especially when you have a payment coming out long after pay day, automating will take the hassle out of your budgeting. Removing the hesitation when you physically have to move money about is worth being a little more budget conscious come debit d-day. Set up a savings amount that automatically pulls a portion of your pay into a high interest account, if you make it a manageable amount you won’t have any legitimate reason to touch it. Not even for that ASOS sale that’s temptingly too good to pass up.
Make Sure You Have A Secret Stash
No, don’t hide money under your mattress, that’s the first place a would be robber would check. Nor should you freeze money or your credit cards in the freezer. In addition to your savings towards previously implemented goal (look at you making progress), you should also have a rainy day fund. In case the car breaks down, you lose your job, need to repair something at home or need to make a sudden trip.
Part of the difficulty of being an adult is cutting yourself off from the bank of mum and dad. The best bank in the world according to Choice*.Of course in extreme emergencies a teary, desperate call to your parents will do the trick, but new responsible you should prepare a little cash, tucked away just in case. If something does come about you won’t feel as anxious or stressed about paying for it or have to dip into your savings for something less then glamorous.
*Not really, but if they were eligible the big banks would have to watch out.
Invest In Yourself
Hey, this isn’t an excuse to buy shoes. Sorry. In applying an adult mentality to your money, it’s time for you look to the future. First step was to sort out the debt your frivolous university years has left you with, now it’s time put a little cash away for future you. If the stock market seems like a foreign concept or the thought of parting with money with even a little risk attached, there’s a level of investing right for every comfort level. High interest saving accounts are one end of the spectrum and channelling your inner Wolf of Wall Street, the other. Even if you err on the more cautious side of things it’s a good idea to get more familiar with the stock market anyway, since that’s where your super money for retirement is being traded on the daily.
Baby steps, we know. So consolidate your super to start and work your way up to buying shares in Snapchat. It’s all these incremental changes and even just shifts in attitude that put you ahead in the long run. So future you will look back and think, wow past me was so thoughtful and responsible. Being an adult ain’t easy but it’s worth trying.
Image source: See Want Shop, Tamirra Jamel, Harpers Bazaar, Forbes.