When I was a kid, I once found a wad of fifteen one dollar bills crumpled in the bottom of my sock drawer. I preceded to run through my entire house announcing at the top of my lungs that I had finally made it big. I was practically sleeping on a bed of money. I was rich. Or so I thought.
Money is one of the hardest concepts to grasp growing up. When you have no real bills and an endless list of wants, it’s hard to see it as anything other than a step in the process to acquiring an abundance of candy and toys. Ignorance is bliss. When I found out that income tax was a thing, I moped around for a week. Now as a young adult, my list of needs and wants far exceeds the number of zeros I see on a paycheck. Millennials all over the world are struggling to make ends meet. Tuition is at an all-time high. The cost of living continues to skyrocket, and the minimum wage isn’t keeping pace. Regardless of your ideas about how to solve these problems, we can’t deny that the financial landscape for young adults is becoming increasingly treacherous.
Financial independence is a long and winding road filled with bumps and occasional stop signs. Many young adults are grappling with the same tricky concept: live paycheck to paycheck, or save? For many millennials, it’s hard to imagine having extra money to save in the first place. Many people must spend their entire paycheck in order to meet their needs. It’s hard to think about saving for a rainy day when you can’t even afford an umbrella.
In the long run, saving your money will provide a piece of mind and level of comfort that living paycheck to paycheck simply cannot compete with. We all have to face the reality that we cannot work forever. Retirement may seem like a spec on a distant horizon, but the earlier you start saving the more prepared you will be for not having a steady income. Savings also create a safety net in case life throws you a curve ball, like a layoff or a health issue.
Whether you’re raking in the bucks, or searching for change in your couch – it can seem difficult to find money in your budget to put away. The best way to identify how much you can afford to save is to keep track of your monthly spending. Hang onto receipts, or make a spreadsheet. Track your expenses and weigh them against your income. This will also help to identify areas in which you spend money on non-essentials. The line between needs and wants is often blurry. When it comes to managing your money, discerning between the two is critical. Saving is important to prioritize, but enjoying life is also vital. Keeping a close eye on your money will make you an expert at striking a balance between the two.
When it comes to saving, getting started can be the hardest part. Whether you save five dollars or five hundred dollars a paycheck it will make a difference. Every journey begins with a single step. Love yourself and your future self enough to proactively prepare your financial life.
Success looks different to everyone. Define your goals, and think about your ideal financial future. Once you have a destination it becomes easier to chart a course.
Money rules the world. But if you start saving now, it doesn’t have to rule you.
Featured image via screengrab from Workaholics