What should I be doing financially at the age of 21. I am horrible with money.

[narcissist]

I am 21. Would anyone here be able to help me out and give me some advice on what I should be doing to get on track financially?

I would like to be independent and debt free when I am older and I would like to have a decent amount of cash to be able to travel comfortably and live life without financial stress.

Any advice to get me on the right track is much appreciated!!!

thanks bros!

 

[Aware]

The most solid advice about getting rich I've ever heard was that everyone wants to get rich and won't share their secrets with competition. You have to gain your own experience and develop intuition.

There's planty of information about that to be found in books, but have have to know what to look for and sort useful info from garbage.

 

[Moroder]

Here's some oldschool advice:
a) work your ass off to earn as much money as possible. If you want to have money, you gotta earn it. Lesson for life.
b) pay off your debt and make sure you'll NEVER be in debt again except maybe a mortgage. Make the payments on a monthly basis, with automatic withdrawal, so the money is GONE before you can touch it.
c) Speaking of automatic withdrawal, use it for all reasonable payments (utilities, insurances, taxes and so on - stuff you have to pay anyway).
d) If you want something, but can't pay for it in cash, either save your money until you can pay cash or don't buy it. Do not "buy now, pay later" unless you want to get your a$$ into trouble again.
e) Put up a savings account and fuel it with monthly payments (automatic withdrawal of course!). Make sure this account is not easily accessible for you and does NOT have a debit card. Save the money from yourself! On this account, you are saving for your travel etc.
f) Don't buy cheap-a$$ stuff. Quality and style are fücked, you'll end up buying the same things 2-3 times over time. Buy nice shoes, trousers, shirts, likewise, buy nice furniture, appliances or whatever. But obviously just do this ONE at a time. Don't get frustrated if you don't have that Corbusier chair or Armani Suit - you're fücking 21, not 40.
g) Learn to cook. Yes, I mean it. Apart from making you an independent man who won't have to look for a 1950s style woman who can "cook and clean for you", you'll save tons of money. Cook 2-3 meals per week and rejoice in leftovers.

Yeah it doesn't sound that exciting, I know. But unlike the get rich quick crap it'll work.

 

[The_flying_dutchman]

The best advice I can give is to put your money towards your retirement. It reduces your tax liability and will also ensure you don't go on outrageous spending sprees.

 

[Bible_Belt]

Learn to tell the difference between the things you want and the things you need. For example, you might need a car, but in all likelihood you don't need a new car. That would be a want, not a need.

You'll be a lot happier in life if you want less. And you'll end up with more money in the bank. Sometimes it just takes experience to learn about yourself. A boat is a good example. The expression about both boats and planes is that the only happier day than the day you buy it is the day you sell it. People think they want one, but don't realize all the expenses and hassles involved.

 

[Albatross953]

Ten percent of what you make into an exchange traded fund (s&p500). Cash on the barrel for everything else. Buy a house at 25, pay it off as fast as you can.

Done.

 

[Albatross953]

Oh, and if you want to get really hardcore.

Mr money moustaushe.

 

[narcissist]

Awesome advice you guys!

After reading these posts I have come to my own personal plan towards gaining success with money management.

Currently right now I do not have any expenses except for the gym.

My goals are to save up 2500$, save up some cash for a car (nothing special, just a beater - probably like 2 grand), and start saving to pay off my student loans.

I currently receive 482$ from my father a month for child support, which i will receive until I am 25 because of schooling.

I suffered a pretty severe injury just before I went back to university in september which forced my to quit my job because it was labour intensive. So at the moment I am looking for a new job. BUT here is my plan.

#1 - I will save 75% of my fathers child support each month which is roughly 360$ - that will add up to 4320$ for the entire year.

#2 - I will save roughly 50% of all the money I receive from work related income. As of now I do not know how much that will be but Im guessing, the next job I get will pay a little higher than minimum wage - (uni student).

#3 - I must learn to live on BARE MINIMUM. I want to teach my self to live on absolutely the bare bones. I very much want to start saving ever penny I get and be careful to watch ever penny I spend. I find that living on the bare minimum is actually more fulfilling too. Living a minimal/zen lifestyle with little to no possessions is more a more real and quality life to me, because I learn to live for myself and not my consumption.

#4 - I want to start a money managing journal. In fact - lets just make this thread my journal. I will post up a daily log on what I bought and what I spent money on, or whether I saved my money, or whether I didnt buy anything. I am going to document my net worth increase in this journal over the next year, and jot down the progression of my saving skills.

#5 - lastly I want to quit certain habits that I have which digs deep into my pockets. For one I spend a ridiculous amount of money on coffee. Lets calculate it

2 coffees a day - at $1.75 a piece x 365 days a year = $1277.5/year

wow. holy f*ck. Thats outrageous. So obviously I need to officially quit coffee. The addiction is clearly unhealthy, and its also making my cash flow diminish drastically. I need to stick to water when I am at school, and drink green tea/water at home.

The second habit/addiction that I must learn to control is my consumerism when it comes to clothing. I am obsessed with buying nice clothes. OBSESSED. I go to zara/h&m etc etc etc, and drop needless amounts of money on nice clothing. For instance, I bought a jacket back in October for 250$ and honestly I havent even worn it.

So I must learn to not go crazy with clothing, and when I NEED to buy clothing (not want) I must buy it on sale.

I will admit that today I was close to buying a sweater, I was in the line, about to check out, but inside I was yelling at myself "PUT IT BACK YOU F*CKHEAD," well needless to say I DID put it back and I can feel myself becoming already more sovereign over my consumerist urges.

 

[narcissist]

Money Management Journal Day 1

MONEY MANAGEMENT JOURNAL DAY 1

Here is my first money management journal. The numbers I am going to post are embarrassing but you know what? I am making it a goal, actually a necessity to raise my net worth over the next year. It is a DREAM of mine to be prudent with money and good with finances. Not only is it a dream, but in the world we live in a NECESSARY ability.

Current net worth: $ -350

Thats right I'm in the negatives. This is not including my school loans. Currently I owe my mom $350, because I had to buy gifts for christmas smh, such a consumerist holiday. Fortunately, $200 of that is for my transit. So my bus money is paid off for the month of January.

I will have that paid off in 2 days when i cash my $100 check and get $480 child support. 580-350 = $230

$230 is my left over money that I will have for the month. I will probably have to spend a good portion of that on school textbooks. But I am receiving loans for school and may be able to buy them with that, depending on what time I get the loans.

I am also going to be applying for a bursary, which is extra money the school gives if you can show that you need it. Which I can.

goal for the rest of the winter break -> Do not spend any money on coffee or clothes.

 

[Albatross953]

Forget the car if you live in the city. Can you pay money on the student loans now without penalty? I say do that.

If you do buy a car, drive carefully. Do the maintenance. Put a few bucks away in a rainy day fund. And plan to keep it until its fifteen years old. Check lemonaid guide for what to buy.

 

[synergy1]

A few tidbits, and my apologies if there is any repetition from what others have already added.

-Kill the debt, do not add more than you need to. It will hold you back. New car? Huge waste. If you absolutely need a car, buy a used one.

- With money, do the following: (1) keep 10% of all your net worth in cash. (2) money you do not need now invest in a basic S&P 500 index fund. This can be as high as 90% and you will outperform more than 90% of hedge funds and mutual funds in the long term.

- Stay healthy because medical bills can be a quick way to go from doing well to broke.

-Take some money and enjoy life. As long as you meet your saving and investing goals, life should also have some fun thrown in.

- Investing - stay away from day trading, quick tips, mutual funds, penny stocks, pink sheets, and anyone claiming to make you money. Investing takes time, and a lot of understanding.

 

[Atom Smasher]

Read or listen to "The Richest Man in Babylon" By George Classon. It will change your outlook profoundly and open you up to new possibilities. I wish I read it decades ago.

You're young enough to become a millionaire easily if you look up and understand the principles of compound interest.