But how do I know how much to put in these accounts or what to spend money on? The rule of thumb is 10% in savings. If you're saving up for something big, you may be wanting to save more. But that is a good starting point. I'm always so amazed at how people only start saving when they need something. What if you're in your early 20s and you know that you want to buy a house someday?
Wouldn't you want to start saving as soon as you could, if you know you're eventually going to need that money, if possible, putting 10% in an emergency fund is also advisable. If 10% is too much, you can start smaller at 5%. The key is to start getting into the habit. Housing can be as much as 50% in some large cities. That leaves 30% for all things food, entertainment, insurance, bills and expenses. Some of you You may think that's not enough.
But what if you're on a phone bill all by yourself? Could you partner up with a friend or family member to save? Most people are spending $100 per month on a phone bill. If it costs $20 to add someone bringing the bill to $120 and splitting it, it comes to $60, saving you $40 every month. It should be noted that that's $480 savings a year. thinking in terms of a year will help you see the big picture.
Likewise, car insurance is typically around $100 per month. But are you tied to one company? Or are you able to shop around, there are free services like nerdwallet that help you compare prices and what you're actually getting for those prices. I'm providing a budget worksheet for you to use. But remember, it's not the tools you use. are going to make the difference.
It's the mindset. If we're about to play a game of hoops with an NBA player, do you think it makes sense to go buy new shoes and the cool new outfit? Pretty sure they're going to score on you easily anyway. But what if you learn that they will weaker on their left hand side and you spent your time playing to his weakness? Do you think that would help you at least score one point, maybe the point is, the shoes you're wearing aren't going to help as much. Likewise, what budget app you use isn't going to matter unless you get the principles of budgeting down.
I would be remiss if I didn't speak about credit cards at this point. A lot of people use credit to buy things they can't afford. I understand that. But with everything you've learned so far, I hope you see that that's just what they want you to do. rack up interest payments, so you're constantly paying The credit card companies to keep them in business while you continue to live paycheck to paycheck never able to save or get ahead or really understand the value of money. Regardless of how much debt you have moving forward, I'm hoping there's a way where you start only buying things that you can afford.
If that's an impossible statement. I hope this course has taught you others ways to save money that can help you afford those credit card payments. Having a credit card that either gives you points or rewards towards free things or money back really goes a long way. If you do pay for many things on credit. Maintaining your credit score is super helpful here as it affects your interest rates. There are services which help you repair your credit and can be well worth the investment.
I have a credit score of 810 I don't tell you that to brag. I tell you that so you know it's possible. The minutes That you understand that you can poke life and actually something will, if you push in, something will pop out the other side, that you can change it. You can mold it. That's maybe the most important thing is to shake off this erroneous notion that life is there and you're just going to live in it versus embrace it, change it, improve it, make your mark upon it. Steve Jobs said that and I think those words are huge when it comes to understanding what's possible.