As a young woman, there’s nothing more important than mastering your personal finances. In order to be able to lead (and be a good role model for other young women), you must have your own financial house in order. Of course, being this young means that in the first place, you’re not making that much money. So you think to yourself: why bother? I can barely cover rent and essential expenses, why have a budget or think about savings?
In fact, now is the time for you to start making healthy money habits. The key to a woman’s independence is financial independence, and it is not easily acquired. It’s hard earned, and must be learned and practiced.
A recent TED Talk by Alexa von Tobel, founder of LearnVest, a site for young women to control their finances, is a must see. It provides us with 5 key financial principles, one of which I want to highlight here.
It’s crucial to have a budget. LearnVest recommends the 50/20/30 rule:
- 50% of take-home pay goes toward your essentials (housing, utilities, transportation and groceries)
- 20% to debt repayment and future savings
- 30% to everything else
Another article I read this week provides another tip for budgeting: fill out a monthly budget worksheet. All I have to do is subtract my fixed and semi-fixed monthly expenses — things like the phone bill, health and car insurance, gas and electric, and debt financing — from my monthly net income (after taxes) to determine the amount I can spend every month without going into more debt, then divide that number by 30 (the average number of days per month) to arrive at my daily spending allowance.
I’m committed to start sticking to my daily spending allowance. How about you? What are you doing to become cultivate good money habits?