Dear Young Woman: A Get What You Want in Life & Finance Plan
Dear young woman,
If you’re healthy and in your 20’s - consider yourself blessed. You have the most valuable resource of all - “time”.
Like most, I took my youth for granted. I wasted much of my time as a young adult and didn’t plan ahead more than a couple weeks at a time. I rarely had money to travel or to treat myself to a big purchase. And when rent was due each month, I’d scramble to put it together. There are a few little things that I wish I had done during my 20’s that would have made a massive impact on my 30s and so on. Primarily investing my money vs. spending it on things I can’t even recall now, and working towards my career/life goals vs. going with the flow - i.e. saying “yes” to everything my parents or friends wanted me to do.
Here are my tips on how to set yourself up for success. You could call it a general.... “Get What You Want in Life & Finance” Plan:
Eliminate all expenses, people and distractions that aren't bringing you closer to your dreams or real happiness. They have no room in your life and you can’t afford to spend your very limited resources on them. At least for right now.
Pay off all your debt. This means credit cards, school loans, personal loans, and anything or anyone else you owe money to. Start by paying off the debt you’re paying the highest interest on. The sooner you can get your debt to zero the sooner you can start saving and investing.
Start an emergency fund. Save enough money that can cover 3-4 months of expenses. Only use this money in case of an emergency. Emergencies such as you lose your job or become unable to work, medical bills or your car breaks down.
Create four "shoe boxes" or something to this affect for your income. Each “shoe box” represents a budget for each one of these living essentials - 1) bills, 2) travel/entertainment/clothes, 3) transportation/food and 4) savings. For every dollar you bring home, be sure to put 10% into your savings and the 90% divide up accordingly to the remainder of your shoe boxes. This is a simple way to budget your money. Rule of thumb - put more money into #4 savings than you do #2 travel/entertainment/etc.
Invest 10% of your income for retirement. More if you can. Smart investments would be a retirement index fund or a no load, low cost mutual fund such as Vanguard 500 and Vanguard Small Cap Fund. The stock market is also a safe place to invest money long term. This is money you will not touch for 20+ years...when you're ready to retire.
When it comes to reaching your long term goals - make a plan with the end in mind. Start with where you want to be, then work backwards. Write down each step you will take to get there. This will be your roadmap.
Take each step. Little by little - make sure they are not that big. When you accomplish each small step, your confidence...and happiness will grow. If you're struggling with a step - ask for help from someone who has experience with it. Don't be afraid to ask for a hand, but don't expect it to be given to you. You still need to show up and put in the work.
Be patient with yourself. Forgive yourself. And get excited! The glass is half full and you have plenty of time to make mistakes, learn and grow. When you see a problem as an opportunity, failure as growth, pain as progress, set backs as lessons, etc ... there really is nothing in your way. It's just a matter of perspective...so change how you think to get what you want.
I think the above is a good starting point in maximizing your youth. Happy to share more with you - if you find any of this helpful or if you have questions please leave in the comments below.
Sincerely,
Die Happy Tonight’s Founder & CEO
p.s. This email is a part of series of emails I’ll be sending to all of our models in hopes that this 38 year old man can shed some light on topics of self-growth, self love and excelling in this cloudy world we all work in. If you disagree with anything I share or would like to offer some of your own advice, please write back. I'd love to hear your perspective and will consider including it in future models emails. Let's rise together!