Stressed african businessman sitting at his desk.

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There’s nothing worse than being told you don’t qualify for a car, or line of credit, or can’t rent that dream apartment because you don’t have good credit.  According to the National Endowment for Financial Education, only 24 percent of millennials have a grasp on basic financial knowledge (think everything from understanding how to balance a bank account, managing a debt to income ratio, accumulating adequate savings and staying on time with bills). This means that a lot of twentysomethings are making poorly-informed decisions about what to do with the cash they earn, and the consequences can be long-lasting. Chiseling the muscle to ensure you’re on top of your funds may not seem sexy when you’d rather bar hop and leave budgeting for your thirties… until you hit your thirties and realize you can’t do any of the grown ish (upgrade your car, buy a house, or even refinance your student loans) because your credit sucks and you have nothing in the bank.

Understanding the basics about money is an investment that will literally pay off for years to come.  Here are some things to start with.

1. Develop a new routine

Your financial habits need a routine just like eating healthy or working out. Build sustainable habits, like balancing your budget each week and stashing away small sums of money into long-term savings that you don’t touch. Ask yourself, what are the things within your control that are stopping you from building a future that allows you to be in control of your finances? If it’s knowledge, make a goal of reading one article a week, or a book a month, to increase your knowledge base. You can also search the web for podcasts and videos to gain access to more info.

2. Set financial goals

Think about what you want to accomplish with your money and the ways you want to see it grow. Do you want to finish paying off that student loan early, save for a house or fund your own business? Find a financial reward that you can direct that energy towards besides something that is tempting and temporary. Get committed to becoming financially savvy by staying informed, organized and disciplined.

3. Automate your spending habits

From groceries to upcoming events to bill due dates, take an hour to track how much money will be coming in and the amount of money coming out of your account(s) each week. Calculate every single penny, leaving less room for overdrafting and overspending. After you’ve organized your money for the week, see if your income is more or less than your expenses. If your income is more than your expenses for the week, consider adding more money towards one of your financial goals. If your income is less than your expenses, see how you can cut down on what you spend, whether that’s through negotiating bill payments or only spending on things you need for the week. A budget is a great tool that is often neglected because it can feel like a restrictive method—so are pants, but we wear them. But if you view the budget as a device that is there to shield you rather than hurt you, you’ll be on your way to having less stress around your money. Need a little help getting started? Use a budgeting app such as Mint to support you, especially if it’s your first time creating a budget.

4. Put your name on it

Owning everything you have is the fastest path to building financial stability. Why?  Well, let’s see. You’re more likely to buy things you can actually afford. You’re more likely to value what you have because you had to work for it. You’re more likely to streamline your needs. Nowadays, folks finance everything from clothes to cars. How much would you actually have in your wardrobe if you didn’t put it on a credit card? Would you upgrade your car if you had to save another year to pay for it? Even more, you’d realize that most of those things are meaningless. It may seem difficult to conceptualize any form of ownership when you’re not earning a lot or have loads of student debt. Think of it as an investment in you. Start small and pick one thing that you can possess. For example, no more buying clothes on credit. Then upgrade. Ideally, you want to own something that will either get rid of monthly payments such as a non-dealership used car or something that will add to your stash such as having another stream of income. Create some net worth now so that you can have enough finances later to eventually work less and just watch the money roll in.

5. Improve your credit by eradicating debt

That mentality o,f “Oh, I’ll pay for it later?” Get rid of it. If you can’t pay for it that very moment, you don’t need it.  Make tackling your debt and improving your credit a priority. If you have any loans to pay off, make it a goal to put a small percentage of your income towards lowering your debt each week. Call your credit card lenders to see if they can lower your interest rates. Make an effort to plan how you will break the cycle of debt collection this time around.


Tracey Onyenacho is a freelance writer for CASSIUS.