My 10-Second Take on Personal Finances

When I decided I was going to stick it out at my new job longer than I ever had in earlier jobs, in order to work toward more financial freedom, I realized I needed a plan. I started reading about personal development and personal finance.

Here are the moves I made as soon as I started earning and that will help you become more financially secure once you make some bucks:

  • Track your money. Track every single expense and income. If you know this, you will see which expenses are necessary (groceries, certain insurances) and which ones are nice to haves (novels, your tenth pot of nail polish, eating out frequently).
  • Minimize your expenses. Since I moved out of my parents’ home, I roughly tracked my monthly expenses, but I got a sharper eye for better deals once I started tracking my money to the cent. Lower expenses give you more room for what I describe in some of the bullets below.
  • Pay off your debts. I didn’t actually do this, since I didn’t have any debts, but if I would have had them, I’d pay them off aggressively asap.
  • Save aggressively. Build an emergency fund you feel comfortable with. Financial bloggers and advisors recommend 3–6 months of expenses, but if you need more (or less) to feel comfortable, do it your way.
  • Once your have done the above, invest in low-cost index funds. Investing is more risky, but can yield more money than saving. Bonus if you invest in dividend funds, since this allows you to maximize your compound interest.
  • Educate yourself. Asking others to answer this question is a great first step, but to really educate yourself, you need to take it up a notch. Pick up by Robert Kiyosaki, and some other books, podcasts and videos. Learn different points of view and experiences to determine what’ll work for you.
  • Seek ways toward a raise. Take courses relevant to your field of expertise, join projects beyond your current level of operations at work — in other words, prove your boss you’re worth more than you’re currently earning, so you can re-negotiate your salary in the future.
  • Do it yourself. You probably can’t afford to outsource a lot if you want to do all of the above. Learn to cook and clean your house, and only seek expertise for the things you truly hate or that require specific expertise.

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