You are out of college now. Hopefully your college degree has catapulted you into a career you enjoy. Perhaps you even have some discretionary income for the first time in your life. It’s time to get real. Quit acting like a kid and start to steward your financial blessings.
7 Essential Financial Habits:
1. Stick to a Budget –
Be real with yourself. What are you currently spending? What do you need? What do you want? Where do you need to sacrifice to achieve your financial goals? Discipline yourself to stay within your budget. If it means cash only – then do cash only. Whatever it takes.
2. Set Financial Goals –
When you have identified a higher priced item that you would like to own, add this as an item in your budget. Perhaps your major financial goal is to pay off any existing debt. Maybe it is to save a certain amount this year. Whatever it is, write down this goal. Revisit it often. Make sure it is top of mind and celebrate when you hit this milestone!
3. Don’t Be A Slave –
The Bible says in Proverbs that the borrower is slave to the lender. Dave Ramsey always says, “debt is dumb”. He is right. Pay off your debt. Easier said than done, I know. If you have a 15 year mortgage at a solid fixed rate – that’s the exception to this rule. When you rent, your investment will never return. You don’t accumulate any equity when you rent. When you make payments to own a home, you can usually make backmost of what you have invested. Mortgage rates are excellent right now – so take advantage of them while you can. If you have student loan debt, get rid of it! All of it. If you have a note on a car, sell the car immediately and buy something you can afford with cash. Don’t be a slave.
4. Establish an Emergency Fund –
I recommend stashing away at least 6 months of expenses. When you don’t have an emergency fund, the emergencies seem to come. When you have one, emergencies seem to happen less.
5. Start Saving for Retirement –
Don’t do what so many do and bank on their inheritance from their in-laws. Put away some money. If your company matches any amount, put in at least as much as they match. If they don’t match, find a Roth IRA. If you don’t want to go that route quite yet, open a savings account titled “Retirement” and start putting at least 5% of your paycheck into the account. Whether it’s 5% after tax or pre-tax, I don’t really care. That’s up to you. You have to start somewhere.
6. Invest –
Make your money work for you. If you need to start small, start small. Find a balanced fund and let it work. If you would enjoy slightly more risk, find a growth and income fund. Throw some money towards these less risky mutual funds and let them work for you for several years.
7. Tithing –
This is last on the list but it is certainly the most important. In Malachi chapter 3, The Lord says, “Test me in this, and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.” You can militate against this all that you want. My hero, Mike Bickle says he can’t afford not to tithe. All I know is the financial favor that Suzanne and I have received in our lives because of “testing” God with this…
Return Value:
Peace of mind. Security knowing you have been a good steward. Whether you are married or not, your spouse or future spouse will thank you for forming these financial habits. Your children will eventually express sincere appreciation to you for your discipline.
-CK