Money might not buy happiness, but getting your finances straight is pretty damn satisfying.
When you build and take care of something yourself, you have a better idea of how it works.
You might even appreciate it more.
I think this applies to your finances, too.
Control Is Everything
Money has a lot to do with mindset.
And I feel like I’m the one responsible for all of this.
Here are a couple of other benefits to being in control.
So when my 401(k) statement came, showing my balance dropped, I freaked out.
I immediately stopped contributing to my retirement.
And history shows, over time, my investments will likely recover.
I now know what to do (or what not to do) when the market goes down.
There’s Value in My Mistakes
Have I done a seamless job of managing my own money?
In learning on my own, I’ve made mistakes.
I earned some money, then I lost it.
Luckily, I broke even.
It could’ve been worse.
It alsodidmake me understand how the market works a little better.
If I handed my money to a pro, I might never know this.
(And I’d have less money from paying them, too.)
You don’twantto make mistakes.
Avoid them as much as you’re free to.
But when you do something yourself, mistakes are kind of inevitable.
Gleaning information from your mistake, though, can be hugely beneficial.
How I Learned on My Own
Of course, one doesn’t become a financial ninja overnight.
I had to read a lot to get there, and learn from my own experiences and mistakes.
But the more I learned, the more I got my financial life in order.
I Dug My Way Out of Debt
I got my first credit card at 18.
Then, I bought more things.
That $100 quickly turned into a couple thousand.
Before you know it, I was in consumer debt for the very first time of my life.
When coupled with my student loan years later, it felt overwhelming.
A few years earlier, my dad had given me a copy of Dave Ramsey’sTotal Money Makeover.
He’d read it and said it was helpful.
At the time, I tossed it aside.
When I officially became a debtor, I cracked it open.
I found Ramsey’s ideas and concepts about money totally relatable.
My debt was intimidating, and his “baby steps” were doable.
Like a lot of people, I had no idea how to start managing my money.
But Ramsey does a great job of introducing the basics of personal finance.
His “Snowball Method” worked well for me.
If money is more about math than mindset for you, you’d probably prefer theStack Method.
Either way, these methods require you to understand and stay on top of your debt.
But that doesn’t mean I’ve always budgeted the right way.
Again, I had to learn from my mistakes.
For example, when I first started paying off debt,I went about it all wrong.
I decided I would live bare bones and simply throw every cent of my income at my debt.
That was my plan; that was my budget.
It didn’t work.
If I bought even the smallest luxurya pack of gum, for exampleit messed everything up.
I’d overdraft my account, and my whole plan would be rendered useless.
I gave myself zero breathing room.
I needed a better budget.
Basic ruleslike the 80/20 method and the 50/30/20 rule helped me do it better.
I designed a budget, thentracked it using Mint.
When I understood my habits better, I had a better idea of how to manage my money.
As for learning to save money, Ramsey’s book also helped me realize I needed an emergency fund.
I also got a lot of use out of a book calledYour Money or Your Life.
This one is helpful if your mindset gets in the way of your money habits.
In fact, I was happy just to have work.
For this, I was incredibly grateful.
But months later, I found a similar job that paid double.
I took the job, put in my notice, and my original employer offered to match it.
At first, I was upset that they could afford to pay me double this whole time.
Then I realized:that’s business.
It was my fault for not speaking up and negotiating my salary or raise in the first place.
I just wasn’t good at earning more.
But that situation motivated me to get better.
A couple of things made a difference.
Also, Barbara Stanny’sSecrets of Six-Figure Womenwas motivatingin particular, her chapter on the traits of underearners.
Unfortunately, I could relate to nearly all of them.
His basic money advice, like budgeting and paying off credit cards, is nothing new, really.
We’ve told you thebest way to get started investing on your own.
It’s really not that hard, but it is a lot of information.
It’s sort of like Mint, but for investing.
Tax laws can be really difficult to navigate on your own.
I ended up confirming my information with an acquaintance who’s a financial advisor.
He told me in five minutes what took me days to learn on my own.
Images by Nick Criscuolo,Shutterstock,Pixabay,401k 2012,Pedro Ribeiro Simoes, andJulia Taylor.
