Get Started Today!

Updated: Aug 4

When we talk about enormous sums of money, it can seem like an impossible, unrealistic, absurd pipe dream.


"Oh, sure -- I'll retire when I have a million dollars." Like that will ever happen.



Well, the longer you wait to get started, the longer it will take to get there! You know I'm right. So you may as well get going today.



1) Open Excel or Google Sheets and make a budget.


Come on, it's way more fun than it sounds. Instead of budget, why don't we call it... "the workin' hard and makin' money chart".


You probably don't need the explanation, but just in case...


Assign one column that lists all of your income. That's probably a job, but maybe you

have side hustles, allowance from your parents (no judgment), subletting your

apartment, etc etc etc. Make sure to use your "after-tax" income. (Wait and see how

much you get on your paycheck.)


Assign a second column that lists all of your expenses. To start, just list everything that

you think is NECESSARY or a regular expense. So, if you know you won't be canceling

Netflix or Spotify anytime soon, go ahead and add it to the list. The most common

expenses include rent, utilities, food, internet, cell phone, car/transportation, insurance,

minimum payments on debt, and more. Check your credit card and checking account to

make sure you aren't missing anything.


Calculate your total income and total expenses by adding up the items in each column.

If your expenses are greater than your income, you'll need to find a way to generate

more income or reduce your expenses. You might need to find a cheaper place to live,

cut out some extras like large data plans or Netflix, reduce your food bill (no more

avocados, sigh), and get creative.


A good place to start off your budget is with 50% of your money going to needs, 30% to

wants, and 20% to savings. Long-term you'll want to save more than 20% to retire before

65, but don't worry about that yet. If you're a zoomer, you have nothing but time!


Also, this plan isn't possible for everyone, so don't feel discouraged if you aren't there.

We will talk about some techniques for tweaking your budget below.


If your income is greater than your expenses, CONGRATS!! You are thriving! Dwight

and Michael are proud of you:


No matter where you are currently: drowning in debt, swimming in cash, or somewhere in-between, there are ways you can improve your financial situation. And the most important place to start is recognizing where you are!



2) Find a way to make more money, if you need to.


Maybe you just learned that you spend more money than you make. Or maybe you decided you can't maintain your shopping addiction and save for retirement, but you can't give up the shopping.


Either way, you may have decided you need to get a job, or a second job, or a third job.


Well, the best time to get started is now!

  • Sign up to drive with Uber or UberEats or Grubhub or Lyft

  • Sign up to shop and deliver food with Instacart

  • Rent out a room with Airbnb

  • Look around town for "help wanted" notices at grocery stores, restaurants, local stores, and more

  • Post on Facebook, ad boards in town, and on local sites offering pet care, babysitting, tutoring, house watching

  • Teach English online through sites like Lingoda, Tutlo, Teachaway, and many more

  • Start a blog.... I've heard you can make money doing that!


If you are looking for a job in your field, shop around on LinkedIn, Indeed, Glassdoor, and ZipRecruiter. If you're applying to competitive jobs, try to find the right balance between quantity and quality. Of course, you want your applications to be nice, neat, and accurate, but you also don't want to spend 5 hours perfecting a single cover letter. To get my first post-college job, I applied to 100 jobs over 6 months, got interviews for 15 jobs, and got 2 offer letters. Those magical numbers are different for everyone though, and who knows -- maybe your first job application will be the last one!


Try not to get discouraged if you get lots of rejections... Trust me, I got plenty. There's no shame in it, and you'll probably learn something toward the next application or interview. And there is *always* another interview in your future, I promise.


Couldn't they at least be a little more creative??


So, start applying today. Because a paycheck is headed your way!




3) Put money into a retirement account RIGHT THIS VERY SECOND.


I mean it, guys. To learn about why investing money today is better than investing money next week, read this post about compounding interest. Or, just take my word for it. The sooner, the better.


Now that you (hypothetically) have an income that is greater than your expenses, you need to make a plan for the rest of it. You've paid your rent and health insurance bills, you can afford to eat. Now, you need to start planning for the future, which is basically made up of three parts:

  • Unknown expenses: You have an emergency. Your car breaks down, you break your leg, you spill oatmeal on your brand-new laptop. These things must be fixed, and you never know when they might happen.

  • Known expenses: These are big things that you need to spend money on occasionally. You might not have planned them into your monthly budget, so you need to think ahead (years ahead, in some cases) and start saving for them. For example, buying a car, buying a house, going on vacation.

  • Retirement: This is a big one. Did you know that you'll spend 20 or 30 or 40 or more years of your life not working? And you're supposed to have a bunch of money saved up that you live off of! Yikes!

These are the three basic types of events you'll need savings for. That is why you can't just use half your income on needs and half your income on wants. That's why your expenses can't just match your income, but need to exceed it.

So now you just have to figure out how much money to save, and what to do with it. Here are a few rules of thumb.


  • First, put at least enough money into your 401(k) to get your company match. If they'll match 3% or 6% of your salary, put that money straight into your 401(k). If this isn't available to you, keep reading...

  • Build up some emergency savings in your checking account, savings account, or money market account. This post has more specific advice, if you'd like more guidance.

  • Lastly, aim to put at least another 10% of your salary into retirement savings, either a 401(k) or IRA. If you can afford to, put the maximum into both! If you can afford to keep going, open a brokerage account and put more investments in there (that you have to pay taxes on).


Note: If you wanted to max out a 401(k) and an IRA, that would be a total of $19,500 + $6,000 = $25,500, or a contribution of $2,125 per month. If that seems completely out of reach, instead aim to contribute 20% of your total income to savings of some sort (short-term or investments). Or even start at 10% savings, and increase the amount a little every month. Eventually, you'll grow accustomed to your changed income (less for present you, more for future you).


Another note: The more you can contribute toward retirement, the earlier you can afford to retire! People who retire crazy early often contribute 50-75% of their income toward retirement investments. To be on track to retire at 65, you should aim to save 20%. If you're behind, don't worry about it and just start now. Almost everyone in the world is behind :P



4) Pay off debts!


Hey Frugal Zoomer, shouldn't this be a much earlier priority???

Well, not quite, eager readers.


You need to get your finances in check before you can start paying off your debts. Paying off debts requires understanding your cash flow, having enough money in general, and **hopefully** starting to save for retirement.


Saving for retirement is JUST AS IMPORTANT as paying off debts, like credit card debt or student loans or a mortgage. You need to look out for future you!


But yes, you're right -- you do not want to default on your loans or lose your home. Credit card debt, especially, should be paid off as quickly as possible because it carries such high interest rates. A typical interest rate for investments might be 6%. In terms of debts, for a mortgage it might be 3%, and for student loans it might be 5%. In both of these cases, an investment of $100,000 would grow faster than student debt or a mortgage of $100,000. In other words, you're gaining money by contributing to a retirement account instead of just paying off the debt.


On the other hand, credit card debt can carry interest rates of 15-25%. That is absolutely insane and the debt can grow out of control before you know it. Try to pay more than the minimum payment every month and reduce (but don't eliminate!) your retirement savings until you pay off credit card debt.


Even better, don't use a credit card unless you know you can pay it off. I know there are circumstances where this isn't possible, but credit cards should be used as a last resort for fast cash. It'll cost you big time to carry a balance and won't save you any stress in the long term.



5) Practice healthy money habits.


And no, I'm not going to tell you to balance your checkbook! I'm not 60!


Here are some easy things you can do to make the most of your dolla-dolla bills.


  • Check your accounts pretty frequently. Credit card, debit/checking account, investment accounts... Make sure nothing fishy is going on. Cancel monthly payments that you don't want (goodbye, Chegg!).

  • Pay off your credit card every month if you possibly can and don't have more than 2 credit cards. I've said it before and I'll say it again. They're dangerous stuff. Stay away from them like Hydroxychloroquine.

  • Automate where all of your money goes, so you don't forget or change your mind. 401(k) contributions are made even before you receive your paycheck (talk to HR if this isn't happening and your company offers a 401(k)). Send money directly to savings accounts and retirement accounts using automation through your bank or company. You can even set your credit card to be paid off automatically every month. Then any leftover money from your paycheck is yours to use! Go crazy.

  • Put bonuses, birthday money, and $20 bills you find on the ground directly into your savings.

  • Revamp your budget frequently. Things change fast, so try to keep your money plan updated. And stick to it!!

  • If it helps you stick to your budget, print it out and put it on your wall. Or keep it bookmarked on your browser.

  • Write down your money goals and share them with a friend or family member. Talk about your goals and how you're doing when you see them.

  • And most of all, don't get mad at yourself if you make a mistake, miss a payment, or don't stick to your budget. However, if it happens a lot, maybe you need to re-evaluate your budget or find another source of income so you don't have to give up the daily $8 Frappucchinos or monthly Phish concert. Hey, we all have our vices.


Do you have a budget? How do you stick to it? What are your best money practices?


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©2020 by The Frugal Zoomer.