If You’re Going to Spend The Money…

Don’t regret it. Just put the money down, enjoy or learn from the investment, and move on. Cut your losses and figure out how to move forward. There’s no point at all in tarnishing a good evening by despairing about dollars and cents. Live the good life.
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Savings: The Game

The best financial advice I received upon graduating college: always have enough cash in savings to survive for at least six months without income. I took that advice with a vengeance. Savings not only provide you with a security blanket, they award you the confidence and flexibility to make major life changes. The risks of quitting a job, changing cities, moving into a new place, taking on a life partner, and having children are dampened by the relative stability of an earned allowance. I would not have felt comfortable quitting my job, leaving Hollywood, and moving to Denver without the cash buffer I built since graduating.

Yes, savings are difficult to accrue. It takes discipline, commitment, and a passion to see numbers grow. I treat my savings like a game: I want to get the high score. With online banking, it’s easier than ever to convince yourself  those numbers are points on a leader board. Have fun with it and take pleasure knowing your high score means something real.

If you are living paycheck to paycheck, you need to find a way to make more money or live cheaper. And who really wants to live cheaper? Negotiate a raise, yo! But we’ll save that conversation for another time.

Don’t Cut Spending. Make More Money!

Many twentysomethings live paycheck to paycheck. Very rough riding. Most people in this situation try to spend less and make do with what they have. Ramen noodles, no nights out, no entertainment purchases. I think this is the wrong attitude. Instead of protecting every little dime you have, invest your energy into making more money. Side projects, tutoring, part-time work, surveys, leveraging a raise, finding a higher paying job. The opportunities are endless. There’s a limit to how much you can cut from your spending, but no limit to the amount you can make.

Ramit Sethi is a strong proponent of this train of thought. While I find his advice verbose, he makes several great suggestions.

Before you can set out to bring home extra bacon, you need to ask yourself one really important question: do you think you are worth more in the first place? If you do not believe you are, then no one else will either. But if you truly believe, then the money will come. I was frustrated with my work last year and felt I deserved more. I modestly outlined my needs to continue providing the same level of value to my company and was met with a 33% raise.

Believe you are worth more. Act like you are worth more. Life will sort itself out.