How to Manage Money When Mommy and Daddy Say ‘No More!’
It all started with a card. Yup, a simple little 4×6 birthday card with a balloon and some glitter on it. A card your parent’s decided to give you in the privacy of your home before heading out to your big 5th birthday celebration. This wasn’t JUST a card. Oh no. You knew this card was magical. You rip apart the envelope like a ravenous animal and bypass all the sentimental writing on the inner lining of the card because that’s not where the magic lies. You may not have known the complete value of what came tumbling out of your birthday card, but even as a child you knew one thing and one thing only: birthday cards meant birthday cash and who better to bless you on your day of birth than the people that made that all possible. That moment was your introduction to addiction — an addiction you were no more prepared for at 5 years old than you are now at 25 years old.
As you grew up, how your parents gave you money evolved, but you knew that as long as your behavior was in good standing, you could always rely on cash from dear old mom and dad. Completion of chores equaled a weekly allowance. Academic achievement warranted a new outfit. Graduating high school and getting accepted into a university permitted a summer pool party with all your friends. By your 20s you’ve figured out, in so many words, how to “pimp” your parents for their pockets and comfortably float about off your families funds until now….
You’ve been cut off. Your parents have said ‘NO’ to paying your car note, sponsoring your shopping habits and affording your luxuries. W-T-F?!
The initial shock of the B.O.M.D (the Bank of Mom and Dad) minimizing your cash limits may have seemed like it came out of left field, but if you’re truly honest with yourself, you knew it was coming. Your parents can’t afford you forever and at some point you knew you would have to become an independent woman and learn how to make it on your own – like really on your own. You may not have been prepared for your money stream to dry the hell up, but one thing a #BAUCE chick knows how to do is thrive under pressure and come out on the other side shining bright like a diamond. Here are some tips to help you streeeeeeeeeeeeeeetch your dollars once you’ve become financially responsible for yourself:
1. Set A Goal
Most of us have a hard time adjusting to change, so taking on our new financial responsibility will need some time to get used to. Before you make any moves, asses your income and expenses and make long and short term goals. Forecasting where your money will be is a lot easier when you can break it down into smaller measures. Draw out a manageable month-to-month plan to help keep you on track and make a prediction of where you would like to see your finances at the end of a year.
I know it’s hard to not spend every dollar you get, but the key to having a healthy financial situation is having a good balance between money you spend and money you save. Start by taking small amounts out of each paycheck and put it to the side – this way you view that money as untouchable and you won’t account for it in your monthly income. Example: If you take $25 out of your check, at the end of the month you’d have about $100 to your name and at the end of the year, you’d have about $1200! Another incentive to help you save is to designate what your savings will go towards. Want to take a girls trip to the Caribbean? Want to put down a bigger down payment for a new car? Want to pay off those student loans? Beginning to think about what you’re saving for might help keep you focused and maybe even encourage you to save a little more!
3. Adjust Your Social Calendar
No, you don’t have to completely stop going out with your girlfriends and become a social hermit to save money. You can still workout, go out for drinks and entertain yourself – just be smarter about HOW you do it! Opt for money conscious activities like happy hour specials, in-home movie nights or free outdoor workouts to help you cut corners. Cut your mani/pedi appointments down to a once a month thing or instead of valet, start parking on the street when you go for a night out with friends. Being thrifty doesn’t mean you become boring, so don’t write off your extracurricular activities because you have to watch your wallet.
4. If You Ain’t Got It, Don’t Get It
Some people see credit cards as an “in case of emergency” device and that emergency could range anywhere from needing to move out to needing a new pair of heels. If you’re the type to shop ‘til you drop and deal with your credit card statement later, you’re only setting yourself up for a potential disaster. Credit card companies charge interest on purchases not paid off in full at the end of each billing cycle – costing you more money. The best way to manage buying on credit is to immediately pay off your purchase and keep your credit card balance at bay. But if you still have to pay off a credit card with another form of tender, why not just collect all your coins and pay for those heels with cold hard cash? See what I did there…
All in all using a credit card isn’t bad, but like with anything, misuse can come back to bite you in the butt or your even worse, your pockets….Financial responsibility is a long, hard road, but the sooner you begin your journey to independence the easier it will get along the way. But in the event you do find yourself stuck in a money rut; remember, you’re a platinum member of the B.O.M.D. and they’ll always find a way to give you a loan – just make sure you can pay them back with interest.