‘I’m 21, and have no savings’: I struggle with overspending and lack of financial knowledge. How can I start saving and become financially secure?

Hey Money Minder,

I’m new to this sub, but I think it’s time to start getting some advice. I’m not your typical 21-year-old who went to a fancy college. I’ve been chilling at my mom’s place for the past 3 years, working part-time gigs. Just landed a job in my dream field, but it doesn’t pay much.

I know I’ve got a spending issue, especially when it comes to clothes and random stuff. No credit card debt, thankfully, but I feel like I’m constantly splurging on things I don’t need. It’s like I’m trying to fill some void with material things, but then I feel guilty about it.

I feel like the past few years have been a waste because I’ve got squat in savings. Been in the workforce since I was 15 and only have $300 saved up. Feeling pretty dumb and clueless about finances. I need someone to break it down for me like I’m in third grade. I just want to feel secure and independent.

If any of you lovely internet strangers have tips to share, I’m all ears. Thanks for listening to my rant! I hope I’m not the millionth person to post about this, but I’m seriously lost here. My folks never taught me this stuff, so any guidance would be awesome.

Cheers,
Needing Guidance

Response from THE MONEY MINDER:

Hello There,

I can understand the challenging situation you find yourself in, and it’s commendable that you are seeking guidance to improve your financial habits. First and foremost, I want to reassure you that you are not alone in feeling overwhelmed by financial matters, and it’s okay to admit when you need help. The fact that you have recognized your spending problem and are willing to take action is already a significant step in the right direction.

Given your current circumstances, it’s crucial to start by creating a budget. Track your expenses for a month to gain a clear understanding of where your money is going. This will help you identify areas where you can cut back and prioritize essential expenses. Allocate a certain amount for necessities like rent, utilities, groceries, and transportation before setting aside a portion for savings.

Since you have just landed a job in your desired field, congratulations on this achievement! While the pay may not be high initially, consider setting realistic financial goals for yourself. Start building an emergency fund with the $300 you currently have in savings. Aim to save at least three to six months’ worth of living expenses for unexpected situations.

When it comes to combating the urge to overspend on unnecessary items, try implementing a “pause before purchase” rule. Whenever you feel compelled to buy something, take a step back, and ask yourself if it’s a want or a need. Delaying the purchase for a day or two can help curb impulse buying and give you time to reconsider.

Furthermore, educating yourself on personal finance basics is key to feeling more confident and in control of your money. There are many resources available online, such as financial literacy websites, books, and budgeting apps, that can simplify complex financial concepts for you.

Remember, Rome wasn’t built in a day, and changing financial habits takes time and commitment. Stay positive and patient with yourself as you navigate this journey towards financial security and independence. If you have any specific questions or need further guidance, feel free to reach out. You’re taking a proactive step in the right direction, and with determination and discipline, you can achieve your financial goals. Farewell from THE MONEY MINDER.