Maybe You Should Leave the Nest

I understand that moving back home after college is not for everyone.  You may not get along with your parents or you just do not want to give up your freedom. Moving home does has its drawbacks.

 Lack of Privacy

For the past four years, you could come and go as you please. No one was there to nag you about where you were going and what time you were coming home. You could do what you want without your parents having a clue. When you live at home with mom and dad, you have to live by their rules. This means letting them know when and where you are going to get your next hangover. You also may not be able to bring that hot girl/guy you just met at the club home. For some of you, moving home may put your dating life on ice.

Squander Your Money

Without the responsibility of paying bills, you have more discretionary income. It’s easy to blow your money on clothes, vacations, gadgets, and anything else your heart desire. This defeats the purpose of  you living at home to save for your own place or pay off debt.

Regression

The purpose of you moving back home is to get your life together. With mom doing the cooking and cleaning, it’s easy to get comfortable living at home and lose motivation to stand on your own two feet. You begin to depend on your parents to do everything for you. You parents also may treat you like the teenager that left 4(5,6) years ago. After all you are their “baby.”

I’ve experienced some of these drawbacks living at home. My shopaholic tendencies are starting to show again and I’m not always motivated to go after different opportunities. While I prefer not to live at home, I can deal with mom’s craziness until I save enough to survive on my own again. However, everyone is different. Some people prefer to struggle to make it on their own than give up their freedom.  If you feel that living at home is stifling your growth as a man or woman, maybe you should move out.  You decide what’s best for you.

From Rags to Riches: Pay Yourself First.

I want all of us to have financial freedom. The key to financial freedom and the road to prosperity starts with one simple concept- pay yourself first!  Our friend Kerri  Smith show us how we can go from rags to riches by applying this concept.

Have you wondered how rich people got to be rich people? Some, of course, are born into money but others come from very humble beginnings. Even those born into money have to find ways to save or make more money than they are spending. They have also learned that everything has a price and the most precious is their time. 

The value of your time will change over your lifetime; however what you do with the money you make will decide whether your financial picture will be that of rags or riches. 

We know the government will take 20-30% with all the taxes such as federal income tax, state income tax, sales tax, property tax and so on. So, you should retain a portion of your income to build your financial wealth – that’s paying yourself first! That’s before you buy groceries, pay your rent or any other bill.
By paying yourself first, you build a nest egg to fund future goals, a cushion in case of an emergency and it will build your confidence. Believe it or not, the lack of a nest egg will influence your decisions. You will stay in a dead-end job or put off going back to school or it can deter you from starting a new business. 

Most people spend what they make and even more by using credit. One way to think about spending is to equate everything to your hourly wage. For instance, if you make $15 an hour and they take out $5 for taxes, it leaves about $10 per hour in your pocket. When you buy a new iPad for $499, you will have to work 50 hours to pay for it – 50 hours! And if you buy it on credit, you will be working a lot more hours than that to pay for it.  Even smaller purchases such as DVDs or fancy frozen coffees, they really add up. Before you make a purchase, consider how many hours you will have to work to pay for it and you will definitely change how you spend your money.

How do you start paying yourself first? It’s simple really. Start with 2-5% of your take home pay and deposit it into a savings account directly from your paycheck. There is an old saying, “if I don’t see it, I won’t spend it.” That’s just one of the reasons taxes are taken out of our paycheck.  Ideally, you would want to get to 10-15% of your take home pay. 

A clever way to remind yourself, is to set up a timer on your phone or computer for payday and put three words in the description “pay yourself first” … You’ll be richer for it. 

- Kerri Smith, CU Member