Step 0: Create a Budget, Reduce Expenses, and Set Realistic Goals

Create a Budget

No, seriously.  Create a damn budget.  There’s a reason it’s #0 on the list: it’s the most important thing you can do with your money.  If you don’t know where your money is going, you’re flying blind.  Without a budget, following the flowchart isn’t impossible, but it’s way harder.

Yes, taking a long, hard look at your financial situation can be scary or depressing.  Yes, there’s some up-front work in creating a budget.  Yes, it requires a little work to upkeep.  I promise you, however, that you lose nothing, and gain a ton of valuable information.  Once you’re in the budgeting mindset, it becomes second nature, and you’ll wonder why you waited so long to get started.

Do I have to say it again?  With uppercase letters this time?  In big, big font?


I’ve created a step-by-step tutorial on how to make a budget.  For the math-averse, here’s an even simpler one.  It takes less than an hour per month to upkeep, and could save you thousands of dollars a year.  10-15 hours of work a year to save thousands?  Yes, please.

One more time: Create a budget.

(In case you couldn’t tell, I feel pretty strongly about budgets.)

Reduce Expenses

This one can be pretty tough for some people, myself included – I live in a city with a high cost of living, and there’s only so much I can do to reduce my overhead.

You might be in the same situation as me – whether expenses are high or pay is low, sometimes unavoidable bills take up a significant portion of your take-home pay.  That’s okay – just do what you can.

It tends to be that food takes up a big portion of expenses.  Do what you can to reduce that – I cook a couple $1 bags of beans in my crock pot weekly, and it’s a cheap, filling staple to have around the house.  This doesn’t mean you have to eat beans for every meal – it’s just a much cheaper (and healthier) alternative to running to the store and grabbing a snack on a whim.

Since I’ve started having a supply of beans in the fridge, my food expenses have gone down about 10%.  Just knowing that there’s cheap, healthy food available at home is valuable.

Set Realistic Goals

This blog isn’t here to push a product or sell you on a get-rich-quick scheme.  It’s to distill and share the knowledge I’ve gained over years of research to help millennials like me (and anyone else!) avoid common pitfalls and achieve financial health.

Everyone is going to start on a different part of the flow chart: I’ve recently finished paying off my student loans, so I’m still pretty high up on the chart.  Some of my friends got theirs paid up-front, which is an amazing boon… if you know what to do next.

Some folks have low-paying jobs; some have high overhead.  Depending on your situation, it may take you longer to get to the end of the flowchart.  That’s okay.  Everyone has to go at their own pace.  I’m struggling through, just like you are.

Setting realistic financial goals is important.  You’re probably not going to get rich tomorrow (though, if you do, good for you!  I’m jealous…).  You don’t have to eat beans for every meal; you don’t have to become a hermit and never go out with your friends; you’re still allowed to spend money and have fun.  Just make sure to be mindful of your spending, don’t live beyond your means, and think about the rewards that come with financial health and independence.  As the old adage goes: “Pay Yourself First”.

Step 1: Build an Emergency Fund