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Writer's pictureGrace Walker

YOU Need to Tell Your Money Where to Go.

Updated: Apr 7, 2021

The other day at a church event, I met a young girl with a big problem. For the sake of anonymity, we're gonna call her Emily. Emily was telling me about how no matter how much she works, she still didn't make enough money. Well, hold on right there. That was a LIE she had just told me. It's not that she didn't make enough money, it's that she "didn't know how" to manage her money. She wasn't telling her money where to go, her money was telling her! I believe that making and saving money are both parts of the equation that equal growing wealth. But, you can't get the answer to that equation with only one part of the puzzle. Someone who makes $200 a week could still be wealthier than someone who makes $1,000 a week, if they play their cards right. Emily wasn't "not making enough money" she was just not managing her money in the best way possible.


Start managing your money by

living frugally and saving.

With a pay raise, doesn't come a spending raise. Or else, your pay really didn't raise at all.


"Live like no one else, so you can LIVE like no one else." -Dave Ramsey


Like Emily, it is easy for people to NOT be educated on how to manage money. Financial literacy isn't taught in our school systems, it's something that we actually need to go out and learn for ourselves. Thankfully, I found financial literacy to be one of the most interesting topics of my life when I was only 17, so I started educating myself early on. But, that's not very "stereotypical" for most teenagers or even beyond. I want to share some of my tips on managing money and becoming financially literate, that way you can beat the culture by being educated from an early age, as well.


STEP ONE: Save up a starter emergency fun of $1,000

If you read this and immediately thought "Dave Ramsey?" then you're on the right track. I started listening to Dave at 17, and have built my wealth and knowledge from his principals. The first step to financial success is saving an emergency fund of $1,000. Some of you may be looking at that and laughing because it's not a lot. But, for someone who doesn't quite know how to save money yet, this is a hard step! Not only will creating this emergency fund create a safety net for you in case of emergency, but it will teach you how to set a saving goal, work for it, and achieve it. Once you've saved up this fund, do NOT TOUCH IT. Before you have the emergency fund, you have

-$1000 in your bank account. Now that you have this saved, you have $0, got it?


STEP TWO: Pay off all of your debt!

Now, as a young adult you probably don't have any debt, but never say never. If you have any debt, this is the step where you PAY IT OFF! Pay it off using Dave Ramsey's "debt snowball" method, paying the smallest debts first and the largest last. I never had any "debt" because I was lucky enough to find these steps before I got to a place where I could've gotten into it. Instead, I used this step to pay for all of my expenses in full. I bought my car and paid my car insurance all in cash, that way I wouldn't have ANY monthly payments. Paying in full helps you to save money, as some insurance companies charge extra to process monthly payments, add interest to your monthly bills, and some even give a straight discount to those who pay in full. On top of that, with no monthly payments there's no stress of owing money each month- except to give and for yourself!


STEP THREE: Create a full fledged emergency fund of 3-6 months expenses

Alright, back to practicing your saving habits! As a young adult, 3-6 months of expenses probably isn't much, but you never know what could happen and this is great practice for the real world. Calculate how much you spend month to month (hopefully, if you practiced paying your yearly expenses in full, your month to month shouldn't be that much) and save up that amount to add to your $1,000 starter emergency fund. Once you've saved up all of this, you're better off than 71% of America's adults...

Only 29% of Americans actually have the recommended six months of expenses stashed away. Just 18% have enough to cover three to five months of expenses.

Here is where our steps are going to take a slight turn off of the Dave Ramsey plan. As young adults, we have a BIG step that older adults may not have- college and trade school. After we have finished "baby step three," we are pretty well cushioned to take on wealth growing, saving, and living unlike most of the culture. Once we get out of high school, or community college, we have a huge bill to pay if we decide to go to school. (If you are not planning on going to school, you can skip this step and go straight to step 5!) Step 4 is save for school. Yep, that's right. If you want to grow wealth, student loans are a no for you. The culture may tell you that student loans are "normal" and that there are programs that can forgive your loans, but you can't listen to that. Student loans are a normal that you certainly don't want or need. Cash flowing school is completely do-able, and I will make a post specifically on how to do this in a couple of weeks.


There is over 1.5 trillion dollars in student loan debt in the U.S., and the average length of time repayment for student debt borrowers is 21.1 years


STEP FOUR: Pay for college/trade school in CASH

Figure out your personal game plan on how you're going to save up this money. Start by calculating how much you will need (for example: $30,000 for four years) and do the math on how much you need to earn to pay it off per semester, quarter, year, etc. It's best to do this now, and cash flow your education, rather than deal with the consequences and debt after graduation. As it says in the Bible, "The borrower is slave to the lender" (Proverbs 22:7) and you don't want to go to school just to graduate and become a slave, right?


NOW, once we have finished Step 4 we can finally start growing wealth! And that can only mean one thing- investing!!


As Dave's baby steps continue, they go on to say:

STEP FIVE: Invest 15% of take home income into retirement

STEP SIX: Save for your children's college fund

STEP SEVEN: Pay off your house early

STEP EIGHT: Build wealth and GIVE


All fantastic steps that need a post of their own. Investing is one of my favorite topics that I will make sure to touch upon in the future, probably multiple times. But let's stick to steps 1-4 for now, all having to do with beginning to learn financial literacy and how to save your money.


The BEST WAY to put financial literacy to practice is to start out by creating a BUDGET for yourself. There are many different apps and programs out there to do this, all of which are beneficial, but my favorite one is none other than Dave Ramsey's FREE APP - Everydollar. (No, Ramsey Solutions is not sponsoring this post, but I wish they were!) Everydollar allows you to input how much money you make or predict to make in a given month, and plan out where you expect to spend every dollar of that money. Once you input your income and predict where you will put all of it that month, it should equal out to zero. You do this before the start of every month, and throughout the month as you spend, log every purchase into the app. The app tells you how much you have left to spend, and you can easily keep track of where all your money is going.


From ages 16-18, with every paycheck I received I would put a random large chunk of it into my savings, and then I would keep the rest for whatever I wanted. I made a pact to myself that I could only keep $200 in my checking account at a time to spend, but I really didn't pay attention to where that money was going. I was doing great at saving due to my self discipline, but there was still hundreds of dollars that would just come and go with no record of where. It was working- until I started having bills. Now, I really had to pay attention to where the money in my checking was going. When I started using a budgeting tool to keep track, I realized just how much money I was wasting on miscellaneous things- going out to eat was my biggest weakness. Now that I have a budget that I stick to, I still save my money, and I still go out to eat, but I limit myself and keep record of how much I'm spending. Creating and sticking to a budget is a great way to train yourself to have self discipline with your money, save as MUCH as you can, but still allow room for fun.


So, you've learned the first few baby steps to building wealth. It all starts with learning to save, get out of debt, and budget your money. Sounds simple enough, but the truth is very few people really do this (as shown in statistics above). Go apply what you've learned, and you will already be THAT much closer to beating the culture, building wealth, and giving.

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