I have worked in the banking world since 2002, and have sat through enough classes so that the powers-that-be have seen fit to bestow upon me a master's degree in finance. I figured that with all this knowledge, I needed to share the wealth a bit--no pun intended!
With all this experience, I continue to see the same story over and over again with my client's finances...a basic lack of understanding for how the "big picture" works. Statistics will tell you that most of today's college students who enter the workforce are not concerned with their company's retirement product options. What they are concerned with is managing rent, student debt, credit card bills, and of course, having a bit of fun. All without overdrawing their checking accounts and owing the bank fees that add to their debt and financial frustration.

Where's the way out? The simplest solutions sometimes really are the easiest. It comes down to basic planning. Ask any ten 20-somethings...or 30-somethings...or really, anyone regardless of their age, if they have a written out budget. My guess is the answer is no. What makes it so difficult for us to track our spending? A basic lack of willpower? We all want money. We all want the American dream...yet aren't willing to work for it. All it takes is a bit of simple planning...and sticking to the plan.

Let's start with figuring out how much we have to work with every month. For most of us, that's our pay checks. Maybe a bonus here or there...and a commission. Let's stick with the base paycheck, though. Even in work environments where bonuses and commissions are involved, typically you're only guaranteed your actual salaried paycheck. Word to the wise: don't count on money that isn't guaranteed. The old philosophy of not counting your chickens before they're hatched is finally starting to make sense!

Once you figure out how much you've got, the next step is dividing it up. You know you have the mortgage or rent to pay each month. The car payment. Insurance. Certain expenses that just don't change from month to month. In college economics, they call those "fixed" expenses. It's easy to budget for those, since you know what to expect each month. And you should know that you can only spend what's left over. Problem is, that out of what's "Left Over", you still have to cover all of those variable expenses--or bills that DO change each month. Groceries. Gas. Power. Water. Fun. You get the drift. Financial difficulties come into play when these variable expenses are bigger than the "left over" that we just talked about.

Here's where rubber meets the road. Too many times, I've seen it happen where that extra Starbucks mocha latte becomes more important than paying the minimum on a credit card one month. This lowers your credit score...and pretty much creates a downward spiral that's very difficult to recover from. Cut back. Put money where it needs to go. Easier said than done? Yep. But if it's not done...well, we all know the horror stories of endless calls from creditors.

Give yourself something to look forward to. Even when money is tight, there's always something you can cut back on. Cable TV, the extra cost of gas to drive somewhere. That dinner out. Lunch at McDonald's. Sink some extra money into your credit cards. Pay off the high rates. Start with the card with the lowest balance...that way it gets paid off quicker. Once you see debt really going away, you'll have the excitement of knowing that it *is* possible!

Now, for those of you who figured out all of your variable expenses and found that you have EXTRA each month--congratulations!! Give yourself a pat on the back for living within your means. Then start reading this article again. you're not out of the woods. You're OK for today...but you want to eventually buy that house, get that new car, go on vacation, retire...etc. Make the most out of the extra. Save back. Pay yourself first! For those of you who haven't already heart, Murphy's Law is a real thing. Your car will break down. You will get sick. Life happens. Life is SOOOO much easier to deal with, though, when you have money set aside in savings, and don't' have to life paycheck to paycheck. Life becomes freedom.

Instant gratification is fun...but only in the instant that is gratifying. Financial freedom becomes gratification forever.