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Six Key Points For People Entering The Workforce (And For Everyone Else Too)

Updated: Jul 17, 2019

by William Sabin - Financial Strategies


Live on a Budget – know how your money is spent.

Learn Self-Control - The Art of Delayed Gratification.

Have an Emergency Fund.

Get Healthy, Stay Healthy.

Start Saving for Retirement. Control and Guard Your Finances.

Over the last several years I have been watching how often, as a country in general, we are not financially savvy. I’m not talking LBOs and derivatives. Unfortunately, I’m referring to basic financial education. I have counseled some extremely intelligent people that know almost nothing about how to make a budget, buy a stock, open a bank account, apply for a credit card, get and stay out of debt, etc. Why is this? At a minimum, finance is not taught in schools. Unfortunately, personal finance is not taught at home either as their parents also do not have a basic understanding of finance.

As such, here are the six key things that I have shared with young adults just starting out.

#1 Live on a Budget – know how your money is spent

Most readers here know that you should spend less than you make. However knowing if you are spending more than you make needs to be more than a gut feel. You need to track your expenses.  It’s important to live on a budget. Create a template in Excel or use an online tool to capture your expenses by category.

Of course, as people that I have counseled have found, many times you cannot adjust your spending habits overnight. You might have to have a longer-term plan to get on a balanced budget with savings included. For example, you might be living in an apartment that is twice as much as you should be spending as you were enticed with the property’s amenities. Once your lease is over, you might want to consider moving to reduce your fixed costs. Keeping your recurring monthly expenses as low as possible is key.

Over the months, you should be able to make better choices on your non-fixed expenses to save as much as possible. So, when a dinner invite comes up, check your budget. If you don’t have room for the expense, suggest to your friends that eating at home with a pot luck meal might be more fun.

Don’t forget to budget for taxes – depending on where you live, that takes a relative large portion of your gross income.

#2 Learn Self-Control - The Art of Delayed Gratification

When I was growing up, delayed gratification was ‘in’ at least in my parent’s house. We generally had what we needed, but not everything we wanted. These days, it seems like most people cannot decipher between a need and a want. I see this in diet choices, spending habits, and relationships (and tattoos, but I digress..). Delayed gratification is so important especially when it comes to finances. Nothing ruins a well-planned out budget than crazy spending on stuff you don’t need. Then, you will find that you need a bigger place to store your junk. Even worse, however, is renting a storage unit at several hundred dollars a month to store the things that you didn’t need in the first place.

The key on spending and using a credit card is to use it for your advantage – for the airline miles, cash back, and convenience of not having to carry cash. Pay it off each month. Do you really want to be paying interest on food you have already digested or clothes that you have already used and donated? If you miss even one month of paying your credit card in full, I suggest that you stop using them immediately and move to a hard currency method (money in envelopes by budget category) until you have your gratification under control (see emergency funds below).

#3 Have an Emergency Fund

Unfortunately, life sometimes just happens to all of us. An unexpected car repair or a medical bill not covered by insurance, etc. Having money put aside in an emergency fund or reserve will really help keep you out of debt and from blowing your budget.

How can I build an emergency fund - I don’t make enough, I have student loans, etc.? The major point here is to pay yourself first. No matter what happens during a month, make sure that some portion of your income goes into savings such as a money market or savings account. Stock investing will come after you have liquid rainy day money set aside. Pay yourself first, pay off high interest debt as well. Build that emergency fund each month – I have found that it is possible if you treat this payment to yourself as a fixed expense. Maybe you need to turn off your cable bill, unsubscribe from Netflix or Hulu, etc. for awhile and get outside and exercise. Don’t worry, life will go on without seeing your favorite sitcoms and movies.

#4 Get Healthy, Stay Healthy

I love watching old movies and YouTube videos of grainy pictures and videos of people and lives from a century ago. One thing that appears almost universal is the seeming high fitness level of most strangers in these videos. Thin, not fat. I’m speaking to myself here as well. We investment folks are always looking for correlation between x and y to make a bigger return. Being healthy and experiencing low medical costs are directly correlated. Its hard to talk with a 20-year-old about health and weight. Bodies can take a lot of abuse – until they can’t. Medical coverage and related insurance premiums are huge in the US especially compared to much of the world – trust me, I feel it. I have found that the healthier I am, the less physical issues I have. Hopefully, this will keep me off the operating table as well having to meet deductibles and high out-of-pocket costs.

#5 Start Saving for Retirement

Retirement? I’m only xx – fill in the blank. For most, there is never a good time to save for retirement. We want what we want now. Retirement planning and saving is too much of a delayed gratification process for most. However, it’s so important to begin to save when you are young. Get in good spending and saving habits. Putting away money early will allow it to compound over time. I love showing people that have taken my advice and watched their money grow over the years. Compounding - now that’s power! Get ready for retirement – it comes up so fast. Speaking of retirement, make sure you participate in full in your company retirement plan – especially company savings match.

#6 Control and Guard Your Finances

Now that you have money saved up (by following steps 1-5), you want to make sure that people and life do not take it from you. You can mitigate this risk by having insurance to protect your home and furnishings from theft and fire and your health as well as health of others.

In addition, be careful of who you trust and listen to about investing your money. Not everyone has your best interest in mind. Read as much as you can to educate yourself. Seeking Alpha is a good resource for education. There are also many good books to be found on the subject. In addition, ensure you are using an age-appropriate allocation in your portfolio. This partly means not to put all your eggs in one basket – spread your risk around.

You must be careful on even relatively simple things – don’t buy more insurance than you need - many times it is duplication from work health insurance and homeowners insurance policies.  Don’t buy a bigger house just because the lender has built a mortgage package for you to allow you to do so.


You don’t need to be an MBA to be able to manage your money. You just need the right guidance and tools.  Remember, no one cares about your financial future as much as you do. So when you have the right system in place by using the simple rules above and my financial & investment coaching service - you will be able to build your foundation to a successful financial life. Contact me for a free consultation. Together we will establish the next best step for your financial success.


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