Why is it that school never taught you how to budget and save money? You learned how to add, subtract, multiply and divide. They even went as far as to teach you what the value of X is. But finance, nah you’ll just learn that when you get older. Or better yet you can learn that from your parents. And then you had your parents over here telling you that they should’ve taught you that in school. I didn’t learn about finance until I made a ton of financial mistakes. I had to figure it out the hard way. Let me share some tips with you so you don’t make the same mistakes I did.

But first a small disclaimer, I am not a financial advisor. I am sharing these tips because they’ve worked for me and I believe they can work for you. But everyone’s situation is different, so seek out professional help if you need it. Alright, So let’s get into these tips.

One of the biggest things that plagues so many families is their inability to manage money. You see when it comes to me and my family, we had to learn the hard way. I’ll never understand why in school they never taught me how to budget and save money. In High School I got all the way up to Pre-Calculus and I cheated my way through every single class starting with Algebra.

I had the most horrible Algebra teacher that put problems on the board, had us read a chapter of the textbook, and never taught us anything. So I made friends with the A student in the class that was just a Math genius and I cheated off him for every test. Still ended up passing barely with just D- but hey I passed right?

The point is, all those “advanced” Math classes and not one of them covered the most basic principles of adult life, how to manage your actual money?

My parents didn’t do any better. They didn’t teach me how taxes worked. How to write a check? How to build my credit? Absolutely nothing. They just assumed my teachers at school were teaching me all of that.

This is the case for a lot of us. We hit adulthood and we’re left trying to figure this stuff out as we go. I messed up royally at first as my wife and I for a while were living paycheck to paycheck. We made just enough between both of us to keep us afloat. We covered rent, utilities, car insurance, and all other expenses barely scraping by month to month with no savings.

It was hard because whenever we wanted to plan a trip or buy something for our home like new furniture or a dining table, these expenses were so huge that it would take us forever to save enough money for it.

Until we learned an age old trick, which brings us to…

Tip # 1: Pay Yourself First

Whenever you see that check come in, do yourself a favor, pay yourself first. Before you start paying any bills, transfer some of that money over to a savings account. Make a decision as to how much you can realistically afford. A good percentage to start with is 10%. If you can save just 10 percent of your check every time you get paid, this will add up over time.

Just to keep the numbers simple, let’s say that every check you clear is $1000 so 10% of that would be a $100.

And if you get paid every 2 weeks, that’s 2 checks a month, which means you’re paying yourself $200 every month.

Multiply that by 12 and you have $2,400 you’re saving every year.

Now to some that may not seem like a lot, but I think everyone will prefer having that at the end of the year, instead of an empty Savings account.

If you can build the habit of paying yourself first, it slowly starts giving you a sense of accomplishment every time you get paid. By doing this you demonstrate that taking care of you and your family comes before anything else.

It does require discipline though because after you move that money over to the savings account, the key is to make due with what’s leftover to pay your bills and have spending money for the month. You don’t want to dip into that savings unless you absolutely have to for an emergency.

If you’re just taking money out of that account every month, then what’s the point, right?

Start small if you have to, maybe 10% is too much of a stretch, then do $50 bucks. The point is, you just wanna start developing that habit and little by little watch how it changes your financial situation.

The next tip I have for you to budget and save money is to…

Tip # 2: Track Your Money

I know some people that think this is dumb, but trust me, there’s nothing better than the truth. When my wife and I were really struggling, we didn’t do this. We would be out of money at the end of the month anxious for the next payday.

We were always left wondering where the heck all of our money was going. So my mentor at the time sat us down and showed us the power of a spreadsheet. He had us drop all of our spending into this sheet and it was set up to calculate and ad everything up for us.

Came to find out we were spending almost 1k a month on eating out. Going to restaurants, buying lunch almost every day at work. That’s about $10 to $20 for each of us spent 5 days a week. My wife would tend to buy coffee every morning so that’s another $5 bucks there. Not to mention once we got home after work, some days we wouldn’t wanna cook so we would eat out for dinner too.

Throw in some more eating out on the weekends, you’re talking about another $40 - $80 depending on if we went to a restaurant or not. We looked at these numbers and it was shocking how much money we were just throwing away. All because we were lazy and didn’t wanna cook food at home.

Not to mention all of our free spending. For my wife, it was clothes, purses and shoes. For me it was video games, gadgets, and ammo. Yes Ammo, I used to go to the shooting range a lot until ammo got expensive and they wanted to run a background check on me every time. Stupid Cali Laws.

Anyways, the point is we were spending money like we had it, and it wasn’t until we wrote it all down on that spreadsheet that we got a hard look at the truth and we realized that we needed to change our habits.

We began tracking our money. Paying attention to where every dollar went. We cut back on eating out and made the choice to cook at home almost every day. On occasion we still splurge and eat out, but we plan for it.

This simple thing alone made a huge difference for us and put more money in our pockets. But there was one other thing we needed to conquer that was racking up our debt like crazy!

Tip # 3: Take Advantage of Your Credit Card

Man when I first got my credit card, I had a whopping $200 limit and I used it all up  to play Santa that year. My wife and I bought gifts for all of our family members and I maxed out that credit card in one weekend.

As we moved into a bigger place, we needed furniture, so I got another credit card with a higher limit and maxed that out too in order to buy our couches and a dining table. We wanted to take a Hawaii vacation, put it on the credit card.

You see we were looking at credit cards as extra money that we could use now and just pay off later.

Worst part is we were just making the minimum payments during the no interest period, so when the interest finally kicked in, let’s just say we were shocked to see how much our debt had increased.

These credit card companies were loving us because of our ignorance. After racking up 33k of debt, we decided to stop using credit cards so that we could start lowering that debt.

My younger brother moved in with us after that and he unlike me, actually educated himself on finance and was pretty good at managing his credit. He surprised me by saying that he paid everything with a credit card, all his monthly bills, even when he ate out, literally everything.

He shared with me that credit cards offer more security and protection than debit cards. Which means if you have a false charge, credit cards will refund you pretty quickly. On top of that using a credit card frequently builds up your credit score. And lastly, credit cards offer you rewards, whether it’s points or cash back, it doesn’t matter. The point is, you get something back.

When you pay with a debit card, you don’t get any rewards for using it, just a lower bank account.

After learning this trick, we literally use a credit card for everything now. And we keep racking up points and cash back that then pays for other things. As long as you pay off the balance when it’s due, you shouldn’t pay any interest.

Don’t be afraid of credit cards. If you pay yourself first and track your money, then you know exactly how much you spend each month. If you put that on a credit card, money that you were gonna spend anyway, you will be able to get something in return for your regular monthly expenses. Take advantage of these credit card companies and stop letting them screw you over.

So that’s gonna wrap it up for today’s post.

Until next time my fellow Alpha Dad,

• G. Vidal