Financial Freedom 101

Last summer I was a marketing/media intern at a Financial Solutions company called Active International. During my internship, I made many great connections and learned a lot about working in a company and reporting to a boss in an office rather than working at a deli or as a laborer. When I found out what my salary was I instantly calculated how much I needed to put aside for my 8-week internship to be able to invest by the end of it. An example of a required expense during my internship was lunch. I ate the same lunch every day which was a cheap, healthy meal that was able to fill me up for the rest of my day at work. I chose to do this purposely so I wasn’t wasting money on food. Investing in your body is just as important as investing in your financial future.

Cutting Expenses

The internship was Monday through Thursday 9-4 so, I was not working a 40 hour work week which made it harder to achieve my goal of investing $1000 at the end since I wasn’t working Friday to make extra money.  To begin I calculated my total salary for 8 weeks.  I got weekly paychecks for about $315 after taxes.  So overall in 8 weeks, I would make ruffly $2,520.  So if I wanted to invest $1000 I needed to plan my expenses properly.  My two main expenses were lunch and gas.  Thankfully my drive was about 7 minutes long so gas wasn’t a large expense. Lunch was about $11.50 a day and my boss would often take me out to lunch one of the four days which I greatly appreciated and very much enjoyed.  So 3 lunch meals for 8 weeks comes out to 276 dollars. Gas ended up being around 15 dollars a week which is about $120.  Totaled it was about $400 worth of expenses just for work.  This doesn’t include my expenses on the weekend or during my free time.  This part of your budget can make or break your goals.

Taking a percentage out of each paycheck

After understanding your required expenses and personal expenses my next step was to break up my weekly paycheck.  This was broken up in three ways…

• Set $50 aside for lunch and gas (~16%)
• Set $125 aside for my goal of $1000 (~40%)
• Rest of the pay was for me to enjoy, $140 (~44%)

Percentage-based budgeting is simple. It uses and relies on the percentage of your income to determine how much you can spend and where. I made about $315 after tax from each paycheck. I put $125 of each paycheck into a separate checking account after receiving each paycheck via direct deposit. This was to reach my goal of $1000 to be able to invest after my internship was completed.  After doing this at the end of each week I had an extra $140 for myself. By doing this I gave my self the freedom to save money while limiting the amount I spend each week.

Anybody can do this

Many say that investing isn’t worth it to them because they don’t have “enough” to invest, but if I can do it as a college student making just above minimum wage anyone should be able to save to invest. It only takes a little bit of discipline and hunger to reach your goals. To achieve these two simple goals its simple, stop spending money on worthless things, be smart with how you spend your money. Saving money is a skill that not many people have, invest in yourself learn and create quarterly financial goals, and stop buying worthless items. As a consumer, once you figure this out the opportunities for your financial goals are endless. Live happy, free, and financially smart =)