While young, you think that once you grow up and get to have money on your own that life is easy. You imagine yourself with fancy sports cars, jet skis, and all the big boy toys you can dream of. But you’ll quickly find out that being an adult and financially independent is tougher than it may have seemed growing up. You’ll run into student debt payments, all sorts of monthly bills, and heck you may even want to raise a family at some point. This gets expensive – before you know it you’ll have double digits in your bank account while waiting for the next paycheck to get in. Here is how you can avoid

Turning Hobby into Habit

It may seem weird to have saving money as one of your hobbies, but have some fun with it. Push yourself to save more and more each month. Obviously you don’t want to cut necessities like food, hygiene, or insurance, but you can cut nights eating out and entertainment expenditures. Make saving a natural thing. Pretend you make ¾ as much money as you actually do and send that ¼ directly into savings. Over the months, that number will really start to add up. Make it so that saving is as natural as breathing. It’ll be difficult at first if you’re used to spending most of your money on a monthly basis, but once you get into a routine and become accustomed to being without some of those unnecessary amenities, you won’t feel any different.

What to Cut?

How do you know what is “excess” and what is necessary? It comes down to asking yourself this: do you need food? Yes. Do you need to go out to dinner 3 times a week? No. The food example works well because many (if not all) of the dishes you receive at a restaurant can be cooked at home. You might contend that it doesn’t taste as good and you don’t have to put the time it to prepare it. But is your life any better now because you went out to dinner instead of staying in to cook yesterday? Going out to dinner is short-term satisfaction. Cut this down to 1 night a week eating out, make it more of a reward, and designate the money saved for rent or utilities. You can make this short-term sacrifice if it means rolling a little extra over into savings or towards outstanding debts.

Depending on your lifestyle, this will dictate which is a want or need. If you don’t spend much time on the internet and don’t find much use for it during your free time, internet is a want. On the other hand if you work from home and need to email co-workers about an upcoming deadline, internet may be necessary. Substitutions for cable television, premium movie services, and video game subscriptions can somehow be found for free at some level on the internet (YouTube instead of Netflix, streaming sites instead of cable, etc.).

Denting into your Debts

After a few months of cutting you should have a nice little stash of cash. What to do with that? Your options are plentiful. You can put it into an interest-accruing account (401K, CD, or other options), you can invest it into stocks, or let it sit in your checking account. First things first, pay off all outstanding debt. Pay off your high interest debt first and low interest debt second. If you can, eliminate several of the small debts before jumping into the larger chunks of debt. Pay debts down first and think about investing after you’re debt-free.

Cutting excess and becoming financially independent is a slow and steady process. Stick to a plan and keep your splurging to a minimum. Remain committed to becoming financially independent and you will be prepared for the many financial woes life will throw at you.