Financially responsible redditors – if you were 26 with very bad credit and no savings, but just got a job that pays enough to turn your life around, what would be your first steps towards financial stability?

Financially responsible redditors – if you were 26 with very bad credit and no savings, but just got a job that pays enough to turn your life around, what would be your first steps towards financial stability?

What do you think?

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  1. Set yourself a strict budget. Put a small amount aside every paycheck for your emergency fund and devote whatever is left to clearing old debts and improving your credit.

  2. Don’t get overwhelmed with having a good paycheck. Start putting money into a savings and pay down your bills. Don’t go out and start buying expensive things you’ve always wanted. Budget yourself some fun money but make sure that you’re putting money into your savings first.

  3. Don’t change your lifestyle a lot. Continue to live like you have, but add in nicer stuff periodically. A lot of people splurge when they get a good bump in pay, but they never consider how that could change.

  4. Start a retirement account. Start a savings account. Change your your lifestyle to what’s affordable based upon your earnings. Get rid of your credit cards and pay off the debt to start rebuilding your credit. Get one card to maintain a credit history and buy a pack of gum once a month and pay it off immediately after purchase. Keep said card locked in a safe where you are less tempted to use it regularly.

  5. This just happened to me. Get the credit karma app and see whats hurting your score. Get the Mint app and create a budget. Follow thecreditbrothers on instagram.

    Not sure if you have credit card debt.. If you do find the card with the highest interest rate and pay that card off first. Pay the minimum balance on all the other cards until you pay off that 1st card.

    For savings pay yourself first. Whatever you budget to save each month. Set that money aside and dont touch it.

  6. Credit means basically nothing when you look at it on a macro level. You got plenty of time to build credit.

    First things first, apply for a beginner credit card. Your goal until the end of time is to pay it 100% off every month; never miss a payment in full. Use it in place of your debit card.

    While you’re doing this, pay off student loans with reckless abandon. Your credit sky rockets after you pay those loans off.

    It may be rough for a bit, but building credit is like going to the gym. You gotta commit fully to it if you want to save money on a car loan or when you buy a house

  7. I would set aside some money every week that goes into a savings account and build an emergency fund. You always want some liquid capital in case you need money quick.

    I’d also make a list of reoccurring bills: car insurance, house/rent, etc.

    At the same time, I’d assess what debts I have: how much, what’s the interest rate, is it behind, how far behind, can I work with them to clear late fees/get it back on track, etc. If you don’t know what you owe, get a credit report.

    And now it’s time to budget. Take all that info and make a budget. Every dollar should be accounted for: it should either go to savings, reoccurring bills, paying off debt, or a small fun fund. It’s important to remember to still enjoy the fruits of your labor, but do so responsibly.

    Good luck!

  8. Pay off debt then choose a good credit card for rebuilding credit(I used capitalone; there’s an option for rebuilding credit). Only use that one credit card til in excellent credit and then you can have 2 if necessary; never exceed 2. Pay off as much as you can monthly (I pay off everything each month) and try not to exceed 20% of credit owed.

  9. Continue living like a pauper for at least a year and pay off any outstanding credit card bills you have. Try your best to get debt free besides housing cost and maybe a car, then bank everything else. Open a savings account and have money move into it automatically from checking so it’s not easily accessible. If you do have a credit card, use it for everything you can for daily living. Cable bill power bill groceries and gas…but PAY it off monthly in FULL…(I actually pay mine off weekly). You will be amazed at how quickly money will build in your accounts, and banks notice this and start offering better credit, which leads to a beautiful cycle instead of a vicious one.

  10. Lots of good advice here. Just don’t forget to fund your retirement account. Between your contribution and any company match, aim for about 12-15%. Invest mostly in stock-based or index-based funds, and forget about it. In thirty years you’ll have a million dollars in that account.

  11. If you are disciplined enough to pay it off 100% each month then get a credit card. Use it for expenses like groceries and gas – stuff that you would normally buy each month. Eventually you will use it for every purchase

    Pay it off 100% each month! This will skyrocket your credit score quickly. Once you have better credit then get a credit card with cash back. It adds up and you pay no taxes on it.

    As long as you pay it off each month you will never pay interest.

    Tip, it is much easier to stick to a budget when using a credit card for all purchases. Suppose you set a budget of $1000 for the month. All you have to do is look at your credit card balance to see if you are on track. If you are trying to balance your checking or savings account to calculate how much of your budget you have left it can become difficult and confusing

    Credit cards are a great way to budget and increase your credit score. You just have to … pay it off $100% every month


  12. Dave Ramsey dude, if you can admit you are financially irresponsible it is an absolute life changing program.
    I’ve always been pretty good financially but it was a game changer for me. I paid off 80k in loans in 3 years. Got my retirement plans set up, and the only debt I have is my mortgage. Lots of resources on how to understand finances and credit

  13. If your company has a 401k program put money away in it each pay period. A lot of companies match up to a certain %. Depending on what you’re comfortable with it doesn’t have to be a crazy amount and you can choose what funds to invest in.

    My dad told me about this when I got my first job that offered 401k in my early 20s and I balked at the idea. But I grit my teeth and set 20% aside each paycheck. As I’ve gotten promotions I’ve kept it at the 20%.

    I think it helps me from a psychological standpoint beacuse it’s automatic. I’m not “missing it” beacuse it was transferred before it would drop into my checking account and I live within my means at that 20% removed take home pay.

    Try to put a few dollars away in emergency savings too that you can pull from in the event something financially unexpected happens.

  14. Probably give up. 20s are for building your career and wealth, if you threw that away you likely won’t be able to catch up until you’re in your late 30s. You don’t have debt so at least you can save all the spare you get

  15. Not knowing what kind of numbers you have to work with, I’ll throw out a few general ideas

    1. If you have no savings, you need a basic savings account for quick cash. This is for an extra $100 for a speeding ticket or you lose your job and you need to move to a new town by Monday for new work kind of cash. I would start putting aside $100/week if you can until you reach 1 months salary. As you make more, you can up it to 2 or 3 months but 1 month is a good start.

    2. Get your retirement plan going. Most employers offer a 401k. Many have matching funds. Take advantage of it. At your age, if you can put 10% of what you make into a 401k for 40 years, you should do ok in retirement.

    2. After you get 1 months salary in savings and some retirement savings flowing, it is time to get some long term savings going. Always keep your savings account at one month so replace what you take. Long term savings is for future house down payment, a blown transmission on a car, bail money or lawyer retainer…stuff like that. Find a mutual fund company you like (I am a fan of one of the largest mutual fund companies that I’ll call “Handguard” but you do you). Find a mutual fund you like. If you don’t know shit about mutual funds, you can’t go wrong with an Index stock mutual fund or a total stock market fund. You may need a few thousand as initial investment, but get an account opened and pit your $100/ week you were putting in savings in there and let it sit. If something big comes up, sell some funds off and pay for it, but this is “oh shit” money, not let’s go do some Coke money.

    Do those three things, you should be fine. As you make more, make adjustments. Add a bit more to any of them, maybe a little less in the long term savings if you blew your savings on auto repairs.

  16. Put aside 10% of your salary into a 401K plan. Also put aside some money into a savings account every paycheck, even if it’s only $25 or $50.

    Next start paying down your debt. Pay as much over the minimum payment on your credit cards as you possibly can Without making your life super difficult.

    Watch your spending. Don’t splurge except on small cost items. (Getting that ice cream cone isn’t going to kill your budget, but buying a new surround sound TV system might.)

    Make sure to get your payments in on time, because you don’t want to get hit with a $39 late fee.

    Think about and plan for your upcoming expenses. For example, you know that’s you’re going to need an oil change for your car every so often, So put that in your budget. You know you’re going to need money to buy Christmas and birthday presents for people, so include that too.

    If possible, put aside money in your budget for vacations and trips. We don’t live to work. Everyone needs adventure and enjoyment to some level in their lives. Just be realistic with what you can afford. A week in a beach front condo in Florida can be almost as good as a week in a bungalow in Bali, and it won’t break your budget.

  17. Okay, here’s the advice I got when I started working pipeline a few years back. That first check, get what you want with it so long as you don’t have anything immediate to get, like a new place to rent or something. Enjoy it. Then double down on savings once you have that out of your system keep whatever ridiculous thing you bought as a reminder that it could have paid off a bill or two. For the MEII Project it was a gaming computer. For the MXP it was a drone. For the BXP it was a 55″ TV. After that bit of satisfaction commit yourself to saving as much as you can. Budget, scrimp, pay down your highest interest debts first, start going to yard sales for utensils and furniture, and pick up free stuff off the side of the road if it has a use for you. Which brings me to my next point.

    My only other piece of advice is that *nothing* is beneath you. You ever been dumpster diving? I have. Not for food of course, but you’d be surprised what people throw out. Chairs that just need a new spring, radios that a little wiring brushing of the battery contacts will fix right up, and other goodies that just need minor repairs. That goes along with my free stuff on the road tip. Hell, my family *lives* for when I move because they tend to get some of my stuff. They all eyed my TVs when I went in the hospital for a month. They didn’t get em but if I had expressed disinterest in one they’d have snatched em up. It seems callous but we all grew up going to flea markets, pick and pulls, and will *always* stop at yard sales that catch our eye. There’s a whole unspoken market of second hand stuff out there. Don’t believe it? Put something on the side of the road with a paper sign that says “Free.” You’ll be shocked at how little time it takes to be loaded up and gone from your sight forever.

    So splurge once to get it out of your system. Also nothing is beneath you.

  18. Delayed gratification.

    #1 get out of debit.
    #2 live frugally and put money into savings, investments and 401k or similar.
    #3 if your employer offers a 401k match contribute that amount. It is literally free money.

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