Dropping out of anything can be scary, but let’s be honest; deciding to dropout of college can be one of the scariest decisions of your life. An endless amount of questions are probably rolling through your brain right now.
“What am I going to do now?”
“How will I make money?”
“I still have some student loan debt, what can I do about this?”
These are all valid questions. Dropping out and hitting the ground running is a big task to take on, but you dropped out for a reason. You are ready for this. If you want a full guide we at The Dropout have a free e-book called “The Dropout Manual”.
But for today we are going to stick with the financial side of things. Lets get into it.
1. You need to get all your financials in order
Without organization you can kiss any type of peace of mind out the window. So lets set up a simple budget. Here are two options that are FREE!
Every Dollar: This budgeting software is a very user-friendly platform. I have used it and I can say anyone can set up and start using this in minutes. Within it you can start inputting all your estimated expenses. From there you have an idea of your estimated monthly expenses. Another amazing feature is “Baby Steps”. This is where Every Dollar helps you create and set up goals, such as an emergency fund, pay off debt, etc.
The only downside to this platform is that it does not connect to your bank account, unless you pay for Every Dollar Plus. This means if you are using the free version you will need to stay on top of what you are spending so you can input it in later.
Mint: Mint is one of the most powerful free budgeting platforms out there! The owners of mint (Intuit) are also the creators of QuickBooks, which in my opinion is the best business financial platform in the market. With Mint you get everything, you have the ability to connect your bank accounts and cards so you can see every transaction made. From there you can categorize the transaction so you can analyze what you are spending your money on. You can add bills you have to pay so you get timely reminders, and you can also look at trends, which Mint creates for you to show you your spending habits.
Conclusion: If you are brand new to budgeting I would go with Every Dollar first. This will help you get your feet wet so you can build the basic habits of creating a budget. Overall though, Mint is by far the superior platform, and on top of that it is FREE, which is pretty incredible. Check them both out and see what you prefer!
2. You Need To Start Saving
You have probably heard this a million times. Well let me say it again, “YOU NEED TO START SAVING!” Saving is a word that most people will nod and agree with but never act on. Look at it like this:
Your landlord comes up to you and says hey I am going to be raising your rent an extra 100 dollars a month. You could move out and try to find another apartment, but with all the moving costs involved it’s probably not worth it. What are you going to do? You are going to pay the extra $100 dollars! No matter what it takes you will find a way to pay the extra $100. So the next time you think you can’t save or don’t have enough money think back to this.
In terms of savings, you want a bank account that will be out of sight. An account you cannot access very easily. I always suggest people open a Barclays Online Savings account. Here are some money saving features it has:
1. No monthly maintenance fees- Um, yes.
2. No minimum balance to open- Hallelujah
3. 1.00% APY- Higher than most savings accounts by far
Another great feature is that you have the ability to automate transfers, which is key in saving. You can set a specific amount you want to be transferred to your savings account each month from any bank account you have. Remember, out of sight out of mind. Let saving become as painless as possible.
3. Start Dominating Your Debt
If you have debt, one of the easiest things you can do is neglect and deny its existence. No one likes debt, but it is something you need to get a handle on before it gets out of control.
First things first, find out how much debt you have and what the interest on it is. Do you have a monthly minimum payment and if not when do they start kicking in? From there the best thing to do is to pay off the credit card or loan that is the lowest. Pay off the minimums for the others until the first debt is completely gone.
If you have student loan debt you need to go check out Student Loan Hero. They have free calculators to help you crunch all the numbers and they can help you pay off your student loan debt faster and more efficiently.
4. Educate Yourself
Without proper knowledge you will only go so far. Start investing in yourself, take this seriously and the pay off will be priceless. Financial peace of mind is something most people do not have, and for the people that do have it you can tell. Your life will become exponentially more satisfying once you know your money situation.
Here is some reading material that may help:
1. Tony Robbins: Money Mastery- A book that has so many actionable takeaways. This is a must read.
2. Rich Dad Poor Dad- One of the first books I ever read on money. Many life lessons stuffed into one book. Worth the read.
3. Millennial Money Man- This site you are on right now is a tremendous resource for you. It is filled to the brim with guides, lessons, and posts that will help you in the long run.
4. The Dropout (this site)- We do not specialize in financial education, but if you are reading this you are either a dropout, a person who just changed careers, or a risk taker. We offer help make that happen + you can grab The Dropout Manual for FREE!
We could go on forever; the key though is to take the first step. These baby steps will help create momentum for you. Once you have the momentum it gets easier and easier. Consistency is the name of the game; if you are consistent with your financials you will develop habits that will last a lifetime.