I’ve often been told not to refer to myself as “broke”. Understandable, since the definition of the word is to be penniless, poverty-stricken and completely out of money. Yet, it can certainly feel that way when you can’t really afford the lifestyle you want.
Hi! My name is Jayla and I’m a 23-year-old college graduate in the third year of my career. I am able to pay my bills on time every month and have a couple thousand dollars in savings. I love to travel and take about two or three small trips each year. I’m also very much a foodie and occasionally am willing to splurge on a good meal.
However, I am only able to afford this lifestyle for one reason – I still live with my parents. The Wilsons, a.k.a. Mom and Dad, allow me to stay in their humble abode for a small amount of rent and a share of the groceries and other household items. I realize this is a great deal, and if they kicked me out tomorrow, the struggle would be beyond real. There’s no way I could afford to pay my current bills and rent, plus maintain the lifestyle to which I’ve become accustomed.
As much as I’ve enjoyed living lavish on Mom and Dad’s dime, it’s time I learn to better manage my money. If I’m going to ball out in the future, I have to budget today. I want to bring you along for this journey, as each month I work to stop breaking the bank and start building long term wealth. Hopefully, we’ll both learn a thing or two about getting on the right financial track.
Math Alert: Calculating my net worth
My financial advisor (who also happens to be the CEO of Southern Bancorp, Inc., Mr. Darrin Williams) says that to get started, I need to understand my current financial picture. That means calculating my net worth, or my assets (cash, property, investments, etc.) minus my liabilities (credit card debt, car loans, student loans, etc.). This will tell me where I need to begin.
After subtracting my liabilities from my assets, it looks like I have a net worth of about $ -5,000 (yes, that’s negative $5K). Seeing this number is a wake-up call. If I’m ever going to attain financial independence and a positive net worth, I’ve got to tackle this monster called debt first.
Using money from bonuses at work and my tax refund, I was recently able to pay off a credit card and drastically increase my student loan payments. I would have much rather used that money to go on a nice vacation, but it felt really good to look at my credit card balance and see $0.00. What’s most impressive is that in the last three months I’ve paid off a year’s worth of minimum payments on my student loan. I can actually see the amount owed decreasing from month to month!
The second step is improving my savings habits. I mentioned earlier that I have a couple thousand dollars saved…but for as long as I’ve been out of school and staying with my parents practically rent free I should have a LOT more than that. So to make my saving more consistent, I recently started having a portion of my paycheck automatically deposited into my savings account.
I also mentioned earlier my financial coach, and yes, I realize not everyone has a bank CEO as their personal advisor, but having someone to be accountable to is really helpful. We meet every couple of months to see how well I’m reducing debt and living within my set budget. We also set short term goals for me to accomplish prior to our next meeting. Opening up your financial situation to someone can be very uncomfortable, but it provides a level of accountability that I’m currently not capable of holding myself to.
I am very proud of the progress I’ve made so far in 2019. I now realize that it’s much more important to actually have money than to just look like I have money. However, my journey to financial independence has just begun. Over the next several months, I will be using this blog, Dollar Scholar: A Millennial’s Guide to Wealth Building, to share the steps I’m taking to reduce debt and increase my net worth. My hope is that you too will be encouraged to embark on your own wealth building journey. Let’s do this!
Jayla Wilson
Jayla is a Media & Content Strategist at Southern Bancorp. She graduated from Arkansas State University in December 2016 with a Bachelor’s degree in Creative Media Production and a minor in Marketing.