Take control of your finances: 3 tips for improving your financial journey
(BPT) - If you're just beginning your financial journey, it might feel overwhelming. Finances are one topic many are unwilling to talk about, leaving you on your own to figure out basics like budgeting, building your credit score or negotiating your first salary.
To help young women develop skills so they won't have to sweat the stress, Secret Deodorant has gathered resources and partnered with financial experts to provide young women the tools they need not just to survive, but thrive. Through their "No More Financial Secrets" initiative, Secret Deodorant is offering free resources, and tips from a diverse group of financial experts at Secret.com/MoneyMoves.
One of these experts is Carmen Perez, creator of the MUCH budgeting app, which helps individuals manage their money and paychecks.
"While finances may seem intimidating when you're just starting out, remind yourself how far you've come," said Perez. "Don't be afraid to face finances head on, talk to trusted people and use resources available to you.”
Here are some tips to help empower you on your journey to financial wellness.
Get a clear picture of your finances
While the word "budget" can sound scary, it just means making a plan for how to best use your money. You need to understand your financial picture before planning where you want to go. It begins with two steps: know how much money is coming in (what you earn) and how much is going out (tracking all your spending). Budgeting apps can help you get started.
"Always make sure your needs are being met before spending on wants," Perez recommended. "If you spend more than you earn, you'll need to make some changes, or you could end up in debt." If you find yourself in a situation where you have more bills than income, your first focus should be on increasing your income. Increasing your income could look like taking on a side hustle temporarily, learning a new in-demand skill, asking for a raise, or changing jobs to get a bump in pay.
After tracking your spending for a few weeks, you'll see areas where you could cut back. Some costs are essential (like rent and utilities, food and debt repayment), but other areas may be possible to trim, like going out to eat and non-essential purchases.
How to build your credit score
Having a good credit score makes it possible to open new credit cards or get loans, to buy a car or home — and can even impact your ability to rent an apartment. From a lender's point of view, a good credit score means you'll be reliable when paying your bills.
To build a good credit history, you need to use credit (make occasional purchases on a credit card), then pay your bills on time every month (preferably in full). You shouldn't use over 30% of your available credit, so if a card is maxed out, it's time to pay down debt more aggressively.
"Building a good credit score takes time," advised Perez. "But the habits you need to get a good credit score, like paying bills on time and not over-using credit, are financial habits that will benefit you throughout your lifetime."
Use your digital calendar or a bill payment app to help you monitor due dates so you don't miss payments, because even one late payment on a credit card can negatively impact your credit score for years.
Negotiating your first salary
Negotiating your first salary can be nerve-wracking, but it's a crucial part of the job process. Start by researching the typical salary range for your position in your area. Understanding your own value is key; think about what skills and experiences you bring to the table.
Be prepared to describe the skills, knowledge and experience that make you a valuable employee and do your research! Understanding the salary range for the role and what types of salary packages are common for someone with your level of experience will help you during the negotiation period. If the offer seems low, ask about other benefits, which can be part of your overall compensation package. If your skills meet or exceed the requirements of the position, it's reasonable to ask for 10-20% more than the initial offer.
Remember, they are expecting you to negotiate and you don't have to accept the job offer immediately. Tell them you'd like to take a day or two to consider it, then take time to weigh the pros and cons, and consult trusted friends or family members.
"Talking about salaries and money can seem uncomfortable, even with good friends or relatives," added Perez. "But discussing your offer with others who've been through similar situations is very helpful. Don't be afraid to ask questions when you're dealing with new circumstances."
Developing the ability to achieve your financial goals is within your reach. Visit Secret.com/MoneyMoves to access free educational resources and tips to help you on your financial journey.