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- As a teenager, I learned to manage money by making $8 an hour babysitting.
- Now, I’m in my 30s, but I use those foundations to help me build and stick to a budget.
- I also pursue multiple income streams and pay close attention to every dollar I spend.
When I was in high school, I worked my first job as a babysitter for several families who lived in my neighborhood. I did this for two years, almost every weekend, and I was making $8 an hour. That money then helped me save for future college expenses, pay for my gas, and allowed me to have spending money when I went out with friends.
But as the years went by and I started taking other part-time jobs while in school and a full-time job when I graduated, that hourly rate doubled, then tripled. Even when I was making more money, I tried to pretend I was still living on $8 an hour.
That’s why I still approach my finances the way I did when I was a teenager, and the best money lessons that have followed me over the years because of that mindset.
1. It helps me stick to a budget
Back when I was making $8 an hour as a high school babysitter, I tried to make sure I saved $2 to $3 of that hourly rate for last minute shopping or things I needed at school. Tricking myself into thinking I earned less helped me build a mini cash fund for the future, instead of spending every dollar I had as soon as I earned it.
That’s why, after spending most of my 20s racking up credit card debt and having no emergency fund or retirement account, I wanted to make my 30s the decade where I got my finances in order. To help with this, I reverted to that teenage mindset, reminding myself to spend less than I earned.
For the past two years, I’ve made it a goal to try to save at least 20% of my income. To make this happen, I stick to a strict budget that I create each month. Instead of budgeting around my current income, I like to pretend I make 30% to 40% less than I do. That way, I can always spend less money than I earn each month to meet my savings and investment goals.
Any leftover cash helps pay bills, goes into my emergency account, or goes into my savings account until I have a game plan for how to use that money.
2. Makes me have more sources of income
Early in my nannying career, I realized that working with just one family limited the amount of money I could make because I only needed them one night a week. To bring in more cash, I started advertising my services to families who needed me on a Saturday or Friday night. I took on three additional families and was able to triple my weekly income.
When I started working full time, I realized that even though I didn’t have enough time to take on more things, I could start finding ways to earn passive income so that I could continually grow my net worth without having to. work around the clock.
I started earning passive income through financial means, like putting my money into high-yield savings accounts, CDs, and even dividend-producing stocks to bring in a few thousand dollars in extra income each year.
I’ve also created passive income with side effects like online courses, selling products on Amazon, and even sharing affiliate links with my favorite products in my weekly newsletter that gives me a percentage of every sale that happens when -someone clicks on those links and makes a purchase. something. These side hustles take less than an hour a week and can bring in thousands of dollars a year.
3. It makes me pay attention to every dollar I spend
When I developed my babysitting business, I was making $150 to $200 a week and working 20-24 hours a week in addition to going to school. Every dollar I earned felt important because I had worked hard for it. I made sure that when I did spend this cash, it was on purchases that I needed and not just on impulse purchases during my daily mall outing.
Even today, as someone who wants to achieve certain financial goals (retiring as a millionaire by age 50 and being able to save 20% of my income), I stick to the mindset of paying attention to where I spend each the dollar. .
On a weekly basis, I review every item on my credit card statement not only to look for errors, but also to analyze everything I’ve purchased and whether or not I need that item. I also update my budget spreadsheet weekly and make sure I do a financial inventory at the end of each month to track my goals.
Even though I make over $8 an hour like I did when I was a teenager, paying close attention to where every dollar goes is my way of controlling my money, something I stopped doing in my 20s. However, in my 30s, when I’m making the most money I’ve ever had, I find it important to track my spending and savings as if I were a teenager again.