Twenty-something, sexy, and broke! What to do?

You’ve graduated college with student loans on your back. You’re making less than $45,000 a year which means around a third is given to Uncle Sam as taxes. So, you are left with a $31,500 salary which leaves you with $2,625 (give or take a few dollars) monthly income. Oh, and cooking is not your specialty, so, you opt of eating out most days of the week. You rent and still owe on your car because you didn’t know you’re not suppose to tell the dealership how much you can afford a month on a car loan. By opening your mouth about monthly payments, the dealership got you! You feel you live paycheck to paycheck. It seems all your money is heading towards bills. Plus, you have to have a social life and purchase chic clothing. Come on, you may be broke, but your style doesn’t have to suffer.Now, how in the world are you going to invest toward retirement, build an emergency fund, invest in a brokerage account, and still manage a quasi-lavish lifestyle? Here’s what you do:

• First thing first: Write down where your money is going. Grab a pen and paper. Write down fixed expenses on top-left of the paper and fickle expenses at the top-right of the paper. My definition of fixed expenses means anything that you have to pay monthly no matter what. For example, rent, water bill, utilities, TV and high speed internet, car loan, car insurance, gas (car), food (restaurants, fast food), credit card debt, student loans, emergency fund, retirement, investment portfolio (eventually), etc. For fickle expenses, my definition is any inconsistent expenses. These are expenses where you may or may not spend your money. For example, shopping, entertainment, personal items, gifts, etc. For example, you probably can do without the mall for a month. Under fixed and fickle expenses write down the category and the amount next to it. Of course, you can estimate the amounts, especially for items like gas and food; you should estimate a little on the high end to give yourself a cushion.

• Second: Evaluate. Take a good look at where the majority of your money is going. Generally, your highest two expenses will be your living expenses, such as rent, TV & internet, utilities, and water; and, secondly, your car and everything that comes along with it like gas, car insurance, and maintenance. However, you may be surprise to learn the amount of money spent on food. I know you have to eat, but if the majority of your money is spent on fast food and restaurants consider buying groceries for the week and cook, just a little bit. Can you cut back a little on the entertainment, shopping, etc?Moneylicious Tips:At the end or beginning of the year, review your cell phone, utilities, power bill, and TV &

Moneylicious Tips:At the end or beginning of the year, review your cell phone, utilities, power bill, and TV &

At the end or beginning of the year, review your cell phone, utilities, power bill, and TV & internet. Shop around if it’s possible for you to get a better deal somewhere else. Also, if you are renting and you have been a tenant for a couple of years negotiate with the leasing office to lower your rent. In my case, I lowered my rent by $175 a month. I negotiated with the leasing office as my leasing contract was about to end. I noticed what they were offering new tenants and told them I found it to be unfair and that I believe as a tenant who has lived here for a couple of years along with paying rent on time I would like to lower my rent. And, so, they did.Review any investment and/or retirement statements, at least, in the beginning of the year.

• Third: What are your financial values? Is it important that you pay off your credit card debt and student loans? Is it important to you that you have an emergency fund in case your car needs to be fixed? Retirement may be far away, but trust me when I say the earlier you start the better. Beginning to invest toward your retirement after 30 is a late start. I’m sure you value your social life. I know I do. I enjoy heading out with friends to a night club and get my groove on with a Cosmopolitan drink. I love shopping, especially at H&M. But, I splurge when it makes sense. Recently, my car needed to be fixed, costing over $300. Plus, my birthday was coming up. I paid for my car to be fixed in cash, thanks to my emergency fund, and still managed to purchase a birthday dress with my paycheck.• Four:Develop your plan that meets your needs and desires. Whether you begin with $50 a month to invest in a brokerage account and only 5% of your income toward your retirement account or more, it will all depend on what you find to be important. I would recommend if you have credit card debt to pay them off as soon as possible.

Student loan interest, typically, is a tax deduction. So, that’s a plus. It’s really quite simple. Take a look at how much you make a month and distribute your money according to your financial values. First, look at how much of your income is expended to fixed expenses. Whatever is left over can be spent on fickle expenses. However, this doesn’t mean you should spend all your left over money on fickle expenses. Even if you begin saving $50 a month in an emergency fund is a great start. Even if you don’t have much money, a little bit will go a long way. **By the way, if you truly are broke-broke, then consider getting a second job.  And by broke-broke I mean all your money is spent on fixed expenses. **Once you understand where your income is going, you can develop a plan that meets your needs and desires.  I am all for going out with friends, buying the latest technology, shopping, splurging, and all the good things money can buy us, but it’s important to manage your money, too.