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Broke Millennial: Stop Scraping By and Get Your Financial Life Together Summary – February 2022

Author: Erin Lowry

Short Summary
Broke Millennial (2017) by Erin Lowry will help you go from knowing little about managing money to being confident in your finances. Moreover, the book guides the readers about budgeting and saving money.
broke millennial: stop scraping by and get your financial life together
Source: amazon.com

Detailed Summary

In the book Broke Millennial: stop scraping by and get your life together, the author has motivated the readers to be independent. It doesn’t mean you have to be really rich and have a lot of savings. But it means that you know where to spend and how to save money smartly. It’s all about making smart decisions that will benefit you. When you know where to spend and how to manage money, you will be confident in your finances.

Many of us believe we have a solid handle on how to manage our finances. However, if you’re a recent college graduate who is broke, this element of life may be daunting. Even if you don’t fall into this category, you can be making some poor financial decisions without even realizing it.

Let’s admit the fact that, paying bills is already difficult. However, when financial consultants start talking about an emergency fund and retirement, it may quickly become overwhelming. The good news is that it’s not your fault, and you won’t be broke forever.

In her book Broke Millennial: Stop Scraping by and Get Your Financial Life Together, Erin Lowry discusses all of these themes and more. Some of the guides given in the book are summarized below.

Broke Millennial Key Points

Examine your past

According to the author, it’s not rocket science to manage money. It’s pretty simple. All you need to do is think about your past experiences.

Just like when it comes to losing weight, we’ve all heard the advice to “eat less and exercise more.” However, putting it into practice is more difficult than it appears. Whether it’s overeating or overspending, you have a hard time resisting your inclinations.

Stop trying to follow superficial advice and instead focus on figuring out why you’re having trouble with money. To do so, you must examine your past.

Years ago, it all started with your first encounters with money. You may find it difficult to recall financial incidents from your childhood, but you are correct, but it’s there that you’ll discover the deeper issues that make managing money tough for you.

Consider how your parents dealt with money and how they spoke about it. Did they talk about their profits and expenses openly? Is it possible that the topic is off-limits?

 Moreover, try to find answers to these questions like how did you feel when you earned money for the first time? Or how did you earn money for the first time? And What did you buy from your first earning? You will get a better understanding of how to manage money.

Breakdown your expenses

The second thing that the book Broke Millennial: stop scraping by and get your life together teaches is that, in order to manage your money is to break down your expenses. It means your money is usually divided into three categories I.e fixed cost, savings, and flexible spending. Fixed costs, such as rent, should account for 50% of your total expenses. Saving for a new car is an example of a financial aim. Set aside 20% of your budget for these. Flexible spending on ordinary items, such as food, accounts for the final 30% of your spending.

Achieving this breakdown should always be your objective. As you obtain raises, for example, you’ll need to re-adjust. Make sure your breakdown is reasonable, regardless of how you go about it. For example, don’t allocate 60% of your profits to flexible spending!

 Consider the following scenario: you live in New York and earn $32,000 per year after taxes and automatic savings. This equates to about $2,667 per month. The total cost of rent, utilities, and transportation is $1,350 a month. If your monthly student loan payment is $250, your fixed costs are $1,600 per month or nearly 60%. With just over $1,000 remaining, it’s difficult to put aside 20% of your income, or $500, each month for savings. Instead, you’d aim for a starting salary of $200 and then work your way up as your salary increases.

Credit Score

Besides this having an apparently limitless amount of money that comes with a credit card may sound appealing, but it can be quite risky. There are numerous hazards to avoid. However, you must obtain them if you want your financial resume to be full.

 This is due to the concept of a credit score. This is a history of how successfully you’ve managed debt over the course of your life. When you want to borrow money for a car or a house, it’s also what lenders look for.

Make a promise to yourself that you’ll only spend what you can afford to pay off in a month, and you’ll pay off your credit card in full every month. This will keep you out of debt and allow you to purchase whatever.

Who would I recommend Broke Millennial: stop scraping by and get your life together to?

The book is recommended to teenagers and young graduates who want to become independent but always fail to manage money efficiently. The book will guide them to save money and be confident in their expenses.