No, it's not about skipping the avocado toast.
Of all of the personal financial advice out there, my favorite is one that I first read from Ramit Sethi many years ago.
Create and automate multiple savings accounts.
It's the one advice that helped me feel secure about my future. The concept is simple. First, create multiple savings accounts. This can come in the form of retirement, investment and general bank savings accounts. From there, split out the bank savings accounts into specific short-term and long-term goals. This may mean having a saving accounts for Iceland 2017, Weddings 2018, and Vacations All Year Round. It's about planning ahead. The key to funding these successfully is to automate it all. Before even any of your paycheck touches your bank account, money is streamed into separate accounts and what your left with is money for your basic needs and some for luxury.
For years, I used Capital One 360 (formerly ING) and am plugging them right here and now. Part of the reason I love them was because they did not have a branch office or ATM support so it was difficult for me to withdraw money on a whim without incurring a charge. When I first used them, the savings rate was pretty high and they had one of the most competitive rates out there so it was a win-win for me. The best thing about them is that they support the creation of additional savings account without additional charges. It's as easy as pressing a few buttons on the website. Another win!
When I first started using them, I was a few years post college. I lived with my parents while working full time at a pharmaceutical company and completing my masters. This gave me a chance to save money. During this time, I saved for things that were long-term and perhaps things that a 23 year old doesn't even think about it, but when we look at statistics, majority of us will follow the same path. Here's what I saved for and here's what I would suggest. If you are in your 20's and just starting out, ask any 30 year old what they should have done sooner and it's definitely to save earlier.
Emergency Fund - this advice has been beaten to death, so just do it!
Wedding Fund - someday it will happen even if you are single AF right now ;)
Vacation Fund - because one Thursday, you will seriously need a break and want to book a flight to the Bahamas without any regrets (I've done this!)
F It Money - at some point, you may come to realize that everything you've been doing is BS. This is the quarter life crisis. Prepare for it.
Vegas Money - at some point, all of your friends will start pairing off and will invite you to spend tons of money on last hurrahs and bridesmaid dresses that you only wear once. Be prepared for this because again even if all of you are single AF, it will happen. Trust me on this!
Medical/Dental - even though you are superman or superwoman right now, in a few years, those eyes, ears and teeth and probably that back will start failing you. Save some money for aging.
The American Dream House - because it's the American Dream whether you've decided to follow it or not.
For many of us, we may have been under the impression that we can afford anything as long as we have the credit card to pay for it, but if we look back, credit cards did not always exist. Our parents and grandparents saved money before buying anything big or small. It's time that we take a lesson from them. I think we also have to learn that any debt we incur today is a bite into our lifestyle tomorrow. Remember that personal finance is personal so while you may be saving for different things, start saving for whatever your hearts desires even if it's just $10 or $15 a week. And save before you get a chance or the temptation to spend.