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How Do I Do Money?

How Do I Do Money?

I don’t spend a lot of time working, but I do babysit and grab shifts at a friend-of-a-friend’s shop when I can. So while I don’t have tons of money, I want to make sure I’m smart about the cash I have. Where do I start? Should I save it all? Is it OK to spend a little bit? Please help me not go broke.

One of the biggest questions we’ve heard since starting Clover is how to deal with money. To be honest, we weren’t really sure, either...it’s not the kind of thing that’s usually taught in high school, although it definitely should be. So, we asked our pals at CBS, who are much more financially-minded, for advice. They have a smart-sounding network called MoneyWatch, and we want money to watch, so it seemed like a good fit.

We ended up working together on an event that happened earlier this week, where we all promptly turned into millionaires. Just kidding, but we did learn a lot from the segment—so much so that we took notes in hopes that we will one day be millionaires (or thousandaires, who's counting?). Here's what we took away from the night that'll help you, too.

1. Start saving now (or, like, yesterday).
Whether it’s babysitting money or your first paycheck out of college, learning how to not spend all your cash immediately after you get it is a valuable—and underrated—lesson. You can do something as simple as putting it in your savings account (or starting a savings account); or, if it’s a more substantial amount, you can invest it so it’ll grow later on. 

2. Related: Learn how to budget.
Budgeting is one of those ~life skills~ that everyone talks about—but that nobody really teaches you how to do it. Fortunately, it’s pretty easy. One of the most valuable things we learned is that you don’t need to save your entire paycheck. Devote 80% of your money to needs and wants, prioritizing necessities like rent and food first. The remaining 20% should go to savings. While 20% may not seem like a lot—it’s just $20 of $100, or $5 of $25—it’s actually a really reasonable amount to save. You'll be glad you did.

3. 401(k)s are important—and not as complicated as they seem.
A 401(k) is a retirement plan that’s partly paid for by your employer. You defer money from each one of your paychecks to go into your 401(k)—and then you forget about it. While you don’t get the instant satisfaction of immediately spending the cash, the money literally works for you. It’s not taxed right away, and it’s distributed into mutual funds, stocks, bonds, etc. to help grow the dollars over time. Plus, if you’re lucky, your employer will match the amount you put in, which means more (free!) money for you later.

4. Speaking of, want to retire someday? Then get on it asap.
If you hope to eventually stop working and relax on a beach or ski slope later in life, then you’ve got to make this dreamy future a priority. This means starting to put money away when you’re young (and most likely not thinking about life after work at all). Delayed gratification is not the most fulfilling thing in the world, at least not this instant. But the money that you put away now will add up in ways that make your mind spin. Trust us: Your future self will thank you. 

5. Enjoy it.
OK... that wasn't actually a lesson we learned But if you're not going to enjoy some of the money you make, what's the point?


Watch the CBS money special here. And if you need advice, hit reply on this email and ask us anything (really, anything!).

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