The Best Money Advice When You Don't Have Any Money

Illustrated by Abbie Winters.
Getting advice about what to do with your money, when you don't actually have very much, might be fun — like playing a game of Monopoly. On the other hand, it could also feel soul-wrenching, like watching an episode of Black Mirror that hits too close to home.
But if you don't have a lot of money to spare and want to get on the right track, focus on covering all of your bases instead of investing in the next hot startup or buying property. Clear your immediate financial hurdles out of the way before aspirational investments (those can come much later), through earning more and managing what you do have better, and you'll be a lot better off.
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Everyone has regrets about something related to their finances, whether that's signing up for a credit card and going buck wild, or missing out on eons of matched retirement funds through work. One of the best ways to avoid pitfalls is to learn about ones other people have made — not for schadenfreude, but to increase your own knowledge. You could stay mum and pretend that you have it all under control, but if you open up about your concerns with the people closest to you, they might just do the same.

"When you don't have any money, you might feel as if you're excluded from the money conversation. This is a great way to develop a comfort level with talking about it so it's not such a taboo topic," says Manisha Thakor the director of wealth strategies for women at Buckingham Strategic Wealth and the BAM Alliance. "Reach out to three people who are at least 20 years older than you, and ask them to share their best and their worst money moves. It's cost-free and the lessons you'll learn are unbelievable."
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Recent grads who are working full-time for the first time may be thrilled to see steady paycheck deposits in their accounts. But where there's income, there are always expenses. Do your best to make sure that your spending and debt payments add up to what you make, right out of the gate.

"No matter the size of your salary, it’s important to assess your monthly spending and make paying at least the minimum amount(s) due on your debt obligations a top priority," says Chrissy Celaya, a certified financial planner at Betterment. "Not doing so can lead to penalties, extra interest, and higher finance charges, not to mention negatively impact your credit score."
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One way to make the best of the money you make is by capitalizing on some of the freebies that accompany it, such as enrolling in any employer-sponsored retirement or student-loan repayment plans.

"While it might be tempting to put off investing until you feel like you have a better handle on your budget, you could be missing out on free money your employer is willing to give to you," Celaya says. "Company-sponsored retirement plans often include a benefit in which your employer will match any contributions you make yourself, up to a specific limit. Think of it as a little raise you never had to ask for."

For example, say you earn $70,000 per year and your employer offers a dollar-for-dollar match of up to 3%, a pretty common scenario, according to Celaya. If you set up a 3% deferral from your paycheck (or $2,100/year), your employer will also contribute 3% — another $2,100 — on top of that.
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One you’ve paid off any high-cost debt (i.e. credit card debt), start building a safety net for financial emergencies.

"At Betterment, we recommend three-to-six months’ worth of living expenses, which includes monthly rent payments, utilities, and any other recurring monthly bills," Celaya says. "That can seem like a lot up front, but having that safety net in place means you won't have to rely on a high-interest credit card, for example, if an unexpected emergency expense arises."
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Even if you know all the right things to do with your money, you might not know how to prioritize those tasks. Do what’s best and most urgent for you at the moment, Thakor advises. She calls it the "financial cha-cha-cha," because your tasks may alternate like a series of dance steps.

"Make the minimum monthly payment on your credit card debt first because that protects your credit score. Second, if you have an employer match, contribute up until that point, because most employers match at either 50 cents on the dollar, or dollar per dollar for the first 2% to 4% of your salary, giving you a guaranteed 50% to 100% return on [each dollar]," she says. "Third, if you still have extra money left over after you make those minimum monthly credit card payments and contribute up to the point of your employer match, use it to pay off your credit card faster."
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One of the best games ever is the "Add As Many Items To Your Online Shopping Cart And Look At It Longingly Game." Even if you manage to whittle your cart down to just one or two coveted pieces, listen to the small voice that's urging you to wait just a little longer. You'll probably end up making a more prudent purchase (or none at all).

"If you sleep on it, you will forget about 90% of those purchases the next day," says Cary Carbonaro, a certified financial planner and the author of The Money Queen's Guide.
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Stating your worth is hard enough to do in traditional professional settings. Doing so among friends, especially when it comes to a hobby you actually love, can be just as difficult. Push forward anyway.

"Many people, particularly women, have side-hustles — something we do for friends and family that we could potentially turn into a business for ourselves where we could generate income," Wright says. "Whether you do hair, makeup, can cook, or put on a fabulous party, look at that and think: How can I stop giving my services and talents away?"

Swallow your fears about seeming obnoxious or greedy, and tell people upfront that your services are no longer free. Some people may be reluctant to start paying you, Wright says, but if you put your foot down, you'll find people who recognize your value — and compensate you accordingly.
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You won't know how to make the most of what you have if you have no idea where it all goes every month. Print out a copy of your most recent billing statement (sometimes going old school with pen and paper helps) and see if there are any recurring expenses worth phasing out. Wright regularly hosts free "debt bootcamps" in which she advises people on how to manage their debt, increase their income, and eventually get to a place where they can save and invest. A big part of that is vetting their expenses.

"Make sure that you're covering any leaks within your budget," she says. "Many of us, regardless of income, have a lot of phantom expenses, whether it's a gym membership we're not using, or monthly recurring bills that are automatically taken out of our account."
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One person's trash really can be another person's treasure. Poke around at home and you might discover that some of your old belongings could be worth money if they're in decent-enough condition.

"If you're a gadget girl like myself and you have a lot of things that you stop using once a new model comes out, you might sell [the old one] on eBay, Craigslist, or to a friend," says Jocelyn Wright, the managing partner of Ascension Wealth Management, and chair of the Women's Center at the American College of Financial Services. "Many of us have closets full of clothes, shoes, and other items that we just aren't wearing anymore, or that still have the tags on them."

You could sell those items to consignment shops, through sites like eBay, thredUP, or Poshmark (which also accepts beauty items), or simply donate them. "Give them to Dress for Success or any program looking for clothes for women who are in transition and going back to work," Wright says. "That's a sort of 'giving in order to receive.'"
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One of life's most disappointing financial fake-outs is when you start making more money, but don't experience any of the relief you expected, such as less paycheck-to-paycheck living, a bigger cash buffer, or a fatter retirement or investing fund, for example. In most cases, the mystery is easy to solve: your cashflow increased, but so did your spending. To avoid undercutting your own goals, intentionally or subconsciously, consider coming up with a plan that details exactly how you'll spend any surplus that comes in, before it comes in.

"As your income goes up, two things must happen," says Priya Malani, a partner at Stash Wealth. "Your lifestyle can go up, but your savings must go up."
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If managing your money feels like grueling work, you might end up wanting to spend more of it to find some relief. Decrease the sense that figuring all of this out is a terrible burden and try to enjoy the ride, suggests Sherrie Grabot, the founder and CEO of GuidedChoice.

"Make it a game and create new ways to save. If you usually spend around $100 per week at the grocery store, challenge yourself to only spend $95 — and then put $5 more a week into your travel fund."

Say you already have $500 in a short-term savings account, she says. At the end of one year, that extra Lincoln per week will have nudged your fund up to $760, enough to cover $400 airfare, $175 for hostels, and $185 for pub crawling. Not so dreary after all.
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