I would like to change my "paycheck to paycheck" way of life and am looking to learn about financial vehicles (US based) and investment basics, and anything else that "I wish I had known when I was 20 years old".
All of the comments so far have talked about mechanical things (researching investment vehicles, what percentage to save, etc), but in my experience to move beyond a paycheck-to-paycheck lifestyle the biggest change you need to make is psychological. You can do all the research you want, but if you don't change your mindset around money it won't make any difference.
In my case I was lucky. At the age of 25 I was also living paycheck-to-paycheck, and did an obnoxious 5 week trip around Europe which left me broke and unable to make rent. I had to ask my father for a loan to get me through, and the whole experience of that was humiliating. Especially because I had built up a self image of being financially independent. Within a week of that humiliation I had set up a planning spreadsheet and set up savings goals to never have to beg for money again (and it worked).
Point being that, for me at least, setting up the spreadsheet was the easy part - the hard part was deeply having the psychological shift of "I really need to save money".
Advice here seems generally good. I did start learning about finance and investing very young, and my views have changed a lot as I’ve gotten older. So take this advice as stuff after you learn investing basics.
1) financial independence is great, but you could also die tomorrow. Make sure you understand what your most important values and priorities are, and don’t put them off in favor of more future wealth.
2) health is wealth, don’t ever sacrifice health for more savings. I promise it won’t be worth it.
3) relationships are wealth. Don’t sacrifice the people that matter to you for a little bit more savings. In my own life this meant going from spending very little on traveling to see old friends to quite a bit traveling to see old friends.
4) it’s often much easier and more enjoyable to increase your pay 25% than it is to decrease your spending 25%. Most people are actually not good at navigating “how do I get paid more per hour worked” and a little bit of brainstorming and long term planning in this department can take you leaps and bounds further financially than penny-pinching.
> 1) financial independence is great, but you could also die tomorrow. Make sure you understand what your most important values and priorities are, and don’t put them off in favor of more future wealth.
So much this. Raised by grandparents here. They have some strong regret how they didn't do certain things when they were young. I've seen it up-close for too long. They're kind of in a "part of your life was a lie" realization as they never challenged their beliefs.
I decided to become a digital nomad and am meeting cool people while sharpening my dating skills (my dating life is quite fun atm, took 6 months to get there - I got rusty after my relationship), while seeing cool cultures and learning languages. Truthfully, work is a welcome break (I work 4 days) to just mellow down the craziness, haha. I'm a normal looking guy, I put a lot of effort towards dating skills (20 hours per week at least, it's a second part-time job really, a fun humbling one, so many rejections, lol, ego dissolution can be achieved through psilocybin or through dating, lol).
So not even death, you might regret how you've lived it. I know I won't regret this. I am living paycheck to paycheck atm, but I have fairly good savings since this is the first time that I'm traveling this much.
The subreddit personal finance has straightforward advice, and a very nice algorithm for determining where to put your money (and an exit criteria after which you can do whatever you want).
That basic flowchart has helped me set my goals for years, and to maximize my progress towards those goals.
It's very simple, a 10 minute read, and backed by most the books and advice you're likely to receive anyway, including basic stats about emergency funds, etc.
Unfortunately, it can seem mundane, as financial responsibility is about time in investment and good lifelong habits, not easy tricks.
The stuff on personal finance does not apply to anyone with weird life circumstances or too much money - past a certain point, you need to do weird forms of diversification. Also, if you are saving part of your money for a short-term goal like a house, rather than retirement, you have to adjust the mix accordingly.
And OP definitely said "paycheck to paycheck" which seems quite normal, and didn't mention anything too strange.
But yeah, there's no one-size-fits all, but as a philosophy, this flowchart is spot on: Cover your butt, then maximize money growth by optimizing paydown / investment by interest rates, and cover your butt more over time.
Let’s say an investment has a 20% return and your calculation gives a 0% default chance for the first four years. You can structure your investment to compound for the first four years and get back your initial capital after the fourth.
You are essentially now (4 years later) on a risk free 20% return. Your initial capital can be reinvested somewhere else.
If there is something I learned trading the financial markets is that structuring is the only thing that matters and what will bring your returns. The other thing I learned is that real 20% returns with little risk are abundant if you are looking hard enough and comfortable executing exotic trades.
It slightly misses the point that actual threshold depends on inflation. 20% annual return on an insured bank deposits is absolutely normal for currencies with 25% annual inflation.
I suppose another piece of financial knowledge is "check whether figures are in real or nominal units (i.e. inflation adjusted or not) and apply adjustment".
This has been greatly simplified by inflation being low for a very long period until the recent transient bump.
So true. Vietnam offers ~7% on bank accounts and inflation is much higher than that. Although, of course, the government doesn't admit that either and reports it at ~4%.
Understanding the Bogleheads philosophy is a great place to start. Along those lines, the book “The Simple Path to Wealth”, by J. L. Collins is great for developing an initial mindset on how your money can work for you.
Bogleheads subreddit and forums are generally great. A lot of great knowledge there, as most investors there are familiar with riskier investment as that is how many started.
I have read some insane upvoted comments in r/personalfinance and r/investing but bogleheads are generally on point.
The nice thing about bogleheads is it starts pretty simple but scales into the minutia of various tax efficiency techniques, fund selection, real estate, and so on when you need it.
The other thing I like about it is that the forums have lots of detailed personal scenario discussions that are helpful for getting real life examples of the application of the dogma.
/r/personalfinance has some solid stuff in their sidebar/wiki.
I'm big into Financial Independence as a concept and community, so I'm partial towards that. Some recommended reading (some which you may like and some you may not):
- Your Money Or Your Life - Incredible book (foreward by MMM referenced above)
- YouTube/general searching for investment vehicles. Big ones in the US are: 401k, IRA vs Roth IRA, 403b, 529 (if you have kids). Tax advantaged accounts have huge benefits, so definitely understand them. Only takes a little bit to read about the ones I listed.
- Dave Ramsey - Love him or hate him, if you really struggle with money and debt on a fundamental level, he has good advice. His advice isn't optimal for everyone if you don't have issues with debt, but something to consider.
- Depends on how you want to invest. A lot of people (myself included) are pretty straight forward with index funds and diversify in different types, such as US vs international or maybe a variety of focus on industry. Do you research and figure out what's best for you, but index fund investing is pretty safe and easy.
Some personal advice:
- Spend less than you make. Seems obvious but it really is the golden rule of personal finance. Easier to say than do, especially without knowing your financial/life situation.
- Reduce any debt you have. High interest is obviously a big one and some people have varying levels of comfort with low interest debt (like mortgages from the past few years). Find what you're comfortable with, but just get rid of any credit card debt immediately. The chances you beat that interest rate with an investment is basically zero, and the limit as it approaches zero over multiple years.
- Think about the depreciation in your assets. Buying a new car means you eat the bulk of depreciation. There's an optimal point to buy a car where you get the most life for the best dollar after the depreciation is lost.
- If you're in software like a lot of HN, we're very lucky to have careers that pay well in most cases. Take advantage of that. Live on less, invest more, and be generous with others.
Another new resource I've discovered is qubemoney.com. Great way to set a budget and stick to it. They issue a debit card that declines unless you "open" a budget first on the app. That way you always have to think about what you're spending before you spend it and you always know how much you have in your budgets.
You might accuse me of being glib in saying this, but this scene from the movie The Gambler[1] contains a lot of wisdom. The movie as a whole is moderately OK, but this scene really distills a lot of good stuff into a few minutes.
Listen to his podcast episodes. It’s a quick way to get a feel for his advice and to hear how real people who call in benefit from it. Go back to 2020 or so before his co-hosts started taking more airtime.
He catches a lot of flak because the debt snowball that he advocates is mathematically inefficient (folks prefer to pay debts with the highest interest rates off first). Also his political views. Look past those things - there is so much valuable advice.
20+ years ago, he was one of a handful of well-known faces of personal finance, was nationally syndicated, books, etc. There were fewer outlets and fewer options than there are today.
His focus on debt and changing mindset around that will help some people, but if he's a turnoff (for whatever reason), you'll get 99% the same advice on most issues from dozens/hundreds of other personalities.
Yes, was about to suggest Ramsey as well. His advice is quite repetitive (baby-steps..), but that's kind of the point: there are some easy rules that you will learn by heart if you listen to Ramsey for a few months. I live in Europe and half of what he says doesn't even apply to me, and yet I still think about them every time I consider a financial transaction. "Can I buy this car? - no, it's over 10% of my household income".
He's a real estate millionaire that has moral issues with declaring bankruptcy. Real estate is like life's cheat code: borrow money from the bank -- buy rental property -- pay the bank back with someone else's money. All this "get a second job"/"deliver pizzas" advice is disingenuous in my opinion when the real secret is borrow money and become part of the landed class.
I recently went through this myself after a long time of avoiding it due to the way I grew up (parents always argued severely about money - made me basically ignore it as it caused me extreme stress)
I have found the BogleHead guides [1,2] and wiki [3] the absolute best place to begin!
William Bernstein has written many finance/investing books, though most of them can get quite advanced. But he also wrote a much more approachable, 27 page booklet available for $1 called “If You Can: How Millennials Can Get Rich Slowly” that is a good intro to the space. I greatly appreciate the wit and no BS style of his writing.
Bernstein has given permission for Cuffelinks to provide a complete copy of his 2014 booklet, ‘If You Can: How Millennials Can Get Rich Slowly’. It is his simple recipe for young people starting on an investing journey. It is linked here:
I've figured out the following concepts. This is what worked for me:
- learn accounting especially cash flow accounting. Not at Deloitte partner level, the basics aren't hard, high school level understanding is enough.
Doesn't matter how "rich" you are are on paper; bad cash flow makes you insolvent and then the banks starts grabbing assets.
- Net Present Value and how future cash streams are discounted.
Very theoretical. Very important to understand
- compound interest.
This is of dubious utility for investments (who can guarantee a return? Who knows tomorrow's interest rate? And the inflation rate) but fundamentally important to understand how nasty high interest rate loans are
- learn about the market portfolio and the basics of risk.
The market port. is built on dubious assumptions (a risk free non zero return asset, market efficiency, etc) but really drives home the importance of diversification and having a safe asset as a fulcrum
- Save at least 10% of your income (when you're very young). Better 30-40%.
Make sure its not all cash. But make sure you have >4 months cash on hand, or a roof repair which ever is greater.
My goal is to avoid insolvency while putting as much aside as I can. I invest in rental properties primarily because that's what I like to own (we have two), but I have a 401k to match my employer contribution (obviously).
1. An app called YNAB (You Need A Budget). They use the envelope system of budgeting and they have group classes you can join. Absolutely transformative.
Rich Dad Poor Dad should always be mentioned with the caviet that:
A) 99% of the book is fabricated
B) It's based on methods which are significantly harder to do in this day and age
The biggest takeaway from the book is the mental shift to assets and liabilities. But the anecdotal stories are pretty poor and, as I said, fabricated.
I didn't read that book but watched a seminar via YT from the author. It talked about real estate investment and I found it eye opening from how/where profits came about. The example I remember (I have no idea if these are feasible numbers, just pulling numbers out of thin air for an example) goes something like this:
1. Buy 50 unit apartment complex for $10mln. Get investors to pay $4mln, loans for $6mln. Cash flow is $600k/year from avg of $1000/mo.
2. Slowly invest in the property, refurbish units by maybe adding in-unit laundry for example. Keep property well maintained.
3. After some time (3 years?), get property re-assessed and now its worth $15mln. Refinance the property to $15mln, pay off $4mln to investors, take $1mln from loan for renovation recovery/profit, tax free, pay off previous loan.
The eye opening part for me was that the goal is to not build and sit on the equity like a residential house but use the equity and increased property value to refinance and the extra money from the loan becomes essentially tax free profit. There is risk that something like a large employer leaves town/lays off people and now you have less renters and property value might decline and things like that. He had a real estate developer discuss how they would do this and do it well by researching areas, property values, etc. This also gives some insight into one element of why rents might be skyrocketing recently - loan rates are higher so developers/investors doing this re-assess/re-fi pattern have higher costs.
So what was portrayed in the YT video did not seem fabricated, he had an actual real estate developer talk through this process.
For sure, it's legit. However, it's a full time job requiring a specific set of skill, training, knowledge and non-trivial upfront capital. It's not something one is looking for when they ask for financial advice, more so when they are living pay check to pay check.
> Rich Dad, Poor Dad is one of the dumbest financial advice books I have ever read. It contains many factual errors and numerous extremely unlikely accounts of events that supposedly occurred.
> Kiyosaki is a salesman and a motivational speaker. He has no financial expertise and won’t disclose his supposed real estate or other investment success.
> Rich Dad, Poor Dad contains much wrong advice, much bad advice, some dangerous advice, and virtually no good advice.
I strongly agree with YNAB. Investment advice and higher financial knowledge is all well and good, but they open with living paycheck to paycheck. Getting out of that lifestyle is all about employment and budgeting. YNAB is great, even if only as a tool to get you to use envelope budgeting.
If you're living paycheck to paycheck I'd say learn to walk before you run. Keep it simple, open another account and transfer 20% or whatever you feel comfortable from every paycheck. After you save more than a year of living in that you can start to look into more advanced stuff.
If you are living paycheck to paycheck. You can not afford to lose your job, or not have one while you are looking for another one. This economy should make you immediately do anything and everything in your power to quickly amass at least 3 months of living expenses. This will give you that safety net necessary to be able to find a new gig if the need arises. You will be amazed at how much stress it can take off you and your attitude towards your job.
Agreed. I have probably a couple years of living expenses available now, and I still have some anxiety around work/income/etc. When I lived check to check, it was even worse. There's not no stress now, but far less, knowing I can still eat/live/etc if some engagement is cut short or reduced. Beginning of covid, early lockdown stuff, the company I was working for cut some folks, and reduced me to ... limbo for a few weeks. The project I was on had no clients willing to renew their contracts because... lockdown - they had no idea what was coming in the next few months (who did?). 15 years ago I'd have freaked out about having a project suspended like that. This time, it was... a blip. True, there were bigger things to be concerned about anyway (covid) but short term financial stability wasn't an issue. Longer term - would still like enough to be even 'lean fire', but not quite there yet.
Having slack in your finances may not solve all your problems, but life is much better when you escape from the class of problems surrounding lack of money.
It takes a while, but when you get used to having enough money your time horizon can extend much further, and you can start to make decisions that will be likely to help you in the future.
I say this as someone with household income below the local median, but with thrifty habits and a financially compatible spouse, and who had the good fortune to buy a house before things got so crazy. If housing wasn't a mostly-solved problem for us life would be very different.
I thought the motivation was OP asking about it. But let me give you my personal experience as well. Started doing this about 10 years ago. During this time I switched 3 jobs at my leisure. I once stayed unemployed for 8 months and just traveled until I ran out of money. The savings account went up and down with my life-style, big purchases like cars and such, at the moment I have 2 years of comfortable living set aside. The best thing about it is my mental state re money. I do not live in fear of setbacks, and even though I save more and more I feel I can splurge whenever I feel like it without feeling guilty.
For some people it happens automagically once there’s more than you can let yourself to spend in a moment. You see money, you think “good, better keep on keeping on”. For me it actually created motivation to seek and earn more.
The richest man in babylon - a book of parables about an ancient babylonian who accumulated wealth - is a fun read and a nice way to pick up some essential concepts in an entertaining way.
I’ve always heard people talk about how they were duped but I never thought it’d get to some point where I’d be in the same situation , after the sudden pandemic in 2020 I was fighting so hard to get back on my feet financially and that’s when I ended up in a pit instead , I came across this asset manager on Instagram , he explained everything I thought I needed to know about the crypto investment but got to a point where the whole scenario changed , I could not withdraw or even login to my account with the fake crypto company and that’s when I realised I have been duped , at first I was devastated and didn’t know what my next move will be , on telling one of my close friends what happened she was mad that I didn’t tell her at first but the good thing was that her cousin had been in the same situation and was able to recover her money with the help of a private recovery Agent “ Knighthoodbot @ gmail dot com “ , I didn’t hesitate to reach out to him and that was how the Long search on how to recover my hard earned money came to an end , within just 48 hours I was filled with joy after receiving my funds back to my wallet .. we texted more on telegram : @KNIGHTHOODBOT9
Lots of people talk about investment basics below (FIRE is a bit crazy for me, but worth evaluating for the underlying message).
For me it's about respecting money and saving like social security will be next to useless by the time you retire. To start, save for a 6-12 month runway, invest in ETFs (QQQQ - nasdaq100 / IVV s&p500) and take advantage of employer matched 401K (it's free money!). Don't pick individual stocks as you most likely don't have the time to invest in this.
I think it's too easy to buy crap you don't need using a credit card. Yeah I fancy that fancy-coffee and muffin for breakfast, click 25% tip and don't even look at the total, just click buy-now. It's magically gone from your mind.
TIP-1: Stop using the credit/debit card (yeah, yeah, everyone thinks this will be nuts, but it will work). Make it a pain to spend money. Going to the ATM because you keep burning all your cash makes you aware of all the crap one buys. Yeah, you could use spreadsheets and technology and all that to track, but nothing is more of a pain than going to your ATM. And really stop buying coffee and if you can, make your own lunch/eat leftovers.
TIP-2: Don't go into debt for crap you don't need. I hate debt (yeah, it's probably not cool). I don't have ANY. I pay of my credit-card in full and I get a massive sense of security that I don't have anyone chasing me.
TIP-3: Do you really need spotify/netflix/fancy iphone. Oh you'll be miserable you say. Well go to the library (yeah they still exist) and read some books.
TIP-4: Don't lease, as one tends to overspend. If you can't afford it, save up.
> The Richest Man in Babylon is a 1926 book by George S. Clason that dispenses financial advice through a collection of parables set 4,097 years ago in ancient Babylon. The book remains in print almost a century after the parables were originally published, and is regarded as a classic of personal financial advice.
> The parables are told by a fictional Babylonian character called Arkad, a poor scribe who became the "richest man in Babylon". Included in Arkad's advice are the "Seven Cures" (or how to generate money and wealth), and the "Five Laws of Gold" (or how to protect and invest wealth). A core part of Arkad's advice is around "paying yourself first", "living within your means", "investing in what you know", the importance of "long-term saving", and "home ownership".[1][2][3]
> The content is from a series of pamphlets distributed by U.S. banks and insurance companies in 1920–24; the pamphlets were bound together and published as a book in 1926.[4][5] The book is often referred to as a classic of personal financial advice,[1][2] and appears in modern recommended reading lists on personal financial advice and wealth management,[6][7][8] which has kept the book in print almost 90 years after its first edition with over 2 million copies sold.[9][10]
he's good for people who are in massive debt and can't control themselves. people need to graduate themselves from him once they don't fall into those categories as his advice will hold people back if you blindly follow his hard advice.
To me it seems like a lot of people enjoy having things more than being free and not having to worry about getting paid. Also 'spend less than you earn'. As simple as that - yet people struggle to follow this. It also boggled my mind to find that someone with masters degree believed they had money - despite it being cash withdrawn from a credit card. When challenged why do they not pay back their credit card - I heard it's the feeling of empty account, and that money is for -just in case-. Yeah, you are paying % monthly on that just in case, that you could get from a credit card if it really happened. That $ on the account also was affecting that person's spending habits - thanks to the avoidance the feeling of being out of money. Crazy - money illiteracy is real.
I don’t understand. Cashing out a CC, paying fees, avoiding being out of money and having $ on the account - these statements mixed together make no sense to me.
Sorry, I mixed up one thing:
Paid for things with credit card. Got paid salary on current account but not paying back credit card out of fear of having 0 on current account. Paying fees while the money on current account just sits there, making that person believe to not be broke. Ridiculous
This blog has clear information on how to be deliberate with money, and retire early on a fixed income. I also find his writing funny and enjoyable to read.
The "deliberate with money" is really the whole key. Once your income is greater than your expenses, you can work out many things to do with the surplus, but getting out of the "I will just buy this now because I need a bit of joy" is huge.
One go-to I used for awhile was hamburgers - does the price of this thing please me more than the equivalent number of good burgers would?
Very valuable point. People joke about 'retail therapy,' etc. and I think this is a real problem, where buying things becomes an addictive habit used to escape negative feelings about other things. Its especially easy now that you can shop in an instant online from anywhere.
I think one way to combat this is to setup some rules- e.g. add non-urgent purchases to a 'cart' where you consider them for a week before actually buying, and don't ever buy non-essential things when you aren't feeling well emotionally.
This is why when you get deep into ideas about responsible money use, it ultimately ends up focusing on concepts like Stoic philosophy and Cognitive Behavior Therapy (CBT), where you can work on reprogramming the internal narratives that lead to buying things you don't really need or possibly even want.
Imagine you're lanky or fat and you want to build muscle and get in shape.
Saving is like going to the gym and lifting. You'll look and feel a ton better.
Putting together a budget is like going to the gym with a routine and maybe a rough diet plan. You'll get there faster.
Investing is optimising your routine so that you hit every muscle group once you're starting to plateau.
But it's all built on the basic mindset that you need to go to the gym. It's not optional, you just do it.
The main thing is to build the mindset of saving. You spend what you _need_ to, and perhaps a bit on top for fun. Money that comes in is saved by default.
1. Spend less than you earn.
2. Learn about investing and develop an investing mindset. Investing can mean stock, but also a personal skill like cooking or a small business, a thing you can rent out, whatever.
3. Repeat.
My friends live paycheck-to-paycheck and I got $300k stashed in cash and a mix of investments. I'm not living for the money, but this world is full of costly stuff you definitely do not need - and it really surprises me what people are spending money on.
I got $300k stashed in cash and a mix of investments
Why?
I can understand if you're saving to buy a house outright for cash, or to invest in a startup that needs a chunk of capex at the beginning, or something, but just sitting on a pile of depreciating cash assets is silly in an economic market where retail inflation is running at ~10%. If you're literally just holding cash because you can't think of anything fun to spend it on then that's quite sad.
There's something to be said for having some cash, despite inflation. Obviously you want enough to cover short-term emergency situations. But beyond that, the advantage of cash is that it's liquid AF and having a stockpile can enable you to take advantage of opportunities that you might not be able to seize if you don't have cash on hand.
No, you don't want your entire "life savings" in cash stored in pillow-cases under the bed, but you do want enough cash where the value of "enough" varies depending your circumstances.
For all we know it could be 10k cash and the rest investments.
Could be, but regardless, it's very unlikely that his investments are beating inflation at the moment so the point still stands. By holding on to the money its value is shrinking.
I've always thought that a good metric is that if you had to leave the US in a real hurry (not sure if it would make a difference, but for e.g. Yellowstone is going to explode), do I have enough liquid to charter a private jet to somewhere else.
Probably $80K to $100K for that, plus extra for snacks. :)
One irony between investing and spending is that people often use "investment" to refer to a big expense whether it provides a return or not. It's a dangerous mindset.
It's an "investment" in the sense that you are getting some conceptual return on it, even if the return isn't financial. For example, a $300 pair of boots is an investment, because you expect to get more than $300 worth of utility over the life of the pair of boots.
A Random Walk Down Wall Street is a real classic. First published in 1973, updated several times and still relevant today. Gives you a great idea of what investment is, how you should think about it, how the markets are structured and some practical advice that works for 90%+ of people.
Check out pensioncraft on YouTube. The guy is an ex UBS macro guy and is very good at explaining everything from the most basic financial stuff through to macro economics in a way that you can relate. The YouTube videos are obviously free and he has his own site which is about $200 per year to join. Part of that includes access to a Slack forum where you can ask anything you like.
If you're paycheck to paycheck, the first thing to do is cut spending.
Generally the biggest expense (after housing) is food and the easiest to replace is entertainment. Don't eat out and cancel all your non-utility subscriptions/recurring charges.
Paycheck to paycheck is vague though. If that includes having a secure job putting money into a 401k and paying down a mortgage maybe its a perfectly good strategy. If you aren't doing those things then you need to change.
Paycheck to paycheck is an idiom that means you're spending all of your earnings on basic day to day expenses (whether necessary or discretionary). No or negligible retirement contributions, emergency fund, or savings. It aligns with short term thinking. Such people are often one major event (medical expense, car problem, job loss) away from disaster.
100% agree, i've got that, but how can I make most of my 401K and mortgage (e.g. through Roth IRA or refinancing? I saw some mention of both, so will have to read up on that).
I read an old book about a decade ago called “The Richest Man in Babylon” which was an easy read. I don’t know what it was about it but something clicked for me and things started looking up after that.
Consistently spend less than you make is the most important part. Then always factor the risk in an investment according to your ability to handle risk.
The best book bar none on investing is "The Intelligent Investor" by Benjamin Graham. So if you want to learn about investing in a way that is a sustainable way to build wealth for the long term, that is the one to read. The original is pretty old, but the advice remains sound. The modern edition with the original text + chapter updates from Jason Zweig is the one to go for.
That said, it sounds like you have some financial foundations to build before investing is a realistic option.
In my case I was lucky. At the age of 25 I was also living paycheck-to-paycheck, and did an obnoxious 5 week trip around Europe which left me broke and unable to make rent. I had to ask my father for a loan to get me through, and the whole experience of that was humiliating. Especially because I had built up a self image of being financially independent. Within a week of that humiliation I had set up a planning spreadsheet and set up savings goals to never have to beg for money again (and it worked).
Point being that, for me at least, setting up the spreadsheet was the easy part - the hard part was deeply having the psychological shift of "I really need to save money".