The Financial Diet summary

One of the fun things about being an adult is the freedom it brings – to stay up late, or to spend your money exactly how you like. That freedom is a rush, and constructing a strict budget for yourself might feel restrictive. But without one, you will be forever financially lost.

So the first, most important step in your financial diet is to establish what money is coming in and going out. There are lots of useful apps you can use to do this, like Mint or You Need a Budget, but you can also just make a simple spreadsheet.

Ask yourself a question: are you working for your money, or is your money working for you?

If you are stuck thinking about working for your money, it’s time to become your money’s boss. Make it work for you, as soon and as much as possible, by investing it.

For many of us, thinking about investing conjures up images of men on a trading floor, shouting into telephones as they frantically buy and sell stocks and bonds. The good news is that the reality of investing is very different and much simpler than that. But before diving in, there are two things you need to do.

First, build an emergency fund. In addition to always having a little money in your standard checking account for everyday expenses, you should also have an emergency fund covering at least three months of living costs. You never know when you might get sick, have your house flooded or experience some other disaster that requires some immediate cash.

Setting money aside in a fund isn’t the only way to invest in your future; you can also expand your career horizons or build your skill set and experiences.

A great way to do so is to find a mentor who can help you. One of the author’s early mentors was Joanne Cleaver, a journalist and entrepreneur. Cleaver argues that networking is a key to building a successful and satisfying career, because being known by the right people for the right things always pays off in the long run.

Many millennials have a strange relationship with food. It’s not necessarily that they eat badly, but they are more likely to slave over a fancy recipe found on Pinterest than to rustle up something simple from leftovers in the fridge; they’re also more familiar with local takeout menus than with good, honest, everyday cooking.

This approach to food can cost you. It costs you the pleasure of eating a simple home-cooked meal and, of course, it costs you financially. So if you’ve done your budget and are horrified by how much you’re spending on food, maybe you could learn a little from Italian grandmothers.

Think of money not as a way to buy happiness, but as a way to buy a happiness construction kit. It can’t buy you inner peace, but it can buy you the comfort and security you need to take risks and pursue your ambitions. Even then, it can be hard to maintain a sane approach to money, your future and your life fulfillment. But here’s how you can.

First, don’t dream big – dream medium.