My Personal Finance Journey: A Long Way to Go
Young 20-somethings and money are a volatile mix right now.
Money management is key to a fulfilling personal life & future success. It’s worth the time, energy, and sacrifice now, in my eyes, to be able to try for a better future.
I hear constantly, from peers, my partner, coworkers, and especially here on Medium is that there’s no economic hope for Millenials and Gen Z! “The Boomers ruined it for us” or “My student loans are so expensive” (not ignoring that they ARE stupid expensive, just pointing out an observation).
Growing up, my family’s finances were a roller coaster. I’ve lived through some strange & notable experiences: Hurricane Katrina, the 2008 Recession, & the Pandemic. I was in Houston for Katrina, Detroit for the ’08 Recession, and Seattle (Ground Zero) for the Pandemic.
Now, thankfully, I have stable and gainful employment. It pays my bills with a little extra for fun and savings and paying off debt. As a college student, I’m also fully aware I’ll be accruing more debt over the next few years. As a 20-something, my net worth is tanked until this is under control.
Wow.
The whole purpose of this post is to illuminate the fact that what you’re going through is normal. Economic flux is normal. Financial hardship has always existed. What hasn’t existed is the sense of urgency now upon us due to things like climate change and the resurgence of oppressive policies that restrict your economic mobility.
I want to help you figure your whole situation out because I’ve realized that if we keep believing there’s no hope, then we’ll stop trying and to not try is the worst thing we can do.
Where We Are
We all know we’re in a recession — the worst one since 2008. Even though the economy recovered a bit earlier this year (roughly 33% in Q3) but it will take until 2023 to really see any steadiness with our GDP, the most critical economic indicator. Unemployment, a frequently cited number, does not include the underemployed: people whose hours got cut & are unqualified for benefits under their employers. This doesn’t include a whole slew of other issues that are prevalent and emergent.
“Since the onset of COVID, Uncle Same has poured more than $5 trillion (and counting) into the economy.”
In this Forbes article, author Dan Runkevicius follows the above quote with the points that “on paper — Americans are richer than ever” and yet, “inflation still hasn’t budged.” These are two important distinctions because the relationship between “money printing” and inflation is a correlation rather than a causation. We could be on the edge of a massive inflation risk, but the other argument offered in this article posits that the future is brighter because “printed dollars don’t automatically translate to economic output.” More people are saving than in recent history. State of the union, indeed.
Now, when it comes to women + money things get funky and I do my best to level my temper.
The Gender Pay gap is only the tip of the iceberg. Many women, especially women of color, have left the workforce en masse due to COVID closures and lockdowns across the country. The Motherhood Penalty should make you angry — any sensible, considerate person would be. Women also make up about 75% of the essential workforce, so they’re also the most at risk. And yet, we women are still fighting for wage equality across the board.
During the pandemic, I saved and spent more money in two and a half months than I had ever in my entire life. Then my workplace re-opened in late June, early July, of 2020 and suddenly that yummy stimmy was no longer hitting my bank account every week. I was deadass broke again, working 10 hour shifts four days a week just to pay bills and eat and afford no leisure or luxury.
I don’t know about you, but I hate living paycheck to paycheck.
Solutions Feel Better Than Shame
You’re probably working your 9–5 while you read this. Good for you. Keep that thing on lock — a paycheck, especially a secure one, is a blessing. Remember that many people don’t have that right now.
My goal in late summer of 2020 was and is simple: Financial Freedom.
Not the FIRE movement you read about everywhere. Financial Freedom as I define it is subjective to my own goals and lived experience.
I have a threshold of life and leisure that provides comfort, purpose, and adventure — I defined it by giving it a number. My goal income to maintain and grow is $80,000 per year. That salary would allow me to make healthy financial decisions without falling into bad habits, with my current mindset.
Money management apps feel gross sometimes. I get a tad nauseous looking at my bank account. Worry isn’t a good look, it gives me wrinkles and it stresses me out more than I need.
BUT I found Ellevest and I’ve stuck to a routine with a paper planner and my Google calendar that really hits the sweet spot of personal finance organization for me. I don’t like to do too much because part of my financial freedom goal with that $80,000 was to have leisure time included in my schedule.
I pay about $900 a month for rent, about $150 a month in utilities (living in a house with three roommates will look like that in Seattle), my car payment is $275, my insurance is $330, I pay for my college classes (college student life, baby!) — and already that’s almost $1700 in bills that I dish out EVERY MONTH.
Tryna do the impossible — make money happen while I spend exorbitant amounts of it. Sorry, not sorry that I’m not about to live in squalor because I know I deserve a decent quality of life in one of the most expensive cities in the world.
I’ve paid off $8,000 of debt, saved my baby emergency fund, haven’t missed a bill and have leisure time and can afford little luxuries like doing my nails and the occassional nice dinner date with myself.
So far, my plan is working out well.
What My System Is
If you’ve read this far: kudos! I appreciate you. Money management & personal finance is a growing interest in my circles and I personally don’t see enough people interested in their financial health in their mid-20s. So key.
Monthly
- Log bills into my Google calendar & my Passion Planner. When I have a bill, I add it to my Google calendar as an event and then copy it into my Passion Planner
- I then do the same for outings: most are planned. Things like appointments, I name them and total how much the visit will cost. The key is to be transparent with yourself about the exact amount that’s leaving your bank account. Let none of it surprise you.
Bi-Weekly (Every Payday)
- I don’t know about you, but I get paid twice a month on the same two days. My job is weird and pays us on the 5th and the 20th instead of on the 1st and the 16th like most other companies. What that means is, I put away half of my rent and the bills due before the 20th (including what I put into my savings) into an easy-access savings account every paycheck.
- When those bills come due, I transfer the money back into my checking and pay off the amount. With my savings, I transfer them to a high-yield savings account on a different card so they become less accessible but still manageable to retrieve in the case of an emergency. A portion of that amount gets transferred to a small investment account through Ellevest.
Generally, I try to limit my daily spending to under $40 — which is within my budget. Food for my partner and I is split on an “as needed” basis, I prefer to eat at home and he likes meals out so it works to split the bill.
Final Thoughts
Money management is the best thing to have ever been implemented in my life. I am so proud of myself for breaking out of the toxic cycles of spending and debt that I grew up with — that most of us grew up with.
This system works for me and is also constantly in flux. Your mid-20s are a confusing clusterfuck of fun, surprises, and adulthood and, in my opinion, need a lighthearted seriousness to see it through to a hopeful future.
Here are some of my favorite personal finance & abundance mindset resources:
The Financial Diet on YouTube
Aja Dang on YouTube
Ellevest Blog
The Budgetnista
Thanks for reading!
Follow me here on Medium for more serious-optimism: Jade Kanui Roque
