What I Learned While Getting My Finances Together, Once And For All
I've recently done the adult thing: I’ve started sticking to a budget and saving for retirement. It might seem daunting, but once you sort out your finances, the hard part is over.
My friends and I like to push each other—to pay down our student loans or credit card bills, save a little more cash each year, or plan for unexpected financial emergencies. Using online resources and a bit of my own handy work, I've come up with a budget and savings plan that worked for me.
Here’s what I learned along the way:
Let go of past mistakes.
You can’t go back and start saving earlier, or un-lease a car you can’t really afford—but you can start making better choices now. I spent countless hours agonizing, when I should have been taking action.
Don’t compare yourself to others.
Truth: I started sobbing when I had my finance-whiz of a sister help me allocate the ROTH I opened up two months ago. My balance: $300. Hers? $13,476. I just couldn’t believe that I was so far behind.
But I couldn’t go back in time and start saving earlier, and crying wasn’t going to help me. But what would? Automatic transfers. Which brings me to my next point.
Automate everything you can.
Especially if you are having anxiety about money, you need to set up systems that won’t get derailed when you’re stuck in a moment of anxious or hopeless thinking. It might take you a couple tries before you find an automation strategy that works.
I’m not the type of person who is going to be detailed day-to-day, but I can force myself to dive deep into my spending once or twice a month. I’ve learned I’m an all or nothing type of person—so I try to come up with strategies that align with my “habits.”
Have something special that you’re saving for.
One of the hardest parts of getting my finances together was having to say no to fun things—and then watch my friends doing them on social media.
As it turned out, having a systematic savings plan helped me get over this. I knew that $50 a week was being saved for my friend’s bachelorette party and wedding. I knew I was setting aside another $200 a month for a vacation that’s long overdue. That's a good feeling.
Different strokes for different folks.
There was a time when I was backpacking in Colombia, when I wasn’t sure I was ever coming back. I had fallen in love with salsa dancing and a boy with a motorcycle—stereotypical, I know.
“I’m just going to join the gig economy and travel,” I thought. Some people say the gig economy celebrates working yourself to death. But other people totally make it work. Me? Turns out I’m way too anxious to not have some kind of plan.
Invest in your future earning potential.
One of the best investments you can make is doing the work now, to impact your earning potential in the future. One of the things looming over my head—and causing some of my financial anxiety—is the fact that I took a pay cut at my last job.
But for me, learning is the most important thing right now. And I can honestly say I learned more during this period of my career than I did in college. Invest in yourself now, and you could benefit financially later.
Figure out what you value most, and spend your money there.
I’m not going to lie: Being on a budget sucks. Planning for the future also sucks. We see our friends on social media doing cool shit all the time. We also want to be doing cool shit all the time. But the thing is...we can’t. Life just doesn’t work like that, so hey, let's stop pretending that it does. And save some cash along the way.
Words: Meghan Raab
Photo: Daria Kobayashi Ritch