Recently I’ve been thinking about the past year I’ve had. The easiest way I can describe it is to call it balanced–the tough events and circumstances were relentless; the joyful moments were intense. Although the pessimist in me is more inclined to write it off as a bad post-grad year, the realist can admit that it wasn’t all bleak. Where they both meet in the middle, however, is an agreement on money being stressful.
Money, amirite? Wish I had more of it; wish it didn’t matter; wish that existing comfortably didn’t have a price tag attached to it, because we, as a society, have internalized the belief that the poor have only themselves to blame for their destitution. I am by no means destitute, but could I use a couple extra hundred dollars in my pocket? Of course.
I originally intended to write a “things I learned over the year” list, but that didn’t feel nearly as significant as the things I learned about money and handling money and understanding money. Over the past 365 days, money and finances were at the center of my stresses. Well, perhaps not the center but the crust if you will. Though I’ve been getting a grip on my dollars, do I wish I had a tighter hold on the reigns? Yes. Do I wish that circumstances hadn’t walked into my life and stayed for nearly a year? Absolutely. As much as it is what it is, as little control I had over the way events played out, I did what I could and I think I’m doing a good job of keeping myself out. So I’ve decided to share with you all some tips I collected from my dearest of friends, mentors, and the interweb. As they say, it takes a village.
- Be realistic.
That new foundation just melts into your skin; the final book of a series you’ve been waiting for since the dawn of time came out and you couldn’t not get it. I get that. I really do. But now you’re eating eggs until your check at the end of the week. I guess that $45 dollar foundation could’ve waited, love.
I’m not saying don’t have fun. I’m not saying it isn’t okay to treat yourself. What I am saying is a treat is so much more enjoyable when it’s either free, a gift, or affordable. I get that’s it not fun to be the friend that bails on a group hang 77% of the time because you can’t afford it, but real friends will understand that when you have the money you’ll be the first one ready to go. I’ve definitely found myself in the cereal-for-dinner gang because the dinner with friends the weekend before wasn’t in the budget. Listen to your budget; it wants you to thrive.
- 30 is the magic number.
If you live in New York like me, and if you’ve ever looked at StreetEasy, even if for the sheer fun of looking at apartments, then you’ll know that you can’t move anywhere without a minimum credit score of 650. During my apartment hunt that was the average credit score I encountered the most. I don’t know what it’s like in other cities, but credit is everything here.
Take it from someone working her way out of credit card debt: do not spend over 30% of your credit card limit. If your limit is $2,000, you’re allowed $600 of that. Pay your credit card bills on time, even if it’s just the minimum payment. These little habits are literal protein shakes for your score. I wish I had known this rule earlier, though it wouldn’t have mattered. My credit card debt comes out of necessity, and while it’s not fun I understand why it exists. I cannot stress enough to you that a credit score can make or break you. A credit score stands between you and a loan, a car you need for work, an apartment. Don’t dig yourself into that hole. Even when they raise the limit, 30%. That’s it.
- Look at the numbers.
For me, it was hard to get a grasp on my finances because I had everything tucked away in my head. I’m decent at remembering when things are due and how much they are, but very early on realized how badly it was affecting my money when I would forget or when I failed to realize that a recurring bill would be due earlier than usual, resulting in more stress. It kind of sounds like a “duh” piece of advice, but listen to me: write things down. Write down their due dates. Everyone’s got a great mental notepad until the air conditioning bill wrings your wallet dry.
3a. Spreadsheets are your best friend.
You need to write things down. For a while, I was tracking my finances in my bullet journal, and perhaps that method is an effective one for you, but it wasn’t that helpful for me. I was writing down the numbers and dates but I didn’t feel like the information was collected in an effective way. So I decided to give a spreadsheet a try and it was a game changer.
I made one on Google Sheets and it’s by no means bursting with pie charts. It is, however, showing me how my savings are collecting or depleting, how my debt is increasing or decreasing. I am effectively able to see what my money is doing and I feel I have more control over it simply because I get to track my income. Here’s an example of what my sheets look like (these numbers are random):
Consider your bills, your debt. Make your spreadsheet work for you. It doesn’t have to look like this at all. What’s important is that this information is consolidated somewhere and that it makes sense to you. That’s what the spreadsheet helps me with–understanding why my finances look the way they do.
- You need a safety net. Seriously.
I once had a savings account during college, but because I was dipping into it so often to cover my ass from starvation/my school account becoming delinquent, the bank I was with at the time changed it into a checking account. At the time, that was good for me (no more fees!) but thinking back on it I shouldn’t have opened it up. That, however, was the start of teaching me how crucial it is to have a cushion, savings, anything to soften the blow when you crash. Surprises happen, life happens, there’s no avoiding that. So why go through it with no guarantee that you’ll come out of something okay?
Do your research on the types of savings accounts out there and see which one works best for you. If you can, keep money flowing into it. I used to have a formula on my spreadsheet that would calculate about 20% of my check to be put into savings but after my pay schedule changed I now play it by ear. Still, I make sure that some kind of money is going into it, even if it’s small. Being consistent and having the willpower to only use it for emergencies or its intended goal really made a difference. Because of that determination, I was able to get myself a new laptop and move into my new place. Set goals for yourself. Build up that willpower. It’ll pay for itself.
- Humility is hard, but it is a virtue worth learning.
Anyone close to me knows that one of my Achilles heels is asking for help. I am the kind of person who doesn’t want to burden others; I think about the things my friends and family are going through and I think, “I can get out of this, I don’t want to disturb them.” It’s always been easier for me to say “Don’t worry about it, I’ll figure it out,” and I do the figuring out at the cost of my mental peace and checking account.
Recognize that your friends, adults that you can turn to for help, family, anyone in your inner circle, want to help you. You’re not a charity case. You’re a person with circumstances working with you, against you. There is only but so much we can control and if someone is offering to help, know that it’s not a cruel prank. Of course, exercise judgment. If you know accepting someone’s help would serve as the catalyst of something more difficult, then you are allowed to refuse. Understand these decisions you’ve made. Understand the weight of them, but don’t get lost in the what ifs. If you don’t have to go through it alone, don’t.
I have people in my life that exist on opposite ends of the financial spectrum. I know people who know what a struggle meal is (my favorite growing up was Hamburger Helper). I know people who go to the Caribbean every year. I know people who have traveled only once in their lives, and that was due to school funding. I know people who are free of student loans. It is easier for me to relate to people who have grown up in similar conditions; I can be so jealous of people who don’t/very rarely stress about money.
The combined lesson I learned from the above 5 is that everyone wants to be the other guy. We compare ourselves to people who we think are in better situations. I have friends who are well off, who won’t ever have to think about how they’re going to afford their next meal, but who suffer in ways I am blessed to say I have never encountered. It was more than just realizing that we’re all human beings who go through terrible things but that comparing is truly pointless.
My goal is to grow me and my finances into a place of comfort. I want the cushion to cover a sudden bill, to be there when I need a new piece of equipment, or when I need a weekend getaway. I don’t think that’s unattainable. I don’t think that’s unreasonable to ask for. I am going to take the privileges I have and use them, and if along the way I can help someone else then I will. We’re all out here trying to stay afloat.
Now, go on and close that GrubHub tab. There’s food at home.