Tag Archives: money

FYI – You can have your financial cake and eat it, too

sedona

A few days ago, a response to this article on Elite Daily was posted on one of my favorite blogs, The Financial Diet. After reading both pieces, I have to admit I was a little fired up too.

If you don’t feel like reading either (I do recommend you read them as they are both thought provoking) I’ll sum it up for you here. The Elite Daily article presents the idea that saving money in your 20s is stupid, you should spend and enjoy all your money and focus on landing yourself a $60k pay raise instead. It goes on to say that by focusing on saving, you apparently are accepting defeat and robbing yourself of potential.

The Financial Diet article firmly stands against this advice, stating that it is idiotic to follow, and more importantly that it is horrible advice to seek in light of the issues we are facing in our 20s – the fact that many of us have just thrown in the towel when it comes to finances (due to high levels of student loan debt and a crap economy) and made false assumptions that it’s okay to live it up now and just figure it out later.

What aggravates me the most about the Elite Daily article is that it presents life and finances in such a black and white manner. You can be wild and crazy and spend all your money having a supposed “fantastic” life, or you can be a non-career driven loser who saves all their money and never has fun. What? It’s unfair to take such a complex subject (finance) and present it in such an extreme manner.

If there’s one thing I have learned by starting to clean up my financial act, it’s that successful money management is all about BALANCE. It’s not about having one or the other, it’s about having both. Enjoying your life in the moment, while glancing towards the future every once in awhile to let your future self know you’ve got her back.

Listen – I am all for living it up in your 20s. I did it and it was a fun and wild time of my life, but in the past few years I’ve wisened up to the fact that there are things I want in life in addition to new clothes and nights out. There are certainly places in my life for those things, but my bigger goals are becoming equally, if not more, important as I get older. Among these: the freedom to pursue work that truly makes my heart sing, without having to worry primarily about money as a deciding factor, marriage, eventual retirement, more travel. All require – you guessed it – MONEY and in order to have money you have to both make it and save it to meet your goals.

Before I continue, I do have to say that there are a few points the article makes that I agree with. Making more money for more example. I admit to being afraid to ask for more, even when I know I’m worth it, or uncertain about setting up more income streams for myself even though deep down I know I could succeed. I’ve given away things for free without second thought. I’ve never negotiated pay. I’ve definitely undercut myself more than once.

I’m also fully on board with taking some risks while you’re young. At 23, I quit my job and moved 1,000 miles to live with my long distance boyfriend after 1 year together. I didn’t have a job lined up and had very very little money. But it worked, and 4 years later I’m still here and happier than even with my decision. I’ve also switched up my career multiple times and never looked back.

Your 20s are certainly a great time to make big changes and try new things. I wholeheartedly agree with not holding yourself back when it comes to making decisions that can potentially improve your life drastically. However, making more money and taking risks as your sole strategy fails to account for the numerous times in life in which it is necessary and wise to cut back, proceed with caution and save a bit. As with everything in life, balance is required in order to be successful.

In a way, I think our 20s are a lot like the earliest years of our lives. We’re born, and we get to have fun and generally worry about nothing while someone else takes care of us. But as we get older, we learn and grow, and eventually it’s time for us to stand on our own two feet. We learn to walk, we fall down, we get up again and try until we’ve got it right. And, eventually, we have to make a choice after high school pertaining to our general life direction. The choice we make after high school doesn’t necessarily have to be the only path we follow, but we care enough about our futures and understand that it’s important to at least give ourselves some sort of rough plan to follow.

Your 20s are a lot like this, just more grown up (read: confusing, frustrating, exciting) and completed in a shorter timespan. If you’re anything like me, your early 20s were spent bar hopping, meeting new people, living paycheck to paycheck, worrying about rent and bills, spending money like its hot, having credit card debt but not really understanding the full implications, and generally not wasting any time thinking about anything past the next few months. But give it five years or so (at least that’s how it happened for me) and it’s time to figure out what you actually want to do with your life, get your financial shit together, and start thinking about your future. Nobody said you can’t have fun and stay out til 2am drinking, or blow your tax return on a tropical vacation you’ll remember forever. But you’re also foolish if you can’t be bothered to look out for your future self at least a little bit.

Your 20s are a time to have fun and enjoy youth, travel and explore, but they’re also a time to start taking care of yourself. Look out for the future you just a little bit – she’ll be grateful for it. You don’t have to choose between being the fun crazy twenty something carefree girl or the smart saver with no social life or career goals – instead, you can choose to be the girl in between who knows the importance of both sides and chooses to plant her feet firmly in the middle.

Which girl would you rather be?

Your bank account called, it said “put down the shoes”

(source)

Step one: admit you have a problem. Hi, my name is Stephanie, and I am addicted to shoes.

I am in love with shoes, the kind of love where I’d buy shoes instead of groceries. The kind of love where I walk into a store, see a shoe from afar, picture myself in an outfit and have to buy it kind of love. But now, being faced with a closet full of shoes I rarely wear, I ask myself, “is this where I really put all of my money?”

It’s comparable to that moment in Sex and the City when Carrie is going to get kicked out of her apartment if she doesn’t buy it and is shocked to realize she’s spent $40,000 on shoes. Then, in a time of monetary need, she has nothing in savings and a closet full of expensive footwear to blame.

Often I wonder if I’m going to have to have this terrible moment of clarity. Now that I live with my boyfriend in a HOUSE (read: not an apartment) I now share financial responsibility with a very financially responsible man who no doubt is a much better saver than I. Would I be prepared for a household disaster? What more could I offer up than a pair of Rachel Roys if God forbid an appliance broke? A hurricane did damage to the house? My car died?

I suppose this whole thought process is a very accurate depiction of how I have grown up financially over the last few years. Before, I’d go online shopping, see a pair of shoes I loved and convince myself my life wouldn’t be the same without them in my closet. It was no matter that I’d probably only wear them once, to a dark and dingy bar where nobody is bothering to look at my feet anyway, and they’d come home smelling like bad pick up lines and cigarettes. Now I find myself asking a question I never thought I’d think of, let alone ask myself: “Stephanie, do you absolutely NEED those shoes, or do you just really really want them?” Hint: the answer is usually (sadly) the latter. I’ve learned to starting giving up the shoe addiction and thus save my money for bigger and better things with better payoff.

Truthfully, I’ve learned that there’s a gap my shoe addiction can’t fill. When I buy a pair of shoes, I feel that moment of instant gratification and tell myself I’m going to love and cherish them and wear them everyday. The reality? I put them on, complain the whole time about how bad my feet hurt, and can’t wait to get home and kick them back into the closet where they belong, sitting there on display behind a closed closet door. Shoes can’t give me that warm fuzzy feeling I get when I’ve spent my money on ingredients to bake a birthday cake for my boyfriend. They can’t excite me in the way that saving up for a huge patio project can. Honestly, I can’t stare at my closet full of shoes and really tell myself that each and every pair was an excellent investment, but when I walk into the living room in our house or our garden out front I couldn’t be more happy that I put my money towards those things.

As I’m entering this new chapter in my life, so many of my priorities are changing, including financial ones. I’ve learned a ton about managing finances from my boyfriend, and I’ve learned even more from making my own financial mistakes. Now I’d gladly trade in those fabulous heels for a new patio, kitchen remodel, or on ingredients for a romantic meal at home. Besides, who says I can’t look fabulous doing yardwork in my rubber garden shoes?

What have you given up as a result of becoming financially independent? Have your priorities changed in terms of where you put your money? Are you shifting from a spender to a saver?

The free money concept

I don’t think I know anyone who isn’t in some sort of debt, whether it be student loan debt, credit card debt, or debt from a mortgage. And in a country that is in debt itself, it’s pretty hard to have a good understanding of money and how to manage it. Even now I’m still battling debt (although I’ve come a long, long way), so when I saw Molly’s post about her personal debt story, it gave me the courage to share mine as well.

I got my first credit card when I was in college. I was working part time in retail and the company had a store card. I figured it’d be a good way to build a little credit and I couldn’t do too much damage with the low credit limit. Instead of being responsible, I started spending money I literally didn’t have. Something new came into the store? I had to have it. It didn’t matter if I didn’t have the money in checking, because I had all the free money in the world I could need thanks to my credit card. I may not have been the “girl in the green scarf,” but I was happy to be the girl in the leopard scarf, red shoes, black dress and everything else I bought out of want instead of need.

My credit card count jumped from 1 to 3 and I started working at a more upscale retail store, so my debt only grew more as a result of my on a whim purchases. I was convinced I was getting a great bargain and that I was smart for getting clothes at discounted prices, but it’s never a bargain when you’re spending intangible money that doesn’t belong to you, money that isn’t real, money you didn’t earn.

One day, it finally hit me. I had spent thousands of dollars on almost clothes alone. I used all the money I’d made from photographing a wedding to make a credit card payment, and it still barely made a dent in what I owed. My debt wasn’t huge, but in comparison to the money I was earning each month, it was overwhelming. I’d justified shirt after dress after scarf convincing myself I needed it, paying no attention to my monthly expenses and things that were more important, like school supplies and groceries. I vowed that I would cut back and really start focusing on paying the cards down, but I still kept slipping up.

It wasn’t until I made the decision to move to Florida that I really faced my problem. If I moved, that would mean no job, and I didn’t know for how long. I didn’t want to be burdened with my credit card debt, and I didn’t want John to become responsible for my own bad choices. I also had student loan debt that I was paying down, and I’d have no way to keep up with all of my expenses if I was jobless. Then and there I vowed to myself to get rid of as much debt as I possibly could before moving.

I stayed true to my goal, cutting back on things I didn’t need and budgeting my money each month. I wrote down my monthly expenses and subtracted that from my monthly earnings so I could visualize where my money needed to go and how much I would have left over. I found writing it down helped me understand where my money was going and how much I really had leftover (sometimes hard to see on an online statement). I still had fun, but I paid a lot more attention to what I was purchasing and if I could actually afford it or not.

Although I didn’t get rid of all my debt before moving, I’m proud to report I only owe $400 today (besides my student loan, but that’s another story). I’ve learned to treat my credit card as an emergency (no, not fashion emergency) card rather than something to be used on a daily basis. As a result of going through credit card debt, I’ve learned a lot about the importance of having a budget and managing my money each month. I’ve learned that you should never ever spend more than what you make, because it can and WILL catch up with you. And more importantly, I’ve learned that I don’t always need new clothes or shoes and my wardrobe isn’t going to suffer without that amazing dress I saw at the store. Already, with two of my cards completely paid off and the third close to being paid off, I feel as though a huge weight has been lifted off my shoulders and I know the feeling will only be better when I make that final payment.

Have you struggled with debt in the past? How did you or are you overcoming it now? What did you learn from it? Feel free to comment or inbox me: twentysomethingsteph@gmail.com.

Photo source.