The absolute most important and meaningful thing I did for myself when I turned 30 (besides going on an SSRI!) was to get serious about money. This is especially important for women, because sometimes men will look at you like you don’t know what you are doing and it is always fun to enrage the shit out of them when you show that you do.
But if you’re just starting out, money can be scary! I get it. But also, no excuses. If you can understand 10-step Korean skincare or cropped flares, you can understand your finances. For what it’s worth: not so very long ago my (much younger) brother had to explain to me that no, my money does not actually live in the bank, nestled snugly like a hamster waiting for someone to collect it at my request, and yet recently I spent six months as a contributing editor at a personal finance website. WE ALL HAVE TO START SOMEWHERE.
Savings: The how and what
Saving money is a thing that is karmically important, so do it — unless you have major loans, in which case, you should dedicate every dime to getting your house in order. Let’s get that clear out of the gate: debt is bad (although often necessary), and interest is not an animal with which you want to do battle. If you are struggling with loans — student or otherwise — the first, most important, no-excuses step is to get clear about the amount and put a payment plan in motion.
Debt-free, braless, wind in your hair, you can now tackle retirement. When working in your favor, compound interest is a miraculous and mystifying beast, and your job is to hold it tight like a fat puppy. If you are employed and you haven’t yet set up a retirement account, read this next paragraph and then stand up, lap your office, get a beverage, pull your hair up, and call your employer’s retirement adviser. No time like this exact present moment.
Briefly: A 401(k) is a retirement account sponsored by your employer with deductions taken from your pre-tax income. Certain employers will match your contributions to a 401(k). If your company offers a match, USE THE MATCH. Max out your personal contribution. Sacrifice something if you have to. This is free money! How are you getting away with this? I don’t know! This little upstart will grow and grow and you will only be taxed once you start making withdrawals, hopefully after you reach the age of retirement. Your employer’s financial brokerage company will help you figure out how and where to distribute your investments.
If your company doesn’t offer a 401(k) match, and you anticipate being in a higher tax bracket when you retire, the Roth IRA will probably be your best bet. You use after-tax income to fund these accounts, but similarly, your investment growth remains untaxed. The limits on your annual contributions are smaller, but there’s still plenty of room for you to make a sizeable impact.
If you don’t have a salaried job, or if the idea of saving is just beyond, try an app like Acorns, which automatically rounds up purchases and puts those pennies into a savings account. These are plopped into an investment account of exchange-traded funds. The monthly fees are teensy and the minimum account amount is $5, which you have probably sneezed away before. Or, use an online high-interest savings tool like Ally — the interest is peanuts, but that is still peanuts more than you had yesterday. Set up a direct debit from your paycheck to pull money in automatically, and then forget about it. What’s great about these options is you simply do not have to think about them, and yet just by living you are building a future; or, if it serves you, a Fuck Off Fund. You are creating a world in which no one can take advantage of you. You are valuable. Which brings me to…
Ask for what you’re worth
I could swear I once read a statistic that claimed 90% of women have never negotiated a salary. That is categorically not true (the number is closer to 20% — still monstrous!), but it stuck in my head when I got my first offer at my last job, a salary that was already more than what I was anticipating. I was so grateful for this figure I cried, but then I remembered that as an ambassador to the female species it was my goddamn responsibility to ask for more. So I did. Always. Always. Ask. Be clear, firm, and concise. Articulate what you bring to the table, two or three key reasons why you add value, and state your commitment to doing your work well. This is not a hostage negotiation. The worldwise Ann Friedman has great things to say about asking for what you are worth.
And me? I got what I asked for. I was in London, alone, celebrating my 30th birthday (ask me about it sometime!) and I got the confirmation email in a bathroom stall at the Ace Hotel where I was stealing wifi and I have never felt more ecstatic or more bone-deep lonely.
Credit Cards: Friend or Best Friend?
My credit cards (I have three) impart a dangerous free-wheeling glee, but I think they are important and here’s why. 1. They are a super easy way to build your credit score (as long as you pay on time). 2. The benefits they endow make using them for large purchases more fiscally intelligent than using debit or cash (as long as you pay on time). 3. They can create a peaceful sense of financial well-being because you do not have to watch your checking account like a hawk — AS LONG. AS YOU PAY. ON TIME.
Credit card debt is bananas and pointless and makes me very very angry. I have friends who got buried in debt back when banks were willy-nilly giving 18-year-olds 20K of credit. A CREDIT CARD IS FAKE MONEY. THIS CAN BE GOOD BUT ALSO VERY BAD. Do not use a credit card until you have understood that even though the money is kinda fake it is also very real. It’s a concept I’ve swallowed but I also try not to think too hard about, like space.
There are lots of sites around that allow you to compare offers and benefits. I advocate cards that give cash back or provide a purchase eraser. If you can figure out airline points, more power to you — I just erase my flights off my statement when I’ve made enough in credit card points to do so. Make sure your savings (i.e. how much you can erase or cash back) are more than the annual fee and — what’s that? — that you pay it off each month in full.
Plot twist: I don’t have a budget.
Basically every piece of financial literature you read is going to tell you that the budget is key to financial success and like, sure? Maybe? But I don’t like numbers or spreadsheets. If you are one of those people, there are peachy apps that link your accounts and allot spending categories. I use Mint (sporadically), and both LearnVest (powered by women!) and You Need a Budget are also great options. (Here’s a good comparison tool.) These might work for you. They don’t work for me. I also hate baths. We are all very curious and unique.
Here is what works for me — and this, really, is the bare minimum of what is necessary as a grown lady — I write down my fixed monthly expenses (rent, phone, insurance, my ridiculous cat, yoga, savings), subtract that from my monthly income, and the resulting figure is what I have to live by. I keep that number in my head and know that I can’t spend more than that — or if I do, I have to make sure to spend less the following month to cover it. I also spent some time thinking seriously about where I wanted to spend money, a tip I learned from Ramit Sethi’s book I Will Teach You To Be Rich. (The dude is a smarm monster, but the book was helpful.) I don’t care about electronics or cars or blingy jewelry. I care about books and theatre and those Rachel Comey carpet mules. As such, I try not to wallow in my guilt trough when I spend $150 on a Fifty Shades “sports bra” from a local designer. (“Does sex count as a sport?”) If you make up your mind about what you’re willing — and excited! — to spend $ on, you will be much happier when you do.
I don’t break down my budget beyond that, because some months I need eyelash extensions and other months I need a reiki healing session and BULLY TO YOU if you are able to predict these things, but I am not. That is as granular as my budget gets, but it works for me. That’s the key: you need to find the thing that works for you, and keep doing it. Consistency is paramount.
Money is not the enemy
And yet no one really likes to talk about it. This needs to change. Ask financial questions of your friends, your parents, your sex partners, your colleagues. We can get real about our UTIs but still can’t be upfront about our salaries? No bueno. Be respectful of boundaries, sure, but don’t be afraid to ask. Instead of a book club, start a money club. Have your friends over, drink your rose in a can or soda and bitters or what have you, and talk about your salaries. Talk about negotiations. Talk about saving goals and mortgages and debt and what you feel guilty about and what makes you proud. Money is only stigmatized because we decided it should be. You know people used to rent pineapples to display at dinner parties as a demonstration of wealth? I know, we’re crazy! So let’s put money back where it belongs: on the dining table, in the shape of a pineapple.
If you’re reading this article, you’re already in better fiscal standing than most people in the world. That’s a cold hard nugget of fact, and it is good to remember. We get to choose how we spend our money, and for that we are very lucky. So, cultivate gratitude around your spending. Don’t beat yourself up when you have a fugue episode in the French pharmacy section of the drugstore. Honor what you purchased by lavishing it over your brief and beautiful body, and be grateful for the work you did to earn the money that allowed you to have these things. Give back when you can. Say thank you. Sort out which corner of your home is the Feng Shui zone for wealth and prosperity, and tuck something there — a coin, a tiny gold elephant — that reminds you how charmed you are, and helps inspire balance. Good vibes beget good buys, is what I always say (I have never said this before).
More questions? Other financial topics you want to explore? Comment away!
Meghan Nesmith is a writer and editor living in Toronto.
Photographed by Krista Anna Lewis.