Personal Finance 101: The Man Repeller Guide To Money

No time like the present to make it rain

08.30.16
Finance-101-Man-Repeller-2

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.

Finance-101-Man-Repeller-26

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.

Finance-101-Man-Repeller-11

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.

Be grateful

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.

personal-finance-101

Get more Brain Massage ?
  • Hilary

    THIS IS AMAZING THANK YOU.

    It’s really refreshing to hear that you don’t have a real “budget” other than subtracting monthly expenses from monthly income – it’s pretty much how I operate, too. Although I do want to try those apps and see if they might help.

    • Yes! It is totally worth experimenting with Mint et al – they make it dumbfoundingly easy to get granular with budgeting, which everyone says is key to being a financial wizard. They just don’t work for me, you know? And they made me bitter and grumpy which is not how I want to approach my little gold nuggets.

  • I think about budget the exact way you do, and I use the app Level! You just plug in how much you want to spend (on non-fixed expenses) every month and it updates with how much is left. It’s the best!

    • THIS SOUNDS FANTASTIC.

    • Emily Gregor

      Wow, how have I NOT heard of this???

    • Verena von Pfetten

      I am downloading Level right this second.

  • What a pleasure to read!
    BTW, I think my Feng Shui Ganesha was a good idea … 🙂

  • I LOVE this post so much omg every woman needs to read. Every person actually, I’ll probs show this to my boyfriend when he’s home from work haha! We’ve both just graduated from uni, he has a job, I’m still searching, and we’re living with my parents until we can afford to move out. I have tried making a budget (turns out that’s impossible when you have no income and a lot of debt) but hearing others say they don’t meticulously budget is so reassuring! I think I’ll try one of the apps you suggested just to keep track 🙂

    The real world is scary man. I just can’t wait to earn enough money to live lol.

    Amber Love Blog

    • BuffyAnneSummers97

      Yeah when you have no money it’s a whole different ball game and it’s just about trying to survive! I have been there. Every time I read about budgets and savings I would think, ‘????!!!!!’. These articles should really be called ‘How To Avoid Pissing Away Your Paychecks’.

      • Hahaha I totally agree! I saw one yesterday titled something like ‘things I will spend less money on’ so I read it thinking yeh cool, I could learn something. Everything they were buying less of was just STUFF! Stuff I can’t afford anyway haha!

  • Glad that I read this post just 4 months before my 30th birthday. I like to think I kinda have my shit together by now but there’s always room for improvement hey! Thanks for the tips x

    http://www.wonkylauren.com

  • wooo

    Love this – and especially that you included savings under fixed expenses. I started doing this a year ago and it helps a LOT when you start thinking of it as a non-negotiable, instead of a “let’s put away what’s left over at the end of the month into savings”. Also helps me feel way less guilty when I make stupid purchases because instead of obsessing over every dollar as “I could be putting this into savings.. but I’m not” I already know that I’ll be making my savings goals regardless (as long as I don’t spend more than I have that’s left over).

    As a result I have way more savings and a better credit score than my bf who makes 50% more than I do. Also worth noting – I still have student loans but I’ve chosen to still a) max out my 401(k) match and b) also contribute to savings to build as a nest egg. I’m chipping away at the loans but it’s also so important to max out the match if you have it and have SOME sort of emergency fund in addition, if you have the ability to meet the minimum payment on top of all of that.

    • Yes yes yes very true! If your debts are on track and manageable, maxing the match for the 401(k) should be a priority. You’re rocking it!

      • wooo

        Also – have to say, I feel like this is the 3rd or 4th personal finance post I’ve read in the last few weeks on a style/lifestyle blog – it’s awesome that people are starting to talk about this and share tips and facts! It’s such a positive trend and I think it helps make this info accessible to so many people that otherwise may have continued to turn a blind eye towards managing their expenses.

  • What is this post??? AMAZING! “if you can understand 10 step Korean skincare…” Absolute GENIUS.

  • Vanessa

    This is awesome. Can Meghan write more articles teaching me how to be a grown up?

  • Abby

    Very informative, thank you! I do most of this so I feel pretty great. Now if you could just write an article entitled “How to be the bread winner in your relationship without losing your mind” because I’m married to a full time grad student and counting the days until he re-enters the job market and we have disposable income again!

  • Ariella

    Really enjoyed the plot twist! I also really appreciate that you spend your 30th birthday alone in London & told us #goals

  • Stacy Leigh

    Yes! This is the first financial post I’ve read that didn’t instruct me to make an itemized budget- which always ended up causing me more stress and anxiety than it was worth. For me, it was kind of like dieting- if you count your dollars/calories too closely and restrict yourself too much, you’ll end up binging later to make up for it. Thanks for these helpful and practical tips!

  • Natalie

    “If you can understand 10-step Korean skincare or cropped flares, you can understand your finances.”
    BRILLIANT. At the beginning of every month I berate myself for how much I spend on coffee, car sharing, eating out, going over on my mobile data, and cancelling workout classes.
    The only thing that has ever worked to change it is being accountable to the girls in my office. It’s so important to have people who are struggling through the same thing to encourage and moderate you! Every month is a chance to try again (what I keep telling myself)

  • Alexia

    I agree with all of this this, except for the part where you state that you should talk about your salary with other people. Call me old fashioned, but I think it’s rude to talk to a friend about what they make, especially if you know that is it less than you. It can make people uncomfortable and feel bad about their personal situation. If your friend is a financial advisor and you need budgeting advice, go ahead, but tread lightly in other situations. Always think about whether or not what you’re sharing has a purpose.

    • Sarah

      Would you tell someone not to talk about weight to someone who is smaller than them? And not be aware of the crazy double standards? Money is one of those things – it has stigma – but it’s not necessary. Just like the number of the scale, how much money you have doesn’t define who you are as a person.

    • ESW

      I think the solution here is to talk about it thoughtfully. Don’t just casually say to a grad student, “I make 60k a year, but life would be so much better if I made 73k!” That would be rude. That said, if women keep mum about money out of politeness, they are doing themselves and their community a disservice.

  • Trish Seren

    I struggled for years with debt and money, I knew the ideas behind it but recently got sick of dealing with it. So I got smart, firstly, debt is bad, the idea of some debt being good is completely misleading. Secondly credit cards are not an easy way of building a credit score because most people don’t manage to pay them on full every month (I never, ever have and I’ve had one for 10 years). Thirdly, money management is 80% behavioral, I’ve had a budget for years but not once have I stuck to it because my spending behaviors suck. Finally ALWAYS save a $1,000 emergency fund BEFORE starting to tackle debt because something will break or you will get sick and you’ll wipe away your debt gains buy needing to use the freed up credit to get yourself out of the hole.

  • EmilyWilson

    I want to hear about your 30th birthday in London, because right now I am bone-deep lonely.

    • Rosie

      Just moved to a brand new city and i feel ya. Making friends as an adult is hard, and man, loneliness is hella stigma-esque and man, it sucks.

      • It was a condition I brought upon myself – I went to London (alone) to try to grasp the full impact of turning 30 (alone) and rather than feeling awash in wisdom and strength I just felt…sad? And alone? Solitude is a choice; loneliness is a burden. So, I’m reaching out to you two – hello! You are seen and valued.

      • Anni

        Can you try Meetup? I moved to LA last year and that is honestly how I have made the majority of my new friends – I attempted to use VINA this year when it came but I didn’t like the one-on-one friend building because it felt a) a lot harder to connect online, b)when we met in person and it was awkward it felt like a bad date whereas when you meet a new group of people you hopefully, find at least one person you click with.

  • Greer Clarke

    Still cannot believe none of this is taught in high school :// it’s up to your parents or happening upon articles like this (which was so super!!!)

  • More personal finance posts please! I’m clueless about finance, but have thorough knowledge of the 10 step korean skincare routine. Maybe a post on the best personal finance books, apps and resources for women?! I have feel like a lot of the literature doesn’t speak specifically to young women.

  • Taste of France

    Very good points.
    For your 401(k) or IRA, look for a no-load (fancy term for no extra fee) broad-market index fund. Basically it’s a bet that the market will grow. Index funds have lower expenses than managed funds (so more of the profits go to you) and managers do a famously bad job of picking stocks.
    Women tend to invest better than men because they are, in general, more attracted by growing slowly but surely whereas guys are, in general, more apt to take a big risk in hopes of a big win.
    Otherwise, one of your biggest expenses is housing, so live in the smallest, cheapest place you can stand. Less space means less stuff which means less spending. Virtuous circle!
    The other thing is to really examine your pleasure purchases. You want things that will make you happy each and every time you use them. Too often, we buy things thinking that will be the case, but the pleasure dissipates soon after. It’s a hedonistic hit, like a drug. Get off that drug.

  • grace b

    I finally understand what a 401k is THANK YOU!!!

  • sam

    This article was like getting a warm hug from a friend on a Friday afternoon 🙂

  • Gina Fuchs

    This is so fantastic and supremely helpful. Somehow, the first post I’ve rly read about personal finance even though I continue to be waist deep in student debt (though I know I’m not alone in that). Feeling thoughtful but not pained. THANK YOU!

  • lydia260

    I have separate accounts. I added up rent, bills, insurance etc. and it comes out of my main account on payday every month. From there, it’s paid by direct debit, and the money left in my primary account is for spending. I have two more accounts for savings, one for emergencies and one for holidays. If you set it all up so it’s automated, it makes it very difficult to overspend.