How I Went from Financial Frenzy to Financial Freedom
Full disclosure, I had complete and utter imposter syndrome as I wrote this because my past spending habits make me feel like I’m not ‘qualified’ to write about this. But in the hope of being transparent with the journey, here I go –
One of the biggest things I struggled with was money, the habits towards good financial decisions were never established when I was younger and this led me to continue spending more than I made after I started earning real money. Major red flag. But this isn't where this story ends, I ended up taking back the reins toward my future thanks to having the opportunity to slow down from the Pandemic.
When I started understanding the gravity of importance our twenty-something years in our life, the societal expectation/lifestyle most people were living, didn’t make sense. How could we expect our life to suddenly change in our thirty’s to be the type of life we envisioned living…? We all wanted a family, financial stability, professional success but the habits that were paving the way in our day-to-day life didn’t represent the values we were striving to uphold. Clearly, there’s a misalignment and maybe I’m wrong in speaking for others but I believe that Meg Jay’s book, Defining Decade, was a major wake up call in my life. It was the “oh shit” moment that really began my personal development journey which gave birth to so many other aspects of future endeavors such as grad school, finding a professional purpose, and recognizing that money does matter.
Becoming serious about my finances was another one of those things like losing weight, snoozing, and biting my nails that I wanted to figure out but was never quite able to. For as long as I can think of, I’ve spent more than/if not all the money I earned. Savings were for after I made “real” money and part of the blessing of being in college is the lack of financial freedom, right? Wrong. As much as I don’t regret anything in my life and wouldn’t change much, I would change my spending as early as possible because it’s one of those things that really can make your life easier, the earlier you start.
So now that you know I’ve had a late start and began with a terrible, “spend all attitude” I really went from 0-100 with my finances the past year and think that while I perceive myself to be on the less financially aware end of the spectrum, I can’t be alone and if this helps anyone who is in my position then it will have been worth it. Here are my top finance “get it together tips”
1. Use a money management app: I use Personal Capital for an accumulated view of all accounts, net worth, month over month view of expenses. It’s free and I def recommend downloading it
2. Automate savings: Next, I automate all payments, savings/investment transfers. I find it easier to just funnel money there first and then budget my discretionary income. It becomes a LOT easier to spend less money when it isn’t at the tip of your fingers (aka in your account) waiting to be spent.
3. Budget: For budget, I use an Excel spreadsheet - there are apps for this, but I find that inputting 2x a week forces me to think more about my purchases rather than just see them on an app. This is part of my weekly Sunday routine and I generally update it once a week besides that.
4. Set daily account balance alerts: I also set daily push notification alerts from all of my accounts so that I know how much money is in each and that also helps me spend less if I’m nearing my budget amount. There’s nothing like waking up to a higher credit card limit or lower bank account balance.
5. Max out retirement If I have any advice it's to open and max out both 401k and IRA. It took me a while to do this with the amount of money I was making and paying rent. This money is going to grow so much, non taxed (unless it’s Roth)- it will become 1million in 30 years!!!
6. Start having ucomfortable conversations: It’s no wonder my finances were in shambles when the only conversations around them were from my parents yelling at me about them (fun fact: my parents actually took me to a local restaurant to hold an intervention about my finances that ended so poorly because I WAS IN DENIAL AND ENDED UP THROWING A FIT LIKE A CHILD. Many of the conversations I have today are around finances and they don’t feel so uncomfortable anymore! If you feel like you don’t know as much as others you’re conversing with, tell them you want to learn, and don’t try to pretend you know it all. Soon, you’ll be able to pay it forward and help others.
7. Set realistic goals: I remember being unable to meet any of my former budgets and being so disappointed and just giving up on budgeting all together. It’s like when you try eating healthy and then end up giving into a craving which leads you to binge-eating because you’ve already gone over. If you’re not meeting your budget, take a look at your budget and try to figure out why - are your expenses too high? Are you not taking something into consideration? If you live in CA, you’re likely paying WAY too much in rent. Unless you work in tech - more power to you, tech bros.
8. Consume information that will help you learn: The amount of resources out there for someone who is interested in financial freedom is overwhelming. However, the amount of people who don’t consume or even consume the wrong type of information, is concerning for how much is out there. This is one big reason why a lot of people find themselves in debt - a lack of proper personal finance education. Information like credit, taxes, and other personal finance items should be taught in ELEMENTARY SCHOOL if it were up to me. But it’s not, so we have to take it upon ourselves to learn on our own. I’m always happy to share my personal resources but instead of linking them I think there’s benefit in urging people to take the leap to ask or do the research themselves.
9. You don’t have to do this alone! Try to recruit a friend or SO to reach a savings goal with you or try to read a book/listen to a podcast with a friend and then discuss. Even just taking some tips that your friends do can be so helpful, Personal Capital was a recommendation from my dear friend Racquel and I frequently go to her for financial advice because she always has helpful tidbits/wise savings goals.
Overall, in order to make actual change with poor financial habits, you have to recognize that something’s going to give: I moved home because I was struggling living my life + paying rent. It worked out that it was the pandemic and I was able to save basically all of my income since we weren’t traveling. However, if I don’t get into grad school this year, I know that I have to choose two between saving, traveling, and living in a city. This is completely a personal preference on which two you care about.
These are pretty basic and chances are you probably have a lot of these in the bag. If so, congrats. But if not, know that you aren’t alone and going from financial frenzy to financial freedom begins just how it would for any other habit creation – tiny steps that will pave the way to a nice pile of green cash.
