20-something miseries, advice, how-to

A Millennial Guide to Money

I’ve written briefly on the unique money problems facing Millennials before, but this post dives deep into what we can actually do about those problems in our day-to-day lives. How to save money, how to spend money, how to make a budget to help actually accomplish those things—the whole shebang.

I used to pay as little attention to my spending as possible so I wouldn’t have to feel bad, and shockingly, that did not lead to financial prosperity. My husband, on the other hand, is a money-savvy wizard (AKA, he is mildly responsible and this amazes me) and has taught me so much in the year we’ve lived together. Now I want to share that knowledge with you all. This post lays out the framework, and in coming weeks I’ll be making additional posts to flesh it out, like a step-by-step post on how to create a budget, posts with specific savings tips depending on your financial situation, and more. I feel so much better about money since realizing all of these things, and I hope I can help make you feel better too.

There Is No Shame in Having Money Problems

No matter how well-intentioned someone is, advice about money problems always comes out judgy (she says, in a post about money advice). And a lot of the time, it isn’t all that well-intentioned to begin with. We’ve all had that conversation with Aunt Susan at the Thanksgiving party:

Aunt Susan: So, have you found a job yet?
You: No, not yet, I’m applying everywhere and they just never resp—
Aunt Susan: Oh, still have that iPhone though I see. Kids these days!
You: I’m in my thirties, Susan.

If someone tries to make you feel bad about how you spend your money without knowing anything about your actual money situation, then seriously, just ignore them. Smile and nod, get in your car and scream for a while, and then go find ways to get your finances together without all the unnecessary shaming.

How to Make a Budget

Knowing how to make a budget is one of the most underrated financial literacy skills out there. The concept of a budget isn’t hard (plan out your expenses based on your income), but finding a good system for keeping track of your spending and actually sticking to your budget can be much more difficult and very individualized. Different people have different needs to make a budget successful. In the last year, my husband and I have honed a great system that works for both of us, which is a miracle considering our wildly different attitudes toward money. Here’s what I’ve learned:

  • Make it physical. Don’t just look online at your credit card bill and say “Yep, looks good!” or “…Yikes.” I’ve found that saving my receipts and going through them at the end of each month really helps me visualize how much money I’m spending. I tend to spend small amounts of money all over the place, so it never feels like much, but by the end of the month, I’m staring at 30+ receipts and suddenly it feels like as much money as it really is. You can tape them into a notebook, scan them to your computer, whatever works for you.
  • Determine a time-frame. You should never go longer than a month without updating your budget to evaluate your spending, but for some, it can be helpful to do a budget twice a month or even every week. My husband and I are still learning how to make a budget, so once a month is really all we can make ourselves do, but my parents are much more disciplined about their budgeting and they use the bimonthly system.
  • Make a template. Making a budget is no joke; it can be time-consuming and energy draining, and we’ll discuss why that’s a problem in the next section. Having to completely start over each time just isn’t worth the hassle. If you do your budget on Excel or a similar program, you can save a template to your workbook, and if you do your budget on paper, you can draw up an empty template, make copies, and fill in the blanks on a new sheet each time.

Keep an eye out for an upcoming post detailing exactly how I made our budget, and maybe even a downloadable version you can use yourself.

Your Other Resources: Time and Energy

In general, we all have three main resources to draw from: time, money, and energy. When making a budget, it’s important to budget for all three resources. When money is really tight, it’s tempting to believe that you have to just muscle through and ignore your time and energy needs to dedicate yourself to saving every dollar you can. But 99% of the time, that just isn’t going to work.

You might think to yourself, “I’ll save money on XYZ by just doing it myself!” but if you don’t have the time or energy to actually do it, that means it just won’t get done. Depending on what that something is, putting it off could end up costing you more in the long run. For instance, it might sound like a good idea to change the oil in your car yourself, but if you don’t know how, learning will sap a lot of time and energy. And even if you do know how, if you don’t have the time for it and don’t actually get around to it, you can cause expensive damage to your engine.

This doesn’t mean you shouldn’t save money by doing things yourself, it just means you need to do so responsibly. The only way to know if you’ll really have the time and energy to do things is if you properly budget your time and energy like the valuable resources they are. When making your budget, make a similar system for time and energy. Look at your expenses (time you know has to be allotted to something, like work or travel), income (things that give you energy, like fulfilling conversations or meaningful work), and priorities (how you’d like to spend your energy or how much free time you need to feel like a human being).

How to Spend Money

Everything you read online is usually about how to save money…but what about how to spend money? To exist, you have to pay. We can talk more about why that’s messed up in another post about late-stage capitalism, but for now, let’s focus on how to make it work.

The problem with focusing solely on how to save is that you put yourself in a box. When you’re trying to save money, it usually means trying to cut costs off what you already pay for. What if instead, you looked at how to spend your money better? For example, if you’re focusing on how to save, you might look at reducing your cell phone data plan. But if you’re looking for ways to spend smarter, you might consider switching cell phone providers entirely and saving a lot more.

This slight change in mindset can open up so many possibilities for saving money, but it requires you to spend from your other resources, sometimes significantly. Researching different cell phone providers, looking up how to get out of your current contract, contacting various helplines, and discussing these changes with anyone in your life who would also be affected by it takes time and energy, and it’s important to take those expenses into account. But if you can afford it time- and energy-wise, thinking about how to spend smarter can save you a lot of money.

Coming soon, I’ll have a post on specific brands/companies (non-sponsored, legit recommendations) that have helped me and my husband spend smarter.

How to Save Money

Okay, you’ve thought outside the box, you’ve figured out how to spend your money the smartest way possible, or you’ve concluded that you simply don’t have the resources to do the research, and now you need to know how to save money.

Techniques for saving money vary widely based on where you are financially. If you’re in a pretty good place, but you’d like to cut back on spending to expand your savings, your savings plan is going to be somewhat flexible and will probably focus largely on reducing extra purchases. But if you’re living paycheck to paycheck, you probably cut most extra purchases long ago. You can’t save money by drinking less coffee, because odds are you already can’t afford coffee. That’s why I’m making three upcoming posts on how to save money in three different financial situations: well-established and looking to increase savings, in college and struggling to get by, and absolute bare-bones fighting for the basics.

In the meantime, here are some generic saving tips that may or may not work for you depending on your situation:

  • Make. A. Budget. No matter what your situation is, knowing your expenses, your income, and your priorities is a huge help when it comes to saving.
  • Set savings goals. Everyone loves meeting goals and feeling accomplished, so set goals for your savings. This can be number of days without spending, amount saved, or something else entirely that works for you.
  • Acknowledge the role of emotions in spending. It might not seem like it, but our finances are strongly influenced by our emotions, and I don’t just mean succumbing to retail therapy every now and again. One of the biggest ways our emotions affect our finances is through our upbringing. Seeing the way our parents/guardians spent money and hearing how they talk about it can have a huge influence on how we spend money now, and if we don’t acknowledge and account for that, we might make poor decisions or hold problematic beliefs about money that cause all kinds of problems for us without our even knowing it.
  • Make sure all the adults in your household are on board with your savings plan. If you’re the only one scrimping and saving, you will start to harbor a vicious resentment for the other adults in your household who seem to spend money all willy-nilly. Make sure everyone is on the same page and being held to the same standards.
  • Determine how rigid or flexible your savings plan needs to be. If you can afford to be flexible, that’s usually best. Like a diet, you’re more likely to stick with your savings plan if you have a little wiggle room (but not too much; hold yourself accountable!)
  • Ask for help. This one is hard, I know, but it can be super helpful and sometimes it’s unavoidable. You can ask other people to be your accountability partners by texting them in the morning on days you know you don’t want to spend any money. Sometimes just letting others know about your intentions is enough to help you stick to them. For times when things are beyond tight and you’re out of money, it’s worth it to set up a Kickstarter for yourself or advertise your PayPal account. It’s not embarrassing to ask for help getting what you need, it’s embarrassing that we live in a world where people can’t afford what they need.

That’s all I have for now, but keep checking in for more posts with more specific advice. And good luck managing your money!

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