Your financial past, present, and future

By nature I’ve always been curious about “witchy” things like tarot, astrology, palmistry, metaphysics, etc. (Fun fact: I bought palmistry book in 6th grade that I still own. I used to read my classmates’ palms. I accepted Surge soda and pizza goldfish as payment.) I’m currently nurturing a budding obsession with crystals (could be a phase), and on my commute to work I got to thinking about the tarot themes of past, present, and future…specifically concerning personal finance. Here’s what I uncovered:

The Past // Lessons

This is where our most powerful lessons reside. I’m a firm believer in that even our ugliest mistakes were made to teach us something, and that includes in our financial lives. My financial past is full of regrettable decisions: payday loans (yep!), not budgeting for YEARS, not saving enough money, falling shamefully behind on my rent when I lived alone (to the point of almost being evicted), not paying my credit card on time, taking out a high-interest car loan…the list goes on. Some of my financial errors are so embarrassing I would rather not think about them ever again, but I needed to at least remember what happened to avoid making the same mistakes again.

In my early 20s I lived in a place of struggle and want. I didn’t make nearly enough money to support the lifestyle I wanted. I bought (useless) things I couldn’t afford on credit cards to make myself feel better. I was working two low-paying jobs and I deserved to treat myself, right? In reality, all this behavior did was cultivate a debt cycle and reinforce my attachment to material goods as a measure of my worth. If I had to hazard a guess, 95% of the items I spent money on back then are gone—donated or discarded. In retrospect, I would have been better off to embrace a simpler lifestyle of living without. (Marie Kondo wasn’t a thing back then.)

Over time, I learned to be more mindful of the things I buy, and how reckless frivolous spending impacts my future financial goals for the worse. While it’s important to look back at what went wrong for us, we don’t want to dwell in a space of shame, negativity, and regret when we think about the past. Regard your past self with kindness, and allow it to be a lesson for you: when you know better, do better.

The Future // Freedom

But wait, what about the present? (It’s coming, I promise.) In order to be effective in the present, we must look to the future. Think about yourself in 5 years, 10 years. What goals do you want to have achieved? Buying a home? Taking amazing vacations? Paying off a portion (or all!) of your debt? Your future is your “why,” that helps you stay on track in the present. A huge chunk of successful personal money management centers on delayed gratification. Skip buying a few handbags and pairs of shoes, and that money can pay for your vacation. Take your lunch to work and drop an extra $100 into your savings account every month.

The future looks different for everyone. Regardless of what your goals are, it’s a sound piece of advice to prepare for an unforeseen expense by creating the oft-hailed “emergency fund.” If you’ve not done so already…you need to do this! Almost every financial guru will tell you the same. Suggested numbers will vary, but I would suggest beginning with $1,000, which can assist with most short-term “unexpected” expenses. Starting small with an achievable goal is way more encouraging than having an unattainable goal. I’ve found that building my savings is addictive. I do my very best not to touch it unless I absolutely have to. Keep your money working for you by using a high-yield account to stash your emergency cash.

Ultimately, it’s sometimes about the long-long term and weighing pros and cons of all your decisions. Sometimes spending money will make you “poor” in the short term, but build wealth or happiness (or both) in the long term. (Example: taking out student loans to pursue a degree in a field that interests you.)

The keyword I use when I think about my financial future is “freedom.” This can mean so many things, but that’s what I love about it. Freedom to do more of what I want in the future is what today’s discipline is going to “buy” me.

The Present // Discipline

All we have is now. It is, after all, the only thing we can truly control: our actions today. The past is immutable, and the future is unpredictable. Our actions that we take today should be informed by our past mistakes and made with our future selves in mind. By striking a balance between the two, we can build financial stability that makes sense for us.

There is no such thing as perfection. I still struggle immensely with balancing my needs and wants, fighting off impulsive urges to buy things and keep my easily bored “inner child” satisfied. When I slow down and remind myself why it’s not a good idea to spend $50 on a cute hoodie, I can put my present actions and future goals in line with each other, which is really what it’s all about. We can still have takeout twice a month and be effective savers. It shouldn’t be a feast or famine mentality. Small habits over time can lead to big gains if you are willing to commit fully.

So what can you do today to improve your “financial tomorrow?”

  1. Reflect on your past mistakes. Be honest with yourself and look at everything.
  2. Think about what your future goals are. What money goals do you want to manifest? Write them down. It helps make them feel more tangible.
  3. Begin a spending diary today. You will learn so much about yourself from writing down all of your expenditures, I promise.
  4. Create a budget. Boring, yes, painful, perhaps, but oh so necessary. Regardless of how much or how little you earn, you really do need a budget, and it doesn’t make you poor.
  5. Get inspired. Seek out content that you find encourages your goals. For me, it’s been minimalism, decluttering, and “panning” (a beauty-lover’s term for using up products) that keep me from overspending.
  6. Unfollow any social media accounts that don’t line up with your goals. You won’t miss them.

I would love to hear from you in the comments! What are some of your worst financial mistakes? What are your future financial goals? And what are you doing today to make them happen?

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What meticulously tracking my spending has taught me

I’ve been tracking every penny I spend since October 2017. I plan to continue to track my spending for the foreseeable future. If you’re reading this, you probably have some interest in personal finance and improving your own money situation. My husband and I have been on the path towards home ownership since September 2017, when we attended a home-buyer seminar. That launched our diligent spending tracking, which we have kept up, despite our hectic schedules and planning our wedding (we got married in July). Tracking our spending as individuals and a household has been transformative—here’s what I’ve learned.

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It keeps you accountable—for the big things and the little ones. Knowing that I will have to write my purchase down and share it with my spouse really and truly does keep my impulses in check. I’ve still made some questionable purchases and I still spend money on frivolous things sometimes, but by and large, if I know it has to come from money I don’t even have—I won’t spend it.

It helps you be more transparent about money with your partner. My husband and I each have notebooks we organize and track our individual bills and spending, and we enter all of this info in a spending tracker, which at the end of the month gets entered into a budget spreadsheet. Whew—it seems like lot of work, but it keeps the money fights to a minimum when you know exactly what your spouse is spending money on and what their ins and outs are each month. Unifying our finances and being fully transparent about money have brought us closer and given us a firm foundation for our new marriage.

It gives you framework to build and adjust your budget. Tracking our grocery spending, for instance, gave us our monthly budget for groceries: $300. Now we are always shooting to come in under that each month. We’re not perfect, but we tracked what we spent for a few months before setting our goal. If you track your grocery spending and realize you’re spending $800 a month for a household of 2, you may need to tweak your shopping habits to fit more neatly into your budget. It can be shocking to see all of those little trips add up, but so crucial to know where that cash is actually going.

It helps you identify annual expenses or bills so you can budget for them. I was caught off guard by my annual New York Times subscription renewal in January ($143) my NatureBox membership fee in June ($50) and my Amazon Prime membership fee ($119) in October. But now I know! Going forward, I can work these items into my budget, and knowing they are coming helps to minimize any disruptions to my cash flow.

It helps you stay grounded with your charitable spending and gift-giving. I’ve found it’s very helpful to monitor what I’m actually spending on gifts. It’s really easy to derail my budget, one “small” gift at a time. I’m a pretty generous person considering my income level, and tracking these categories have helped rein me in when I need it the most!

It gives you a sense of control over your financial life. I think my biggest money problem pre-tracking, pre-budgeting was a lack of control, and that was due to a lack of information. I didn’t parse out what was due every month, when bills were due, or what I was buying. I also didn’t have a clear goal in mind until we decided we needed to be more prepared to buy a home someday. I flew by the seat of my proverbial pants for a long time, and while I had a good credit score, that was about it. I was pretty clueless without the raw data I’ve gathered in the past year. My financial house has only benefited from the habit of tracking my spending, and I have no plans to stop tracking. I actually find it a comforting and healthy habit, one that I know is helping us work toward our long-term goals.

What do you think about tracking your spending? Have you done it? Do you plan to? If you have, what did you learn? Please share in the comments!

PSA: It’s none of your business

A couple of my fiance’s friends asked him over his bachelor weekend if I was pregnant. Me, his bride, who was not there to answer for my body or myself. Me, whose uterus and its contents, are of no concern to them. If I had been there, I would have taken the opportunity to provide what we call a “teaching moment.”

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Image: NBC

We need to be woke enough as human beings that both women and men can know what’s appropriate and not appropriate to ask a couple/man/woman about.

For the record: No, I’m not pregnant. No, we’re not trying. And it’s definitely none of your business.

As a woman of a certain age, I’m ever-aware of my biological clock. I’ve written about it before. My heart has ached and grappled with the decision to become a parent (or not). Fertility, pregnancy, and the idea of becoming a parent are emotionally fraught topics for me (and many others). I suffered a miscarriage when I was very young and not trying, and the experience of it has made me afraid to try again–afraid I will lose a pregnancy that I very much want. We don’t know what issues or complications will await us when we do start trying. I try to be sensitive to the topic of infertility, the pain of it, the financial burdens that go along with fertility treatments (most of which are not covered under American insurance plans). I may or may not have problems. I don’t know. But I know it’s a sensitive topic and I know better than to ask someone what’s up with them in the reproductive department.

Some have said to me: “They’re men. They don’t know. They’re clueless. Let it go.” To me being a man is no excuse to be clueless or insensitive. In fact, it only underlines my point. We collectively excuse an entire gender because they’re “just men?” I don’t think so. It’s 2018. We need to be woke enough as human beings that both women and men can know what’s appropriate and not appropriate to ask a couple/man/woman about.

The timing of trying to conceive–of starting a family–is so deeply personal. There is no right or wrong time to do so. But it is wrong to ask. Always. There are plenty of good articles on the internet that are spreading the word about pregnancy etiquette and surrounding topics. The bottom line? It’s never okay. If a couple wants to share with you their happy news, let them. Welcome their experience with the joy and attention it deserves. But please, never ask. You never know someone’s journey, and truly–it’s none of your business.

How it felt to be outbid on our first offer on a house

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Photo: Moore Realty Group (not the house we bid on)

It’s no secret that first-time millennial homebuyers do not have favorable odds in today’s fiercely competitive housing market. My fiancé and I knew this when we placed an offer on the first home we saw and loved—a charming midcentury ranch just over 1,100 square feet. The house was a true “starter home” with nothing fancy about it, but was elevated from the undesirable fixer-uppers we’ve been seeing. It was only our third property in our two weeks of active house-hunting, but we knew we had to be ready to pounce.

We put an offer in on the spot—$10,000 over the asking price and offering to pay $3,500 of closing costs. Initially we included all closing costs in our offer, but panicked and reduced our offer. Yes, asking a seller to pay any part of closing costs in a “seller’s market” weakens the appeal of an offer, but we simply don’t have the cash to lose. We have minimal savings, and didn’t want to drain them completely leaving us with nothing when we moved in.

The reality of our position set in when we found out (after two long days of waiting) that the seller had gone with another offer. This didn’t surprise us, of course, as there were dozens of people at the open house we attended. We had discreetly eyed our competition, wondering what their positions were and assuming (correctly) that many of them were flusher than us, making their offers naturally more appealing. I’ve asked our agent for some insight, and the unfortunate truth is: We are at a tremendous disadvantage in the current housing market. We are going with 100% financing through USDA RD. We don’t have a down payment. We earn low salaries. We have auto loans and student debt that we can’t just magically erase overnight, even though we’re really good with our money and have excellent credit.

Being outbid on what would have been our perfect home felt terrible. Even though it’s what we expected, it still sucks to hear from your realtor that buying a home will be a struggle for us because of our position. It all comes down to that almighty dollar. Having a steady job and good credit hurt you if you don’t have them, but having those things doesn’t really help you. It was the absence of cash that stung us, and will continue to. It feels like an insurmountable, impossible obstacle. How can we compete in a seller’s market when we don’t have heaps of money?

Becoming homeowners is important to us, and we’ve already worked so hard to get where we are (even though we’re not swimming in cash, sadly). Right now, it feels like nothing we can save is significant or good enough, even though we are tucking away about $500 a month between the two of us. It’s so difficult to not feel discouraged, even at the beginning of our house-hunting journey. We’re getting married in a month and a half, and we desperately want a home of our own so that we can start our life together as husband and wife, and hopefully have a family. The reality we’ve woken up to: It will not be easy. It will not take two weeks. We will have to spend most of our savings. It will be frustrating, difficult, and disheartening at times. Right now it feels awful, but every month that passes gives us another chance to save money, and continue our quest for finding a home to call our own.

I’m thinking about making a first-time homebuyer series here, from our perspective as two “broke” millennials. If that is something you’d like to see, let me know! Share your thoughts, comments, and advice in the comments below. I’d love to hear from you.

Being “on a budget” doesn’t mean you’re poor

The more I learn about personal finance, the more things stand out to me. Often I’ll read or hear the phrase: “If you’re on a budget, this [inexpensive item] is a great option for you!” News flash: We’re ALL on a budget. Every last one of us! The word “budget” can get a bad rap. It might conjure images of eating beans out of a can, putting coins into rollers, or clipping coupons (none of which are shameful or bad, for the record). When some people hear “budget” they think “poor,” or “restrictions.” For those of us personal finance folks in the know, a budget is simply a tool we use to make sure our money is properly directed to where it needs to be.

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Cash.” Image from Pinterest.

Here’s my point: Everyone has a budget, even if they haven’t defined it. The budget of a family that earns $300,000 a year will look different than that of a single mom working two minimum wage jobs. Everyone’s budget is completely unique, and how you define that budget is up to you. The reality is, even the wealthiest person has finite financial resources. A budget is a structured tool that simple tracks “money in” and “money out.” Everyone should know where their money is going—regardless of how much or how little of it they have.

“I don’t have a budget, and I don’t need one,” you insist. “I make enough money, I pay my bills on time, and my accounts are in good standing.” Yes, you still have a budget, you simply haven’t defined it yet. Even if you don’t overdraw your account, put money into savings every month, and pay all of your bills, you still need to define your budget. Budgeting brings to light financial blind spots you may not see until you’ve done your homework. And believe me, you need to do your homework.

Your budget can have space for all of the lovely wonderful things that bring joy to your life: Golf memberships, yoga classes, brunches, concert tickets, vacations! But defining your budget and bringing it structure may help you to meet your future financial goals. It may be a wake-up call. When I started tracking my spending, I realized I had spent $500 in one month on clothing and beauty products. When I only earn $2,000 after taxes, that’s a big red flag. I needed to see what I was spending in order to define my budget—so that I could try to stick to it.

Defining a budget requires a two-pronged approach: 1) Make a list of all your “obligations.” Utilities, bills, debt payments, housing, etc. 2) Track your spending for a few months and add up what you spend in each category. Find a number that falls between what you actually spent and what you feel “fits” into your income with your obligations.

No one is perfect: Be flexible with yourself.

For example, I allow myself $100 for clothing each month, $100 for beauty, and $100 for eating out (combined with my fiancé). I may not stick to that budget every single month exactly, but I know my ballpark figure and try not to go too much over. Simply being aware of where you are is empowering, rather than letting all those “small” purchases add up without realizing. I recommend keeping a money diary where you write down all your spending on a daily basis, and a daily to weekly update of a spending spreadsheet, where you can track your spending by category (this works well in a Google Sheet for myself and my fiancé). It doesn’t have to be fancy, or perfect, your just have to do it.

Budgets are for all of us! Have you defined yours? Let me know in the comments.

12 questions to mitigate impulse spending

Throughout my journey to financial fitness, I’ve been thinking more about my spending habits. Instead of mindlessly slapping down my credit card (or entering my password and hitting that dangerous “complete order” button), I’ve started asking myself a combination of these questions:

1. Do I like the product or the packaging?

Be honest here. Companies are really sneaky when it comes to packaging. Beauty companies come to mind—I dare you to walk into an Ulta or Sephora and not be seduced by something, even if you don’t know what the item is. Whether you’re into all things cute and feminine or like sleek minimalist aesthetics, packaging can be quite alluring. Think about the product inside—were the product in basic or even ugly packaging, would you still want it? Example: Room spray in a beautiful lavender iridescent glass bottle, but I didn’t like the scent—I almost bought it just for the pretty bottle (that didn’t appear to be reusable).

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Case study: Packaging & marketing that worked almost seduced me: Birthday Cake Balm Dotcom. Photo: Glossier

2. How does this purchase inspire my creativity?

This is a great question when it comes to purchasing items for your hobbies. If you get inspired by a sparkly pink eyeshadow and have a vision for a look to create, you may want to buy it—after asking yourself the rest of the questions, of course. Example: The Anastasia Beverly Hills Aurora palette with its untraditional shades gives me so many interesting looks, not just for highlighter but layering over eyeshadow.

3. Will this fit me–as I am now?

Never buy items for a future body goal. It’s not motivating, it’s discouraging. If you’re on a weight loss journey, buy items that fit you now, donate or sell them as you outgrow them, and only keep clothing that fits you. The same goes for oversized clothing. Example: Adorable sweatshirt from TJ maxx that was two sizes too large for me. I ended up putting it back because I knew it would be too baggy.

4. Is this an aspirational purchase?

Understand where the “idea” to buy the item came from. Was it on YouTube? Am I unconsciously trying to emulate someone else’s lifestyle by purchasing this? I once considered buying a milk frother after watching a video on YouTube of someone making the perfect matcha latte (which I don’t even drink, but I want to be the type of person who drinks a matcha latte, if that makes sense). Fortunately I skipped that purchase once I caught myself in that “aspirational” mindset.

5. Does buying this item somehow support my future goals—and if so, how?

These goals could be personal or financial. Items in this category include: fitness equipment, self-help books, web-building services, and the list goes on. Of course, be mindful of spending without action to follow up. If you buy a $60 yoga mat and never use it, consider that money wasted. I consider these types of purchases “investments in your future self,” but they have to be managed carefully.

6. Will this item integrate with my current lifestyle and storage needs?

While that $300 blender might make bomb green smoothies, it’s more of a burden than a benefit if you don’t have a decent place to store it. I’m currently fighting this battle with my wedding registry, which is a little different since the items a) aren’t purchased with our money and b) are designed to go in the house or condo we will eventually have. Think about your current situation—do you have a plan to store this newly coveted “thing?” Or is this a purchase you’re making for a “future self” (see previous question)?

7. If I postpone this purchase, or look elsewhere, can I get this cheaper?

This strategy is gold. Example: I was going to buy my trusty niacinamide and zinc serum from an online retailer for $15, when I got the original bottle from Marshalls for like $5. I held off until I went to a TJ Maxx, where lo and behold my serum was there for $6. By delaying my purchase, I saved myself from paying nearly three times as much for the exact same product.

8. What have I already spent on this category this month?

This works if you’re tracking your spending—which you should definitely be doing. I keep track of all my purchases in a notebook and enter them into a spending tracker spreadsheet that I share with my fiancé. Example: I budget $100 for clothing each month (sometimes I do go over). Monitoring my spending by category helps me to remind myself what I’ve already spent, and keeps me from going on spending sprees or buying things I can’t truly afford, even if I technically “have the money.” If I can put it off until the next month, I may not be tempted by the same item(s) anyway.

9. What does my current “inventory” look like?

Before buying yet another pinky-nude lipstick (guilty as charged) or pair of black yoga pants, get real with yourself about your “inventory.” Consumerism is rampant these days, and it can be so easy to be sucked in by a good sale, clever marketing (see next section for more on that!) but at the end of the day, think about whether or not you truly need “another” of whatever you’re about to purchase. Humans are creatures of habit, and as consumers we tend to gravitate towards similar items, often leading to a surplus of “dupes.” It’s perfectly acceptable to replace favorites as items reach the end of their lifecycles, but try to avoid accumulating heaps of similar items, perhaps not all of which will be enjoyed or used.

10. Am I being marketed to?

As the saying goes, “a sucker is born every day.” It can be harder to spot these days with ads embedded as sponsored YouTube or Instagram content, and those familiar ads that pop up in our sidebars based on our browsing history. And let’s not forget “just for you” promo emails with coupon codes that can put the pressure on to buy now. Always ask yourself if you’re being marketed to—make yourself aware of that fact, and choose how to respond. Example: You may see an ad for a crystal-infused water bottle and be compelled to check them out, only to discover they’re $80 (me), but remember—it’s all just clever tactics companies use to get your money, and they can be really good at it. Stay strong, be informed, and don’t be a sucker.

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Confession: I almost bought this $84 “crystal infused” water bottle because of an instagram ad. Sorry, Glacce, I’m not your sucker. Not today. Photo: It’stheNow.com

11. How am I sufficing without this item/product?

9/10—probably just fine. When we see something, our brains can often find ways to rationalize how this will make our lives somehow easier/better. Let’s face it: most of the time, it’s all a lie! Find ways to use the things you already have in new ways. If the item truly offers a “solution” to an active problem in your life (i.e. shoe organizers to get your kicks off your closet floor) then maybe it’s worth considering. I find that this question helps me draw a clearer line between my wants and needs.

12. Does my purchase of this item/product align with my values and ethics?

I ask myself this question a lot since I’ve become cruelty-free. I am now about 90% cruelty free and as such, I tend to be more conscious about my purchases. Fortunately, more brands are going cruelty-free/vegan/organic, and using sustainable practices. Think about how the production of that “fast fashion” can impact the environment, and it may encourage you to look at other options. As consumers, we have the power to “vote” with our money. Consider brands that support causes that matter to you (like Tom’s shoes, for example). If a product is not only something you truly want (and need), but also aligns with your values, it’s a win-win.

The Ant and the Grasshopper

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Illustration: Library of Congress

This Aesop fable came to me in a dream a few days ago, and I haven’t been able to get it out of my mind. Early spring is the time of year when (for the past 2 years) my fiance and I plan a vacation for the last week in April. In 2016 we went to Arizona, last year we went to California. We had so much fun, and looking forward to a vacation brings some light to what can be a really hard time of year in the northeast: spring is (technically) here but it’s cold, and things are still brown and barren. This year is different: we’re getting married in July, and working toward buying our first home. While we do have some financial help with the wedding, there are still many expenses we’re covering on our own. When it comes to buying a house, there’s no such thing as having “enough” money. Even with a no money-down loan, we still have to worry about closing costs, real estate fees, inspection, and future improvements. Since last fall, we’ve buckled down hard on our finances. We’ve been diligently tracking every dime we make and spend, making a practice mortgage payment each month, sticking to a budget, paying down our existing debt, and majorly scaling back on frivolous spending (eating out, clothing, movies, etc.).

We knew this year it wouldn’t be wise for us to take a vacation. Not only do I have to save every iota of paid time off from my employer to take my vacation week off, but we just can’t afford it. I guess we could–but we know we shouldn’t. Our “new lives” are filled with a discipline and restraint we never really practiced until our goals became clearer (and closer). We are the ants–saving and storing our grain for the hard times ahead when we know we’ll need it. I desperately want to be a grasshopper, living a carefree life enriched with travel and energizing experiences. It pains both of us to know that we’re missing out on that this year. But we hope that marriage and home ownership will be new kinds of adventures for us, with different rewards. We accept that this is simply a season in our lives, one that we need to go through if we want to become homeowners (which we definitely do). We crave roots, a place to call our own, a washer and dryer, a basement, a place we can invest in and make our own. We want to build our lives.

It’s okay to be the ant. Maybe it’s even better. We’ll keep our heads down as we work away at building something that will last for many seasons to come.