I’m 25 and financially illiterate. I have a college education, can discuss Shakespeare in detail, and I wish my parents hadn’t paid for me during college. In my five years of college (yes, I took a victory lap), they never once told me to foot my own bill. I was on scholarship for the first four years, which was a major blessing, but they never told me to get a job. Quite the opposite, actually. They asked me not to, and my dad handed me his credit card for five years and regularly deposited money into my checking account. I’m not ungrateful for this. I know how wonderfully blessed I was to go through college without once worrying about how I would pay for my gas. Not needing to budget in college left me financially unaware once I graduated.
I didn’t learn how to manage money until it was my only choice. I got a full-time job right out of college. It came with full benefits and a regular paycheck I could live off of. It did not come with directions for budgeting or money management. It’s taken me nearly two years to grasp budgeting, and I still struggle with it daily, despite the fact I’m an obsessive over-planner. No matter how meticulous I am in planning my schedule, my meals, or my to-do list, I fail at planning out my budget. I tend to be a little erratic with my spending. I’ve gone three weeks barely spending $100, and then walked into a clothing store to drop $200 on a whim. It’s an unhealthy cycle I’m trying to break.
My first problem: I didn’t know how to budget.
Budgeting has been the worst of all my adult growing pains. It’s stressful. It’s confusing. It’s hard to follow sometimes. It makes me want to cry, honestly. I tend to create a budget for a two-week period, and then completely ignore it. I plan out how much is going to bills and what I need to purchase in those two weeks, but somehow I always end up forgetting the budget, not allocating enough for a certain expense, or spending money on impulse. Then I find myself in a financial pickle, buying the bare minimum at the grocery store, and transferring money from my savings into my checking account to tide me over until my paycheck comes in.
To somewhat control myself with each budget, I take out cash — usually $50 to spend on impulse items like coffee or nail polish. This kind of helps me keep my spending under control, and it definitely makes me think before I buy. This is mostly because I have to check if I even have enough cash. Aside from my cash-only safety net, all of my money goes to rent and bills, and whatever is left over goes toward food, gas, and unexpected-but-still-completely-necessary purchases (like a new coffee pot when mine breaks).
This is an improvement compared to the first few months after college when I tried to budget for the whole month, which turned into a major train wreck. It’s hard for me to budget specifics for 30 days in advance, aside from bills. I spent months struggling with this approach until I finally decided to budget based on each paycheck. It’s still really really hard, but I’m getting better each time.
My next challenge: contributing diligently to my savings.
I was actually a star at saving money as a kid. I knew how to stockpile all of my allowances until I had enough to purchase something really special. Once I hit my teens, I forgot all about saving. I figured it was something I would do when I was older, when I had a career, and when I needed to save money. I continued that approach through college. Of all the money I earned babysitting and doing church childcare, I never once opened a savings account or stuffed it under my mattress. Again, I thought that was something I could do later.
Looking back, I want to throttle myself. I made good money babysitting. I could have easily saved 20% of each check and had at least $2,000 in the bank when I graduated. Instead, I had to learn how to save money with my first adult paycheck. It’s been touch-and-go. Thankfully, I found articles online preaching I save 20% of each paycheck, and I did that religiously for about a year. But then I moved into a far-too-expensive apartment and no longer had the money to save. (This was, sadly, not my first stupid financial decision.).
Oh, and I didn’t even try to learn about or use my 401k matching plan until I was a year into my job. Even I’m appalled at my past self. I didn’t use it at all, and now I’m kicking myself for all of the money I threw away. I wouldn’t have even missed the money, but the thought of even having $20 less was unacceptable to me. As a result, I’m worried I didn’t start off on the right foot and am desperately playing catch up.
My third step: I needed to find out where all of my money was going, and start tracking it.
On top of all this, I didn’t learn the importance of staying within your financial means until I was about three months into my career. I was a college kid with access to daddy’s credit card and a cell phone to call him for a checking account deposits whenever I needed. My means weren’t even something I could comprehend, because it wasn’t my money, and I was never given any limitations. Then I was sent into the “real world” in a flurry of graduation robes only to find myself suddenly and unglamorously trying to figure out where all my paycheck money had gone.
Checking my bank account always left me scrunching my eyebrows as I tried to figure out when I had spent my money, and what on. The sad thing is half of my expenses didn’t even ring a bell. (No, I wasn’t hacked. I was just flippant.) Then, I not-so-wisely chose to spend 50% on rent alone. That’s not counting utilities, gas, food, or medical expenses. Each month, I have about $1,000 left over after I pay my rent to live off of. I manage now that I’ve gotten my spending under control, but I’m counting down the days until my lease is up, and I can start spending smart again. With this rent payment, I can’t afford to take on a car payment despite the fact that I need a new car. I want to start saving for one, and I want to take over my car insurance from my parents. Right now, I can’t, and that kills me.
In a way though, I’m grateful for the last almost two years. It’s been stressful and bumpy, but I’ve learned so much about my spending habits and how important it is to be financially literate. Nowadays, I devour everything remotely related to financial advice, because I’m desperate to have my money stuff figured out and feel financially stable. Yes, I still wish I had learned all of these lessons sooner, but I’m working on it now, and finally feel like I’m starting to improve.
Terra is an Arkansas-based writer who spends her free time obsessing over her planner, debating between working out or eating, and singing to her dog, Gatsby, even though he hates it.
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