Here’s How I Manage My Money in My 30s
I’m a spender. I’ve been a spender from the time I received my first $1 from the tooth fairy to last week when I went to the bookstore and dropped a cool $50, and I’ll probably be a spender until the day I die.
I’m 31, and I’m just now figuring out this whole money thing.
The past few years have been a whirlwind financially; from buying a house, renting that house out, leaving teaching, working in the tech world, selling that home, buying another, and finally making the money I deserve, I’ve been more than overwhelmed trying to figure it all out.
So this year, I decided to stop making excuses and start doing something about my finances.
Without a doubt, the best thing I did was find a Financial Advisor. I started by asking around for references, and from there I interviewed a handful of people before I found someone I was comfortable with. I am smart enough to know that there are people who are much better at financial planning than I am, and I made the decision to hire one of those people.
My first meeting was completely overwhelming and a little scary. Finances are really private, and I felt like I was discussing my sex life instead of my savings account. It feels so personal and overly intrusive, but if we don’t talk about these things we can’t learn and make changes. Luckily, I made the right choice for my FA and he made me feel so much better about where I was, and he was impressed with the retirement accounts I already had set up. He assured me I wasn’t going to retire penniless, and by being there that day I was taking the right steps financially.
I learned a lot in that meeting, but the biggest thing was realizing I didn’t have to change who I was as a person; aka a spender. I could save for goals like my future bookstore, a new car, and retirement, while also buying those GG sneakers I’ve been eyeing for 2 years. I don’t have to live my life chained to a budget on a spreadsheet, but I do need to have a plan.
Thanks to my awesome FA, I have that plan now, but I also want to thank myself. I received a substantial raise when I moved to my new company, and I made a choice to continue living off of what I was making previously. I am taking the additional money and contributing 1/2 to my brokerage account and Roth IRA, and the other 1/2 to a High Yield Savings account for my emergency and vacation funds (Paris 2023!). The particulars of the brokerage and retirement accounts are up to the professionals, but the HYSA is up to me.
Another thing I’ve done that has been really helpful, based on my FAs advice, was open a second checking account. This account is spending money that gets replenished each Monday. This spending account includes what I’ve budgeted for groceries and gas, as well as my “fun” money. Separating this money from the money that pays the bills is the best way for me to analyze my spending habits. This is my cash envelope method. Cash doesn’t work for me. I shop online way too much, and I don’t like interacting with other humans when getting gas. I know I’m not the only one.
My normal checking account will still have a debit card, but I won’t be carrying that around on a daily basis. This account will be for all the BILLZ *cue Beyonce voice. The mortgage, electric, gas, life, car, and pet insurance, credit card payments, phone bill, and any other monthly payments I’m responsible for come out of this account, just like they did before. This kept me from changing all of the auto drafts I had set up!
Because I’m transferring money to my spending account at the beginning of each week I know that I won’t be dipping into bill money if I go over on a Target run, because that shit just happens. Instead, I’m making sure I have a safety net for months that pesky gas bill is higher than I planned for because I left the budgeted amount in there whether it’s used each month or not.
I’m also paying more attention when spending my fun money because instead of seeing a big number in the bank I see my actual allotted amount. So yea, I can buy the products at Sephora, but that may only leave me with $50 for the rest of the week. If I don’t have anything going on that weekend, maybe that’s okay! If I’ve got dinner or drinks Friday night, maybe I’m more selective of what gets put in that cute striped bag. Either way, the ball is in my court, and the size of my court is much more manageable than it used to be.
I haven’t decided what to do if there’s extra money in my bills account at the end of the month, but I may use it for an additional student loan or credit card payment until they’re paid off, or I may leave it in there until I’m more confident budgeting for utilities. After that, it may go into savings or an index fund.
The point is, I’m learning how to not be a dumbass with money. I do believe some people are born savers or spenders, but as I’ve learned throughout my life, it doesn’t have to ruin your life.
Don’t be afraid to reach out to a professional or even just start the conversation about money with your friends. There are some great accounts on TikTok and Instagram that are also helpful. I like @thefinancialfeminist and @herfirst100k for little tips and tricks about money management!
If you’re also struggling to get your bank account in check I hope this gives you the push to make it happen, and if you’ve already gotten it together give yourself a little pat on the back, and share your tips in the comments!
Love,
Lilly
