Managing My Finances Like a Adult [mostly]
Why Don’t I Have any Money?
When I was growing up in Detroit, and even during graduate school in Chicago, I always had a part-time job. I frequently worked as an administrative assistant, but I also worked as a waitress, a project manager, and one semester in undergrad I recruited subjects for my professor’s study. If I’m honest though, most of the time my finances were in a shambles. No matter how much I worked, I never had any money.
In 2014 when I began my tenure track job here in New York City, my August 2014 paycheck was the first time I’d ever received a salary, I was ecstatic. But by the end of the 2014-2015 academic year–despite making more money than I’d ever had in my life–I was broke! I had no savings, and nothing in my checking account… what happened to my money? where was my money going? After reaching out to friends on a facebook, I received a recommendation for a financial advisor. Thankfully, I found someone who didn’t sell financial projects. This was important to me because during grad school I paid $500 for a “financial advisor,” who literally did nothing for my finances except try to sell me life insurance [I was 25 yr old single and childless]. Needless to say, I didn’t want to fall into the same trap again.
Financial Education
Thankfully Shannon McLay–my financial advisor–had the type of credentials I was looking for. She was a former wealth manager from Merril Lynch, and her financial advising business, The Financial Gym, was focused on helping millennials get a financial education. 3.5 years later, Shannon has totally changed my financial life. We work from a flexible budget that is in alignment with my long term and short term goals. Anytime I get ready to make a big (or small) financial change [like moving], she assists me and helps me figure out what I can afford. Plus although I’ve received a comprehensive financial education from her, she’s continued to provide accountability and support as I continue to grow in my adult life.
One of the things that Shannon is most passionate about is that all of her clients have a emergency money fund. She required that I setup a high-interest savings account and work on saving a minimum of six-months of my salary. An emergency savings fund is critical for a number of reason’s. Back in the day my mom + play aunties stressed that I needed to have a “mad money” fund from the time I was 12yrs old and onward. According to my aunties, a mad money fund is necessary because it means that you can get pissed off and leave [a intimate partner, a job, whatever…]. Other folks have written extensively about a “fuck off fund,” and essentially it is the same idea as a emergency fund, or a mad money fund. Whatever you want to call it, having a savings account that you commit to never touching, is key.
Savings
After a lot of research, Shannon and I decided that an online-only high interest bank account was the way to go. I chose Ally Online Savings Account because the interest rate (as of November 2018) is 1.90%. Compared to the Chase Bank Savings Account interest rate of 0.01%, you can see why online savings accounts like Ally, provide a considerable return on a very simple and safe investment, your savings. Every paycheck a set amount of money is withdrawn from my checking account and is placed in my Ally Savings Account. Another benefit of the online savings account is that it is out of my immediate reach. While it is easy to request a withdrawal, the money still takes about 24hrs to appear in my Chase checking account As a result I always have a couple of hours to consider whether or not I truly want to take the money out. A primary goal of my personal money management is to enable mindfulness practices every chance I get.
Another resource I use for automatic saving is the Qapital App. Qapital allows you to set goals for your saving, and then it automatically deducts from your checking account based on your rules. I use qapital to save for future trips. The two rules I use for my travel savings account is the “round-up” rule and the 52 week rule. The round-up rule is set to round up $2 after every purchase in my checking account. So for example, if I spend $12.50, qapital rounds it up to $14.00, and $1.50 is saved to my travel account. My second rule is the 52 week rule. So week 1 I saved $1.00, week 2, is $2.00, week 50 is $50, and so on… Qapital has been great because it allows me to save for fun/entertainment goals without actually thinking about it. Everytime I spend on something random like hot chocolate, or a piece of art, I’m inadvertently also saving towards a goal that is actually important to me.
Keeping an Eye on My Finances
Key to keeping my head above the financial waters is making sure that I track my credit regularly. After getting my identity stolen twice in undergrad, I learned the hard way that monitoring your credit must always be a priority. With that said, I refuse to spend money to monitor my credit. Most banking institutions offer free credit monitoring to their clients/customers. If your bank offers free credit monitoring, you should’ve signed up yesterday! The main program that I use to monitor my finances is Credit Karma. The program is free and they monitor both TransUnion and Equifax, and they let you know if anything has been added or removed from your account via email/text message/phone notifications. I can’t emphasize enough how important it is to monitor your credit. Your credit score can always be improved. But if you are totally ignorant about what is on your credit report, you will not be in the position to make a positive change and achieve your goals.
Critical to monitoring my finances is using a web-based financial management system called mint.com. Putting it simply, Mint aggregates my accounts using my online checking and savings accounts, as well as my credit card. It tracks every dollar that comes in and out of my accounts, while also putting each expense into a appropriate category. By placing each expense into it’s category (groceries, personal care, shopping, etc…), I can easily assess whether or not I have met my goals for the month. At the risk of sound repetitive, if you don’t know what your money is going, you can’t correct the problems and you cannot celebrate the successes.
Financial Education
Books that are actually worth the money
The Feminist Financial Handbook: A Modern Woman’s Guide to a Wealthy Life
Other financial resources
peace.
a
This post contains [some] affiliate links. I receive a small commission when you purchase through the links.
Alex Moffett-Bateau / Prof MB (she/they) holds a PhD in political science from the University of Chicago and BA in political science + African American Studies from the University of Michigan. She is an assistant professor of political science at the City University of New York. Their research and writing focus on extra-systemic and subversive politics. Her manuscript in progress argues, in order to accurately understand the political engagement of Black women living in poverty, a fundamental expansion and redefinition of what is considered, “political” is needed. Prof MB is a public speaker, consultant, and podcaster. She is a political knowledge worker whose focus is on Black feminist + disability justice political education. Prof MB is originally from Detroit and now makes her home in New York City.
Leave a Reply