- Two years after finishing law school, I moved back in with my recently-widowed mother and only left recently.
- I didn’t get my personal finances in order while I lived there, but I regret that now.
- I’m going to save, invest for retirement, cut extra expenses, and use a budgeting app moving forward.
- Read more from Personal Finance Insider.
After finishing law school I found myself — like many millennials — living with my parents again. It made economic sense at the time: I was waiting for my Bar results, and my old childhood bedroom was still there waiting for me.
Two years later, I found myself in a new career and new town, living with and taking care of my recently-widowed mother. I stayed with her until last November, when various personal reasons led me to move out.
Prior to moving out, I didn’t much worry about money. My salary as a public defender was adequate for most of my short-term wants.
It gave me enough to get something from Starbucks every day, and takeout for dinner whenever I wanted. I was able to go out for drinks with coworkers on Fridays, or go to the movies or a club with my girlfriend. I didn’t shop frequently, but when annual sales came along I’d run up my credit card getting new clothes and shoes for work and Christmas gifts for my loved ones. My mom covered most of the groceries and our shared utilities.
I didn’t live a lavish lifestyle, but I was comfortable during that time. I was pleased about saving money and planning for the future, which I regret now.
Maybe I didn’t take financial planning seriously before because I’m lucky enough to have never been in truly dire financial straits. Maybe it’s because I’m a trans woman — and frankly — I never expected to make it this far when I was younger.
Regardless of why I didn’t start earlier, there are four things I’m doing now to get my finances in order.
1. Gain some modest savings
If you’re going to do something, you need to know why you’re doing it, which is why I’m asking myself what I actually want to save money for. My main concern right now is just setting some extra cash aside for furniture and moving costs for a new, bigger place that my roommate plan to go in a few months — starting small.
To do this, I plan on setting aside the money I’m going to be getting from an upcoming pay increase, a one-time stimulus payment, and my tax refund.
As I’m already living without that money, it will be easier for me to simply set it aside with each paycheck and have that money for the future.
2. Investing for the first time ever
I’ve never been one for the stock market, because I am a very risk-averse person.
At the start of the pandemic I had some money from my late father’s life insurance in the market, and pulled it when things got real in March 2020. I mean, it was the start of lockdown, a new virus was wreaking havoc across the world , and no one knew how bad it’d get or when it would end.
My sister, meanwhile, kept her share of it in the stock market. After the initial dip, she made everything back—and then some. I since have put that money back in, but I am still kicking myself for the lost opportunity.
On top of that, I’ve been living with a more financially-savvy friend for the past few months and I’ve seen how well she has done with investing. I’ve gotten over my hesitancyand I’ve decided to start putting money aside to invest.
As part of my job, I have the option contributing pre-tax dollars to our Deferred Compensation Plan. Until now, I’ve only been contributing the bare minimum of $10 per paycheck. But now, I’m going to be increasing that to maximum allowed per year, and I’m also looking into opening a Roth IRA.
Based on my research, Roth IRA’s are ideal for someone like me still at the start of my career, with an anticipated couple of decades until retirement. They take post-tax money, so there’s no immediate savings benefits, but they can be withdrawn tax-free in retirement. What’s more, the $6,000 per year maximum is something I can easily afford on my current salary.
For money that I might want to use in the nearer term, I’m also looking into setting aside a bit of each paycheck (roughly 5% to start) for an
since they are less volatile than trying to pick individual stocks, which helps with my risk aversion.
3. Cutting extra expenses and dining out less
This one is hard for me. I’m a professional and work long hours, and sometimes I feel like having Pad Thai that isn’t frozen with chicken I didn’t have to cook, even if it costs me twice a lot to have it delivered.
But take out is a massive, unnecessary expense for me, so I am cutting down on it and trying to cook more meals at home. Additionally, when I do order out now, I try to pick it up myself and save on delivery. When I do order in, I’m saving it for the weekends or special events, like a movie night or a particularly bad day. I’ve also been using my roommate’s DashPass to save on delivery fees.
I’m also trying to eat healthier, and save more money by bringing lunch with me to work instead of going to the local coffee shop for a latte and pastry. A yogurt cup, a can of iced coffee bought in bulk, and a packet of trail mix is nowhere near as expensive as a $15 coffee and sandwich lunch from Starbucks.
4. Use a budgeting app
When I was a kid, I’d often see my mom poring over her finances at the kitchen table with a checkbook, calculator, and stack of receipts and bills, and writing everything out by hand. She still budgets like that to this day.
I never developed that skill, making due simply on vibes and checking my banking account now and then. The good news is you don’t need to it old school any more, and there are apps for this. Plug in your bank accounts and credit cards, set spending limits and savings goals, and try to stick to them.
I started using Mint based on a friend’s recommendation, and it was a shock seeing how much money I was frittering away on various expenses like taking out.
While I’m just starting all this, I’m finding that having a clear plan and keeping track of my expenses is already giving me a sense of control over my life. I’m hoping that by this time next year, I’ll have less debt, the beginnings of a good retirement fund, and more cash on hand in case of emergencies.