Adulting so good with personal finance
August 16, 2018 4:08 AM   Subscribe

New adult seeking guidance and orientation on how to be responsible with money. What's your favorite book/audiobook/youtube channel/website etc? Also what's your one advice?

I have shittily and haphazardly stumbled into adulthood recently. I mean, yes, I have been legally responsible for my actions for 15 years (I'm 33), but I am finally starting my first real salaried job this month after a decade of living on graduae student stipends.

I am fortunately without any debt and my credit score is good. I have no mortgage. I am generally very good at budgeting and spending very little money. But I am also aware that I can probably do more with the income I don't spend than shoving it into a basic savings account-- which is what I had been doing until this point of my life, and as such I have a little bit of savings that I can work with.

I want to learn about personal finance/investment-- nothing big, just the kind of thing to make sure my savings don't depreciate with inflation, and if I save a lot maybe it can grow, too. Right now I know nearly nothing. Please help orient me! Books and articles are welcomed, but I'd especially appreciate anything I can listen to as an audiobook or podcast, or that I can watch. Or any gems of wisdom from you!
posted by atetrachordofthree to Work & Money (18 answers total) 29 users marked this as a favorite
The Bogleheads forum and wiki is an excellent place to start. It's very active, and covers simple, low-cost index investment methods (pioneered by Jack Bogle, founder of Vanguard), as well as a lot of other consumer finance topics. I also enjoyed the book The Four Pillars of Investing, and for a longer, more detailed read, A Random Walk Down Wall Street. I'm not sure if I'd listen to them as audiobooks--both have a lot of charts and graphs that I appreciated being able to study.
posted by tybstar at 4:31 AM on August 16, 2018 [8 favorites]

Gail Vax oxlade for budgeting.
posted by Ftsqg at 5:01 AM on August 16, 2018 [3 favorites]

The Investment Answer is a well written and clear book on investment and finance.
posted by nickggully at 5:15 AM on August 16, 2018

Trent's posts on The Simple Dollar.
posted by peanut_mcgillicuty at 5:19 AM on August 16, 2018 [1 favorite]

One thing that helped me significant my when I was in this situation was having a budget--I couldn't get my head round the idea that I could be "responsible" and spend money on myself/things I wanted.

I'm still stressed/afraid I'm doing it wrong about saving for retirement, so am watching answers here, but, YNAB was revelatory for me in terms of getting out of a permanent financial crisis mode, where I could manage my money, but any spending felt disproportionately fraught. I still have problems spending money, but even materials that assume debt (like YNAB more or less does, but which I didn't have) helped.
posted by hoyland at 5:36 AM on August 16, 2018

I really liked the book "Your Money or Your Life" for just an attitude switch about spending and saving money.

My main pieces of advice are:

1. Have one day a week where you don't spend any money. Look ahead each week to see what day would be best for you--don't eat out or get coffee, and avoid online shopping. Having just one day a week where you don't spend money can add up, and it helps you learn about fun things that are free.

2. Use your parks and libraries! Go for walks and bike rides in your parks. Check out books, audiocds, and DVDs from your local library.

3. Invest in retirement as early as you can. Vanguard is a good company to create a Roth IRA--you can save $5,500 per year in this account, and you never pay taxes on earnings since you put in earnings that have already been taxed. They have target date retirement accounts, so if you plan to retire in 2048 (thirty years from now), you can invest in an account like this and then it automatically adjusts to be more risky early on, and less risky as you get older.
posted by shortyJBot at 5:51 AM on August 16, 2018 [1 favorite]

For longer-term investment, I do research from a variety of places, though most of them are Canada-specific. My main general takeaways for a beginner would be:

- Budgeting is important. Don't let your spending get out of control just because you're making more money, or even if you feel like you're saving enough. IMO, mindfulness is better than mindlessness even in the case where you are doing "mindful" spending versus "mindless" saving.
- Don't neglect your emergency fund just because it "could" be earning you money. It's important to have this buffer, because if something happens and you don't have an emergency fund, you could be forced to sell your investments at a bad time.
- Many so-called advisers, the people who work for banks, are literally just salespeople. Do not trust them blindly, do not make decisions on the spot. Research, google, go to personal finance forums and ask around for yourself.
- Focus on learning about and using tax-advantaged accounts (once your emergency fund is set). Can't give you any specifics here because it varies depending on location, but they're often great vehicles for investment and long-term savings.
posted by one of these days at 6:44 AM on August 16, 2018

I really enjoy Laura D. Adams' Money Girl podcast. The episodes are all pretty short and usually revolve around one specific topic or question so it's easy to skip around to the ones that are most relevant to what you want to know. She's really good at putting more complicated finance issues into context and summarizing the most important takeaways. Definitely worth a listen.
posted by helloimjennsco at 6:53 AM on August 16, 2018

I learned to keep 2 sets of accounts - one working set and one long range. I have money from each check automatically rolled over to the long range account and it acts as my emergency fund. The working is what I pull from.

Automate - helped me hugely to get a handle on things. Cell phone, electric, car payment, insurance, and most importantly, I have automated the aforementioned transfer to long range account. You can start this with as little as a few dollars a pay period. If you are living ok, bump it every now and again.

401k - at least meet your company match if you have one. Example - my company will give me 50 cents for every dollar I put in, up to 4% of my salary. I make sure I will at least do 4% or else I’m leaving money on the table. Play with 401k contributions - for awhile I would add a percent or two and see what my check is like for awhile. You’d be surprised at how pretax dollars that you are contributing don’t effect your check as much as you might think.

I had a rule - one credit card, no more than one car payment, one mortgage (although I don’t have one now). Works for me so far. Might not for you, but I think it is something to be mindful of. I also keep the card usage to what I can pay the full balance of every pay period.

If you buy a car or house, buy what you need and research. Do you really need a McMansion? The 4 door pickup with the custom rims? I figured that I didn’t. Mainly after I priced in my area and figured out that I would be spending a fortune on such things.

I guess the easiest way to say it is to live below your means as much as you can. I haven’t always had the ability to, but when I could I did (do).

The book I read that got me was Elizabeth Warren and her daughter in law’s “All your worth”. Others have different ones, but I read this and have given copies to my children and siblings. Some are mindful of it and some maybe not so much. Hit the library and you will have lots of options. If one sticks that you want to follow, buy it for keeps.

The awesome thing is that you are mindful already just by asking the question. See what answers show up here, research, read books - try things that sound good to you, and then adjust. Just because you can’t meet a savings goal this check doesn’t mean you can’t next check. Don’t give up - if you truly want to work it out, you will.

Good luck!
posted by kabong the wiser at 6:56 AM on August 16, 2018 [1 favorite]

Hilarious and 100% shame-free podcast on personal finance for the uninitiated: Bad With Money With Gaby Dunn

My one tip would be to make sure you sign up to pay into a 401K at your new job, and if your employer offers matching, invest up to (or more) the amount they match.
posted by prewar lemonade at 7:35 AM on August 16, 2018

Seconding Gail Vaz Oxlade for budgeting basics. See if you can watch her show 'Til debt do us part' in your jurisdiction. So fantastic!

I found Andrew Hallam's book MIllionaire Teacher (which I sensibly got at the library) to be life changing in terms of how I invest. Before that book, I was using either mutual funds (very high fees in Canada!) or individual stock picking (so stressful! so random!) to build my portfolio.

For a punch in the face about trying to fast track retirement, Mr Money Mustache is a classic resource. I will admit that I am not a very good mustachian, but I have internalized that the path to retirement is more efficiently reached through reduced spending rather than increased savings.

Good luck!
posted by Sauter Vaguely at 7:44 AM on August 16, 2018

This is the best resource I can think of - should take less than 20 minutes.
posted by bbqturtle at 8:00 AM on August 16, 2018 [1 favorite]

Mr. Money Mustache.
posted by augustinetill at 8:38 AM on August 16, 2018

I like Mr. Money Mustache as well.

My One Big Tip would be to never spend more than you make. Don't put that TV on your credit card if you can't pay the full balance this month. If you can't pay the full balance this month, you can't afford a TV. Start saving for it.
posted by craven_morhead at 9:01 AM on August 16, 2018

Get Your Money Together by the producer of Oh My Dollar! It's about how to match your money habits to your values, especially as a formerly-broke, nontraditional earner. Plus, cats! And Bowie!
posted by fritillary at 10:54 AM on August 16, 2018

My One Big Tip would be to never spend more than you make. Don't put that TV on your credit card if you can't pay the full balance this month. If you can't pay the full balance this month, you can't afford a TV. Start saving for it.

I just want to add that in a perfect world where you have the discipline and free headspace to manage it, you can make your money go farther and indeed increase your wealth with responsible borrowing. Between below-market interest rate deals and points/cash back offers, there is money to be made (or at least more immediate gratification without financial penalty) by working the system. For example, if you are planning to buy a new TV or computer or whatever, it can sometimes be cheaper to buy the item during a particularly good sale before you have the cash on hand and pay a month or two in interest than buying at the normal price. When you're "saving" 40% and that adds up to a couple hundred dollars relative to more common pricing, refusing the deal because it will cost $10 or $20 in interest is self defeating. (And it's worth the expense to keep one's emergency fund intact, IMO, presuming that's the other option)

That said, it's all too easy to slip into overspending and wake up one day with 5 figures of debt that's costing you money. But even then, unless you really screw the pooch or have an ill timed interruption in income, it doesn't costthat much. Only you can say whether the risk of overspending outweighs the benefit to your future financial position. For many of us, the downside risk is too high thanks to our habits/personality, but that isn't necessarily true for everyone.
posted by wierdo at 7:23 PM on August 16, 2018

Herr Vortex and I are longtime Your Money or Your Life devotees. We both read it in our late teens/early 20's (long before we met) and it has seriously, positively shaped how we look at money, work, and what we are doing on this planet. We both still have our original, yellowed, dog-eared copies and we still reference them like religious devotees referencing the scriptures. I have not looked at the new version (with a forward by Mr. Money Mustache) but have heard that it sticks to the philosophy and has just updated the specific finance recommendations...not that there were many to begin with. It's very much a philosophy book.

To go with Your Money or Your Life: Herr Vortex just read The Simple Path to Wealth and he says it's the perfect companion book to YMoYL. Whereas YMoYL is philosophy, The Simple Path to Wealth is practical steps that one can take. What is a 401k? How do I invest? What is a mutual fund? etc etc etc It is of the same "flavor" as YMoYL. We got it from the Library but I think that we'll wind up buying it eventually, and it will also get yellow and dog-eared with age and use.
posted by Elly Vortex at 8:54 AM on August 18, 2018

I love Gail Vax Oxlade for budgeting as mentioned above, but I also have listened to Suze and Dave Ramsey for more long term planning and investments. It's really more of a personal preference which you enjoy more or are annoyed less by.

But generally - look for better deals, especially on monthly/recurring bills. We get some household stuff from Amazon, some from Costco, it just depends who has a good deal. Is your cable bill $120 a month? Figure out a way to pay less. Cell phone bills? We just joined my folks' family plan, saving us about $80/month. Car insurance goes up? Find a better deal and sock the rest away.
posted by getawaysticks at 10:36 AM on August 18, 2018

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