*This post was written while I was still pregnant with Riley *
Millennials always get the bad rap when it comes saving money, purchasing a car or home, jobs etc. It is way too easy to condescending towards Millennials. But truth be told, there are various factors as to why we’re broke. Cost of living is expensive, minimum wage has been stagnant for years and it wasn’t until recently that some states raised minimum wage from $7-$8 dollars to $15 (even that is too low for the Tri State area). In addition, we have an exorbitant of student loans and medical bills. To top it all off, we also had the Great Recession of 2008…it’s no wonder we’re broke! A lot of millennials struggle with their money as we face our generation’s unique financial challenges and I am no different.
My name is Blanca, I’m 26 years old and I am a Broke Millennial. Phew! Now that it’s out in the open, let’s discuss how I got here and how I made the decision to change my reckless way of spending. Prior to being the quintessential “Broke Millennial”, I actually had money saved up. No really! My parents always spoke about saving and how vital it was to always have money in case of emergencies. For a long time, I lived by this motto. I began to save every dollar that was given to me at during the holidays and my birthdays and before I knew it, I had a decent amount of amount saved up. I made the financially sound decision to go to a Community College instead of a four year institution. It was not the ideal plan (due to the stigma Community Colleges carry), but in the end, I ended up not paying for tuition thanks to Financial Aid and State grants (during this time I was able to avoid loans for 3 years!). I even had money left over each semester, which ended up going into my bank account. Soon after I graduated Community College and went to Ramapo in order to further my education. It is here, where for the first time, I had to take out a loan. With said loan, financial aid, my savings and help from my parents, I was able to pay for college. I graduated from my Alma Mater in 2015 and was on the hunt for a job. I needed to find one quickly, as I did have a debt of 14k to pay back. In retrospect, it is not awful, but for someone who was only working part-time as a nanny, making the minimum payment was a daunting task.
Two months after graduation, I started my first real job. My starting salary was 32k and it came with benefits! Amazing… right?! I thought I had made it, considering I was one of the lucky few who actually had a job and was starting her career. In hindsight, I should have negotiated the starting salary, but because I was so eager to work and move in with my then boyfriend (now husband), I took the job. So I packed my bags and moved to New York in the summer of 2015. This is where my financial life took a turn for the worse. I had to purchase a “new” used car and thus I used money from my savings. In my naïveté, I thought that I could put the money back but that never happened.
During this period of transition, my husband and I were switching jobs and our financial situation was not the best. Nonetheless, I continued to spend money frivolously and no money went to into my savings account. Out the two of us, I will admit that my husband is definitely more financially savvy than I am. Which is why I was reluctant to talk about money with him. Money conversations never ended well. In addition, we acquired a new apartment (which meant a higher rent), we were planning a wedding and I ended up financing a new 2017 CR-V (it had been two years since I moved to NY and my car was beyond repair). Again, not the best move on my part. All of this required me to save little by little but at the same time use what was left of my savings.
Eventually things started to level out, to the point where my husband and I thought that we could both finally save money in order to have an emergency fund and go on vacations. Unfortunately, shit the fan and there went the little money we had. It seemed that no matter what we did, there was always something that stalled us. He and I would rarely discuss our financial assets because I didn’t want to face the fact that I was spending money that we didn’t have. I thought that by brushing things off, I wouldn’t have to face the numbers. I came to realize that doing this was not a smart move.
So what ended up being the spark that began changing my ways? Believe it or not, becoming pregnant in December of 2017. For two years, I was making horrible financial decisions in my life. Either out of ignorance or just plain stupidity. Now, I could no longer afford to do any of that. I had a baby on the way and I had to put her needs before mine. Around April or May of this year, I stumbled upon the Financial Diet’s Youtube Channel. I was immediately hooked and began digesting every video that talked about getting your finances together. Watching these videos, lead me to the The Financial Diet and Broke Millennial ** (mini review: 2 Personal Finance Book You Need To Read In Your 20’s) ** books. It was here, where things started to make sense and seemed possible to achieve. These books broke down all of these financial jargon and gave feasible steps in order to build up a nice saving account (among other things).
By the time I was done reading both books, I felt prepared to make the proper changes in my life. Following the tips and tricks from these books, I started to look at my bank statements in order to figure out where my money was going. Next, I looked at all of the debit I had accumulated. I have two credit cards that are well beyond the recommended 30% percent of usage, student loans, a car & personal loan and a medical bill.
Once all of this was done, I made a game plan of what I could pay off first. I set my eyes on the personal loan and medical bill since I owed less. I paid off the personal loan in May and I just paid off the medical bill in August. I’ve since then moved to paying off my credit cards. While doing this, I am sending more than the minimum payment to my student loan provider. By sending an extra $40 dollars, I’ve already shaved off 3-4 years off of my payment plan.
Another method that has been helpful, has been cash diet method. I’ve gotten into the habit of taking out money every two weeks and solely using that money until the next pay period. I will admit, that it is difficult to do at times, but it has made a huge difference in my spending habits (This was also an idea that my husband has been telling me to do for years… safe to say he has a point). Now, from point view, my two biggest financial achievements would have to be: opening up a 401k and putting money into both my savings and our joint bank accounts. It was a bit of shock when I saw how much was being taken out of my paycheck (401k), but I figured that I would probably be spending that money on something ridiculous.
In regards to my savings, I feel proud and accomplished that I’m actually saving instead of taking out. Even though it’s not where its suppose to be, the fact that it will eventually be there is satisfying. The only thing that is currently stagnant until further notice is my car note. Until I have no credit card debit, I won’t be able to send extra payments. So far now, I’m making do with the minimum payments.
I’ve come along way in my financial journey. I went from saving every to penny to blowing off practically every paycheck. I can now say that things are improving and are looking better than ever. Even though we’re still kind of living paycheck to paycheck, it no longer feels like a huge burden. I’m no longer worrying about how I don’t have any money saved up or how I will pay my bills. Nor am I making any stupid purchases… ok I’m making less stupid purchases (let’s be real, its hard to quit cold turkey. Plus once in a while, treating yourself to an item, is not such a bad thing). I’ve taken the necessary steps to ensure that I’m doing my very best to be financial free. I owe this, to my child, who unknowingly has been the catalyst of getting my financial life together.
*Since, I first wrote this post, I’ve increased my student loan payment by another $10 as I did notice that my student loan provider was not applying the extra money solely to the principal. Lastly, I’m finally seeing the light with my credit card debit. I hope to have one paid off by the end of the year.