Finance Friday

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Now we get to the really uncomfortable topic: money. It’s strange how we’re willing to talk with friends and family about other areas of my life that are not going well (weight, fitness, work, relationships), but money is still such a taboo topic. It’s incredibly hard for me to want to write about it here, anonymously on the Internet. I’ve struggled with how much I want to share. There’s definitely a feeling of shame that comes along with how my finances are doing that doesn’t appear when I think about my weight. I’ve had the capacity to deal with both in better ways than I have, I’m unhappy about both, and yet only one comes with this profound sense of failure.

Is it because it’s readily apparent how many people in our society struggle with weight issues? It’s not something you can really lie about easily. If you’re overweight, it’s obvious. Finances, on the other hand, are not public. Nobody can look at you and say “oh, they look like they’re about $20k in debt.” And yet it’s definitely something that most people deal with. Millennials between 25 and 34 have an average of $42,000 in debt, with up to a fourth of that being credit card debt. I’m obviously not an outlier, which is somewhat reassuring, but knowing that fact doesn’t put me in any better of a financial position.

It’s time to get serious. I need to be honest with myself and work my way back into a better fiscal situation. So here it is: I’m in about $39,000 in debt. The large bulk of that is student loans, and I have one credit card that is just barely in the five figures (*cringe*). My savings are mostly depleted, after throwing what I can at debt and a rather large vacation I had agreed to earlier this year (*double cringe*).

How did I get here? The student loans don’t bother me quite as much; I know they are at least considered “good debt” (i.e. worthwhile debt). Not that any debt is great, but they’re much easier to contend with than my credit card debt. When I first moved to DC at age 24, right after grad school, I had maybe $4,000 on my card from the tail end of grad school and the move. I thought I’d be able to pay it off quickly. But the reality of my salary (below $40k) plus living in an expensive city, coupled with my student loans coming due, made it difficult. I’d make progress for a while and take a step forward, but then “unexpected” expenses (or expenses I just wasn’t prepared for) came up and it would be two steps back. As my salary rose, so did my expenses. I moved from a big group house (cheap rent) to situations with fewer roommates, and then finally got my own one bedroom once I hit 30. The repayment amounts for my student loans went up. And then there was the fun stuff I spent on too (I’ve only taken two real vacations in my adult life, but they did end up adding to the amount on the credit card.

It’s hard to see that all in writing, but it’s important. I need to understand how I got here to avoid it going forward. And I know it will be slow going sometimes going forward. But I do have a plan.

I need a budget. Or rather, You Need a Budget. YNAB is the absolute best budgeting tool out there. I’ve used it in the past when I was working on getting my finances in order, but of course, as soon as I stopped, my situation took a step back. Any backsliding was completely on me, not the tool. Because it has made progress for me in the past, I know it’s the right budget format for me.

And really, in a lot of ways, finances and weight aren’t so different. To get yourself out of a hole in either case, tracking is key. So while I work on tracking my calorie deficits, I’ll be working towards a budgeting surplus. While working in two different directions, I hope I’ll be able to find balance in the middle.

Check back in next week to see how budgeting is going and why I think a budget like YNAB is something everyone should have.

Now that I’ve bared my most embarrassing confessions, what about you? Is money your most taboo topic, or is there another topic you try to avoid even more?

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