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Things I've Learned Since Turning 30: Money

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When I got my first real job, I was floored at the amount of money that was on the paycheck. It was more than I'd ever seen (interning and working at a summer camp in college weren't the most lucrative careers) and I spent it like I was a rock star. However, when my first round of bills poured in, I realized the shopping sprees at Forever 21 and Urban Outfitters were not warranted. Oh and that huge income I thought I'd been making? It was hardly enough to get by. I soon learned the importance of saving, but I was still unclear on how to manage my finances. Now that I’m a homeowner and run a small business, it’s imperative to have intimate knowledge of what’s happening. Here are the financial lessons I’ve learned over the past few years.


Credit: I had an amazing high school teacher who warned our entire class not to get a credit card in college. Yes, it's thrilling to finally be independent and have access to easy credit, but far too often students fall victim to high interest rates and revolving debt. Had he not terrified me, I would have had a wallet filled with unnecessary cards. He instilled the fear of a low credit score and I made it a point to avoid any retail or promotional credit cards until after I graduated and had a job. Though one of the best ways to build credit is to spend, I make sure to pay off the balance each month. I also manage my score by limiting myself to two cards (one personal, one business), both of which offer great incentives, like points and cash back. Our upcoming trip to Hawaii will be paid fully in points.

Saving/Investing: I didn't put a lot of thought into my retirement when I started my first corporate job, but was smartly advised to take advantage of the company's 401(k) plan. I always put in the maximum allowance and it provided a nice investment without feeling like I was missing out on anything. Now that I work for myself, squirreling away money for retirement is a little different, but even more important. I put about 10% of my income towards my savings account and into an IRA, so it can grow at a more progressive rate. 

I've also become more thoughtful about my purchases. After we bought our house, I cut back on my clothing purchases and lost that compulsion to shop aimlessly. I found more satisfaction in buying something we used around the house versus adding another pair of jeans to my collection. It's not to say I don't spend, but try to treat myself when it's deserved, rather then spending on spur-of-the-moment items. It might seem simple, but even cutting out small things like going out for coffee and getting mani/pedis adds up over the course of a year.  

Budgeting: When I first became pregnant, we stopped going out to eat, mainly because I felt lousy and was averse to making plans. I knew we ate out a lot, but it surprised me how much money we saved. Also, since I had specific cravings and a bunch of restrictions, it was easier to whip up something at home. We've since made a new rule: we only eat out for special occasions or when it's been planned in advance. We'd often order take-out whenever we were too lazy to cook. Now, we use Sundays to meal plan and stock up on groceries. This was a big change for us, but not only do we save a lot, it also makes going out to eat that much more special.

I’m also a big believer in using software to help manage my personal budget and love Mint. It’s been around for a while, but breaks down your spending habits in such a simple and clear way, that you don’t need an accounting degree to see where you stand financially.

Here are the loose percentages that I follow:

Housing: 20-30%

Food/Dining: 15-20%

Health Care (I include gym memberships and insurance): 10-15%

Personal care (clothing, grooming, etc.): 5-10%

Transportation: 7-10%

Loans (does not include car/home): 10-15%

Savings: 10%

Entertainment: 3-5%

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