I recently read an article that was published a while back called A Story of The F*** Off Fund. I fell in love and felt empowered to start my own.
In short, it tells the story of a recent college graduate woman and the financial situation she finds herself in. The story hits home for a lot of women in their twenties who find that their reality mirrors this story all too well. The scariest part of the whole article though is the girl in the story didn’t do anything out of the ordinary or anything glaringly wrong. But yet, she found herself in a terrible personal AND work situation with no immediate way out because she was not financially independent.
The moral of article is to learn from her “mistakes” and ensure your financial freedom starting right after graduation. Having gone to women’s events and seminars and having networked with women in all stages of life, I’ve gotten the message loud and clear that women across the board do not handle their money well and struggle to achieve true financial independence.
I don’t want that to be me! I’ve barely graduated and been in the workforce, how am I already making mistakes with my money?! If you are anything like me, you know little to nothing about your finances—this is probably my first mistake. People are always saying to invest your money, buy stock, build your credit, put money away for retirement etc. etc.
These all go on the running list of things we should have learned instead of geometry, right above how to change the oil in your car and do taxes. I am 100 percent guilty of relying on my parents my entire life to handle the money issues and bills. I was fortunate enough to have their financial help through college and until recently did not have any real expenses. Yikes, I sound so spoiled.
Now that spoiled, over-privileged little old me is out in the real world and have gone from paying for virtually nothing to almost everything, I am freaking out a little bit! I don’t want to make the mistakes that so many women commonly do.
After doing a lot of reading and research here is my plan:
- Limit big spending—I like to shop, go figure. It’s easy to get carried away with spending when you start bringing home a real paycheck. All of a sudden you have all this money and no one to spend it on but yourself. SLOW YOUR ROLL GIRL. While you might have the money to pay rent, buy a nicer car and new furniture for your first real apartment, it’s not the smart decision. Start small and save. Unless you absolutely need all of these big purchases at once, spread them out and pay for them out of pocket. Adding too many expenses all at once can be a recipe for disaster and it limits very drastically how much you can save right off the bat.
- Build your credit—Growing up my parents didn’t really use credit cards. If they couldn’t afford something right then, then they didn’t buy it or waited to buy it until they saved most of the money to pay out-of-pocket. Seeing as this is how I grew up, I was hesitant to open a credit card as I share the same belief as them. I have always had the mindset that if I can’t afford it now then I probably shouldn’t be making that purchase. However, I learned I need to get over this mindset because you have to have a good credit score to make big purchases and be financially independent. Since starting my job in January, I have opened two credit cards and use them for work expenses and pay them off immediately. My advice to you is to view your credit card as a way to build credit not as way to get things you want. Keep it in perspective because just like your GPA once your credit score drops, it’s hard to get it back up.
- Invest where you can and learn how to. This one is still pretty daunting to me and by daunting, I mean I have no idea where you even begin. Return on equity, market capitalization, price to earnings ratio—AHH my head is spinning! The good news is you don’t need to become an expert over night and nor should you. My advice here is to realize that investing, especially as a woman, is a smart decision. Take the time now to start exploring it and doing research on your own. Ask your parents, consult co-workers or mentors and read as much as you can. One resource that I found that talks directly to women about investing is Ellevest.
There are many ways for you to become independent, but I think these are a few good places to start. Once you graduate, everything starts to come at you at once. It can be very overwhelming, so develop a plan now. It doesn’t need to be anything crazy, but its important to at least be thinking about your finances and how your decisions now will impact the state of your financial future. What are some of the steps you are taking to build your saving?