Financial matters are definitely not my forte. Fortunately, a combination of a tight-fisted father and some self guided research has armed me with enough knowledge to secure great credit and relative* financial independence. I do not own property or possess the ability to make any sort of investments, but I’ve never withdrawn an account or paid a bill late. So, if you are looking to be more financially secure this year, here are some recommendations from me, a semi-successful millennial.
•Disclaimer: I say relative because my partner and I are fortunate enough to come from supportive families. For example, if I REALLY needed money for rent, I know my father would let me borrow some- ditto my father in law. This is not the case for everyone, so I do want to recognize this privilege we have.
Avoid retail credit cards. Retail cards are credit cards issued by retailers, like Nordstrom or Banana Republic for example. Unless you are spending a large amount- like several thousand monthly- avoid these at all costs. They have super high interest rates and very limited perks. Reward cards are different. These usually accrue points for purchases and they do not affect your credit. If you do want to sign up for a retail credit card in order to make a specific purchase such as furniture or tech items, be sure to read the fine print! Close these accounts as soon as your items are paid off.
Shop around for a credit card which best suits your needs. In my early 20’s, paying an annual fee for a credit card was not an option because I did not spend enough to justify the cost. Once I hit my late 20’s, my income and expenses increased which in turn made a fee-based card a better fit for me. Personally, I have a Capital One Venture card. I love it because I accrue basically 2% back on everything in the form of miles. The 2% back can only be applied toward travel which is something I do fairly often. Travel expenses do include things like Lyft rides, airport food, and more! Eventually, as my family’s expenses continue to increase, I would consider having multiple cards to maximize my rewards.
If you do elect to open a credit card, be sure to pay it off in full EVERY SINGLE MONTH. Interest is a sneaky, terrifying thing. I recommend using credit as if it were debit. Never, ever spend money you do not have because if you don’t have it for the principle balance, you most certainly won’t for the interest!
Prioritize debts with higher interest rates. Personally, I have student loan debt and a car payment. Recently I have made an effort to always pay more than the minimum payment in order to chip away at my debts faster. But, life happens! Some months I can’t pay more than the minimum payment on both accounts. If I had to chose one account to pay off faster, I would choose my car because the interest rates are higher.
Even small interest is interest. When I signed my life away at 18 to take out loans for college, I was wildly unaware of how much interest I would ultimately pay. Often times young people don’t realize they could be paying double their tuition once all their payments are complete. I made this mistake and only realized I have been paying $4 daily since 2007 in interest- almost $20K so far! Unfortunately, like myself most young people need to take out loans in order to pay for higher education. Be sure to shop around for loans and when possible, pay more than the minimum payment.
If you have children in your life, consider opening or contributing to an 529 account for them. I use College Backer for my daughter’s account. These accounts have restrictions in how and when the funds can be used, but they are low risk and perfect for college savings. I plan on asking for contributions to my daughter’s account instead of gifts for birthdays and holidays.
Consider assigning a monetary value to what your time is worth. Before moving to The Valley, I lived in Downtown Los Angeles. I loved it, but it was notoriously a bit difficult to get around. For me this made grocery delivery services a no-brainer. I used InstaCart and I felt the cost of delivery was less than the cost of my time spent (plus gas + parking). I’m a huge believer in buying yourself time however you can! I have a monthly housekeeper as well. I prefer to spend weekends on social activities and professional development. I do think utilizing my time and income this way has made me more successful professionally and emotionally. If you want to try out Instacart, use my promo code for $10 off: CHAGERTY33
Unsubscribe and unfollow accounts which tempt you to shop. Sometimes email blasts and IG posts prompt us to buy things we really do not need. Recognize your weaknesses- for me, those are clothes and makeup. I often challenge myself to go on shopping cleanses. Out of sight, out of mind works well for me if I am trying to avoid purchasing things.
Use your network for financial help. When I was younger, I used to do odd jobs like alterations and babysitting for a family friend in exchange for help with my taxes and managing my financial accounts. The lessons I learned were so valuable and I’m sure the feeling was mutual for them! It’s very likely there is someone in your social circle or family who is willing to share some wisdom with you.
Check your accounts frequently and take advantage of apps! It’s easier than ever to take control of your financial health. Financial health is super important, especially for women.
I like boarding jets, I like morning sex, but nothing in this world that I like more than checks. -Cardi B