Jess Diamond (00:02.873)
Welcome back to another episode of How to 20-something, where today we are talking all things money. Being in your 20s, it’s really exciting to finally have some consistent cash flow with a new full-time job. I even remember asking my friends who started working several months before me what it was like being an adult and out in the working world, and they would all respond with, it’s amazing. I finally have money to buy things. Now…

Depending on the job you have, your salary, your cost of living and regular expenses, your relationship to money will probably differ from your peers. I know I was making a lot less than my friends. So when they were like, I have all this money and I was like, huh, where? But that’s besides the point. It’s still important to know what to do with your money now that you’re finally making some, even if you feel like you don’t have enough to save on a monthly basis.

And that’s exactly what Julia is here to break down for all of you throughout today’s episode. So Julia Cancro is a seasonal professional who has built a flourishing career spanning the tech and retail industries at Fortune 500 companies. While living and working in New York for the last 10 plus years, she has seen her own successful colleagues and friends struggle to understand how to manage the money they work so hard to earn. This is what inspired her to author More Than Cash.

When Julia’s not reading or writing about personal finance, she’s seeking out untouched snow on the ski slopes or looking for an available tennis court in New York. She has a BA from Notre Dame in psychology and Spanish and lives in Manhattan. Julia wrote a practical guide for her friends, which eventually became more than cash. What to do with your money now that you’re finally making some, hence the title of this episode. She brings a rare combination of expertise and approachability, making financial literacy not just accessible, but actually fun.

She’s on a mission to empower those new to the workforce to take control of their money and ensure it’s working just as hard as they are. Hi Julia, and welcome to How to 20 something.

Julia Cancro (02:00.726)
Hi Jess, thank you so much for having me. What a great intro and hilarious because on my screen right now I have an online tennis court reservation tab open trying to get a court in Central Park, which is a persistent challenge.

Jess Diamond (02:16.633)
Yeah, then I guess your bio stays true. So I want to start this episode off with probably the most obvious question, and that is, what should we be doing with our money in our 20s?

Julia Cancro (02:19.182)
Yeah.

Julia Cancro (02:30.848)
It’s a great question and a very personal one and different for everyone, but there are a few broad sweeping statements that we can safely make about what you should do with your money in your 20s. First of all, pay down expensive debt. There are different categories of debt. You can have educational debt. You can have, you know, car payments. Things like that are different from credit card debt.

and I think a common pitfall of people in their early 20s, right? You’re moving into an apartment, let’s say for the first time or a house, and you need furniture. You buy furniture, you don’t have money yet because you haven’t started working theoretically, or maybe your savings from college jobs or things like that are not enough to cover the amount that you need to pay out to move into a new apartment and furnish it, right? So you may take on credit card debt. That’s what credit cards are for. However,

Carrying that debt for a long time becomes very expensive. Credit cards charge more than a normal interest rate for you to carry that debt. So if you have an unpaid credit card bill and you’re just rolling it over month after month, paying the minimum, pay that off. Do everything you can. If it means saying no to a dinner, no to a weekend trip, your future self will thank you if you pay down that debt. So number one.

One way to assist with that is to, you know, I don’t want to necessarily recommend that people start using a debit card instead of a credit card, but that practice of only spending what you have available is very important when it comes to thinking about how to save. So that’s one, pay down debt. Two, pay yourself first. When you are thinking about a budget,

includes savings in that budget. So when I say pay yourself first, what does that mean? It means put money in a savings account, could be a regular savings account, could be a high yield savings account, could be a 401k or IRA for retirement savings. Put money in those, in one or all of those accounts if you can’t every month, because that money then is for you versus going and paying for

Julia Cancro (04:55.374)
any other living expense that you may incur that is going out the door that you will never see again. So pay yourself first. I think, you know, when you think about your twenties, age 22 and age 29 are very different, right? And doesn’t sound like that different, right? Seven years, but first job out of school, first paycheck is very different than you have some working experience under your belt.

Maybe you’ve gotten a promotion, maybe you’ve gotten a raise, hopefully a few of those in between 22 and 29. And so what you should be doing with your money at 22 is different from what you should be doing at 29. And I want to tell one story briefly about the importance of saving early. It’s a story, but it’s also math. So there are two people, right? And we’re going to talk about

saving over a 40 year period. So you’ve got two people, one saves $2,000 for 10 years, $2,000 every year for 10 years, and then nothing else for 30 more years, never puts another dollar in savings, but leaves that savings compounding in the market average return. And then you have someone who graduates from school, doesn’t save a penny for 10 years. And then for the subsequent

30 years saves $2,000 every year. So you have one person that saved a total of $2,000 a year times 10 years, $20,000 of cash that they saved. And then you have someone who saved on the back half or more than the back half, the back 75 % and saved $2,000 times 30 years, that’s $60,000 saved. Then at the end of the 40 year period, those two people meet.

Who do you think has more money saved?

Jess Diamond (06:52.281)
I I feel like I know the answer is the person that saved the for the 10 years, but logically thinking you’re like, no, it’s got to be like the other person saved so much more, but I know it compounding interest does a lot for you. So I’ll let you answer.

Julia Cancro (07:05.78)
Exactly. Exactly. You’re exactly right. So the first person who saved $20,000 over the course of 10 years and then never put another penny in savings, they let that money grow compounding. That’s the compounding rate that I applied was the average market return adjusted for inflation. So approximately 7%.

people hearing this might say, wait, I thought it was 10%. If you adjust for inflation, it’s around 7 % over a hundred year period. that per, I tell this story in the context of what should we be doing with our money in our twenties is the sooner you start saving, the better you are set up for future success. And it takes pressure off how much you have to save because you have time, which is your greatest asset working in your favor.

Jess Diamond (08:00.237)
when you say like we should be saving and I know you said like whether it’s a savings account, a high yield savings account, a Roth, a 401k, whatever it is, if not everything, all of the above, I think where a lot of people get stuck is how much to put in there. So what would be…

Like a minimum, could it be $5 a month? that be like, as long as I’m putting $5 a month into each of these accounts, I’m okay? Or should it be a little bit higher? how, I think like we go into it as like, it should be a couple hundred and I don’t have a couple hundred to spare. And so I’m not gonna save any of it. So it’s kind of like that all or nothing mentality. What is your recommendation of the minimum someone is able to spend if they feel they are living paycheck to paycheck?

Julia Cancro (08:46.926)
It’s a great question. I think the most important thing is building the habit of savings. So if it means you can only save $5 a month, by all means do $5 a month. I think when you talk about living paycheck to paycheck, there are different types of living paycheck to paycheck. There’s living paycheck to paycheck because you expenses, right? You have your rent, you have to eat.

You may have unexpected expenses, medical, you may have debt. I’ve talked about this before on some other podcasts, like Maslow’s hierarchy of needs of how you spend, right? If you’re, you need to meet your basics, right? Shelter, food, water, those things. That living paycheck to paycheck is different from living paycheck to paycheck because your friends were like, let’s go to Miami this weekend and you went to Miami or let’s go to Vegas and you gambled in Vegas. You know, there are.

there are a lot of different types of living paycheck to paycheck. So if you can’t save because you are spending excessively, that might be time to look in the mirror and make a lifestyle change or start figuring out which things you need to say no to so that you can save a few hundred dollars a month or a year or whatever your income versus required living expenses net you out at the end of the day. So I would say first build the habit of saving.

Second, push yourself year over year to increase that percentage of savings, whether it’s in your 401k, if you work for a big corporation that offers a 401k. Typically, you can select a percentage of your paycheck that gets routed to your 401k. Make a commitment to yourself that if you’re doing, let’s say, 5 % this year, that next year you do 6%, and the year after that, 7%. So that’s the second thing, is to push yourself. And the third,

You mentioned you might not be making a lot of money. How much should people save? It’s very behavioral. So there’s a great book called The Psychology of Money. And that book talks about how your relationship with money and the amount of money that you end up with at the end of the day has a lot to do with how you choose to live your life. And so the example at the beginning of the book is a…

Julia Cancro (11:11.182)
a man who was a janitor and a gas station attendant for 40 years versus a, or I don’t know if it was 40 years, or the whole length of his career, and then versus a Merrill Lynch executive. So you know intuitively the Merrill Lynch executive is making a ton of money. He retired in his 40s, and then you have a gas station attendant. At the time of, you know, the comparison of where they both netted out is the gas station attendant when he died,

He left $8 million to his children. The Merrill Lynch executive was bankrupt. And that is all having to do with how you choose to live your life. One of them is clearly making more money than the other, but it’s about your spending versus savings habits and your relationship with money. So that’s why it’s really important in your early 20s to develop a healthy relationship with money and start putting some money away, make it a habit to save.

Jess Diamond (12:09.273)
feel like there’s so much I can unpack from this. So I want to start with what you’re getting out of living above or below your means. How can someone listening determine just for rent, what is above or below their means? Because rent is out the wazoo these days. And I feel like I live above my means a little bit. But there’s the part of it of it’s going to stretch me, of I have to work harder because I want to be able to save on a month-to-month basis. But I’m also self-employed, where I have

the opportunity to make more, but I also have the risk of making less than a given month. Whereas someone with a steady paycheck, how do they figure out what is above their means and what’s below and why that matters?

Julia Cancro (12:53.05)
I mentioned earlier that your relationship with money is very personal and it is. And it also depends a lot on what city you live in. The rule of thumb tends to be that rent shouldn’t exceed more than 30 % of your take-home pay. I live in New York City. That is a very, that is a near impossible thing for someone in their 20s.

It is important to, when you’re first getting started, create a budget of how much are you taking home, right? Like figure out how much is going to taxes, how much, like at the end of the day, let’s say your base salary is making it up $50,000. What are you going to see every paycheck? You have two paychecks a month. How much are you seeing? Then from that,

how much are you comfortable paying to rent? I’m saying comfortable, because it is personal. Some people may say, I’m really nervous about being destitute, right? You and I were talking before we started recording about how your background impacts how much money you believe you need to save. I think, though, the important part is staying very firm in how much you believe.

you need to spend on rent versus how much you need to save, right? So if you say, can only spend $1,200 a month in rent on my $50,000 income, stick to that. Don’t let yourself get swept up and, well, my friends wanna live here and there, and maybe I can push it. And then that means you’re saving less. I know that’s kind of a roundabout answer, but.

Jess Diamond (14:43.957)
But the 30 % is helpful and then being realistic of, hey, knowing the economy right now, knowing how expensive rent is, especially if you live in a city, which I’d say most 20 somethings live in a city, that it might be closer to 50 % of your paycheck when you’re first starting out, when you are first getting that big girl, big boy adult job. But the other part of that is what I also wanted to bring up is the

the need or the want to prove yourself to your peers, because you’re also making friends and you want to show that you have things that you want to host. You don’t want roommates. You have certain standards for yourself or feel the need to either prove it to yourself or prove it to other people. And that means spending more money on rent or on your furniture instead of getting something at IKEA or off of Amazon. Although I have

my coffee table off of Amazon and I love that thing. So there is that desire that somewhat competition, the competitive edge to want to have the nicer amenities, the nicer things to help with making friends, to help with hosting, to help you feel like you are an upstanding member of society. But

It’s also being realistic of, you don’t have the funds to support that lifestyle yet. Delayed gratification of start small. My first apartment, my first job out of school was 35,000 a year. This was in 2019. My first apartment was a three bedroom, bath with two roommates. I shared a bathroom with another roommate, complete strangers, but my rent was $550 a month.

So I was able to save on a very low salary. was living in Orlando, cost of living is a little bit lower there. And it was 2019, so was before everything went absolutely apeshit crazy. it’s swallowing your pride a little bit and knowing that it’s very understandable to have roommates and that you don’t need to prove anything to anyone. it’s better to wait to have that cushion of wanting to make that leap into living on your own. I I’ve lived by myself for three years and I love it.

Jess Diamond (17:02.349)
but I do feel like I live above my means, as I mentioned a couple of minutes ago, and it is that give and take. What is your advice to someone listening that really wants that desire to live in a nice sky rise or with updated appliances and either live by themselves or with one roommate and know that their rent is at 50%, if not to 60 % of their take-home monthly pay? What would you tell someone in that situation to do or think?

Julia Cancro (17:32.43)
What you’re saying is I’m like smiling because it is exactly what I went through when I was in my early twenties. I remember, so I had two roommates. I live in New York City, so different situation, but I had two roommates. had a two bedroom apartment that we flexed to three bedrooms, like built a fake wall. I had someone come literally in the middle of the night and paid him in cash to build this like fake wall. We had one bathroom.

I remember telling my high school friends how small my apartment was and my friend Chelsea walks into the apartment for the first time and she said, this isn’t small. You have a foyer. And I said, this isn’t a foyer. This is the living room. And we were paying a lot of money to live there. And I felt like really squeezed. And I remember having a conversation with my mom and we lived in that apartment for five years together. It was.

We turned it into like the most fun, best experience ever. And still some of my fondest memories. But I remember talking to my mom. I was talking to someone at work who was a few years older than me and she said she lived alone and I went home and I called my mom and I was crying and I was like, I will never be able to afford to live alone in this city. I am like stressed, I’m working hard, I don’t see a path. And that is a very normal.

very normal conversation and feeling. It is, and that was in maybe 2015 that I had that moment, right? So the world was different in terms of social media. There was no TikTok. Instagram wasn’t as big as it subsequently became. So the comparison of feeling like I was, you know, seeing all my peers living this incredible life, traveling.

was different, right? And I still felt that pressure. So it’s much greater now. However, you look at TikTok, Instagram, wherever you’re looking and comparing yourself to what other people are doing, what they are doing is fake. You do not know their backstory. They might have family money. They might, it could be a freaking green screen for all you know. Like, I think about this often, the two roommates that I had, two of my best friends,

Julia Cancro (19:54.614)
we were having the same conversation probably around that time, whenever Instagram first, whenever influencers first made their appearance. And there was a girl that they were, that they knew of from high school that was now an influencer. She posted this picture from the beach in Bali and the caption was like, you know, how perfect her life is, whatever. They had the inside scoop that.

Hours before she had been mugged, lost her wallet, lost her passport, called her family upset, but she didn’t have a good relationship with her family because they had been fighting. So her sister and her parents weren’t willing to help her. And that’s the backstory. All you see is this perfect beach photo. And you’re like, wow, I’m not making enough money to live that way. That will never be me. And like, then when you hear the backstory, you’re like, actually, yeah, I hope that’s never me.

So, you you also have to keep your perspective when it comes to finances and what you see other people having that you don’t have the full picture from that post. And there are other more important things as well.

Jess Diamond (21:08.909)
mean, it’s the same thing. I have the same conversation with my personal training clients about bodies, where they’ll see someone with abs and like, but this girl has abs, and it’ll be a female. mean, like, I don’t have abs. And I’m like, Okay, you don’t know what factor is genetics. You don’t know how regimented she is with her nutrition. You don’t know if she’s having zero social life so that she can look this way. You don’t know if she’s lost her period because her hormones are all fucked up because she is so low in nutrients and is depleting herself that now

She’s suffering with it. Amenorrhea. Like you don’t know the other half of it. You are seeing something, a picture, a video, a person, in person, whatever it may be, you are seeing something and making a story out of it that is not helping you because your brain wants to fill in all these pieces that helps you feel worse. It’s not good. So it’s a similar concept within that. And it sucks, because like you do, you see other people. I see my friends with their…

really nice apartments or like they have a bigger budget when their lease is up to go search for a new apartment. And I’m like, I don’t have that. Or my friends get to go travel because they get to save regular money on a month to month basis. And I’m like, I don’t have that luxury in my life at this present moment. it’s things that you have to know for yourself and be realistic with how you’re spending your money. What’s coming in if it.

If your career is something that brings you to life, but does not pay a ton of money, so have a ton of excess where you can go do these other things. It’s like, is that what matters to you? Do you want a career that lights you up, but maybe the pay isn’t as good? I actually made a TikTok video about this, like asking, it’s like, would you rather have a job you love, but the pay isn’t great or a job you hate and the pay is amazing. And there were people going back and forth with all these hypotheticals and

I for one am someone that believes that money is important. You need money to live, but it isn’t everything. And that if you’re spending so much time in your career, it should be something you like and that you enjoy. it’s definitely not something that you hate, not something that will suck the life out of you.

Julia Cancro (23:06.318)
Mm-hmm.

Julia Cancro (23:18.722)
Completely. you know, you’re, I think the comparison to like physique is very accurate because there’s a lot that you don’t see behind the scenes. And you you mentioned you see friends traveling. You don’t know who’s living beyond their means. You see them traveling, but they’re not also posting a screenshot of their bank account or the credit card debt that they’re carrying. You know, so it’s very hard to get a picture of financial wellbeing.

I think one point I want to clarify too, you know, on the note of like, what should you do with your money now that you’re finally making some, I’ve made the point about saving, but more than saving is putting your money to work while you are saving it. So what do I mean by that? That means generating some sort of return from your money. It could be a high yield savings account, high yield, meaning it pays you more interest than a regular

savings account. The reason why a high yield savings account can pay you more interest is that typically they’re online accounts, which means there’s no overhead of having to pay real estate like, you know, Chase Bank, Wells Fargo, they have a physical retail branch where they have to pay for real estate and pay for tellers and all of that online savings or high yield savings accounts tend to be have more of an online footprint.

and therefore they can pay you a higher interest rate. So that’s free money that you are earning by keeping your hard earned cash with that financial institution. The second piece of it is investing. So when I mentioned that story about the janitor gas station attendant who accumulated $8 million in net worth, he was investing primarily in the

what are called blue chip stocks, meaning like the most reliable, safest companies. Similarly, you could get a return like that on something like the S &P 500. So when people say, how do I get started with investing? The first step is to open what’s called a brokerage account. That is an account where you can trade stocks or bonds. You have to put a little bit of money into it. exam, there are…

Julia Cancro (25:40.76)
plenty of examples, I list them out in the book of like some of the reliable brokerage accounts. Yeah, Schwab, things like that, E-Trade. There are a bunch, I’ve listed some in the book that are reliable, are, you know, there are a lot of smaller trading platforms now that…

Jess Diamond (25:45.113)
I have Vanguard.

Jess Diamond (25:50.585)
you

Julia Cancro (26:06.188)
I would be remiss to not point out some of the risks of smaller trading platforms like technology reliability, sites crashing, things like that. You don’t really want that for your broker, well, personal, right? But that’s not something that I would look for. I would look to avoid that when selecting a brokerage account. So you put some money into it. And then once you have cash in your account, you have the ability

to invest. not encouraging, you know, stock picking. If you want to do that, like do your research. But what I am encouraging is considering buying some part of the S &P 500 because that over time, historically, has proven, like I said earlier, to have a inflation adjusted roughly 7 % return. So that means if you put a dollar in there at the end of the year, you will have a dollar and seven cents.

free money. Now that doesn’t sound like a lot. You’re like, I can’t buy anything for seven cents. Can’t buy anything for a dollar anymore. But if you put in a hundred dollars, then you got seven free dollars and so on and so forth. it, and that compounds over time. Hence the story of the two people, 40 years meeting and the one who only saved for 10 years early ends up with more money.

Jess Diamond (27:29.325)
think a big part of being in your 20s in today’s world is, and I say today’s world as in post pandemic. So like anything from pandemic on 2020 on is we’ve experienced so much uncertainty in that time that there’s a lot of lack of trust in the market, in the government, in the world, that the idea of putting our money, taking it from our safe bank account and putting it into this market that is unstable.

is really scary. So how can someone work to overcome those fears and know and kind of hope that it’ll work out for them in the long run? Because it’s it is a risk. It’s an investment with no actual concrete guarantee. But there’s all these stories of people making all this money in this compounding and you’ll you’ll get it back. You’ll get it back. Plus so much more like you should do this. Like we’re told we should do this. We should do this. But we’re terrified to do it. So where is where is that?

Julia Cancro (28:14.254)
for sure.

Jess Diamond (28:28.931)
thought process begin to bridge so that we actually do want to put our money into the market.

Julia Cancro (28:34.104)
For sure. I think a lot of the stories that people hear are more of the like get rich quick stories. And that is scary because for every one get rich quick story that you hear, there are hundreds of losses. So I’m not advocating for like a get rich quick trade day trading like in and out of Bitcoin. I am

talking about long-term setting yourself up for success, time that the saying tends to be time in the market, not timing the market. Timing the market means like buy low, sell high and do that like over and over and over again. That is almost impossible to get right every time. And there are statistics that if you look at, you know, the market of the S &P 500 over a hundred year period.

If you put in a dollar on day one and then take it out on day 100, compare that to someone who tried to time the market. And if you try to time the market, if you were to miss even the 10 best days during that hundred year period, you would have like half the amount of money if you had just left your dollar in the market and let it run up. And the reason that’s important is because no one knows how to time the market. If you know how to time the market,

That means you have insider trading information and you’re probably going to jail. Or you are like a, you know, an Oracle and you should be like on TV or something. don’t know. So I can understand why it would feel terrifying when you’re like, my God, this person made this risky trade and they made $30 million in one day. I could never do that. Therefore I’m not participating. Like that is…

Forget those stories, throw them out of your head. They’re great to hear about and they’re exciting, but they are not like reality for most people who are going to work, earning a paycheck and want to set themselves up for financial security and financial freedom in the future. So what I believe alleviates people’s stress about money is knowing that you are making the right

Julia Cancro (30:59.118)
and small decisions every day to set yourself up for financial success. So your point about like, what if I can only save $5 a month? At least you’re doing that. $5 a month, where are you saving it? Are you saving it in a high yield savings account? Great, if you are, you’re earning, I think like 3.25 % interest right now. That’s great, that’s free money. If you feel like your appetite for risk and or your need for that money,

is not a short time horizon, They typically say like, if you need the chunk of money within 24 months, you should start to pull it out of the market because like you said, the volatility, like there’s a lot of volatility and uncertainty right now. So if you need to put a down payment on a house in the next 24 months, yeah, maybe you wanna start taking some chips off the table, divest from the market. But if you feel like right now you have your rainy day fund,

you have enough money in your bank to cover your day-to-day expenses and your income is high enough that you can start putting some money away, then maybe it’s time to consider investing in the S &P 500. Put $500, $1,000, whatever you feel comfortable with and see how you react to it and know that you’re not going to panic sell if there’s volatility and say, oh my God, I just lost $100 today.

Technically, you didn’t lose it until you sell it. You have a paper loss, but tomorrow, the next day, 10 years from now, the outcome will look very different.

Jess Diamond (32:40.953)
Yeah. mean, even taking this year as an example with all the elections and all the political crap going on is everything plummeted in April. And it was scary. Like I looked at my Vanguard and I was like, oh, that’s not fun to see those numbers just drop down. And my boyfriend is experiencing the same thing, but his was to a greater degree because he had more money invested into the market. But I just kept hearing everyone say, don’t touch it.

because it’ll come back. And it did, it came back. Like I haven’t checked it in a couple of weeks, but last time I did, it was almost right back to where it was before it dropped. So I think that’s another part is that if things happen in the market that are not great and it’s negative and you see that money go away, don’t just take out your money because you’re scared of losing the rest. will most likely, I don’t want to say guaranteed, most likely come back. And that was a hard thing for me.

Julia Cancro (33:10.35)
.

Jess Diamond (33:35.351)
to digest as well, but then I saw it happen with my own eyes and I got to feel a little bit better about keeping my money in that account and invested.

Julia Cancro (33:44.748)
Yeah, you bring up a really good point about, too, like how often do you look at your accounts? Like I don’t look that often because guess what? If I’m getting all these push notifications from Wall Street Journal, Yahoo Finance, that the markets are in turmoil, super volatile, know, S &P down this percent, the Dow Jones down this percent, like I’m not looking at my personal accounts because I know I’m not selling today based on that news. There have been…

Famous investors like Warren Buffett, Jamie Dimon, who have advocated that when companies report earnings, they do so on an annual basis instead of a quarterly basis. And the reason that they advocate for that is they believe that quarterly reporting encourages short-term thinking. Like, this quarter, they didn’t meet expectations, therefore the company and the management are not doing well and I should not invest in this company.

Not true. Like you just mentioned a lot of variables that impact short term. And so why are we making short term investment decisions when really we want to be looking at the long term time horizon?

Jess Diamond (34:55.673)
question for you in terms of investing. It is I’m to give a hypothetical situation. Is it better to save $100 a month like invested $100 every single month for 10 months or $1,000 once for once every 10 months? Which one is better? Is there a difference?

Julia Cancro (35:17.738)
There is a difference depending on how it’s invested, right? Because of the compounding that I mentioned earlier, it’s the same month over month could be, you know, it’s again more compressed than year over year. There are a few thoughts and again, this is all preference. I advocate for $100 per month because it’s a lot harder.

It’s very easy at the end of the year to be like, I was going to save a thousand dollars right now, but my friends are going away or I really wanted to buy this bag and now I have a thousand dollars saved. You will come up with a million reasons why that thousand, why you will save next year and that why that big chunk of $1,000 will be better served doing something else other than savings. But when you get into a hundred dollars a month, it doesn’t feel quite as painful as.

$1,000 going away out of your, you know, checking account, let’s say. I also think $100 a month encourages a habit, right? And so then your $100 a month, maybe the next year you say, I’m going to do 110 or you challenge yourself every year to increase your percentage. And then the last piece of it is like, if you, you can set up automated investments if you want that.

that $100 a month that you’re saving, depending on your situation. However, you can route it from your bank account to your brokerage account and set up automatic investments. every month I put $100 into the S &P 500. And then the like mechanism is called dollar cost averaging where you are buying here, you buy here. And for those who maybe aren’t looking at video, I’m pointing like.

You might one month buy low, one month you might buy a little higher, the month after that, a little higher, then a little lower. And on average, over the course of the 10 months, you will benefit in your investment from the volatility because your average cost will be more favorable to you than if you just put $1,000 on one day into the market. Because you may then be putting all that $1,000 in on the monthly high.

Julia Cancro (37:41.176)
Could be the monthly low too, but dollar cost averaging tends to give you, the theory is, the math is that it’s the better choice and the more reliable choice to get the best price over time.

Jess Diamond (37:53.145)
Okay, so you say that, but I mean, I don’t know a ton about Roth IRAs. That’s what I have. And whenever I go in, I put in a bigger lump sum at a time. Like I’ll put in 500 to a thousand, maybe even a little more at one singular time, not every month. But if I have a really lucrative month, like I’m putting money in. So instead of over time, but I know that you have to put the money in and then you have to go and buy something with it. A lot of times it’s like the

Julia Cancro (38:13.688)
Great.

Jess Diamond (38:22.681)
I probably just don’t know what to look up for the lower cost investments. Like if I wanted to put in $100 a month, I don’t know how to buy something that is of $100 because like S &P 500 is a little bit more. Like you have to, some of them have a minimum requirement to purchase, I don’t know the right terminology for it, but purchase something that then goes into the market so your money can start making money for you. What…

Julia Cancro (38:49.816)
Mm-hmm.

Jess Diamond (38:50.713)
Is there like other, is there smaller stock options you can recommend for someone who wants to try the $100 month knowing they have to put the $100 in and then actually go take that next step and buy a stock of $100?

Julia Cancro (39:02.818)
Yes, you make a great point. That is a really important clarifying point that in your retirement accounts, when you put or brokerage account too, but when you put money in the account, that doesn’t mean that it’s automatically invested. All you’ve done is move your cash over to that account and then you have to invest it. So it is a two step process. Same is true if you’re working for a company with a 401k, you contribute 5 % of your paycheck to your 401k. You have to go turn on investing. takes

10, 15 minutes, you can call them, but definitely invest that time. Your future self will thank you. It is worth much more than what your 15 minutes or 30 minutes are worth. So that’s one point. Second point, you say you talked about buying the S &P. Every brokerage account has its own

S &P 500 ticker. And I don’t know them all off the top of my head, but you can buy the S &P through Vanguard, can buy the S &P through Schwab, you can buy the S &P through E-Trade, and each of them will have a slightly different name for that, but it is in effect the same thing.

It is often a mutual fund, which means you can only trade it once a day. And so when you’re looking in your account, you can look under mutual funds for S &P.

Julia Cancro (40:35.886)
Oftentimes, if you’re, there are certain accounts that will enable you to purchase a fraction of a share, not all of them. So to your point, like if you’re putting in $100, but the S &P at Vanguard is $101, depending on how Vanguard’s set up, you may not be able to transact, in which case you might want to wait until you put in another $100, then you can buy a share or two.

Julia Cancro (41:07.166)
I am hesitant to say like there are other things that you should buy like off the cuff because it’s going to be different for everyone and your safest investment in the market is going to be the S &P. So I wouldn’t say, sure, just go buy, you know, this stock that I’ve never heard of because it’s only $5. It won’t necessarily have the same return as the S &P 500.

Jess Diamond (41:36.331)
Okay. So in that case, then it doesn’t, it’s more so about building the habit, which I think is amazing advice of save $100, put $100 into this account every single month, just so that it becomes that habit. But at the end of the day, it does not make a difference between when it comes to the cost of the share, it doesn’t make a difference if you have, if you’re building that up over time versus having it all in at one time, if you’re buying the same exact share.

Julia Cancro (42:06.894)
Well, the price that you buy it at matters, but you’re thinking about this is a retirement account, right? You’re not going to touch this until you’re 59 and a half or older. So whether you buy that share of the S &P today at $100 versus 99 versus 101 or 102, like that’s not what’s going to make or break your future. What will make or break your future is if you wait 10 years.

to start doing that. So if you buy it one month today versus next month, as long as you are consistently contributing and investing early, is your better bet than waiting until now I’m 40 and I finally feel like I have $10,000 to invest. Don’t wait, start today.

Jess Diamond (42:36.118)
Yeah.

Jess Diamond (43:02.699)
Yeah, so thinking of it more so in terms of invest within the year versus waiting to invest even five years from now. Okay, all right, that helps. How can someone determine

Julia Cancro (43:11.192)
For sure.

Jess Diamond (43:15.585)
for themselves if they’re doing well financially. I want to change the subject a little bit into just overall, like out of the market, but someone’s just walking around and they’re like, I don’t really know if I’m doing okay. I don’t, you don’t ask people what’s in their bank account. So how do you know for yourself or for being in your twenties, if you’re doing well on a financial basis.

Julia Cancro (43:35.886)
It is, that is like the ultimate difficult question because it is a comparison question, right? Of like, I doing well? Doing well versus what? So I would encourage people to think about your income and are you structuring your own income in a way that sets you up for success in the future? Which means are you saving?

Are you investing? you contributing to your retirement account? Do you have enough money to cover an emergency rainy day fund? That is a more important, am I doing well? Am I doing the right things for my own financial health versus I saw someone on Instagram on a yacht, therefore I am not doing well. It is much more doing well is about the relationship.

of your income to your expenses. If you’re, you could make a million dollars a year, but if your expenses are $2 million a year, you are not doing well. If you make $50,000 a year, but your expenses are only $20,000 a year, you’re doing well. You’re doing better than the person who makes a million dollars and their expenses are $2 million. So it’s about the expense, the income to expense ratio and how you are handling that differential.

on either side. If the differential is you’re in the negative, you have to fix that. And if the differential is you’re in the positive, okay, great. Now what are you doing with that money? It doesn’t have to be a lot of money. It could be a thousand dollars at the end of the year that you have saved. It could be $30,000, depending on your income, whatever. How are you structuring that remaining money that you have, that discretionary income, whatever you want to call it, and are you

putting some in savings to handle day-to-day expenses, rainy day. Are you putting a sliver of that into retirement? Are you investing and investing in that account? Then are you investing money in a brokerage account? Do you have a high-yield savings account? So the book breaks down how you can think about all of those different accounts in conjunction with one another. One of the biggest challenges I think for young people getting started are, okay, I know there are these different accounts.

Julia Cancro (46:01.272)
but I don’t know how to think about them in conjunction with one another. How do I think about a high yield savings account in parallel to my 401k or IRA? And how do I do both at once? How much should I put in each at once? So that’s all what the book explores in more depth than we have in an hour conversation, but it’s not so much depth that you’re gonna close the book and be like, I’m so over this. The whole book only takes roughly 90 minutes to read.

That’s 50 pages. So it’s more like workbooky where each there’s a chapter that like explains different things, how you should think about them. And then a like tiny homework section that says, okay, what do you do with this information now? And it’s very digestible and, you know, easy to put into action.

Jess Diamond (46:48.949)
And I love that recommend it to you guys, I’m going to repeat the title, it’s more than cash, and then what to do with your money now that you’re finally making some. So it’s a whole title. And it’s why I wanted to bring Julie on because this is this is important. We need to know what to do with our money now that we’re finally bringing some in, even if you’re bringing in that remaining like $10 a month, because after all your expenses, you feel like you have nothing like you can still do something with it. When it comes to those different accounts, I’m glad that the book

breaks it down. love when things explain it and then make it actionable because that makes it a lot easier. How can we encourage someone listening to actually go take that action instead of just read about taking the action?

Julia Cancro (47:34.188)
I mean, how badly do you want to be set up for financial success? It is such a small investment of time to set yourself up for success. It sounds like such a daunting thing, like my financial future, I’ll deal with that tomorrow. But it is incredibly easy in today’s world with most things being online to set up an account, link your…

Jess Diamond (47:38.252)
Valid.

Julia Cancro (48:03.444)
income to a savings account so you can, if you wanted to route a percentage of your paycheck to a high yield savings account before you even see that money in your checking account, you can do that. Like those are luxuries that our parents’ generation didn’t necessarily have when they were first getting started because everything wasn’t so easy to do online. So I forgot the question you just asked.

Jess Diamond (48:26.841)
It was just like, you pretty much answered it of how can someone take action? You’re like, how much do you care about making money? Like setting yourself up for financial success for your future.

Julia Cancro (48:33.11)
Yeah.

Julia Cancro (48:37.536)
And I guarantee you that if you invest one hour going through different accounts, setting up or 90 minutes reading the book, you will already feel better and less stressed about your financial future because you now have knowledge. Knowledge is the first step to getting your financial future comfortable and secure.

Jess Diamond (48:59.513)
I mean, already feel better about my finances just from this conversation. So I hope someone listening feels better about theirs. And it’s encouraging me. mean, we’re approaching, it’s the last day of May or the second to last day of May at the time of us recording this. And I’ve like, I should go move some money around after we hop off this call and put it in from my checkings account into my high yield savings or into my Roth. Cause I know that I haven’t done that in a little bit.

For me, it’s different because I am self-employed. There’s not a lot of consistency going on, but I know that the first five months of the year, I have a ton of expenses after expenses, like bigger things. And then I can relatively relax throughout the remaining portion of the year. And I know that where I’m at right now is not, I’m not going to need to take a ton of money out at one time. Like I have been needing to do throughout the last few months that I can start to

Julia Cancro (49:30.286)
Mm-hmm.

Julia Cancro (49:51.662)
Mm-hmm.

Jess Diamond (49:54.421)
move things around again so that it helps me and it grows without me having to do anything about it. Like I do the one-time action and then I leave it alone and I let it do its job.

Julia Cancro (50:03.706)
Mm-hmm, exactly, exactly. And that’s why the book is called More Than Cash because you get a paycheck, right? It’s cash in your account. There is so much more that you can and should be doing with your money than just letting it sit in cash. Investing it in the right way will pay massive dividends to you, not just today, but in the long term.

Jess Diamond (50:29.355)
Yeah. All right. My last question for you before we wrap up is what is something you wish every single 20 something new about money?

Julia Cancro (50:42.51)
I think that a dollar today can be worth so much more in the future, but it depends how you invest it and when you invest it. So I know I’ve kind of beat a dead horse about the value of time being on your side, but it is so true. There’s a chart in the book that says if you invest a dollar at age 20, by the time you are 65, that dollar will be worth

$5.84 from age 20 to 65 grows that much. If you invest a dollar at age 25, five years later, it’s only worth 4.80. You lose a whole dollar in five years. If you invest at age 30, it’s $3.95. So you’re down almost $2 now. And you think those are not important years, right? 20 to 30 is basically the same thing. I’m so young.

but you’re losing a lot of compounding. that just, you know, year over year that, you know, multiplies. start early and save early, invest early, and it will be worth a lot more than if you wait even five or 10 years to start.

Jess Diamond (51:59.373)
Yeah, hardest part is delayed gratification. You’re not able to play with that money right now, but it’s letting yourself play with that money, plus so much more, later. And we have to learn a lot about delayed gratification throughout our lives. And I always blame Amazon and Netflix for why it’s so difficult to wait on our happiness, but it’s true. I the best things come to those who wait.

Julia Cancro (52:23.838)
And ask yourself too, what are those things that you so badly need right now? And why? Yeah, there are some, I have definitely ordered things online or bought things that I was really excited about. And then a few weeks later I’m like, what is this piece of junk? Why do I have this? And so take some…

Jess Diamond (52:33.323)
And why? Why do you feel you so badly need them right now?

Julia Cancro (52:51.608)
Take some time to do a little reflecting about like, talk about delayed gratification. Like what is that thing that is so gratifying to you in the instant? Is it really that gratifying or are you just in this habit of ordering, buying, going out that maybe isn’t really actually gratifying you all that much. And you could for sure feel more gratification in knowing that you are financially sound and in the future have the optionality.

to do much greater things with your money, like buy a house or a car or whatever it might take a trip, something that is worth a lot more than a few online purchases during a random month in your 20s.

Jess Diamond (53:36.663)
Yeah, yeah, it’s asking yourself like, it look good on the outside or is it filling me up on the inside?

Julia Cancro (53:42.445)
Very well said.

Jess Diamond (53:44.121)
All right, amazing. Thank you so much, Julia, for coming on How to 20-something. Where can people find your book? How can they connect with you or learn from you? Just where can people find you and what you have to offer?

Julia Cancro (53:49.432)
Thank you.

Julia Cancro (53:57.046)
Yes, so my website is juliacancro.com. I’m sure Jess, you’ll link that in the notes. The book is an ebook, so you can read it on your phone on the go. It’s super digestible. It’s linked on my website. You can also buy it on Kindle, Amazon, Kobo, Nook, wherever you buy ebooks, iBooks. So it’s available anywhere you buy an ebook. And you can follow me at jcancro.

Jess Diamond (54:28.525)
Yes. And as Julia said, all of her information will be linked in the show notes for you guys to access right now and start investing right now. Otherwise, this does conclude another episode of how to 20 something. If you liked what you heard, if you learned something new, if you’re viewing your money differently, then please share this episode and post on social media, send it to a friend, just do something to help spread the word about this podcast for all the other 20 somethings trying to navigate.

this very weird decade of our lives. And as always, I can’t wait to be in your headphones again next week with another brand new episode.