Why more money isn’t the answer

Welcome back to another episode of how to twenty-something where today is a conversation about money and why accruing more of it won’t actually give you the relief you think it will

For most twenty-somethings your first or second job out of school is going to make you feel like you’re scraping by.. Probably because you are

You’re not making a ton, cost of living is through the roof, and you don’t want to miss out on all of the experiences of your twenties that comes with making friends, dating, and just living your life

The result puts you in financial strain

Now your parents could be funding some of your life, but if you don’t learn the balance of your money and your relationship to your spending habits, then you’re in for a rude awakening when your parents eventually stop supporting you financially

So this episode is to help you better understand why your relationship to money has to change, why more money isn’t the answer to financial security, and of course how to begin cleaning up your finances so you don’t feel like you’re living paycheck to paycheck

What’s unfair is that you’re working 40 hours a week and it still feels like it’s not enough to live on… because it’s not, you’re not delusional it’s just is what it is

And it’s not because you’re buying a coffee every friday as the boomers love to remind us of

It’s also not because you’re foolish in your spending habits

It’s really because you’re not making a ton, but you’re also not adjusting to your new means of living

What I mean is you’re used to living a life supported by your parents income, where you’re living within their means

And then when you start working and making your own money, you cannot expect yourself to keep up with your same living standards, simply because that’s not what your money is capable of just yet

This is where side hustles and second jobs like to fit into the picture and is why I want to be the one to tell you that making more money does not equate to you achieving financial safety

In fact, what happens is because you’re making more money you’re going to be spending more money and still feel like you’re barely scraping bye

This is due to the fact that you haven’t learned to live within your own means and the attempt to accrue extra money outside of your full-time job is proving to be a bandaid fix to your money problems 

More money magnifies your spending habits, it doesn’t correct them

Yes Money solves problems — but only the problems you’re already aware of. Poor financial management creates new ones.

I have a client right now who came to me because he wants to clean up his spending habits and at first I was like oh he probably needs a financial advisor not a life coach

But then as we got to talking I realized it was all of his adulting habits that led to his spending habits and I was like okay this is my wheelhouse

His immediate solution was to get a second parttime job to help him not spend money in his free time and get him earning more money at the same time

Which in theory is a solution

But if your routine isn’t in check or what you’re spending on/not tracking any of your finances then that’s where it becomes a bandaid fix

For example, if you don’t check your bank statements and just swipe your credit card, what makes you think any of that will change with a bigger salary?

Or if you overspend now, what’s stopping you from overspending with more money

Or if you’re tired after work right now, what makes you think adding in an extra job is going to help?

Now, i totally get that more money helps, it definitely makes life easier, causes less stress on your personal life, and you feel like you can breathe

Trust me when I tell you I understand all of that

My first job out of school had me making 36,000 a year, my second job put me at 42k and then before I left I was at 45k in 2022 and then I became a solopreneur so my income excessively dropped for 2 years and I’m currently making about what I would be making if I stayed as an interior designer 

I’ve never once in my life made six figures, I had to learn how to live within my means and then adjust for the sacrifices i would make to my savings and to other parts of my life when I made the leap to live above my means

That was when i moved from orlando to Charlotte and my rent doubled because I chose to live alone

However, I did live with roommates for 2.5 years which helped me save a lot of money

I personally do not think anyone in their lower twenties should be living alone unless their first job out of school is six figures

That is my own opinion, but it’s also the realistic part of adulting that you simply cannot afford the luxuries of living alone and living your life right out the gates

Which i know is not something you want to here, but it’s the truth

It is expensive to exist out in the real world and you need to adjust your expectations accordingly

I personally never had an overdraft problem or lived paycheck to paycheck because I am a really good saver as it stems from growing up with not a ton of money available and with a single mom

My money habits stem from subconsciously learning the belief that I am responsible to myself and need to be able to care for myself without relying on someone else to do it for me

And that’s not to say my mom hasn’t stepped in to financially support me, she has, full disclosure

I lost my job when I was in the middle of a lease at 23 years old and I am very fortunate to have my mom tell me not to touch my savings and that she would pay my rent and my groceries… my too largest bills, until I got a job again

And this was during the pandemic where jobs were not available 

So for six months she supported my life

That support helped make my transition from unemployed to employed to self employed easier because I didn’t have to dive into my savings while I also didn’t qualify for unemployment assistance or the stimulus checks

I tell you this because it’s not shameful to have your parents help you out, but you also need to learn how to help yourself so that your reliance on them is temporary.. Because there is going to come a time when they pull back whether you want them to or not

And I don’t want you to get caught with your pants down!

I get it though, it’s hard to live life right now.. It’s been hard for the last 5-6 years

But what I want to tell you is that you don’t only have an income problem.. Yes you’re underpaid for today’s lifestyle but you also haven’t adjusted your lifestyle to be.. Well your own… and not your parents 

Their vacations, their groceries, their home.. Everything changes

And your paycheck just can’t sustain that same lifestyle yet

So how can you begin to live within your means and what does that even look like?

And before you roll your eyes, allow me to tell you it doesn’t have to be as restrictive or boring as everyone makes it out to be

I am a huge advocate for still being able to have fun and live your life but there’s a way to do that where you’re not overspending on a month to month basis

Which is exactly what I told this client when we first started working together

I assured him that the last thing I want for him to do is give up all of the things he enjoys

But in order to do that you need to develop a stronger relationship with your money coming in versus out

And that is in the form of a budget sheet

I know I know, BORING

But hear me out, I heard this saying once and I adopted it to speak to my clients

It’s: money is like women, if you don’t pay attention to her, she’ll leave you

So you need to do a deep dive into where you’re spending your money and get clear on how much you want to be able to save on a monthly basis to begin building up your emergency fund

Which should be able to cover about 6 months of your living expenses if god forbid something happens to your income.. Which in today’s job market we can almost guarantee that’s going to happen

You should know your exact monthly bills:

Rent, utilities, wifi, insurance, average grocery bill, gas, any subscriptions you have, or other regularly occurring bills

Add all of that up and subtract it from what you make in a month

That leftover money is what we’re working with

Once you know that number, you’re already going to have a better understanding of what you can do with your money or if you need to change where you live, or yes, even how much you make

Then don’t forget to subtract how much you want to save each month.. I would recommend starting with 50-100 dollars

Now we have your remaining balance, but before you get scared of the number you’re seeing I want you to identify your non-negotiables

What are things or experiences in your life that you absolutely refuse to give up.. You might have to lessen the spending on them but not give them up entirely

There should be at most 5, but realistically 3

If you have 16 non-negotiables then you’re fooling yourself with your income

Because a non-negotiable isn’t there to justify getting everything you want.. It’s controlling your indulgences

But these 3-5 is so you don’t feel like you’re giving up everything fun in your life

It could be that you must go out with your friends, or there’s so much peace a friday morning coffee gives you, or you love buying a new outfit every month

Whatever it is, you need to decide how much you are going to allocate towards that non-negotiable

And don’t forget that your non-negotiables should not eat up your remaining income.. It’s not a goal to spend all of the money that you have left

It’s to help you better understand the balance between living within your means and not giving up the things you enjoy to help you live your life

Because your remaining available balance is for the the extras or even the slip ups

For if you go overboard in one category or you have a trip you’re going on or a wedding to attend

After identifying your bills and your non-negotiables it’s time to get real with yourself and figure out where your weak spots are

Is it that you don’t plan ahead for your meals and end up spending extra on eating out or door dash

Is it you get carried away when you go out so you end up spending way more money than your sober self intended

Is it you have too many online shopping tabs open and just have to get all of these items and then say oops I’ll try to do better next month

The client who inspired this episode topic makes a lot of purchases when he goes out and what happens when he goes out

And he’s not my first twenty-something client guilty of doing this

Because it’s really difficult to control impulses when you’re under the influence

Which means you need to give yourself limits

Either in the form of a prepaid credit card or cash

Since continuing to swipe without checking in with yourself.. Which you know isn’t going to happen once the night gets going… is what’s leading to your recurring money problem

And it’s why more money won’t solve anything

But rather learning to live within your current means is the root solution to your problems

And how it’s not about shrinking your life, it’s about getting realistic with what you are capable of indulging in and designing your life according to your realistic standards and habits.. Not what you’re used to

And once you have that foundation built, that grasp on your finances, is when more money actually does start to help you

Just remember to increase your percentages in every category when money starts coming in… and by that I specifically mean the percentage of money being added to your savings 

But you’re not alone with having a money problem in your twenties… it’s why i’m making an episode on it

No one feels financially stable when they’re just getting started on their adulting journey

So don’t be so hard on yourself for feeling like you’re the only one scraping by

It’s expensive out there

But more money isn’t the answer

And that’s the whole point i’m making in this episode

So thank you for listening to another episode of how to twenty-something, if you liked what you heard, learned something new, have a new way to look at your money or know someone who needs this kind of help, then please share this episode

Send it to a friend, Post it to your story and tag me when you do, just please do something to help me spread word that this podcast exists

I can’t do it without you

And as always, I can’t wait to be in your headphones again next week with another brand new episode