Writer Finances: 3 Keys to My (Personal) Finances

Personal Finance: HS Edition

​In the spring or summer before I was off to college, I went to a free financial workshop offered by Prep for Prep, a leadership development program for New York City students of color like myself.

I still remember two pieces of advice I got that day:

1. Credit is an important part of creating your financial identity, so it is prudent to get a credit card with a small limit, and PAY IT OFF EACH MONTH in order to begin establishing a good credit history.
2. As soon as you get a job that offers a retirement benefits package, max out your contributions to take advantage of your employer match because that's FREE money.

I'm sure I learned a lot more that day, but those are the two kernels of knowledge I still remember clearly. Both helped lay the foundations of my financial future.

I can't say I always paid off my credit card bills in full each month, but knowing that I should kept me striving towards that goal of having my debt under control.

And I'm proud to say I snagged the maximum amount of that free money from each of my employers before losing that momentum by going to grad school. Womp womp.

I share this anecdote because if you're anything like me, you grew up with parents who didn't discuss the finer points of personal finance, or they didn't discuss money with you at all.

From what I could tell, my parents lived pay check to pay check, used credit cards liberally, managed to pay my 4 figure HS tuition bills (after significant financial aid), and were counting on hearty pensions after putting in 3-4 decades of hard work for retirement.

Before they landed those good government jobs, our family knew the taste of government cheese. Papi even jokingly called me his “welfare baby” because public assistance provided our healthcare when I was born.

But for the most part our family’s finances seemed good enough: we never lacked housing or food. That said, (lack of) money was often a source of tension between my parents.

While I will always be grateful for that Prep for Prep workshop, it was only a basic introduction that couldn’t prepare me for the complexities inherent in managing my personal finances for the long term. 

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Beyond the Basics

​Since then, I’ve learned a lot through trial and error, and through consulting different books and resources.

I believe that for many of us, one of the biggest blocks to thinking about the relationship between our writing life and our money is not having our PERSONAL finances quite in order.

So if that's where you find yourself, then getting dialed into Personal Finances 101 might be a great place to start.

In the last three years, my husband and I really wrapped our heads around our family's finances, and we took control of them in ways that makes us feel confident in our ability to manage all aspects of our financial future as we move into midlife.

Below are three concrete steps we took that were complete game changers for us. 

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DISCLAIMER: I am NOT a financial advisor nor a lawyer. The anecdotes and recommendations below should not be taken as specific financial advice for your situation. If you have financial or legal questions, you should consult professionals.

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Writer Finances: 3 Keys My (Personal) Finances

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KEY #1 Get Educated

There are many books I've read over the years that have contributed to improving my financial literacy.

That being said, there is one that stands out because of it's clear, actionable, step-by-step guidance:

I Will Teach You To Be Rich: No Guilt. No Excuses. No BS. Just a Six Week Program that Works by Ramit Sethi

Ignore the book's meh main title and focus on the subtitle: Six Week Program that Works because it really does work.

This book helped us learn all the basics they don’t teach you in school in a manageable, digestible format.

The ideas he teaches are so actionable, that we started implementing right away and have never felt quite as empowered as we do now about the state of our current finances and our financial future.

​Best of all, the guiding principle of the book is that everyone gets to define a “rich” life on their own terms, and then use the approaches in the book to fulfill that personal vision.

“Rich” is not about some number in your bank account — it’s about creating a fulfilling aka rich life for you, your loved ones, and your larger community.

I highly recommend the audiobook version.  Husband and I both listened to it and then coordinated implementation for our family finances.

BTW This is definitely a 101 book, so if you have a solid grasp of the tenets of personal finance then this book might feel too basic, but if you don't know where to begin when thinking about money matters, this book is a great start.

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Key #2: You Need a Budget 

https://ynab.com/referral/?ref=FGIKyzhgrzS1GHAh&utm_source=customer_referral
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You need a budget, and guess what?

There's an app for that! The app's literally called You Need a Budget (YNAB for short) and it's the app Sethi recommends (though we had started using it before reading the book).

I freaking LOVE this app.

First of all it's sooooo much better than Mint. 

Second of all YNAB folks don't just provide a tool, they teach you how to budget (read about their "4 Rules" in the "Learn" section of the website).

Third of all the budget you create is flexible -- it can adapt to the realities of your life and still keep you on top of your day-to-day financial picture.  Our budget easily adjusts to changing circumstances while keeping us on track for our big goals. 

For example: Want an extra date night this month? Take the money from the haircut and clothing budget lines and keep it moving.

​Yes, I know, I know, a budget sounds and feels so oppressive, but budgeting with the YNAB and using their  4 Rules has made it downright enjoyable. 

Not convinced? Try YNAB yourself free for 34 days.

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Key #3: Get Your Affairs in Order

No one wants to think about getting their affairs in order, but everyone dies, so....

As soon as I got pregnant, we hired a lawyer who specializes in estate planning  to ensure kiddo #1 would be taken care of in the event of a disaster.

The prep process before meeting with our lawyer required us getting really clear on what exactly constituted our "estate" and gathering all the documentation.

Identifying our "estate" was an eye opener on the money front because we, for the first time, got a birds eye view of our entire financial picture.

While this step might not feel urgent for those without children, there is value in getting your affairs in order before it's evident you need to.

This is especially true for writers and creatives since our creative works are assets within our estates. And they are assets that can continue to earn for our beneficiaries for decades after we're gone (if our estates are properly managed).*

I encourage you to seek out someone with expertise in this area, but to get you started I've linked to some informational articles below, including a few specifically for writers. 

Estate Planning 101

• Nerd Wallet Estate Planning Checklist 

Estate Planning for Authors

• Podcast Episode: Estate Planning for Authors with M.L. Buchman 
• Book: Estate Planning for Authors by M.L. Buchman: 
• Blog: Are You Prepared? Estate Planning for Authors 
• Blog: Estate Planning for Your Indie Author Business 

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Results: 3 Keys in Action

Between implementing the strategies in I Will Teach You to Be Rich, using YNAB, and working with a lawyer for our Estate Planning, we've taken our finances to the next level over the last four years.

What does that look like?

• We tackled all our consumer debt. Now we pay the balance every month. We’ve been entirely consumer debt free for the first time since we’ve been together and have stayed debt free for the last 6months. I don’t think we’ll ever go back to carrying a balance unless we face an unprecedented emergency.

 

• Have a crystal clear picture of all our finances that’s easy to access in 1-3 places.

 

• Have systems in place so most of our bills are paid basically automatically.

 

• Have all our money budgeted a month-and-a-half ahead, and have regular expenses like gifts, holiday, travel, annual subscriptions all set aside for the year.

 

• Have a steadily growing emergency fund.

 

• Have a strong handle on our retirement accounts and plans, and are investing.

• Have our affairs in order. In the case of our untimely deaths, we know there are plans in place and the kids would be taken care of financially and in terms of guardianship. (Still working on getting my creative assets in order).

 

• And so much more.

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Before You Go

• Read more blog posts about Creativity & Finances
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