Financial Report Card: Sidney & Brian
This post is one in a series from real actual life. Along the financial journey, we do some things well and others not so well. We learn as we go, and benefit from sharing our stories.
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Sidney M. (she/her), 36, project manager
Brian H. (he/him), 38, student
Portland, Ore.
Looking back at your 20s, how would you grade yourself in the five key areas of personal finance?
Creating income: C/B-
Sidney: In my early 20s, I worked at nonprofits with crazy low salaries. And I lived in Washington DC, which was expensive. I worked a second job bartending or waitressing to make more money. My late 20s were very different. I started consulting so I got better at creating income then.
Brian: I spent a year abroad and then was also in DC trying to figure out my career path. I worked in bars and restaurants too, and then was part of a group that opened some coffee shops before I decided to go back to school.
Spending less than you made: A
Sidney: I did well at this because I made so little that I didn’t have the opportunity to spend. I really only spent the cash I had on hand. I was always interested in travel, so I stashed my bartending money and saved up for trips.
I had one credit card that my parents said was only for emergencies. I was terrified of using it. I’d spend $10 and then think, “I need to go home and pay that right now.” I didn’t do that really, but I always paid it in full every month.
Brian: We each lived in houses with a lot of roommates, so that helped keep our costs down. That’s actually how we met, through our roommates.
I’d say we spent on travel and booze. Mostly travel.
Paying down debt: A
Sidney: I was afraid of credit card debt and didn’t have any student debt. In college I did work study, had a scholarship, and then my parents paid for the rest. So I had good financial options.
Brian: I do have student debt but pay it regularly. When I went back to school more recently, I decided to pay for some of it and finance the rest with loans.
Investing in your future: A
Sidney: Considering how low my income was, I did pretty well at this. Nonprofits don’t pay well, but we had good benefits, including a great 401(k) match. So I started contributing to that at my first job at 22, on advice from my parents.
Then once I was able to really save, more in my 30s, I had a head start. So I wasn’t overwhelmed by starting at zero. It has really paid off.
Brian: I started saving for retirement at 18 because I had a job with a big company that offered benefits. I was able to build some good savings there. I wouldn’t say I really had cash savings other than that—there just wasn’t a lot to save.
Knowing your money: B
Sidney: Taxes. Those were always really funky for me. First I was waitressing, so I had a lot of money in cash. Sometimes I would even pay my rent in cash. That made it hard to get a full picture of my money.
Later, when I was consulting, I had to pay taxes quarterly, which was totally overwhelming at first, but probably helped me understand more than I ever wanted to. I got a better grasp of it as a result. I even made self-employed IRA contributions.
That’s also when I started using software to help me manage my money and see everything in one place. It was buggy sometimes but overall I liked it. I still use it actually.
Brian: I had to figure out how to pay my loans pretty early, so I learned how to handle that while not spending much but not making much either. I also saw my parents go through some challenging times, and that made me more responsible.