Like many post-college adults, I’ve begun to ask many questions about money. I’ve come to a frightening realization that I don’t know a lot. How do I handle money after college? What should I be doing with the money that I earn? Don’t get me wrong, I’ve always had something of a budget plan and understanding of money. It was essential to be working part-time jobs in college to pay for groceries. I even took a few economics classes here and there. But after college, I found myself increasingly worried about areas of budgeting that I had no idea about. Suddenly, my little Excel spreadsheet felt too elementary.
I am lucky to have parents who are financially secure and able to impart a lot of these lessons over the years, but trying to do it on my own is a whole other monster. It led me down a rabbit hole of online news articles and Youtube videos, with varying amounts of helpfulness.
What percentage of my earnings should go into emergency savings? (Answer: 6 months of spending.) What is the difference between a rainy day and an emergency savings account? (Answer: Rainy day fund is for off-hand needs, an emergency fund is for living without employment.) How much should go into a future investment? (Answer: Depends on salary but $1000 is a starting place.) What does it mean to diversify my portfolio? (Answer: Having a variety of stocks and bonds to balance out risk and reward over time.) How much can I afford to donate to charities and non-profit organizations? (Answer: Depends on your other priorities, but a lot of people donate between 2-10% of their annual income.) What is a good credit score to have? (Answer: 670 and above.)
When I first read the articles and watched videos, it felt like everyone had a more in-depth grasp of financial literacy than me—or at least paid more attention when their parents were telling them about it. I spiraled through articles, took notes, and revamped my entire Excel spreadsheet. But halfway through a video, one Youtuber around my age mentioned that her understanding of budgeting and finances began with childhood games of AnimalCrossing and HarvestMoon. My brain short-circuited and I paused the video, closing my laptop in confusion.
For those of you who aren’t familiar, video games AnimalCrossing and HarvestMoon are role-playing video games where the protagonist starts a new life, starting off by buying a home or farm and finding ways to pay off that debt, similar to StarDew Valley. But I played those same video games and I can tell you that AnimalCrossing imparts about as much financial wisdom as it does knowledge of black-market trading and family monopolies. Essentially, none. You pay your debts to a dog-raccoon character in the game, so trust me when I say the creators of this video game were not thinking about trying to teach important financial lessons.
Instead, I came to realize that just about everyone my age was still figuring out their money and finances. I wasn’t behind. I was just 23-years-old.
In fact, I’m not alone in this feeling of confusion. A lot of my fellow post-college students are doing the exact same way. Prior to the pandemic, I went grocery shopping with a friend who had graduated from college a year before me. They work in finance, and even they began to express their own worry about needing to build an investment portfolio and feeling behind on money planning. (I hadn’t even begun to think about investing until they mentioned it.)
But in reality, it is ridiculous for me to expect to build an entire functioning system of income, credit, investments, and donations at the age of 23. I still continue to emphasize the importance of doing research and learning how to manage your money, especially as a young and independent woman, but I’m also realizing that I’ll figure things out as I go along. I recently got a credit card to build up a history of credit. I’ve been learning about utilities and renters insurance as I’ve started to look at moving to apartments. I’m building an emergency fund that is becoming more and more relevant during the pandemic. But it’s a process of learning, and I’ll figure it out eventually.
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