I picked up a book today that I want to turn into a blog series based on the 12 step program inside: Rich Bitch: A Simple 12-Step Plan for Getting Your Financial Life Together…Finally by Nicole Lapin. Full disclosure: it’s published by my company, HarperCollins. Well, first it was published by Harlequin in hardcover last year and I just picked up the paperback that comes out on March 8th. This does not impact my review of the book (nor do my thoughts and opinions reflect those of my employer), I just happened to find this book at the right time. Also worth noting: the author is a finance journalist and not a CPA or business mogul. Her voice throughout the book is conversational. She’s focused on readers learning and understanding what works best for them and their financial future. And that’s a message I am willing to read more about.
Step one of Rich Bitch is admitting you have a problem.
My financial outlook needs to change. I find that it is becoming increasingly important in my life that I have honest discussions about my financial situation with others around me and in my industry. Further, it’s also important to talk about money because a lot of times we are just lost in a sea of buzzwords, trying to work out how to manage our paychecks to the best of our ability. It’s hard and it sucks.
When it comes to working in the publishing industry, I am on the low end of the pay grade because I am entry level. In the interest of self-preservation I will say that I make between 30-35k per year. I thought that this type of salary was reasonable and more than I would ever need, yet New York City takes. And takes. And takes. It forces you to sacrifice brunch with friends in order to pay the monthly metro card because you need to travel by subway to go to work. It forces you to skip going to Broadway shows because you have to pay rent. From the outside, New York City is the coolest, most exciting place to live. And that may be so when you first move here, but right about the time you move to your fourth apartment in three years, which has a mouse problem (unlike your first apartment, which was too small, your second apartment, which had a dog problem, or your third apartment that had a roach problem despite your cleanliness) it becomes clear that sacrifices are being made for the sake of living in the city.
I have a stable job, which is an advantage of in and of itself. My company puts entry level employees in a union, but I’m not sure how to make that work for me. I have health, dental, and vision insurance. I get paid for overtime when the situation arises (infrequently). Part of my paycheck goes into a 401(k). And I still have problems saving.
The 50/20/30 rule cannot apply to me (or anyone in my position living in NY). It’s a savings plan that is about putting 50% toward monthly expenses (rent, utilities, transportation, student loan), 20% into savings, and 30% toward flexible spending (like groceries, eating out, and fun things). Right away, I see the problem is that 50% of my monthly income goes toward rent. So that means I would have to take money allocated for fun things and pay off bills and the extra expenses that come with living in a city. Plus, why should I save 20% when I need to pay down my credit card that has 5k on it? Not to mention my student loan debt that I’ll be paying for the rest of my life (income based repayment for me–don’t think there’s really another option at this point.)
Okay, maybe you’re thinking that I could try the snowball method, paying my credit card and then using that payment to add to my student loan payment. You’re not wrong, but I feel that every time I make a dent in my credit card debt, some unforeseen event forces me to put the charge on my card. And that’s why it’s important to have a savings cushion. In the future, instead of putting the charge for the moving company on my card each time I move, I could build up enough savings to use that to pay the movers.
So I find saving to be a bit out of reach. And that’s what I need to change.
My hope is that Rich Bitch inspires me and anyone who reads this blog to get your finances together and feel like you have some control over your life. Right now mine feels a bit too precarious, but I’m faking it. And I want to be as honest as I can because there’s no reason not to (that I can foresee). And I have to make an effort to be transparent during this endeavor, to hold myself accountable.