- Unlike most personal finance books, “Finance for the People” is actually about economic injustice.
- I’ve adopted three new book habits that have made managing my finances so much easier.
- Most useful was having two checking accounts: one for bills and another for fun expenses.
- Read more stories from Personal Finance Insider.
As a millennial struggling with student loans, credit card debt, and the rising cost of living in a big city, I hate to hear disconnected advice from “experts” telling me quitting my Starbucks habit will fix it. all my problems.
By contrast, “Finance for the People,” written by former queer Filipino-American financial planner Paco de Leon, is a breath of fresh air. De Leon actually explains how systemic economic injustice affects our relationship with money while giving practical and realistic advice that helps you build wealth.
After reading this book, I learned that there is a huge difference between taking responsibility for my finances and blaming myself for my past financial mistakes.
Taking responsibility for my finances is an act of self-preservation that can help me thrive, especially as a transgender person of color. On the other hand, blaming myself harshly for my past mistakes is a surefire way to sink me deeper into a pit of debt and financial despair, since I make emotionally charged decisions based on past trauma.
This mental shift motivated me to make realistic and achievable changes to my finances. Here are three tips from “Finance for the People” that have helped me change my relationship with my money and improve my financial situation.
1. Weekly funding time
Weekly finance time is half an hour or one hour dedicated to strenuous financial tasks. De Leon writes, “When you set aside time, you commit in advance. You put your financial life first and don’t let your other obligations or desires intrude on this important time.”
Scheduling time for finances on a weekly basis has kept me from constantly obsessing over money. Instead of anxiously doing mental calculations every time a bill comes due or when I go out with my friends, money takes up less mental space because I know I’ve already spent time solving those problems. in advance.
Weekly time spent on finances has also helped me with difficult tasks, like going to my state’s Office of the Disabled and calling my service providers to let them know about my legal gender-affirming name change.
2. Separate checking accounts for fun bills and spending
De Leon suggests categorizing your spending into two sections: “bills and life” and “fun and BS.”
Bills and Life includes:
- Rent/mortgage
- Property taxes
- Home/Tenants Insurance
- Transportation
- Medical insurance
- Take care of an animal
- Debt
- Call
- Household items
- Repairs and maintenance
- food at home
- Utilities
- Kids
- Health
- Other Essentials
Fun and BS includes:
- Dine out
- vices
- Hobby
- Gifts
- personal growth
- Entertainment
- Children’s hobbies
She then suggests using a separate checking account for each category to make your life easier. Because I don’t use big banks like Chase and Bank of America, it took me a while to get used to moving money back and forth on payday for this to work. But once I got used to it, it was a game changer.
This simple gesture took away the mental gymnastics of doing the math to figure out if I’m going to dip into my rent and bills if I decide to spend an afternoon at a museum and then treat myself to lunch. Seeing the actual amount I can spend on fun in its own account gives me the freedom to spend my money on things I love.
3. Automate saving emergency funds
De Leon offers a very simple equation for a savings rate to help readers create a timeline for building up an emergency savings fund. An emergency fund is a readily accessible sum of money usually kept in a high-yield savings account with three to six months of living expenses to use in an emergency.
The equation is: (Monthly savings ÷ monthly net salary) x 100 = savings rate.
Because so much of my take home pay is tied to paying down debt and the high cost of living in LA, I currently have a savings rate of 2% per month. It’s humbling to realize my savings, let alone share them with thousands of readers on the internet.
With this newfound self-awareness, I made it a point to automate my precious little 2% savings with every paycheck. When I have a few extra dollars left in my “Fun and BS” checking account, it makes it all the more rewarding and motivating to build up my emergency fund.