Wait a minute. I can afford this now. This is what it’s like when you’re adulting.

A few weeks ago, I finally experienced what it’s like to be the “rich” friend. A group of girlfriends and I, people I’ve just met recently, were talking about going skiing. The trip can cost almost $100, including gas, meals and lift tickets. That’s a hefty amount for me, but something I can afford.

One of the girls in the group said she couldn’t afford to go. The rest of us said we understood, and that’s when it hit me.

“Wait, I’m that friend that can afford things now.”

Things were different a couple years ago. I was trying to pay off my students loans and was putting any extra money toward my debt. I said no to parties, dinners, and cross-country trips. I said no to hobbies, concerts, and movies.

I remember feeling jealous and judgmental of my friends who could travel and not think about how they weren’t putting money in their retirement funds. Or people who gave to charity while deferring their loans. I gave $25 at weddings, lamenting even that amount.

While I was in college, most of my friends and I were on the same level. We spent money with abandon, even though we all claimed to be broke.

I keep thinking back to one of the first episodes of “Friends,” where Rachel, Joey, and Phoebe have to bring up that they can’t afford to go out to eat or buy concert tickets. I’ve never had that difficult conversation with a friend, but I have been the one to suggest hanging out at my place instead of going to the movies.

Starting to Afford Things

Now my husband and I don’t mind picking up the check when friends come in town — we’ve even treated his parents to dinner occasionally. If you want to feel like an adult, try buying dinner for your in-laws. That will make you feel like an adult faster than you can say “health insurance premium.”

I like this feeling. For the first time, my life has options. I just bought tickets to see one of my favorite writers, Elizabeth Gilbert, speak. When purchasing the tickets, I splurged on the VIP package, which includes a cocktail reception with Gilbert. A year ago, I would’ve bought the cheapest ticket and considered myself lucky.

The good news is that there are always alternatives to pricey forms of entertainment. You can watch a movie at someone’s house instead of going out. You can bake together instead of grabbing dinner. The same way that my friends compromised for me when I was unwilling to spend money, I need to do for other people.

It may mean that they won’t be able to come to ski trips or big concerts, but they’ll be available for drinking wine at home and rewatching a “Harry Potter” movie.

I’ve seen my parents manage friendships while earning differently than other people. It’s not about being ditching the friend who can’t afford to go to the restaurant you want to go to, it’s about being a friend and finding ways to bridge that gap.

The best experiences are the ones when you have the right people.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Without the right financial values, you’ll be lost with money and you’ll set a poor example. Fix that right now.

When you’re struggling financially, you might have two different ways of dealing with it. You might freak out because you can’t deal. Or you might just stick your head in the sand and ignore your problems because it hurts too much.

That’s what I did when I was dealing with the worst of my money problems. I had to hit rock bottom before turning my life around. That gave me a chance to figure out what my financial values are.

1. Money is not for the sake of money.

With money, you have to be that annoying kid. The one who asks, “Why?” after every sentence. “I want to be a millionaire.” “Why?” “Because I want to be rich.” “Why?” “So I don’t have to be concerned about having enough money.” “Why?” “So I can do the things I’d like to do.” “Why?” “Because I want to travel the world.”

Finally we get to an answer. There’s no point in having a high balance in the bank or a long-term investing strategy if there isn’t a goal other than gathering that money. If your only goal is to retire with a million dollars, you’re totally missing the point. The purpose of money is to do something with it. What do you want to do?

2. Balance financial independence with helping others.

What would you do if you ended up with one million dollars that you didn’t plan on having? How about one billion? What else is there besides “financial independence” (having enough money to do what you want without worrying about earning more from working)?

Don’t forget to look outside yourself and your family. Help others, especially those who don’t have the same types of opportunities as you. You don’t need to be financially independent to start making a better world. Some of the most charitable people are those who are not wealthy. Find the right balance for you between making yourself rich and contributing to a rich experience for the world.

3. Are your assets on display?

If you feel the world is a competition or that you have something to prove, you probably have less of a problem with showing off your success. Grow up in a community where success is hard to find, and you feel this even more. You celebrate your success publicly, because it not only helps validate you, but it gives hope to others.

But this perpetuates the idea that money and wealth somehow make people superior. And the competition isn’t only about wealth. Look around and you’ll see people trying to prove that they have the skills to save more money than anyone else. Money brings out your competitive nature. Whether it’s about earning money, having a wealthy partner, or saving money, you may feel the need to show off.

Showing off tells people you’re not confident with yourself. People don’t need to know about your success. Keep it quiet and do good with your money without fanfare.

4. Wealth isn’t something to idolize.

Wealth Isn't Something to Idolize: 6 Healthy Financial Values to Fix Your Money Attitude

We see popular people living well and we want to be like them, whether it’s the musical artist who’s an “overnight success,” a Kardashian, or just some couple on House Hunters International.

Have you seen all the books and blogs that supposedly teach people how to be rich by thinking like a rich person? As if changing your “mindset” will give you the same opportunities experienced by people who have lived their entire life surrounded by wealth? Yes, you do have to have a positive life philosophy if you want to be able to handle the wealth you build, but you won’t gain anything by just thinking like a rich person. Financially successful people are not better or smarter than the rest of us.

Strive to be a person of strong character, not a person of a huge bank balance.

5. Money isn’t related to human decency.

On that note, we often confuse wealth with living as a good human being, just as often or if not more than we characterize wealthy people as “evil.” These are both wrong! If you are a bad person before becoming wealthy, you will remain a bad person when you become wealthy.

Just like wealth doesn’t lead to decency or indecency, the lack of wealth doesn’t correlate either. Poor people aren’t necessarily lazy. They aren’t necessarily hard workers, either. Everyone has a life full of their own circumstances that often don’t correspond with any stereotype or generalization. Separate someone’s character from their wealth, and don’t make assumptions.

6. Financial success isn’t a reward for hard work.

You do your chores, you collect your allowance. This is supposed to be a life lesson for kids about how the real world works. Except it’s not!

Yes, you do get paid when you show up for your job, but how hard you work often is not related to how much you get paid. I worked for an arts organization after college, and I worked hard. There were times of the year I worked 80 hours a week and the job consumed my life. Didn’t make much money, though.

There are wealthy people who never worked a hard day in their life. Many have, though, so having a great work ethic is still the best approach to build wealth. The problem is that it’s far from a guarantee. Sometimes working hard just doesn’t pay off. A vast amount — the majority — of people throughout the world work hard their entire lives but will never be wealthy.

Financial success requires grit, but also much more.

What are your financial values?

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Always coming up short when you’re out. Never paying their fair share. What do you do when you’re always covering?

We’ve all had that friend. You know the one.

When the dinner bill comes, they severely underestimate their share (let alone account for tax and tip). You spot them $10 here and $20 there, yet they always “forget” to pay you back.

But you let it slide every time. After all, what’s a few bucks among good friends?

That used to be your attitude, anyway. Lately, your desire for a person’s company has a perfect negative correlation to how much of their crap you are required to put up with. You are, in fact, too old for this shit.

So here’s how to deal with that friend who makes you feel more like a bank than their buddy — without killing the relationship.

Be honest.

The great thing about friends (real friends — not the people you pretend to like out of various social obligations) is that you can tell them the truth and they’ll still be your friend. You’re not doing anyone any favors by pretending your pal’s poor money etiquette doesn’t bother you.

So the next time they leave you hanging with the bill, be up front and tell them how much they owe right then and there. Add that you’re pretty strapped for cash as well and can’t afford to cover them. Consistently push back rather than ignore the behavior and eventually, they’ll get it.

And if this honesty does cause a rift in your relationship, it’s probably time to reevaluate whether you two shared a real friendship at all.

Find cheap/free things to do.

A novel idea, right? As much as you’re annoyed by your pal’s perpetual brokeness, they likely feel pressured to keep up with the group financially, too. That’s a tough spot to be in, and as a friend, you should find ways to spend quality time together that don’t force your buddy into yet another awkward situation.

Fortunately, another great thing about friends is that all you really need is each other’s company to have an awesome time.

Check your local weekly for low-cost and free events such as concerts, art exhibits, and movie screenings. Have a picnic at the beach. Go for a hike. Get dressed up, pretend you’re rich, and hop from one open house to the next while eating all their snacks along the way.

Consider it a gift.

That Annoying Broke Friend

When your friend does ask for money, and you feel comfortable parting with the cash, treat it as a gift. Loaning money turns a personal relationship into one of business, which opens the door for guilt and resentment on both sides, especially if the borrower isn’t able to pay up.

It’s your choice whether or not you want to support your friend financially — and it’s perfectly fine if you do. Keep in mind, however, that you can’t expect things to change if you continue to enable the situation.

Friendship is something that only becomes more precious as you grow older; it can be tempting to over-compromise in order to avoid conflict. But true friendship is also built on honesty and desire to make each other happy, so don’t be afraid to share your feelings in a caring but straightforward manner.

And if your own financial goals are jeopardized in order to keep the peace between you and a broke friend, that friendship probably isn’t worth it in the first place.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Screw the huge salary and 80-hour workweeks. Do your benefits help you actually LIVE your life?

When you start a new job — including your first job — salary seems like the most important issue.

Making money is important. We all enjoy eating and most of us like to have a little fun, too. But it’s not just about the salary or the hourly wage. When my now-ex-husband got his first real job after, I was shocked, shocked, at how much easier life became with addition of benefits.

Health insurance is your BFF.

The biggest bonus was health insurance. We’d been paying for private health insurance for a decade, using my earnings as a freelancer to pay for everything. With his employer subsidizing our coverage, our premium was cut in half, and we had a better plan. I swear, one of the biggest disappointments of the divorce was the prospect of going back to being entirely responsible for my own health insurance.

Your employer might be paying as much as 68% of your premium if you have health benefits, according to the Bureau of Labor Statistics. If you are paying $250 per month for your health benefits, there’s a good chance they cost as much as $368. That’s a savings of $118 a month. It’s like making an extra $1,416 a year.

Paid vacation days are totes amazing.

Get paid even while you aren’t at work? Yes, please! If you can negotiate a package that allows you to take vacation days and still get paid for them, you are doing something right. It might be worth it to accept a little less in terms of salary if you don’t have to worry how you’ll make up the days you missed to attend SXSW.

Even if you don’t get paid vacation days, some companies are willing to offer extra personal days (although you won’t get paid). If you could take extra time off to live life, would you take it even if you aren’t getting paid? I would.

Nothing beats flexibility.

Money Isn't Everything: Are Your Benefits On Fleek?

There is nothing — nothing — I value more than freedom and flexibility. Increasingly, companies are offering benefits that include flexible work schedules. Thanks to technology, a number of jobs now come with location independence, and there are some companies that allow completely remote workers.

Even if you don’t get to work in your jammies or from the coffee shop every day, you might be able to negotiate telecommuting privileges for two or three days a week, or customize your schedule to come in earlier or later in the day.

I have a friend who is willing to accept a little less in terms of salary because his employer allows him to work three 12-hour days a week. That means that he has four days off each week, and is still considered full-time and enjoys health benefits. That level of flexibility is worth $5,000 a year to him.

How fierce is your retirement plan?

No matter how much money you make, investing can help you prepare for the future. The easiest way to invest is through your company’s retirement plan. Your money is automatically withheld from your paycheck and invested for the future. And if your company’s plan is truly fierce, you’ll get an employer match. That’s free money that goes toward your future, building your retirement portfolio. It’s hard to beat that.

Other epic benefits.

Companies are interested in attracting the best and the brightest, and if that’s you, there are plenty of other epic benefits that you might be able to enjoy at the right company — and that might be worth more than mere money:

  • On-site fitness center or a paid membership to a local gym
  • Meals in a cafeteria that serves actual food
  • Tuition reimbursement
  • Career development and training resources
  • Equipment, such as a smartphone or a laptop
  • Attractive and diverse workspaces (including open offices, standing desks, and other innovative perks)

There are a number of companies willing to offer high-end perks, ranging from concerts to concierge services.

Before you get hung up salary, think of your preferred lifestyle. Your life is going to such if you work 80 hours a week with no time for true enjoyment. You might have a lot of money, but are you enjoying life now?

The right benefits can be worth more than a couple thousand extra dollars per year.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

You don’t need big bucks to get a jump on everyone else.

Investing is one of those things that most of us stick in the “stuff I’ll have enough money to do later” file. We see investing as something you do when you aren’t broke af.

The best time to start investing is now, while you’re still young enough to recover from mistakes — and while you have time on your side. It seems like a hopeless situation. You should put your money to work, but you don’t have enough money to buy a couple hundred shares of Apple stock.

If you think you don’t have enough money to start investing, the good news is that you’re probably wrong. Even when you’re broke, chances are you can invest.

Use a company retirement plan.

Now that you’ve got a real job, there’s a good chance that you have the option to contribute to a retirement plan offered by your employer. Many of us don’t think of putting money in a 401(k) as investing, but it is.

Talk to HR, and have some of your money diverted to a 401(k). If your company offers a match, that’s free money that you can use to invest. You won’t miss what you never see, which is why an automatic contribution from your paycheck is one of the best strategies when you want invest when you’re broke.

Make dollar-cost averaging your bae.

The idea behind dollar-cost averaging is that you take a set amount of money each month (and you can start investing with as little as $25) and invest it. Buy as many shares as you can with that money. Dollar-cost averaging is especially effective when you use your money to purchase low-cost index mutual funds or ETFs.

Index funds and ETFs take all the work out of picking stocks. You get access to a section of the market, so the diversification is taken care of and you don’t have to worry about what happens when you choose wrong. I’m boring as hell when it comes to investing because I’m still into indexing. It’s how I roll.

If you’re putting money aside in a 401(k) from your paycheck, you’re already dollar-cost averaging. If your company doesn’t have a retirement plan, you can still open your own. Many companies will let you open an IRA and put in as little as $50 per month (or even less). Make it automatic and you won’t have to think about it.

Over time, you’ll grow your portfolio through consistency.

DRIP it up.

How to Invest When You're Broke AF

I like to invest in index funds and ETFs that pay dividends and automatically invest them. Many brokers and companies offer DRIPs, or plans that take dividends paid out to you and automatically use the money to buy additional shares.

Investing in dividends makes sense because dividends are payouts companies make based on the number of shares you own. Use DRIPs to automatically buy more shares, and your next payout is larger. You can buy more shares and then get a bigger payout. It’s a beautiful cycle. My decision to use dollar-cost averaging with DRIP funds is the reason that my portfolio kept growing, even during the Great Recession.

TBH, DRIPs seem pointless at first, especially if you invest when you’re broke. Who cares if you got a 20-cent payout? With automatic reinvesting, though, the cycle continues and eventually, as you stick with the dollar-cost averaging to buy more shares, and as your payouts get bigger, everything builds on itself.

Use your pocket change.

If you are absolutely certain that you can’t spare $50 a month for investing, consider using Acorns. This app connects to your bank account and automatically rounds up your recent purchases and puts the difference in an investment account. The fees aren’t my favorite, but if you aren’t investing at all, and this will get you started, it’s better than nothing. This is a good way to at least get started.

You can also use the myRA if your workplace doesn’t offer a retirement account, or if you work part-time and aren’t eligible for your employer’s plan. You can contribute as little as $5 per paycheck to the account.

Commit to your money.

Once you start investing, look for ways to invest more. Don’t forget to increase the amount you invest as you earn more and climb the career ladder. The spare change you invest now won’t fund your future. But it will give you a good start and help you start a habit that can benefit you for the rest of your life.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Can you rent forever and still be an adult? We think so. Here’s why we love renting.

Should you buy or rent? You’ve heard about the importance of homebuying as a life and money milestone. But do you really need to buy a home to be an adult?

We wade into the homebuying debate — on the side of renting. Miranda has actually owned a home, and never wants to again. Harlan has never bought, and he’s not sure he wants to deal with a mortgage and all the expenses that go into owning a house.

Miranda and Harlan tackle the homebuying debate and look at why it seems like such a big deal, and talk about how you can rent forever and STILL be an adult.

Concepts

  • There seems to be a lot of handwringing over millennials and their low rates of homeownership. Why are millennials reluctant to take the plunge?
  • Why does society place such an emphasis on homebuying?
  • What are the main points of the homebuying debate?
  • Tips for deciding whether it makes more sense for you to buy or rent.
  • Reasons that renting can be a good lifestyle choice.
  • The difference between buying property as an investment and buying a primary residence.

Where do you stand in the homebuying debate? So you think buying is preferable to renting? Or do you think it makes more sense to be an eternal renter once you move out of your parents’ house?

Become a Friend of Adulting

To get Adulting delivered directly to your device, subscribe using iTunes, Stitcher, Google Play, or your app of choice.

Join the Friends of Adulting! Please leave an honest review on iTunes. We would really appreciate the feedback!

Resources

The AtlanticWhy millennials avoid buying homes
The New York TimesBuy vs. Rent calculator
AnnualCreditReport.comCheck your credit report

Like what you’ve heard?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Your savings account is a freeloader. Put your money to work by investing now.

When I want something in another room, I send my son to get it. It’s what kids are for. The best way to get work done is to get someone else to do it for you.

That’s the principle behind investing. When you invest, your money does the heavy lifting. With $25 and a willingness to automatically transfer money into your investment account each month, you can enjoy the benefits of letting your money work.

Get Off Your Assets

No one likes freeloaders. If someone is sleeping at your place, you at least want them to do the dishes. When your money sits in a savings account, it’s sleeping on the couch without helping out with anything.

You’ll never build the wealth you need for financial freedom if you don’t move your assets. Once you have built up a comfortable emergency fund, stop relying entirely on that savings account and open an investment account. It’s easy enough, even if you only have $25 to start.

An Open Relationship with Your Money

Don’t be loyal to one bank account or investment account. It’s ok to work your assets in any way that helps you build wealth.

Start with your company’s tax-advantaged retirement account. If your company offers a 401(k) and you contribute, you’re investing. Use that to your advantage, and take the biggest match possible. Many people don’t think of company retirement plans as investing, but it is.

You don’t need to be a one-account investor, though. If you have the right information, you can open an account with an online discount broker (like TradeKing or E*Trade), robo advisor (like Betterment), or a “traditional” company like Vanguard or Fidelity.

Get your money out there to make an effort with others. I was pleasantly surprised the other day to discover that my regular effort with my money has been paying off. I’ve been contributing to a travel fund, and my money has been busy. It’s worked for me, and with the help of compound interest, is already offering a great return.

When you’re ready to spread a little more canvas with your money, keep the following in mind:

Get personal. You’ll need identifying information to open an investment account. Your name, address, birth date, Social Security number, and bank account information will be needed.

Have your personal information ready. Even if you open an account using the Internet, having it nearby keeps you from being timed out of the session before you’re ready.

Index funds are better to start. They aren’t sexy, but index funds, which follow set groups of stocks, such as the Dow Jones Industrial Average, or the S&P 500, can be an easy way to get the most out of your investing dollar. You don’t have to pick stocks (which can get tricky), and you enjoy instant diversity.

Do it in your sleep. Put your assets to work while you sleep. Schedule automatic transfers from your account to the investment account. Most brokers offer an “automatic investment plan.” Sign up for it. It’s better when things happen while you’re not thinking about.

Start small. Even if you’re broke af, you can still afford to invest. With some discount brokers, it’s possible to automatically invest $50 a month. You eventually need to step it up and show your investment account some love, but starting small gives you the chance to let your money begin. The long your money is at it, the greater the chance you’ll see bigger results down the road.

But you still need to boost your contributions over time. As soon as you can, increase the amount you invest. You don’t want to sit on your assets when you have them. They should be out working hard for you.

The following, from Calculate My Wealth, shows you how you should be working your assets. Start investing $100 per month at age 22, and do it until you’re 65, and here’s what you could have:

invest

Unlike investments, that savings account is definitely a freeloader.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!