I think I’m in a pretty common position for people my age (30), in that I’ll have student debt until I die and no real savings to speak of. I love my work (I’m a teacher) and will never get paid well for it. I rent an apartment in Queens and have no real prospects of ever being a homeowner. Money is always tight, and I used to try hard to figure out how to budget and be responsible. My parents were never great with finances and it was always a point of stress growing up, and I don’t want to repeat that.
But during the pandemic I just stopped caring. I now feel like personal finance is just a myth to give people an illusion of control over huge systemic problems that we can’t possibly fix or even significantly improve by tracking our spending or buying fewer lattes or whatever. I’m also sick of feeling like my financial shortcomings are my fault. The pandemic has shown us that you can work hard your whole life to save or build a business, and still lose everything. So what’s the point in trying so hard?
Since I stopped putting much effort into my finances over the past year, not much has changed about my situation. Part of that is lack of opportunity — there isn’t much to spend money on. But once I’m able to travel again, I want to do that more. I want to enjoy my life and not say no to dinner because I should save instead. But I occasionally do wonder if I’m really screwing myself over in the long run. Are there ways to feel less guilty about money, and be less attached to this illusion of financial security, without digging myself into a deeper hole?
I hear you. The past year has exposed so many holes in an already messed-up economic system that money has begun to feel like a huge, cruel joke. You’re right to be frustrated, and you’re right to reject the notion that you can game your way through capitalism if you just try harder. I’m glad that you’ve decided to be happy with a career you love and stop feeling guilty for problems that are outside your control.
That said, it probably won’t serve you to take an all-or-nothing approach to caring about money. I know that a lot of personal finance “advice” encourages that type of thinking — that if you’re not rich by 30, you’ll be destitute forever, and it’ll be your own fault. But that’s absurdly simplistic, and just plain irrelevant to most people who don’t have the option to stockpile their earnings.
Instead, you can see money for what it is — a fickle, nuanced, and sometimes arbitrary force that helps you do certain things. The question is: What things do you want to do with yours? You don’t need a perfect, solid answer. But based on your letter, it sounds like you have a pretty good idea: You want to be able to afford rewarding experiences, and to not be stressed out by money in a way that causes conflict with your loved ones or with yourself. These seem like great financial objectives to me, and you can still be intentional about pursuing them without beating yourself up about it.
One way to do so is by focusing less on big, numerical goals and more on small, constructive habits. For example, trying to save a large chunk of money might be overwhelming and unrealistic, but setting aside $20 a week probably isn’t.
“Putting a very small amount into savings every month — like $40 per paycheck, or something that you won’t really miss — can feel very powerful,” says Tanja Hester, the author of Wallet Activism: How to Use Every Dollar You Spend, Earn, and Save as a Force for Change. Where goals can be too rigid for the challenges of everyday life, she adds, a regular habit of saving can be more adaptable to shifting circumstances. “Focusing on the incremental progress you can make is still worth it, even if following every rule of personal finance isn’t in the cards.”
Better yet, she recommends automating your savings practice so that it doesn’t feel like an arduous decision. Most employers allow you to automate contributions to a 401(k), pension, or other retirement savings account — take advantage of that, even if you’re just saving a little bit. (If there’s any sort of matching program, aim to do that, too.)
Meanwhile, you can set up your bank account to siphon off a little bit of money every week or month into a separate savings pool that quietly grows without any action on your part. The benefits of automation are supported consistently by research — studies show that people who automate their savings are more likely to keep up the habit, and to save more in general. The truth is, humans aren’t very good at delaying gratification when given the choice, so it’s better (and much less stressful) to let the robots do it for us.
I’m not saying that automation will solve all your financial concerns or guarantee your financial security. Neither will saving just a little bit. But it will feel good. A survey by the Harvard Business Review found that people who had at least $500 in cash on hand reported 15 percent higher life satisfaction than those who didn’t. A nest egg of some kind will also help you fulfill some of the objectives you mentioned — namely, being less stressed about money. If you can cover a small emergency without racking up debt, that’s a big weight off your shoulders. It also gives you wiggle room when life happens and you need to react quickly. “Knowing that you have some savings can bring you a lot of peace — that’s money to buy a last-minute plane ticket to a funeral, or to care for a loved one if the need arises,” says Hester.
It will also give you more options. I’m glad that the past year has made you examine your priorities — and they are good ones! — but you should also allow for the possibility that they might change. So may some of the systemic problems that seem so hopeless right now. The Biden administration has pledged to overhaul policies for student loan forgiveness programs for teachers and other public-service workers, so that they might actually work (imagine!).
Overall, the point is to keep an open mind. You’re right that, like many Americans, you may never feel totally secure, and that sucks — especially if you’ve had a challenging, meaningful job your whole life. But there’s a broad spectrum between reaching some ideal of financial security and throwing up your hands entirely. Becoming more secure is a worthy endeavor in itself, and one that you can tackle incrementally, in a way that works for you.