3 new money habits I learned from ‘Finance for the people’

  • Unlike most personal finance books, “Finance for the People” actually addresses economic injustice.
  • I picked up three new habits from the book that made managing my finances so much easier.
  • The most useful was having two checking accounts: one for bills and one for fun expenses.
  • Read more Personal Finance Insider stories.

As a millennial dealing with student loans, credit card debt, and the rising cost of living in a big city, I hate hearing out-of-touch advice from “experts” telling me kicking my Starbucks habit will solve all my problems.

By contrast, “Finance for the People,” written by former Filipino American queer financial planner Paco de León, is a breath of fresh air. De Leon actually addresses how systemic economic injustice affects our relationship with money while providing practical, down-to-earth advice to help you build wealth.

After reading this book, I learned that there is a big 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, harshly blaming myself for my past mistakes is a sure way to sink myself deeper into a hole of debt and financial despair, as I am making emotionally charged decisions based on past trauma.

This mind shift motivated me to make realistic and practical changes to my finances. Here are three tips from “Finance for the People” that helped me change my relationship with my money and improve my financial situation.

1. Weekly finance time

Weekly finance time is a half hour or hour spent tackling overwhelming financial tasks. De Leon writes: “When you set aside time, you are committing to yourself in advance. You are prioritizing your financial life and not allowing your other obligations or desires to invade this important moment.”

Scheduling weekly finance time kept me from constantly obsessing over money. Instead of anxiously doing mental math every time a bill is due or when I’m out with friends, money takes up less mental space because I know I’ve already spent time solving those problems beforehand.

Weekly finance time also helped me tackle difficult tasks like going to my state disability office and calling my service providers to update them on my gender-affirming legal name change.

2. Separate checking accounts for bills and fun expenses

De Leon suggests categorizing your expenses into two sections: “bills and life” and “fun and BS.”

Bills and life includes:

  • rent/mortgage
  • property taxes
  • Home/Renters Insurance
  • Transport
  • Health insurance
  • Pet sitting
  • Debt
  • Telephone
  • household items
  • Repairs and maintenance
  • food at home
  • Utilities
  • Kids
  • Health
  • other essentials

Fun and BS includes:

  • go out to dinner
  • vices
  • hobbies
  • Gifts
  • Personal growth
  • Entertainment
  • children’s hobbies

He then suggests using a separate checking account for each category to make life easier. Since I don’t use big banks like Chase and Bank of America, it took me a while to get used to transferring money back and forth on payday for this to work. But once I got used to it, it was a game changer.

This simple move took away the mental gymnastics of doing math to figure out if I’m going to spend money on rent and bills if I decide to spend an afternoon at a museum and then treat myself to lunch. Seeing the actual number I can spend on fun on my own account gives me the freedom to spend my money on things I love.

3. Automate emergency fund savings

De Leon provides a really simple equation for a savings rate to help readers create a timeline for building an emergency savings fund. An emergency fund is easy-to-access cash typically kept in a high-yield savings account with three to six months’ worth of living expenses to use in emergencies.

the equation is: (Monthly savings ÷ Monthly net payment) x 100 = savings rate.

Because much of my take-home pay is tied to paying down debt and the high cost of living in Los Angeles, I currently have a savings rate of 2% per month. It is humbling to realize my savings, let alone share them with thousands of readers on the Internet.

With this newfound self-awareness, I set out to automate my precious little 2% savings on every paycheck. When I have a few extra dollars left in my “Fun and BS” checking account, it makes building my emergency fund that much more rewarding and motivating.

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