Guest Column: A Millennial's Approach to Her Personal Finances

And, how she makes it work as a freelancer

Jul 09, 2023

Editor’s note: Thanks to Olivia for contributing her personal finance perspective. If you’d like to share yours, please be in touch or add a comment below.

I am honored to be the first guest writer for this newsletter. Despite being Jimmy Becker’s daughter, I am not innately “good with money.” Like everyone else, I think I spend less and save more than I actually do. Up until fairly recently, my overriding philosophy about money was “what you don’t know can’t hurt you” (i.e., I never, ever, took a receipt from the ATM machine).

But I am a freelance documentary filmmaker, which is not a career choice that allows me to have this hands-off attitude. I’ve had to learn by sheer necessity and trial and error to be disciplined about money habits. Even though Jimmy thinks I never listen to him, I have learned from one of the best. So here is some of what I do when it comes to my money:

1. Money should be boring

I do not have Robin Hood, any betting apps, or money in crypto. I have plenty of thoughts about these scams, which I'll save for another newsletter, but suffice to say, I try to view money as a neutral tool, neither scary nor inherently entertaining. I do not want to think about it longer than absolutely necessary. If it sounds too good to be true, it probably is. Which is why….

2. Spending

I have two simple, no-fee credit cards. I pay them off each month. I used to use my debit card for everything but in recent years I’ve transitioned to using one credit card for all of my spending. I mentally treat it as my debit card, in that if I can’t afford something, I don’t buy it, credit card or not. I don’t really know about or care much about points — I get some rewards but nothing crazy. I probably should look into that more.
I don’t know exactly how much I spend. I know roughly how much my monthly credit card statement is and how much rent is and that’s about it. My income varies a fair amount year-to-year and even month-to-month, so I try to keep my discretionary spending at the same, low level, regardless of how much money is coming in. Some months I’m more successful at this than others.
That being said, once a year during tax season I’ll do a more in-depth analysis of what I’m spending my money on. I’m usually somewhere between aghast and resigned (I don’t even remember going to Sephora that many times!). But I also try not to be too hard on myself. I live in New York City for a reason, which is to enjoy life and the city. As long as my bills are paid and I’m not overdoing it, it’s fine to go to the fancy wine bar once in a while.

3. Saving

I have two accounts at Vanguard — one is a Roth IRA, which was set up by my dad after I got my first job in high school. I usually max out my allowable contribution each year (around $6k) since I don’t have an employer that matches funds. Other than that I literally never think about it and hope I don’t forget my p@ssw0rd123.
My other Vanguard account is a medium risk mutual fund, where I put my savings. When I have a steady gig, I try to put away a little bit when I can (usually a couple hundred to a $1,000 every 2 months). I’m not methodical about it and I always think I’m saving more than I actually do. But I do this because it makes me feel better when I have to draw down this account during leaner unemployment times.

4. Taxes

A freelancer-specific point: The second I receive a payment for 1099 income, I immediately take out 40% and put it in a separate “tax bucket” in my savings account until it comes time to fork it over to the IRS for quarterly taxes. The longer the full amount lingers in my checking account, the easier to think it’s “mine” and all my socialist politics go out the window.

[Editor’s note: a great example of “mental accounting buckets”]

5. Health insurance

Since I don’t have employer-sponsored coverage, I get my health insurance from the New York State marketplace (I was uninsured for years before COVID). I go for the cheapest possible plan (“catastrophic” is the elegant term) with the lowest available premiums and a massive deductible. Every month, I consider going back to having no insurance but Jimmy convinces me not to. Instead, I quietly plot my revenge on the greedy healthcare CEOs.

6. A final word

I do not believe personal finance discipline will solve all of our money problems. Wages are too low and the rent is too damn high. No amount of “just make your coffee at home, silly millennial!” will change that. But I do believe that having a basic grasp about your own personal financial life is a necessary first step in taking some power back. I am a firm believer in transparency when it comes to talking about money with your co-workers, partners and parents, especially among people my age. Oh, and I still don’t look at my ATM receipts.