Your Path to Financial Freedom Starts Here

Recently, I read that women in my generation will never earn as much as our fathers did; even though we are much better educated, we will still struggle financially.

After taking some time to carefully analyse my girlfriend’s and my finances, I had to agree with that statement. We were all very well educated and…, most of the time, completely broke.

I started wondering what went wrong that we couldn’t get on top of our finances, even though we had all this fantastic brainpower. Clever, intelligent, well-educated, worldly people should make wise decisions. Well, this is where I was wrong. We are all book-smart and life-smart at times, but not necessarily financially smart.

Where does this lack of financial literacy come from?

1. Misunderstanding how investments work and, often, listening to the financial advisers, who make it sound too complex to wrap your head around. (since women are usually multitasking just to get through the day, anything that sounds or is too complicated goes at the bottom of our to-do list) All that confusion is created to scare people into buying expensive financial advice and services.
2. Overconsumption leads to zero savings. This is a big one; it takes time to learn to resist the social pressure to own everything.
3. There is pressure to spend and buy on credit because everyone else is doing so. Credit cards can be a short-term solution if you struggle to put food on the table. But this may be the quickest way to financial misery in the long run. The rule is not to buy anything you can’t afford by paying with cash.
4. Lack of positive financial role models. Women’s magazines traditionally never talked about finances and financial independence, instead of running shit lots of celebrity articles with their opinions of life, clothing, makeup, hair…When was the last time you heard someone well-known talking about overconsumption, frugality, or savings?
5. Earning less than men. Yes, that’s the fact. Women still earn much less than dudes.
6. Not progressing as fast in our careers as men do, due to family commitments (childcare and caring for elderly parents usually rest on our shoulders).
7. Buying designer bags, clothes, and shoes isn’t an investment. These are just vanity items supposed to keep us in debt, not give us financial freedom or empower us.

Adverts explicitly targeting young girls and women are meant to create a huge need to belong in a group. But to be part of that “exclusive” group, you need to consume, you need to buy something that you most likely don’t need and will never have a practical use.

I started working in my early 20s, and I had never saved even a penny toward wealth building. I believed that money was used for spending only, and it never crossed my mind that it could be a ticket to independence. I was trained well by social norms and marketers.

All the books, clothes, DVDs, and CDs I consumed over the years almost always ended up in a charity. I was working, spending, getting dissatisfied with my purchases and giving it all away to charity. My weaknesses have always been clothes shopping, spa treatments, expensive travel, and eating out (including coffee). Luckily, among all my financial confusion and misunderstandings, I managed to develop some good habits, such as not buying expensive cars and avoiding substantial credit card debt.

However, the stillness during the lockdown forced me to analyse my life choices. Since I’m not getting any younger and the huge checks from all those fantastic ideas, films, and scripts I’ve had over the years aren’t coming in, I’ve started having this nagging feeling that it is my very last chance to get my finances in order.

I always had a gut feeling (this is how much I knew about finances) that living off your stock investments was possible, though I had no idea how that was done. That was until I stumbled upon the Guardian article about a retired couple in their 30s in Canada. That article led me to Mr Money Mustache, whose blog introduced me to JL Collins. Finally, after an intensive period of reading all the blog posts and listening to financial books, I began to understand how finances can work. All those confusing elements that had previously made no sense to me started to become pretty clear.

I’m not a financial expert, far from that, but I’m a woman on a mission, determined to get my finances in order before it’s too late. In this blog section, I’ll be writing about my journey and discoveries as I work hard to make my way toward financial independence.

If you are like me, confused but willing to put in the hard work and change, here is a short list of what you could start with:

1. The first and most important thing you have to do is to get to know the subject. There are plenty of financial blogs out there. At the moment, I have found Mr Money Mustache and JL Collins the most suitable for me. If you go to any of their websites, they have a reading list of books you should read (I’m making my way through the list), and they also recommend other bloggers whose ideas might be more suitable for you.
2. Start tracking your spending. Collect all your receipts and see where your money is going.
3. Start putting chunks of money into your savings account, regardless of whether you know where to invest or not yet.
4. If you don’t have your emergency stash, start building it. It’s usually recommended that you have six months’ worth of your spending saved up in cash.
5. Before you buy anything that isn’t essential, ask yourself if you really need that. Whatever we purchase and later throw out ends up in a landfill. Have you ever watched Wall-E? If not, you definitely should. Among its many excellent qualities, it also paints a very dreary picture of what our world would look like if we don’t get our consumption habits under control.

The cheap clothes we buy and use once are cheap for a reason, and often end up polluting developing nations. No, charities cannot sell them.

If you have to buy something just for one outing, check charity shops in posh, expensive areas of your city/town, or ask your girlfriends if you could borrow an outfit, a bag or shoes. Or, what I do: save up money and buy one or two clothing items a year that are a bit more expensive but I know will last a long time. I have been loyal to a few companies for years, and I’m pleased with the quality and durability of their products. You can always head to Project 333 to learn how to shrink your wardrobe in a minimalist way while still staying in fashion.

Change is scary, but keep the big picture in mind. You are working towards something much greater than the immediate pleasure of buying new things. You are working towards not only your financial independence but also a better, cleaner future for future generations (if you are a parent, that should always be on your mind). Don’t think about your change as a sacrifice. If you do, you will start struggling early on. The change should come from within you, as that’s the only way it can last.

PS. I’m #MadeByDyslexia – expect big thinking & small typos.