Your Money: Meeting Yourself Where You’re At

Financial Boot Camp for 20-Somethings: Day 2 of 5

It’s time to get your money in order.

We want to meet you wherever you are.

If you’re already in the work force, we have you covered. Still in school? We can help. Looking for work? We’ve got some ideas.

But no matter what situation you’re in, here’s the most important piece of advice: Ask for help. Nobody — and we mean, no one — is born or finishes school or enters the job market knowing about all of this money stuff. You’re not alone in your confusion, and there is no shame in raising your hand and asking a question (or 20).

People with a bit more experience than you have learned a few things, often the hard way. So ask a colleague for help. Find an older student or a school administrator who has worked the systems that you are just starting to navigate. Wait in line at the unemployment office or on hold on the phone and keep asking for clarification until you get a response in plain language. Or ask us, and we might be able to answer your question in a future newsletter.

None of us are as smart as all of us, and we’re all in this together.

If You’re Already Working

Your salary is your salary, at least for now. You’ll want to ask for a raise every so often, and you’ll want to keep a file of things that have gone well at work — and things that a supervisor has asked you to do better that you’ve acted on successfully. This will make it easier to ask for a raise, something my colleague, Tara Siegel Bernard, has written about in the past.

If you’re evaluating a new job offer, remember that your compensation does not equal your salary alone. Compare vacation time (every additional paid day off is like getting a raise right then and there), health insurance plans (say, the size of the premiums and deductibles) and other benefits. Salary and vacation time are the pieces you can often negotiate.

The world of employee benefits is probably new to you, and there isn’t always someone around to patiently teach you what they are and how they work. (I wrote a guide in 2008 that holds up pretty well.) Quite often, however, these benefits are worth thousands of dollars.

A medical benefits package can come with access to physical therapy, coverage to see a psychologist and money to freeze your eggs. An employer may offer a retirement savings plan like a 401(k) or 403(b), which is an easy way to save because you can have money sucked out of your paycheck before you even see it. (And if the employer matches some of your savings, even better — take them up on it.)

If you’re self-employed or in a job that lacks benefits, that’s a bit harder. One thing that often surprises people in your situation is how deep the tax bite hits when you don’t have an employer who can withhold taxes for you and send the money to the government periodically. An unexpected tax bill can lead to debt, and the Internal Revenue Service does not play.

You can read more about how to manage taxes on your own in Tara’s 2020 guide here. We’ve written two other stories about taxes for freelancers since then.

If You’re Still a Student

Perhaps you’re an undergraduate with a parent who helps you with money decisions and you want to play a bigger role. Or maybe you’ve just started graduate school.

But if you’ve ever had any family involved at all, now is a good time to ask how they want to be involved in the future. Who is paying for what? Can you stay on a parent’s health insurance plan, which is often possible until you are 26? If there’s a family mobile phone plan, how long can you stick with it? What about cars and insurance for them?

It can be hard to ask these questions. It may feel to you — or to your family members — like you’re asking for things because you have an expectation of unending support. Or maybe you’re worried that you’ll make family members feel guilty if they can’t provide additional or ongoing support. If so, you can prepare a script and rehearse it.

Something like this can work well:

“Mom, I’m trying to take more responsibility in my financial life. I’ve been so grateful for everything you’ve done for me, and I don’t expect anything else from this day forward. But it’s possible that you may want to continue helping or even do more, if you can, or just serve as a backstop if I get into trouble. In order for me to plan, I just need to ask you about a few expenses that are ongoing or coming my way. Can we set a time to talk about that?”

The majority of people who graduate from college have borrowed to do so. This is normal (although we should never totally normalize the fact that students in the United States don’t get as much governmental support as they do in many other countries). Remember, you can always ask for more scholarship money from your school if your circumstances change, or even if they don’t. You don’t get what you don’t ask for.

As for your debt, start tracking it. If you don’t have a list of the loans you’ve taken out and the amounts, it’s hard to begin the repayment process in an organized fashion. Before you do start repaying them, spend some time studying up on the income-driven repayment plans for federal student loans. They are in flux because of policy changes and legal challenges, but the discounted payments are more generous than you might think if your income is relatively low.

Not on your parent’s health insurance plan anymore? Keep a close eye on any school-provided insurance and its limits. They can be rather paltry. If you’re not married, you may want to consider who should get access to your health records or have decision-making authority for you in the event of a dire emergency. Fill out permission forms outlining your wishes.

If You’re Unemployed and Seeking Work

If you’ve been laid off, apply for unemployment benefits. There’s often paperwork and a bit of a wait. No guilt, no shame here — unemployment taxes exist so that when we lose our jobs, we can access this compensation.

The same thing is true with food stamps — you or your family pay into a variety of governmental systems for precisely this moment. Many colleges have their own food pantries for students. It’s depressing that it is necessary, but it’s incredibly useful if you are in a jam.

Landlords may cut you a break. Explain yourself and ask for a month or two off. If that’s not happening, ask about a lump-sum payment at the end of a lease or some kind of medium-term payment plan. Lots of landlords did this sort of thing at the beginning of the pandemic.

Meanwhile, we’ll just reiterate the importance of leaning on your community. You’ve likely done a lot of nice things for people over the years. This is the time to ask how they might be able to help you.

And if you’re lucky enough to be employed, think about how good it would feel for someone who is in a bad spot to be invited over for dinner or taken out for lunch. Now, go ahead and reach out.