New York Magazine's blog, The Cut, recently ran an article in which NYC women listed their dumbest money habits. Some habits had me rolling my eyes but some really resonated. Particularly this one:
“I have this really bad habit of thinking that because I am a ‘professional woman,’ I need all of this stuff to make me really BE that woman. Like, I will justify the constant purchase of expensive haircuts, manicures, leather laptop cases, blazers, and conservative heels with ‘this is basically a business expense.’ Except that I cannot write those expenses off, and now I have like ten more ‘work purses’ than I would ever need.” —Sarah, 28
Despite my years of working in wealth management, leading financial literacy seminars, and writing about finance, I am not immune from money mistakes. In fact, you could argue that my poor judgement in the earlier years of my career is what led me to working harder to understand money and the how and whys behind my interaction with it.
In the interest of partial disclosure, some of my money mistakes:
- Like Sarah, I also had an image of how a professional woman should look and I sacrificed my financial health to maintain that image. In recent years, I've had the opportunity to be in the closets of the "real" professional women. Guess what, their closets hold Zara, Gap, Old Navy and all of the other brands I thought I had to grow out of. They also use Rent the Runway for the fancy stuff. These women make those brands look like DVF and Theory through their knowledge and professional confidence.
- I spent money on things I can't remember. Many of the people in the article cited their Seamless obsession. About a year ago, I realized I was spending hundreds a month on forgettable meals. I love food and I love going out to eat but now I treat it as a luxury rather than a last resort for my laziness.
- In social situations I did what I felt I "should" do rather than what I wanted to do or what I could do. This meant dinners, concerts, and out of town weddings I really couldn't afford.
- I carry a credit card balance because of my previous mistakes. The situation is "under control" but I'll still be paying for misdeeds for a few more months. It's a way of living in the past.
From my mistakes, I learned that financial health is a process not a destination. Like many trying to take control of their financial life, I sometime imagine receiving a windfall that would give me a clean slate. But then I think of a quote I recently heard (that I wish I could attribute properly):
"One who cannot live on $20,000 cannot expect to live on $40,000."
While we should always strive for more, the pillar of financial health is making do with what you have.