Taking Control of Your Finances with Broke Millennial’s Erin Lowry

As the name of her blog suggests, Broke Millennial founder Erin Lowry is no stranger to being, well, broke. On May 13, Lowry spoke to SoFi Financial Planner Lauren Anastasio via Instagram Live to share her tips on taking ownership of finances, and how to start those awkward conversations about money with loved ones.

When Lowry moved to New York City after graduating college in 2011, she was working three jobs, and netting about $26,000 a year. “I was definitely broke,” Lowry said, but for her, talking about money had been normalized from a young age.

“Other people weren’t so comfortable having that conversation [about money], and that’s what inspired me to start Broke Millennial.” She used the space to share stories and help advise other millennials out there about how to make the best decisions with their money.

Years and several book deals later, Lowry’s made it her life mission to empower people to take ownership of their money and start those financial conversations. Over the live interview, Lowry shared stories, tips, and conversation starters that can help guide budgeters in the time of COVID-19, and beyond.

Taking Ownership: It’s Never Too Late to Start

One of the most common refrains Lowry has heard from aspiring budgeters is dwelling on financial mistakes and the past, and the feeling that they’ve already missed so many money milestones.

“Forgive yourself for your past financial mistakes,” Lowry advised. “Instead, ask yourself, ‘How are you improving compared to yesterday?’” Money and budgeting are personal, and each person’s journey is personal as well. There’s not much use in comparing one person’s finances to another, Lowry suggested.

There are no hard and fast rules about when to start saving, or when to begin investing. Instead of focusing outward, aspiring budgeters should look inward, Lowry said—and it’s never, ever too late to start taking control of your money.

Step One: Face the Numbers

A person can’t have a budget without numbers, so right off the bat, Lowry advised people to face the numbers.
“That can be one of the most painful steps in the process,” said Lowry, but it’s nearly impossible to fix something if you don’t know what’s broken. “Without that information, we can’t make an actionable plan for change.”

Facing the numbers means taking a look at where the money is, including:

•  Checking accounts

•  Savings accounts

•  Student loan debt

•  Credit card or personal loan debt

•  Investments, etc.

A person should try to know exactly how much income they pull in each month, a number Lowry said many people she talks with don’t even know.

The secret to completing this step is not being too hard on oneself, Lowry reminded. “We’re all going to stumble, it happens to everyone. Compassion is key.”

Step Two: Set Actionable Goals

Once a person knows where their money goes, it might be time to set goals. However, Lowery suggested that budgeters set smart goals, with clear, actionable steps and timelines.

When Lowry was 18 and starting college, she set the lofty goal of graduating with $10,000 in her savings, “It felt like the right amount of money I needed to move to New York.”

To reach the goal, she broke down the timeframe, calculating how much she’d have to make each year, month, and even each week to achieve this goal by graduation day.

Working backward, she determined how much she’d have to make in hourly wages—searching for summer and after school jobs that could get her closer to the goal.

With calculations in hand, the goal of $10,000 broke down to smaller, more attainable steps to reach it.

A person setting a goal to pay off their student loans can’t just leave it at that, Lowry explained. They should consider setting a date to pay off the loan, then breaking the loan down into smaller monthly or weekly contribution goals to meet the deadline.

These smaller attainable goals can also help prevent unnecessary sending, said Lowry. When a person knows how much they need to save each week, they might think twice about pricey impulse purchases that could go straight to their savings goal instead.

Setting Healthy Money Habits During COVID-19

We’re in a time of unprecedented financial change, but that doesn’t mean aspiring budgeters can’t get serious about tackling health money habits, suggested Lowry. Here are some of her suggestions for making smart decisions with money in the wake of coronavirus.

Track Spending

Lowry goes old school with a custom created budgeting spreadsheet to track her finances, but she also suggested using apps and technology to aid in the process.

Budgeters might consider downloading their bank’s app on their smartphone, so they can see balances at all times—just make sure to password protect it in the event that it gets lost, Lowry reminded.

Additionally, Lowry suggested signing up for text alerts on credit cards and checking accounts. Not only does it serve as a defense against fraud, but it can help keep a person honest with their spending, “you have to face the numbers if you want to control your finances,” explained Lowry.

Text alerts provide a running tab of all spending and the impending text with a card’s running balance might make a person think twice about swiping their card at checkout.

Avoid Emotional Splurges

Many of us are stuck at home right now, feeling bored, stressed, or a mix between the two admitted Lowry. It can be easy to fall prey to emotional spending when we’re at home, but everyone should take a beat before hitting purchase on their online shopping cart and consider if it’s something they really need right now.

Spend (or Save) the Stimulus Check Wisely

Like in an airline safety video, “you need to put on your own financial oxygen mask first,” Lowry suggested. From a combination of stimulus checks, tax returns, and other lump-sum payments, some people feel like they’ve got lots of extra cash to burn, she said. While many of us want to financially support local businesses, we’ve got to take care of ourselves first.

If a person’s not sure how to pay their bills next month, they might consider saving their checks entirely. It can be tempting to donate it to a favorite local charity, but instead, Lowry urged people to think about other creative ways to support locally if they don’t have the financial means to do so.

Offer free photography services, or help set up their online shopping platform. Time and skills are valuable too, reminded Lowry, and people might not be able to take care of others in the future if they don’t take care of themselves right now.

Get ‘Financially Naked’

With couples quarantining and spending more time together than ever, money issues are bound to crop up, Lowry admitted. If that’s the case, couples might consider full-frontal financial nudity—a term Lowry coined. It’s the idea of “sharing everything with your significant other, opening all the books,” she explained.

This doesn’t have to happen all in one evening, but Lowry suggests “stripping down” at home, maybe with a bottle of wine, when both parties know the conversation is coming.

Don’t blindside the other person, Lowry said, “and think about the things you want to share upfront,” which might be anything from the balances of a student loan to finally starting a retirement account.

From there, couples can try setting “Yours, Mine, and Our” goals with their finances, acknowledging that there are both team and personal financial goals in every relationship.

Start Taking Ownership with SoFi

Setting healthy financial habits takes time, but aspiring budget-makers don’t have to go at it alone.

SoFi members get access to complimentary financial planners as part of our collection of member benefits. Schedule an appointment today by visiting the member benefits section of the SoFi app.

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