- Unlike most personal finance books, “Finance for the People” actually deals with economic injustice.
- I adopted three new habits from the book that have made managing my finances so much easier.
- The most helpful thing was having two checking accounts: one for bills and another for spending money.
- Read more stories from Personal Finance Insider.
As a millennial grappling with student loans, credit card debt, and the rising cost of living in a big city, I hate hearing about this contactless advice from “experts” telling me that quitting my Starbucks habit will solve all my problems.
In contrast, “Finance for the People,” written by queer Filipino-American former financial planner Paco de Leon, is a breath of fresh air. De Leon actually addresses how systemic economic injustice affects our relationship with money and shares practical, realistic tips to help you build wealth.
After reading this book, I learned that there is a big difference between taking responsibility for my finances and blaming myself for my past mistakes.
Taking charge of my finances is an act of self-preservation that can help me thrive, especially as a transgender person of color. On the other hand, blaming myself for my past mistakes is a surefire way to dig myself deeper into a hole of debt and financial despair as I make emotionally charged decisions based on past trauma.
This mental shift motivated me to make realistic and actionable changes in my finances. Here are three tips from People’s Finances that have helped me change my relationship with money and improve my financial situation.
1. Weekly financial time
Weekly financial time is half an hour or an hour to deal with daunting financial tasks. De Leon writes, “When you take the time, you make a commitment to yourself in advance. You prioritize your financial life and don’t let your other commitments or desires interfere with this important time.”
Scheduling weekly finance times kept me from being constantly obsessed with money. Instead of anxiously calculating every time a bill comes due or when I’m out with my friends, money takes up less mental space because I know I’ve already spent time solving those problems in advance.
Weekly financial time also helped me accomplish difficult tasks like going to my state disability agency and calling my service providers to notify them of my gender-affirming name change.
2. Separate checking accounts for bills and fun expenses
De Leon suggests categorizing your expenses into two sections: “Bills and Life” and “Fun and Shit.”
Bills and Life includes:
- property taxes
- Home/Renter Insurance
- Health insurance
- animal care
- repairs and maintenance
- eat at home
- other essentials
Fun and BS includes:
- to eat out
- personal growth
- children’s hobbies
She then suggests using a separate one checking account for each category to make life easier. Not using big banks like Chase and Bank of America, it took me a while to get used to transferring money back and forth on payday for this to work. But once I got used to it, it was a game changer.
This simple step took away the mental gymnastics of doing math to figure out if I’d be diving into my rent and bills if I decided to spend an afternoon at a museum and then treat myself to lunch. Seeing the actual number I can spend on fun in my own account gives me the freedom to spend my money on things I love.
3. Automate emergency fund saving
De Leon provides a really simple savings rate equation to help readers create a timeline for building an emergency savings fund. A emergency fund is easily accessible cash that is usually kept in one Savings account with high return with three to six months of living expenses that can be used in emergencies.
The equation is: (Monthly Savings ÷ Monthly Net Wage) x 100 = Savings Rate.
Since much of my net income is tied up in paying off debt and the high cost of living in Los Angeles, I currently have a savings rate of 2% per month. It’s humbling to come to this conclusion about my savings, let alone share it with thousands of readers across the web.
With this newfound confidence, I’ve made it my mission to automate my precious little 2% savings on every paycheck. Having a few extra bucks left in my Fun and BS checking account makes building my emergency fund all the more rewarding and motivating.