Throughout my pre-college education, I learned about the Revolutionary War four separate times. How to organize my finances, balance a checkbook and invest? Zero.
Although a fundamental part of becoming an independent stable adult, our education system fails to teach fiscal planning as part of the core curriculum. Once I graduated college and began to venture into the adult wilderness, I realized just how lost I was when it came to managing money.
I’m not alone in the quest for financial literacy. Luckily, there are experts and people who dedicate their careers to catching people up to speed with this common adult blind spot.
When Mahoney and his wife were expecting their first child and preparing financially, he noticed many young adults had trouble accessing financial advice. Even as a fiduciary expert, he found the process draining.
“I was spending a lot of time researching decisions and questions related to our finances for our child that I hadn’t had to do before and it was time-consuming,” Mahoney recalls.
As a result, Mahoney created his company Illumint to help millennials with financial planning and advising as they take their first steps into financial responsibility — whether it be a first child, marriage or starting a business venture.
N’Jie-Konte also noticed a discrepancy in the financial sphere for women — especially BIPOC women — who are often overlooked in economic sectors. As a Puerto Rican Gambian-American woman who has worked with ultra-rich families in wealth management for eight years, N’Jie-Konte pivoted to create her company Dare to Dream Financial Planning, which helps those she saw missing from the equation.
“There’s totally a barrier in the personal finance space,” N’Jie-Konte says. “Financial services overwhelmingly cater to straight white people who have a cookie-cutter trajectory. Everyone else who doesn’t [fit into] that oftentimes feels a lot of shame for not being on the same timeline.”
I had a chance to speak with both Mahoney and N’Jie-Konte about pressing financial questions for people just starting to think about money management, from saving to spending to investing.
SETTING UP THE GROUNDWORK
As with most disciplines, there needs to be a financial foundation before building toward larger goals. N’Jie-Konte recommends putting in place a sustainable spending plan, an emergency fund and saving money for retirement. Above all, do not get ahead of yourself.
“I find a lot of times people who make the decision to do better with their finances get really overwhelmed,” N’Jie-Konte warns. “There’s so much information out there. They try to do level 150 stuff when they’re at level 10. I recommend doing a lot of research but having an understanding of what you need to worry about and when.”
THE EARLIER, THE BETTER
One thing became abundantly clear after talking with Mahoney and N’Jie Konte: The old adage “Time is money, money is time,” holds up. The sooner you think about your financial future, the better.
“Ideally, my candidate would be a teenager or young adult,” Mahoney says. “I don’t think formal financial planning necessarily but there are plenty of lower cost coaching options or video series that provide a very good start for younger people.”
If you are not a teenager, don’t panic. Most of Mahoney’s clients are in their late twenties or early thirties, which is also a great time to start. Mahoney emphasizes the importance of saving and investing as soon as possible.
“The sooner people can [gain] a basic working knowledge of different accounts or investment options, the sooner they can do something. It doesn’t have to be large amounts of money, but there’s so much value in starting early and allowing smaller contributions or smaller savings amounts grow. The technical term is compound over time. Getting in the habit of setting aside a certain amount of dollars each month or investing a certain amount of money each month — those habits and time for growth makes such a difference when you become 40, 60 or older.”
TO ITEMIZE OR NOT TO ITEMIZE
When visiting my friend and her husband in Boston, I went grocery shopping with them and noticed they took photos of receipts — even when we went out for ice cream. They diligently kept an up-to-date, itemized list of all their spending in an Excel spreadsheet with a strict budget for different types of spending.
I immediately became concerned about my lack of budgeting.
Both N’Jie-Konte and Mahoney assured me a manual budget itemization is not necessary. They advise taking a more holistic approach.
“I think 90% of people can’t create an Excel spreadsheet and stick to it,” N’Jie-Konte says. “I’m a financial advisor and I don’t do that because I can’t be bothered with it. What people really need is some rough guidelines for their budget to make sure they have some sort of sustainable plan in place.”
Specifically, N’Jie-Konte recommends the 50-30-20 budget rule where 50% of the budget goes toward mandatory expenses like rent or mortgage, utilities and groceries; 30% goes toward fun; and 20% goes toward future savings and investing.
She also advocates for automating savings with your employer and bank for expenses like retirement and children’s 529 college savings plan, if you are in a position to do so.
“I know there’s a good amount of privilege [required] to automate savings, but I think you can start small with picking some mandatory expenses and increasing your ability to do so over time.”
Investing tends to be the most intimidating aspect of financial planning. The options are endless, an element of risk is inevitable and I feel woefully uneducated on the common terms used in the stock market.
“Part of my goal when working with clients is to get them to a level of understanding, confidence and empowerment so they don’t feel afraid or uncertain because we’ve talked through the why and the how of doing things,” Mahoney says. “Hopefully they see it doesn’t have to be as daunting as people make it out to be.”
Mahoney advises to start investing small with a 401(k) through work or an individual retirement account (IRA) which you can open independently. Both options are low-risk and if you start early, will be beneficial in the long run.
“I always show clients the opportunity cost of not investing: showing someone what their financial picture looks like if they keep their money in cash for 30 years and don’t invest it versus investing,” N’Jie-Konte adds. “That usually gets them to see how important it is — and that’s where financial planning software can come in handy.”
“When you’re reading about crypto and this person making millions off one company, that’s not how most people should invest based on how the stock market historically has worked for the average investor.”
Whether novice investor or beginning budgeter, Mahoney and N’Jie-Konte’s advice provides a strong starting point for financial success. I myself am excited to (finally) make some money moves.
Smart Financial Resources
While N’Jie-Konte and Mahoney couldn’t educate me on all the ins and outs of planning and investing, each shared favorite resource that help pave the way to fiscal responsibility.
Mahoney’s Book Picks
“I Will Teach You to Be Rich” by Ramit Sethi
“The Index Card: Why Personal Finance Doesn’t Have to Be Complicated” by Helaine Olen
“Psychology of Money” by Morgan Housel
“It’s really accessible and easy to understand,” N’Jie-Konte says about this app and website, which provides information and insight on multiple aspects of financial planning. Best of all, it’s 100% free.
nerdwallet.com // @nerdwallet
You Need a Budget (YNAB)
“This software offers people the ability to do a lot of different things and drill down in different ways,” Mahoney says. “I think the biggest value is it tracks your spending. For people comfortable syncing accounts, whether credit card or bank account, transactions flow into the software [giving] you the ability to run reports on spending.” The app is $98.99 annually or $14.99 monthly. Free 34-day trials are available. youneedabudget.com // @youneedabudget
Want to hear more from Kevin Mahoney and Anna N’Jai-Konte? Check out Mahoney’s podcast “Financially Well: the Finance Podcast for Millennials” and his financial advice blog
at bykevinmahoney.com. N’Jai-Konte hosts “The Financial Powerhouse Podcast” and writes a financial advice blog at annanjiekonte.com.
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