Millennial Money Problems: How I Got Control Over My Finances and Blew Up the Ceiling of My Earning Potential (2024)

I'm the last person to talk about money... but not because I'm bad with it. Actually, my credit score is over 800; I've never been in debt; and I'm not a crazy spender.

I'm the last person to talk about money because, for most of my life, I refused to even think about money.

My parents instilled me with good spending habits; and my allowance, particularly as I got older, was fixed, non-negotiable and non-replenishable. But I hardly ever looked at my bank account during high school, college and my first couple years in the "real world". I just spent as little as I could, splurging on only a few "necessities" like yoga and organic food.

On paper, my financial situation looked okay. I made little, spent little, saved little and stayed out of trouble.

When I got a job as a legal secretary in Vancouver after graduating college, my strategy was the same: spend less than you make. The rest is whatever. So I left Canada after nine months of full-time employment with almost no more money than I arrived with.

This wasn't the worst possible thing. A lot of people go through their whole lives like this. I knew I would always have "enough".

But behind my reasonable spending and "blissful" ignorance was anxiety.

Because looking at my finances head on and understanding what I could spend--and what I could make--meant something scary. It meant taking responsibility.

To me, money grew on trees I watered with hard work. When I needed it, money sprinkled down. The process--and my financial progress--was more or less out of my control.

I had no idea how much money was up there in the dense, foreboding money tree because I was sitting on the ground looking up, holding my hands out. You could say I was lazy. But I was actually just horrified about what I would find if I climbed up and investigated the situation for myself. Maybe the money tree was barren, or incomprehensible, or too high up and too big for little me to manage.

Maybe, as an editor getting paid $17/hour, I was making as much as I was worth.

Maybe the income potential of my dream career as a writer was the size of those mini potted Christmas trees they sell at Whole Foods.

Maybe money was too complicated for me to understand. Maybe I'd just stress myself out and make everything worse with my meddling.

Maybe none of the money I seek belongs to or will or can belong to me.

Maybe I shouldn't test my luck; I should be grateful for what I have.

Maybe wanting money makes me selfish and shallow, and I should bark up a more meaningful tree.

I had to swallow all these concerns when I became a self-employed freelance writer in January of this year. Gone were the days of direct deposits on the first and fifteenth of every month.

Freelancing requires actively tracking every part of your work: from sourcing clients, to outlining and meeting project goals, to logging how much time you spend on each item, to when and how you invoice, to getting clients to pay, to ascertaining that the correct amount has arrived in your bank account, to paying taxes on what you thought was your money forever, to budgeting expenses with an ever-changing income.

So if I wanted to be effective, efficient and reliable, these processes had to become engrained in my workflow. They had to become habits.

Today I opened my bank account for the fourth time this week, to more money than I've ever seen in it. I don't feel overwhelmed by financial ambiguity. I feel in control of my circ*mstance, my lifestyle and my choices. I feel that I've earned the money I've made and done good for other people in the process. I feel optimistic about my future income.

Don't think I'm in paradise though, okay? Self-employment is undoubtedly the hardest professional thing I've done. But the financial empowerment alone has made it all worthwhile. Money maintenance is invaluable because it makes us ask ourselves what we're doing and why. Then it holds us accountable, in the most concrete way possible, for our goals.

Even if you're not a freelancer, here are a few practices you can start today to take responsibility for your money--and, in turn, send your earning potential through the roof:

1) Write down what you need and want to spend money on. Be generous in your expenditures. Include emergency funds, monthly retirement contributions and estimated taxes. Besides necessary and/or unavoidable expenses, what you spend money on should reflect your values. If you value health and a glowing appearance, spend money on a gym membership, nutritious food and proper skincare, not another pair of designer jeans.

After you've decided what you need and value in terms of dollars and cents, work backwards to establish your desired income. I did this a few months before I left my day job and was making twice that amount by Month 2 of self-employment.

Why does this strategy work?

Despite popular conception, money isn't a motivator in and by itself. Money motivates us (or doesn't motivate us) because of what it can buy. When we're clear on our values--that is, why we want certain things--we become more resolute in our efforts.

2) Check your spending regularly. An app like Mint is one way to make spending values habitual, not just theoretical. Take time to get to know the functions and adjust your budget goals according to what you said you wanted to spend money on. If you don't want to spend money on fast food, then give yourself a very small budget for it, etc. Each week, Mint will tell you how you're doing on your spending categories compared to your goals.

But don't convince yourself that Mint is all you need to stay on top of expenses. I recently caught an unauthorized, unannounced charge from a company that had my credit card info. If I hadn't caught the charge until a month later, it may have been too late to file a dispute with my bank, so I would have lost my leverage. When I emailed the company, I had already filed a claim and told them so. I cancelled the claim only once the full amount was refunded.

If you keep forgetting to log in to your account, use a daily habits app like Streak to make yourself check your bank account/s a minimum of twice a week.

3) Make a spreadsheet. I use my Macbook's Numbers program, which is Apple's version of Excel. I also hear Airtable is excellent. To be honest, I love Numbers because it's aesthetically appealing, which makes me more eager to use it. I color code stuff, have multiple tabs, lots of white space, pretty charts, nice font. And, for the basic math my finances require, its backend functionalities are sufficient. (Remember to Google how to create automated formulas in your chosen program so you don't waste time on the math.)

If you don't have a basic spreadsheet for your income and expenses, make one right now. Detail what you're making, when and from whom in one tab. This tab might be super simple if you're employed full-time, though even regularly employed millennials are increasingly making money from side hustles such as Upwork, Airbnb etc.. In a second tab, make a list of estimated monthly expenses--groceries, rent, entertainment, travel, retirement fund, cell phone bill, haircuts, etc.. Update this spreadsheet constantly. Personally, I keep the spreadsheet open on my laptop at all times, so it's easy for me to update it. Once all these numbers are out of your head and onto paper--once you're no longer guessing at your livelihood--managing your finances becomes less stressful and more predictable.

4) Schedule your promotions. If you're a freelancer, schedule when you're going to raise your rates on your clients. If you're at a full-time job, schedule when you're going to ask for a raise. There's no reason this should be less frequently than every six months. Even if you don't actually get a raise that often, you want your performance and potential to stay in the forefront of managers' minds.

5) Decide how you want to save and invest your money. I don't understand the stock market, so I currently put my money in something typically less risky and less lucrative: real estate. I do this because I enjoy real estate and because I know it far better than I know the stock market.

If you're putting your savings somewhere you feel anxious or dispassionate about, you'll be less motivated to save at all. For me, saving money is yet another way to feel empowered by my finances, so I don't want to put the outcome of my hard work in someone else's hands. These days, there are a million places to invest your money. Put it someplace you know, like and look forward to getting returns from.

These actions are the ladder steps to making money management a comfortable, familiar and useful habit. Climb up and have a look. The opportunity is expansive.

This post originally appeared on MoneySchooled, an expert-created money management training school.

Caroline Beaton helps millennials lead more successful, more satisfying lives. Sign up for her newsletter here.