Your money isn’t just the number in your bank account.
It’s an expression of your dreams, beliefs, experiences, and fears ― and it’s probably more intertwined in self identity than you think.
I chatted with Cally Ingebritson, a financial coach at Chillax Finance, about how your identity can dictate how you save and invest money. Cally ― a member of the LGBTQ+ community, who has helped people with their finances for more than a decade ― told me all about how individual goals, situations, and experiences can impact what your journey to wealth looks like.
As we celebrate Pride this month, let’s talk about what puts the personal in personal finance.
Your goals
One of the most important financial exercises is to write out your goals. Not just your money-making goals, but your life goals as well. Why? Defining your goals can help you sketch out a roadmap for your money: where you put it, how long you invest it, when you’re ready to spend it. Goals give your money a stated purpose, and that purpose helps keep you oriented.
Goal setting is a highly personal exercise, too. Your goals depend on what you want in life, which means they will probably look different than mine, and we’re not just talking about dollar amounts. Goals can center around security, power, legacy, freedom, a safety net ― the list is endless. In our conversation, Cally mentioned some of the unique goals her LGBTQ+ clients have brought up: gender confirmation treatment, hormonal treatment, family planning initiatives, and donations to queer and mutual aid-supporting organizations.
You don’t have to set lofty goals, either. Cally pointed out that some of her clients target smaller goals like saving up for a new gaming system, concert tickets, or self-care. No matter the goal, make sure you know why you’re investing, and don’t let anybody else determine that for you.
Tip: Define your goals and build a portfolio that can help you reach them ― not what can make you the most money. Be honest with yourself. Once you’ve laid out your goals, open the right account specific to each goal and have a certain percentage of your paycheck routed there automatically.
Your situation
Another factor that could make your personal finance journey unique is your starting point. At a basic level, your income, employment, and expenses could dictate where and how much you can save or invest.
Think about the traditional money rules you heard growing up: save 20% of your income, invest in a 401K for retirement, don’t spend more than a third of your take-home pay on housing. They’re good in principle, but they’ve largely become out of touch with the ever-changing society we live in. Over 30% of employed Americans don’t have access to an employer-sponsored retirement plan, and given the rise in house prices and rent, the “one-third of take-home pay” rule may not be feasible for everyone. The rules also tend to ignore the economic hardships different groups are exposed to, like pay inequality, childcare responsibilities, and rampant inflation.
One-stop-shop advice, as Cally puts it, can be simplistic and enticing, but it may distract you from what’s working best for your own situation. Many of her LGBTQ+ clients are self-employed and live in major metropolitan areas, so they tend to have to be more creative when thinking about how to budget their money and plan for the future.
Tip: Don’t fret if your life doesn’t fit the rules ― explore how you can leverage your situation to work in your favor. Be careful of analysis paralysis, though. There are so many saving and investing options to explore that you may find yourself drowning in information. Do your research, but remember that starting is the most important part.
Your money story
How you view money can depend heavily on what you’ve learned and experienced over time, often during childhood.
There’s a term for this: money scripts, or what your attitude is towards money. Do you ignore your money because you feel like you don’t deserve it? That’s the money avoidance script. Or do you obsess over money because you believe it can solve all your problems? Money worship script.
Often, these scripts tie into experiences that have shaped your identity, which make them even more difficult to unravel. These scripts may also be sabotaging your money management, from encouraging you to take on dangerous levels of risk to convincing you that you’re not ready to invest.
Money scripts can have deep roots, but you can also take small steps to flip the script. Cally’s point of view? Talk it out. Don’t assume that your views on money are similar to what other people think. Through dialogue, we can learn from people who have different identities and experiences, and fill in the gaps where our money beliefs fall short.
You may be surprised at how many people feel insecure or nervous about their own situations. Just 21 of 50 states teach personal finance as a requirement for high school graduation, and money talk has largely been stigmatized. Thankfully, there’s a growing call for more education, as conversations about money have become more normalized thanks to social media and other online forums. But for now, don’t be afraid to speak up.
Tip: Tell your partner (or a trusted friend) your money story, and ask to hear theirs as well. Talk about the nitty gritty of their views on money ― what they learned about money growing up, why they think money is important, and how they’re managing their own money. Lean on your community, and be that friend who others can go to for some candid money talk.
By the way, here’s Cally’s money story, and my own money story, too.
Happy Pride!