Money is a feminist issue — and yet, women are still reluctant to talk about it. According to a recent Bustle survey of more than 1,000 Millennial women, more than 50 percent of people said they never discuss personal finances with friends, even though 28 percent reported feeling stressed out about money every single day. Bustle's Get Money series gets real about what Millennial women are doing with their money, and why — because managing your finances should feel empowering, not intimidating.
Growing up, I constantly heard my classmates groan something along the lines of, why do I have to take geometry but no one will explain what a 401k is? It might sound weird, but even from a young age we become very aware of how important investing is. Unless you major in something like economics, it's hard to find a time in school where someone will explain the system to you. And then, when you finally make an effort on your own, it's easy to become intimidated, lost, and overwhelmed. Feeling behind, with no idea how to move forward, can happen when you're even just thinking about investing.
"I know that it can be kind of daunting to think about retirement when you're 25, for example," Chrissy Celaya, CFP® a Financial Planning Expert and CFP Supervisor at Betterment, tells Bustle. "But just being able to assess it on an ongoing basis, and that can be once a year even. You can make sure that as you evolve and your goals change, that your plan also follows along with that."
So ready to get started? Here's Celaya's best advice for first-time investors.
1. The First Step
The hardest part of anything is getting started. However, the beginning isn't as daunting as you might think.
"The first thing you can do is ask yourself what you're trying to accomplish," Celaya says. "Everything should be tied back to a specific goal and objectives. It helps you to curate what you're trying to do, it sets the tone for what type of investment, what type of account and what level of risk you'd like to take. Having a goal to tie everything back to overtime helps to motivate you and keep you on track. So sitting down and having a conversation and thinking about what your goals are is step one."
2. Don't Focus On Your Age
When determining the right time to invest, Celaya says your age doesn't matter but to start as soon as possible. "Timing is the key to factor in terms of how your money grows and how much risk you can take in," Celaya says. "You start with what you actually have to save. So I think it's more about assessing where you're at in terms of your cash flow, savings ability. As soon as you have excess money you can be setting aside, do it."
3. Figure Out Your Goals — Short- And Long-Term
Keep in mind that while your long-term monetary goals are extremely important, putting everything you earn towards something that may be even decades away can be a real bummer.
"It's definitely a two-way street," says Celaya. "As an advisor, I have my ideas of what your goal priorities should be. So I would say let's start saving for retirement, let's start saving for your dream vacation. At the end of the day, each individual is going to have their own priority that they're going to follow. So it needs to be a combination of doing what you should be doing for the future, from sort of a responsible standpoint — so saving for retirement. But if its also important to you, and its going to motivate you to stay on track overall, saving for a vacation or something that might not be as serious, that's OK too. There needs to be a balance."
4. What's Right For Others Might Not Be Right For You
"I think [the amount of money you should put away] differs for each person," Celaya says. "What I like to do is create some sort of budget or assess what their cash flow looks like. Then for each person, depending on where you live and how much you have to pay for rent and things like that, is going to change from person to person. I would say, figure out what your biggest expenses are, make sure you are taking care of any sort of high interest debt and then, whatever's left over after that, we can create goals for that particular portion of money. We personalize it for each person, there's no real rule of thumb."
As always, it can be tempting to look at what your friends or family are doing and try to match them. However, each person's income and stage in life is different and the way you invest should reflect those differences. Comparing yourself to others will not lead to a better situation.
5. You Don't Need To Know Everything
"Its OK to not know exactly everything about what you're doing, but instead to find resources that are out there that can help you get started. Even though you don't know all of the details necessarily."
If we each knew everything about investing there would be no need for financial advisors or how to books and websites. Find the right sources to put you in the direction you need to go.
6. Learn Who You Can Trust
Going off of that, know who and what resources you can trust when receiving advice about investing. Find advisors and companies which are fiduciaries, meaning they have to do what's in your best interest. This will be the best marker for determining who to trust with your money and will create a smaller pool of options, which will in turn help with the feeling of being overwhelmed.
7. Stick With It
Don't feel like you have to jump out of the investing game the second things get a little tricky. It's a process that requires patience and monitoring. "I would say as soon as you and whoever you're working with have created a strategy and set goals, stick with it," she says. "So I think a lot of people get started and they notice that their portfolio has gone down in value or maybe it hasn't gone up as quickly as they expected it to. That's OK, that's normal. You've got to remember that investing, in theory, is for the long term. So you want to make sure you stick with whatever plan you lay out and don't make changes to it too frequently."
This is a lot of information, but take it one step at a time and always go back to what feels right for you. Trust your gut, hone your goals, and keep going. You've got this.
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