- Money: apparently, it makes the world go round.
But how?
My name is Andini.
I'm 25 years old, and like many in my generation,
I find myself too afraid, lazy,
embarrassed, and overwhelmed
when it comes to asking for financial help.
And I know I'm not alone.
Let's see what people have to say about their finances.
Could you tell me what your relationship is like
with your personal finances?
- Uh...
- Um...
- Yeah, it's a little stressful at times.
- I've saved pretty well—
I've been working since I was 15.
- I do hear from my parents and everything
that I'm a horrible spender.
- I work really hard just saving money.
- So what about you?
- I don't save anything.
I probably spend like a grand a week, I'm gonna be honest.
- If there was some things
you could learn more about
when it came to your finances,
what would that be?
- How I could like buy a house.
- How to budget your money a lot better.
- I'd like to get into investing.
- High school, like, I'd rather learn about taxes
than do the quadratic formula or something like that.
- Which we never use now. - Which we never use now.
- So, what about you?
Maybe you're like me and find it physically painful
to open your banking app on your phone.
I'm on a journey to learn more about
the world of money,
and I'm bringing you along.
With 46% of Gen Zers and 47% of millennials living
paycheck-to-paycheck and worrying
that they won't be able to cover their expenses,
financial concerns are at the top of most of our minds.
So, how can we address those financial fears?
We need to become financially literate.
While the idea of managing money can feel intimidating,
one of the best places to start is learning how to budget.
But before we begin,
I think it's important that we learn a little history.
Like, what even is money?
To best understand money,
it makes sense to travel back in time,
like really far back in time.
A somewhat recognizable
form of money has been around
for at least 5,000 years.
But before that, people would barter or trade the goods
they had directly for those that they needed.
Basically, bartering set the transactional stage
for money as we know it today.
But it was really only in the last 5,000 years
that we looked at money as a system of value
that facilitates the exchange of goods in an economy.
Thousands of years ago,
money seemed easier to understand and manage,
with currency being quite tangible and straightforward
to keep track of.
Today, we have credit cards, electronic payments,
and mobile banking apps, like Venmo and Zelle.
We can instantly buy anything we want
and money can often feel like it just disappears
into thin air.
So, let's find out why Gen Zers and millennials
are struggling to manage their money—
and what they can do about it.
Thank you so much
for joining me here today.
- Hi, it’s great to be here.
- All right, so why do you think
Gen Zers and millennials
tend to struggle with their financial confidence
and managing their money?
- You know, a lot of people haven't had any type
of education about finance:
they haven’t heard about it from
their teachers, their parents,
and so they're really stuck learning about it on the fly
which is kind of crazy
because it's such a foundational part of your life.
- Where do you even begin when it comes
to managing your money as a young adult?
- A great way to begin managing your money
is to start a budget.
- If we go back to the very basics,
could you explain to me what budgeting is
and how it's beneficial?
- Sure, budgeting is just having a plan for your money.
One of our favorite things that we like to recommend
is a cash-flow balance sheet—
and this is really just showing where your money is going
and how it’s being spent compared to
what’s coming in every month.
The idea is:
List out your income and then you list out all your expenses.
Fixed expenses are things that you can expect not to change
in your budget from month to month.
Those include things like rent, subscriptions,
insurance, car loan payments, student loan payments,
Wi-Fi—and variable expenses are all those things that
aren't the things that stay the same.
Things like your grocery bill, going out to eat, gas,
your clothing, healthcare expenses,
your entertainment.
The fun way to do it is to start out
and just kind of give yourself a guesstimate of like,
"How much do I think
I'm spending on this stuff every month?"
In the upcoming months, you can say,
"Okay, well, last month I spent $300 on going out to eat.
That's a little too much for me.
I wanna try to budget $200."
So this month, you're just gonna be more mindful
about your spending in those areas.
Also, it's important to understand
that there should be some wiggle room there, right?
You should be able to spend a little more and a little less,
as long as it's in that range
of what you're comfortable with every month,
then you should be able to sock away that extra money
and put it into savings or put it into investing,
and put a little bit extra into retirement.
- I have tried so hard over the years to have a budget,
and I truly, abysmally, have failed at it.
So, how can I make budgeting work for myself?
- We always like to say, like,
“Even if you're not doing well with your budget,
continue to do it consistently for at least three months
because it really takes that long to build a habit
and get the hang of it.
One of the biggest things is to be intentional
with your money.
A lot of people don't have a vision
for why they need to budget and why they need to save,
so when they hear the word “budget,”
they just think, "Oh, this is restricting."
But you can actually find a lot of freedom in budgeting.
Why are you saving?
Is it so that you can travel with your friends?
Is it so that you can save
for retirement, or you wanna buy a house?
I like to encourage people to sit down
and have that ‘dream session.’
Why do you want to be good with your money?
Budgeting can really be an exciting way
to create that purpose,
to think about why you're doing what you're doing
when you're doing it.
I know it can be kind of overwhelming,
especially when you're straight out of college
or straight out of high school,
but if you take the time to really get on top of your money,
it can really help a lot.
- 100%.
100% agree.
Thank you so much for your time,
and it was such a great interview
and so helpful for me to learn more
about budgeting from you.
- Thanks for having me.
- Today I learned
that budgeting is a great first step
in learning how to manage your money.
It's important to remember
that there isn't a one-size-fits-all
model for budgeting.
There are many different ways to budget,
and what may work for me, may not work for you.
However, regardless of the method you choose,
budgeting is simply telling your money where to go.
Remember, tracking your expenses is key
to ensure you aren't spending more than what you have,
and don't forget to pay down your debt
and save what you can.
- A mark.
- Ooh, oh my God!
That was terrifying!
Oh, a couple more.
Ah, all right, we're safe now.