A 33-Year-Old Woman Asks For Help Becoming Financially Disciplined: ‘I Know Nothing About Finance And It’s One Of My Biggest Regrets Not Learning’
A 33-year-old woman from Los Angeles is just getting started on her financial journey. While it’s optimal to invest in your 20s, it is never too late to get started. In fact, she’s ahead of the people who only got started in their 40s and 50s.
She works at a grocery store and makes $22 per hour, but she wants to learn as much about personal finance as possible. That’s why she turned to Reddit for some help.
“I know nothing about finance and it’s one of my biggest regrets not learning,” she said.
Luckily, many Redditors were eager to help her out in the comments.
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Start With A Budget
The top comment came from a Redditor who suggested that the 33-year-old create a budget that tracks their income and expenses. It’s important to carve out room in your budget for establishing an emergency fund that can cover six months of expenses and pay off debt. After you establish the emergency fund and pay off debt, that extra space in the budget now goes toward investing.
The Redditor also recommended contributing to tax-advantaged retirement accounts, such as a 401(k) and Roth IRA. Once you max out these accounts, you can invest the rest of your money in a brokerage account.
It takes baby steps to reach a point where most of your money goes toward expenses. The commenter suggested setting aside 15% to 20% of your monthly income for savings and investments. The commenter also recommended saving 25% to 30% since the original poster is getting started at 33.
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Increase Your Income
Multiple Redditors offered their advice in the comments, but one concern regularly came up as people shared their thoughts. A $22 per hour job is not enough to survive in Los Angeles, unless the 33-year-old lives at home. Assuming a 40-hour workweek, that comes to $880 per week before taxes.
The average rent for a studio apartment in Los Angeles is $1,706 per month, according to Apartments.com. That’s almost two weeks’ pay just on monthly rent payments. It doesn’t leave much room for error on other expenses, such as groceries, transportation, subscriptions, and insurance.
“Your biggest investment tool is your income,” one commenter said. “Find a way to boost your income, and you can invest more. Right now, I imagine things are tight at $22 an hour living in Los Angeles.”
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Continue To Learn About Personal Finance
Establishing a budget and getting a higher income will solve most of the financial obstacles the 33-year-old faces. However, it’s important to continue learning about personal finance well beyond this Reddit post.
Several commenters encouraged the 33-year-old to get books at their local library and start reading about personal finance. Regularly reading articles and watching videos that cover important personal finance concepts will also help.
Some of the books, articles, and videos reinforce what you already know. It’s through these regular reminders that good money habits stick. This foundation will make it easier to develop financial discipline and get on the path to financial freedom.
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