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Ask Paco (Because Finance Can Be Fun)

Ask Paco (Because Finance Can Be Fun)

Once a month, finance expert Paco de Leon will be tackling our pressing questions about all things money (with a good dose of wit and wisdom). Here are today’s three topics…

Q. I am bad at saving money. I’ve made a budget and do my best to stick to it, but life is expensive and too often it feels like all the money disappears as soon as it hits my bank account. Do you have any real-life tricks for saving? — Isabel

A. The human brain is a funny thing. Even I — who tell people about finance for a living — have struggled with setting money aside. You know how people say that work will take up as much time as you allow it? Well, bullsh*t spending will take up as much money as you allow it. Here are some things you can do:

1. Protect yourself from yourself.
If you don’t see it, you won’t spend it. So, if you work at a job with an HR department, ask if you can set up a direct deposit where some percentage of your paycheck goes directly into savings. You can also set up an automatic transfer that happens on your payday. For freelancers, designate a regular day where you sit down, look at all your receivables and expenses, and set money aside.

2. Stop buying stuff you don’t need.
To help cut back on spending, unsubscribe from any email lists you get from stores and brands, and delete any shopping apps, if you have them. I actually gave up social media — I haven’t been on Instagram in a year. I know it’s a huge thing to ask, but I do think social media has a lot to do with driving consumption, so at least try to limit it. Capitalism wants to make you buy stuff, with all the emails and ads and constant pinging that makes you feel unsteady. Take deep breaths. Remember: You are enough already.

3. Embrace breakfast.
If you have to take a meeting out, make it a breakfast or a coffee, which will be cheaper than meeting for lunch, dinner or drinks.

4. Give yourself an allowance.
Have one bank account that’s for your expenses — rent or mortgage, groceries, student loans, car payments, insurance, etc. Then set up another account for everything else — all the pizza and all the shoes. This is your allowance. This is THE ONLY PLACE you’re allowed to draw money from for all the extra stuff. Otherwise, it’s so easy to look at your one account that has everything in it and be like, ‘I should go to Disneyland!’ Limit yourself. Humans can’t be trusted.

5. Make it a game.
I like to make up challenges for myself, so I can feel good when I overcome them. For a whole year, I bought only used things. (Yes, that’s extreme, but I’m kind of an extreme person.) I’ll invite people over, and we’ll cook and spend hours talking or playing music, which doesn’t cost a lot. Or I’ll go for long walks in the park, which is free. Make a game for yourself where you don’t buy takeout coffee for one week or where you try to save up a certain amount. Once you’ve hit your first milestone, it’s kind of like a ball going through a hoop, where you want to make it happen again and again. Remember, you have to take action to see change.

Q. I’m getting married next month. My partner earns more than I do, while I am still paying off $60,000 in student loan debt. What are some ways other couples combine finances, divide expenses, etc? I have some friends who contribute on a percentage basis, and others who combine everything into joint accounts. What are my options? — Katie

A. Personally, I’m in favor of having a joint account for household expenses, bills, things like wedding and baby gifts which come from both of you, and joint goals, like saving for trips or to bring a baby into the world. In a situation where both partners have an income, contributing to your joint account on a percentage basis can be great.

Each person can still keep a separate allowance account, which allows for some autonomy. This way, you don’t have to have a conversation every time you want to do something. If one person wants to hoard their allowance to buy a vintage guitar — which is what I would do — it’s okay, as opposed to one day taking that money from a joint account and having it not be met with delight.

Some couples find it works to combine everything into joint accounts. However, if you combine everything, the person who makes more money needs to have the mental fortitude not to feel resentful. This works just fine for some people, but I’ve also seen situations where the person who makes less has a spending problem, and it can get tricky.

I’ve also met lots of couples that have been married for years, and keeping everything separate works best for them.

In some ways, this is actually a relationship question. The important thing is to get on a level of communication and trust where you feel secure enough sharing with each other. The situation that works best for you is the one that both of you are comfortable with. I recommend that all couples have regular conversations about finance. Put it on the calendar. Money can be triggering for people. When you’ve had a crappy day and you don’t feel like dealing with something and then your partner comes at you like, ‘Finance finance whatever,’ that’s a recipe for disaster. But with regularly scheduled space reserved for those talks, it can make it easier to have these conversations and less likely to have conflict in the future.

Q. How big should an emergency savings fund be? I’ve heard people say everything from two months to nine months. Also, in an ideal world, how much of my income should I be saving? — Monica

A. So, here’s a truth: All of this finance stuff is something that some people just made up one day. The textbook answer is that an emergency fund should have three to six months of your fixed expenses. I went to a class once that said entrepreneurs should have 12 months saved up. I was like, ‘Has the person who wrote this ever met an entrepreneur?’

These prescriptive answers work for large swaths of society, but might not work for everyone. I’d say the real answer is you need to save whatever amount allows you to sleep at night. If you don’t have more than one month saved, chances are you’re probably waking up and worrying about money.

Wisdom says that 10% to 20% of your income should be put into savings. But that is assuming you want to have the kind of life the people who prescribed that had, which is to work for a long time and then retire. There are people in Internet chat forums that save like 80% of their income so they can retire by age 30. You have to do what works for you.

At a minimum, though, you should aim to save 10% each month. If you can’t afford to put that money aside, examine your life. It’s like what Jay-Z says: ‘Men lie, women lie, numbers don’t.’ Where are you living? How much more time will you let yourself stay at this job? You have to save, even though you don’t feel like it. Nobody ever feels like saving. Professional athletes don’t always feel like training. But you have to say, ‘Feelings, sit down. I’m trying to do things with my life.’


Paco de Leon is a musician who happens to be killer at finance. Her experience includes business consulting, business management, financial planning, wealth management and even some time at a giant bank. Her experiences led her to found The Hell Yeah Group, a financial firm focused on inspiring creatives to be engaged with their finances and giving them the tools and support to stop freaking out about it.

Thank you so much, Paco! Do you have a money question? Let us know in the comments below…

P.S. A trick for saving money, and do you talk about money with friends?

(Photo courtesy of Paco; illustrated background by Alessandra Olanow.)

  1. Caitlyn says...

    So happy your featuring financial advice and I like Paco’s voice. I’d love to see some Finance “102” info. After college I made all the typical mistakes and tanked my credit. I spent years learning how to fix my credit, eventually was able to purchase a home, build up a decent retirement savings (with good automatic contributions), I’ve paid off debt that had high interest and only have very low interest student loans left (interest is lower than I should be able to make investing). And I’m unsure of what to do next. I’d love to retire early so I’m not sure if maxing out my 401K makes sense (because I’d pay penalties to use the funds early I think?). I am at a completely loss about what I should do next financially. For the first time I’m making enough that I have a little bit left that I should be doing SOMETHING with, but I’m just paralyzed about what that something should be and unlike improving my credit or buying a home I don’t feel like there are workshops or counseling available (but maybe I’m looking in the wrong places?). Thanks!

    • ML says...

      Kudos for bouncing back, what a great story and hard work! You mentioned early retirement so yes, start saving in a regular investment account in addition to a 401k. (A financial advisor recommended that I do the same in my mid-20s, and I later used to the savings to finance a career change which I loved.) Look into Betterment or LearnVest, which ask a few questions about your goals & risk tolerance and recommend a portfolio mix. Another good resource is the Mr Money Mustache blog who writes a lot about financial independence and retiring early. Can be a little extreme to take literally, but I’ve learned a lot.

  2. Lacey says...

    You are so right, money conversations are super triggering! My husband and I had pretty cushy savings as single adults. Enter marriage, job changes with salary reductions, car issues, and a baby. Reality check.

    We are finally heading towards some financial stability, but our savings is nowhere near where we’d like it. However, after 2-3 years of feeling broke AF, I’m like, LETS SPEND ALL THE MONEY. I loathe the idea of limiting myself. Not that I am swiping my card every second, but I just really don’t want to be on a budget or limit myself toooo much. Reading this article made me feel less scared to face the facts. More please!

  3. Katie says...

    One thing I’d love is more details about some of this advice. I find that when reading columns about finance–including the really good ones!–some of my (maybe really stupid) questions aren’t answered.

    For example, in this post: let’s say you advise saving 10% of your income. Does that mean 10% of gross income, or take-home income? Does it mean 10% straight to liquid savings, or does that 10% include savings to retirement (e.g. 401k) AND cash for emergencies?

    thanks so much! Excited about the series

    • Laura Krieger says...

      Agree!!
      When there’s things like you shouldn’t spend more than 30% of your income on rent… what 30% are we talking about? Pre-tax? post-tax? post-tax and healthcare and all those other things that come out of my paycheck??
      401k v Roth IRA vs all those other numbers?

    • M says...

      Hi Laura and Katie, not a finance professional but I’ve read up quite a bit out of fascination. Taking a stab at your questions:

      10% of what?
      Usually this means 10% of take-home income. Where to save it depends on your time horizon, but it’s usually smart to have a combination, and aim for saving 20% or more if you can. I think of it in 3 buckets:
      1. Several months’ (3-12 mos) living expenses go in a cash savings account. Bankrate.com compares account options, but if that’s overwhelming just open a separate savings account at your regular bank — earning 0% interest is better than not saving at all, especially for short term. If you’re fired, car gets totaled, need to leave a toxic job, unexpected medical bill, etc. this bucket covers that stuff.
      2. Flex-term savings go into the stock market, because it averages 9.8% over the last 90 years. Here’s the trick: very few humans are good at picking out individual stocks. Instead, use a service like Betterment, Vanguard, or Ellevest that asks you about your goals and risk tolerance and then preselects a mix of stocks and bonds for you, often via index funds which track the whole stock market to even out the risks. This is for ~4-20+ years out… buying a home, financing a career change, kids, moving to another continent, starting a business, etc.
      3. Retirement savings. Also in the stock market, but in tax-advantaged account types like 401K and Roth IRA.

      If you’re just starting out with savings but ready to go, you can split it into thirds in these buckets until #1 is full. That might be a great time to consult a financial advisor and figure out a plan. Make sure they are “fee-only” (ie they charge a flat fee and not a %), so that they’re incentivized to provide unbiased advice.

  4. Jo says...

    I just really love that you are going to have a finance column. I hate reading about finance generally, but Paco’s style is really approachable! I’m curious about stocks and investments and retirement plans… I have a 401K with a great employer match, and I throw a bunch of my money in there, but beyond that I really would love to know – what else should I know? I’m young enough that I feel like retirement is so far away that I don’t take it super seriously, but I also know that I’m in my prime money making years and should be more serious about it.

  5. April says...

    I am very excited that this series is coming! As a 29-going-on-30-year-old, this topic could not come at a better time.

    I would love to learn more about retirement/pensions/401ks/403b/what does it all mean- and how to get started!

  6. Michelle says...

    I love this! I’m working on getting out of debt (one more year to go!!!) and it’s always motivating to hear simple, optimistic money advice. Looking forward to more of this!

  7. “Feelings, sit down. I’m trying to do things with my life.” LOVE! I’m going to use this everyday just to keep on trucking!

    • Amy says...

      Yes!!

  8. Aanna Greer says...

    This is fantastic. Thank you, Cup of Jo, for recognizing that this would be helpful information for your readers. And thank you, Paco, for being so funny that I actually read for 5 minutes about how to better handle my finances.

    • Jamie says...

      Exactly!

  9. Jill says...

    Slam dunk, as you say ;) Love her advice. Makes it not so scary. Subscribed to her Nerdletter! :) Thank you and can’t wait to hear more. “Feelings sit down!” lol

  10. Jolie says...

    Hi! I actually have both student loans and credit card debt. Any advise how to tackle these? I’m more concerned about the latter than the former, but it all sucks and makes it hard to save anything.

    • Sarah says...

      Read Dave Ramsey!! Debt snowballing has helped many people. We paid off two sets of student loans this way and were debt free for five years (until purchasing our house, which we were able to do at a low interest rate because of Dave Ramsey principles).

    • Regina says...

      I second the Dave Ramsey recommendation! I discovered Dave in the COJ comments section. I read his book Total Money Makeover in January and it completely changed my life. That is not an overstatement. My husband and I are about a month away from being debt free (except for the house) after struggled under the weight of credit cards and student loans for the past 10 years. The structure of Dave’s baby steps offer a great focus and keep you motivated. The stories of all the other people who have used his steps to get out of debt are incredibly inspiring.

  11. Krisel says...

    Welcome, Paco!

    Perhaps you can try your hand at this age-old debacle, one that myself and other late 20-30 somethings ruminate regularly: rent or own (a home)?

  12. erika says...

    “But you have to say, ‘Feelings, sit down. I’m trying to do things with my life.’” What a great line. And a wonderful new contributor and series. Thank you.

  13. Thank you SO much for starting this money series!

  14. Cynthia says...

    Looking forward to more posts by Paco. I just retired, and we have no debt, only monthly expenses. My husband has been retired for several years. My motto is take care of needs first and worry about wants later.

  15. Ro says...

    I love her! This was so funny and informative. (“I should go to Disneyland!” is something my brain screams at me anytime I save more than $20.)

    Love the idea of doing what works best for you, and ignoring well-known financial advice if it doesn’t happen to work with your life/job/relationship.

    • Ro says...

      Reading – “I should go to Disneyland!” is something my brain screams at me anytime I save more than $20 – made me feel SEEN. Also we have the same name so that makes it funnier.

  16. Oh! Also, any advice for making your own retirement account when your company doesn’t provide a 401K? I just started a new job that doesn’t have one, but had been contributing to a 401K my whole career previously. I’d like to continue but unsure how. Thanks!

    • Lucy says...

      Yes! I need this advice as well! It’s insane to me that you can only put $5500 into an IRA.

    • Karina C. says...

      are you working for a small business owner? if so, have him/her look into the option of a sep IRA or SIMPLE IRA for themselves and their employees. the administration costs of these are typically cheaper than that of a 401k, so if cost is the reason your employer isn’t offering a 401k, these could be viable alternatives. also, definitely max out your IRA if you haven’t already!

  17. Taylor says...

    Hi Jo and Paco! I am 26 and engaged, I have pretty skimpy insurance through my government job and I’m the first of my friends to get married, and the only one of my friends to want kids. I have heard absolute horror stories about the cost of giving birth in the US. Should I be getting crazy expensive insurance before I start trying to get pregnant? How much should I be trying to save for the pregnancy alone? I really want kids but I can’t imagine putting myself $20k in debt with the pregnancy. Thank you!!

    • Gina says...

      As painful as it can be, call your insurance company. They should be able to give you estimates on cost based on your plan.

    • x says...

      Maybe your husband gets a better insurance at his job? if so, change to his! For me, with what is considered “good insurance”, having my baby ended up costing us about 5k but it really depends on your birth experience. For me, I had to be induced at 42 weeks and ended up having a c-section, which increased the cost :D

    • Megan says...

      Does your future spouse have good insurance? If so, see if you can get on his/her plan. Your insurance company might also be able to provide you with some numbers regarding how much giving birth will cost. My insurer actually provided average costs for an uncomplicated, vaginal birth and a c-section birth for the three major hospitals in my area. Of course, that doesn’t include pre- or post-natal care, or any unexpected things like medical interventions, emergency c-sections, etc, but it helps! Something else to consider is whether or not your insurance – or your partner’s – covers fertility treatments. Hopefully you won’t need them, but it’s nice to know if you have difficulty conceiving, your insurance coverage might make it possible to seek medical assistance.

    • A says...

      I have pretty decent insurance and my missed miscarriage at 9 weeks cost me more than $5k out of pocket (after insurance)… 6 months later I’m still receiving random bills from the D&C (procedure many people have to have after a miscarriage). And that was all for not even getting to have the baby… just keep in mind that unexpected things can happen that cost money in these sucky healthcare times.

  18. Thank you!

    I have a specific question — we’re looking to buy our first home and we’ve been advised not to put down more than 20% on the mortgage but I can’t wrap my head around WHY. We have no debt (have paid off both our student loans + no credit card debt) so we don’t need money for that. And I don’t just want to get a more expensive house, I don’t need one bigger than we can afford and just want to reduce my monthly payments. Is it a bad idea to put down 25% or 30% on a mortgage? I would really like to know why, if so!

    • Meredith says...

      Because that extra cash will work far harder for you if it is invested over the long term that it will paying a larger down payment on a house. Put the 20% down, put some aside for fixes and then invest the rest. Max out you and your partners Roth IRA allowance for the year ($5500/each) . A great thing is stock market index fund from Vanguard (not affiliated, just use them and like them. Hope that helps!

    • Sarah says...

      Yes! put down more $ if you can (assuming your on track with retirement savings), and also look into reducing the *term* of you mortgage. There’s nothing wrong with taking out less debt on a home, and don’t let the mortgage industry convince you otherwise! Less debt = good thing.

    • E says...

      Mary Kate, just to add to what Meredith said – if you thought you might be able to generate a higher return on an investment in a Vanguard index fund than the interest rate on your mortgage, then you’d be better off investing the incremental 5% or 10% down payment. Say the interest rate on your mortgage is 4.5% and the expected long-term return on your investment is 6% – you’d be better off borrowing that money at a 4.5% interest rate and investing it to earn a 6% return. That 1.5% difference is money in your pocket.

      One thing to note is that you can deduct interest on up to $750,000 in mortgage debt. So the true cost of the borrowed money in this example might not be the 4.5% but rather something less than that. (Depends on whether you itemize your deductions on your tax returns – you might want to consult an accountant about this.)

      Having said that, I’d encourage you to do whatever helps you sleep at night. Personally, I also prefer to have a lower fixed monthly payment. In the long run, I am very likely to be better off having borrowed more and investing the difference. However, in the short run, I fear a downturn in the economy could mean a temporary loss of income and a simultaneous decline in the value of my investment portfolio should the market sell off, and that scares me. I anticipate that having a lower monthly payment will help me navigate a change in circumstances.

      Good luck hunting for your new home! This is an exciting time for you. :)

  19. Amy says...

    This was super helpful. I’m typically a great saver, but lately have been spending more than I’d like. I think these tips will help get my habits back into check!

  20. F says...

    When looking to buy a home, should you be looking to buy a home that is 50% of your net worth? 100%? 200%?

  21. Charlotte A Perebinossoff says...

    This is amazing! I’m trying to get more practiced and comfortable talking about money regularly so that it’s not a big scary monster hanging out under my bed. Thank you so much! Looking forward to the next installment.

  22. Bindi says...

    ‘Feelings, sit down. I’m trying to do things with my life.’ – That is epic advice and not just for finance. I’m going through a major positive life change that includes quitting drinking and living an alcohol free life. And this advice fits perfectly with my goals right now. I LOVE IT and visited her website immediately. I don’t feel intimidated by her and I feel like she is a friend I want to hear from every day!

    Thank you for introducing her to us!

  23. Naomi says...

    This post couldn’t come at a better time – I can’t wait to hear more from Paco! This has suddenly got me excited to get frugal!

  24. Rachel says...

    Paco (and honest talk about finances) is what COJ really needs. Thank you.

    As an aside, I work in legal…. you might want to add a disclaimer about how everyone’s situation is different, yadda yadda, and Paco and COJ are not liable for any bad decisions that result from a year-long savings commitment to only buy one ply toilet paper. Or something. Just a thought. :)

  25. jill c. says...

    thank you for this. talking finances gives me anxiety on most days – but this helped to calm me. I could relate to this without feeling overwhelmed by the usual financial talk that I would typically hear. thank you for adding this to Cup of Jo!

  26. ‘Feelings, sit down. I’m trying to do things with my life.’ This is my new favorite quote; thank you for all of this REAL wisdom, Paco.
    (This quote, and also “You’re good. Get better. Stop asking for things.” -Don Draper).

  27. Jo says...

    I love the running theme here lately. One great dress. Not needing to live in a palace, even if you have kids. That beautiful family vacation. “You are enough.” How refreshing.

    • Rue says...

      <3 this, so well put.

    • Trish O says...

      I agree. This is the way I want to live life, not constantly chasing all the STUFF that my instagram tells me I need.

    • Me too. Very well said. Simplicity!

  28. Alexan says...

    Um more Paco please. Also would love to hear her recount her year of buying used… THAT is a post I want to read!

  29. Eva says...

    When do I actually need to start a retirement account? I’m in my twenties, have undergrad loans to pay off, and will be going back to graduate school in a few years. Is it actually useful to have a retirement account now, given that there is no way I’m retiring as a twenty-something? Or should I pay off my loans first and/or save money for grad school, then start a retirement account when I’m a real professional with a bigger salary?

    • Rachel says...

      Definitely start now! With compounding interest the way it is, money that you put into a designated retirement fund asap will multiply faster than if you were to put in an even larger amount later.

      I’ve always heard you should pay yourself first!

    • Amy says...

      I debated this recently as another twenty-something. I think every little bit you can put towards it now helps! People rarely have enough saved for retirement as is, so the sooner the better. Right now I put a very minimal 1% of my paycheck towards retirement. Some days it seems pointless, but I personally like knowing that even though I can’t do much, I AM doing something at least.

    • Rebecca Van Handel says...

      If your company has a 401k match try really really hard to put in up to the match. For instance, if your company will match up to 3%, try to put in 3%. Otherwise, you are leaving free money on the table!

    • Emma says...

      I totally agree with Rebecca, if your job matches you have to put at least that much in!! I remember my first job that did, the HR guy gave us all information about the retirement plan and told us, as a school representative this is your choice, as your new co-worker and friend you are ridiculous if you leave any of this money on the table, you are definitely not too young to start saving. I have been following that advice ever since. Although I suppose I really should look at that account more often…. at least it’s there for the future though!

    • Joanna Goddard says...

      what a great thing for him to say, emma!

  30. Helen Bird says...

    I have a questions about saving for college. I don’t know how much it will cost and a benefit of my job is up to 70% of my kids’ tuition paid for. As my twins are 11, I’m starting to panic because I haven’t started saving.

  31. Beth says...

    Hi! Great series idea. I’d love a post about being at a lower income level than your friends.

  32. Alyssa says...

    This was a great post! I struggle a lot with finances, having little education when it comes to how to actually manage them well. My job pays ok, but I live alone so I foot all of my living expense myself. I have a budget which is mostly helpful for tracking my purchases, but I still don’t technically make enough to offset living expense. Luckily I get a decent tax return/bonus each year so that helps build up something.

    I’d love to see something about how to establish credit. I’ve never had a credit card, but when my debit card info got stolen earlier this year, I felt that I should get a credit card. And now I keep getting denied for having insufficient credit to open one. HELP!

    • Bunny says...

      When I got my first credit card I had no credit and was able to open a secured credit card. I think I put $300 or something like that. After having it open for about a year (making my payments on time, not going over the limit), they refunded my $300 and the card became “unsecured” and I was able to establish credit.

  33. Kelsey says...

    Question: I’m at the beginning of saving to buy a home—something I expect to take about 3-5 years. Where should I put my savings to achieve maximum growth?

    • Rue says...

      I just opened an online savings account for exactly this purpose! My timeline is likely shorter (1-2 years if I can swing it) so I opted for a high yield savings account with the same big national bank my credit card is from. But if I had a slightly longer timeline I was going to get a CD with my local bank. I bank with a credit union, so it’s called a share certificate there, but it’s the same as a CD. The yield is slightly higher on a CD, but you have to *know* you won’t touch the money for the specified amount of time, and my life is just too up-in-the-air right now for that. (If I buy a house with a partner instead of on my own, I could be buying in a shorter amount of time, but I don’t know yet if that’ll happen.) Best of luck with this goal!

  34. Stephanie says...

    Thank you!!!

  35. Allie says...

    I love Paco’s real-world approach to finances (and she’s funny too)! Looking forward to reading more in this series. Also, it’s so true, all the finance stuff is just made up by “people” and isn’t a one-size-fits-all thing.

  36. Amber J says...

    This is awesome. THANK YOU for making these conversations happen! In our culture it’s hard to feel encouraged to save, with every new IG post boasting a gorgeous new dress or purse or pair of shoes or couch or vase or _____. Having these conversations here helps financial wisdom feel normal (even COOL?!) and even though we should DEFINITELY ALL BE ABOVE WHAT’S COOL BECAUSE WE’RE NOT IN MIDDLE SCHOOL ANYMORE, RIGHT?!?! — it makes a difference. Thanks for using your influence for good and making us all better for it! Can’t wait for next month’s installment.

  37. Megan says...

    Excited about this series!!

  38. Greta says...

    Great post! I’m clueless about finances and I realise this is decidedly not a good thing.

    I have the following question for Paco: my husband and I have some savings which are in the bank and with the interest rates in Europe so low they are not growing. Where should we invest to get a better return while not taking too much risk?

  39. Marci says...

    My husband and I combine our incomes, with a small amount going to our “allowance.” This has worked well for us. My husband can buy his 8th wristwatch without me snarking, “You only have two wrists!” I can spend big bucks on “Hamilton” tickets without him complaining that we should have waited for the movie. We are both frugal and keep to our household budget, but as Paco notes, it’s nice not to justify little splurges that you’ve saved for. We also use this money to buy gifts for each other. We can side hustle (I walk dogs) and use that money for personal purchases. My extra cash goes toward trips, which aren’t a high priority for my husband. I have gone on several girls trips, but last year I saved up to give my husband a plane ticket to see his favorite college team in the national playoffs. (He had the *best* time; his view on travel may be changing!)

  40. Irene says...

    Welcome, Paco – great first post!!

    I love COJ is taking recent reader comments to heart and including more posts on personal finance. It’s so empowering! Just another reason to love this community :)

  41. Hala says...

    This is perfect timing! I’ve managed to put some money aside over the past year and it’s now just ‘sitting there’. I tried to google for information about investing and felt overwhelmed. I would rather do some of that financial planning on my own before going to a financial planner- I’ll feel more confident if I’ve educated myself first. Paco, do you have any go-to websites or apps a lay person can go for education on investing? Thanks!

  42. Cait says...

    “Feelings, sit down, I’m trying to do things with my life.”
    That is epic, not even just for finance.

  43. Megan says...

    I know this sounds crazy … but maybe a post about money shaming and how to deal with that?? Or dating someone who comes from a family with more money and how to navigate tricky family situations.. I never realized how much money plays into relationships until recently..

    • Rae says...

      I think this is a really rich and important topic. Money is such a difficult topic, even within family & friends. The recent push to have more transparency about wages to exposure gender pay gaps shows how very far we have to go!

  44. J. says...

    Thank you Paco and thank you SO MUCH Cup of Jo for taking on this issue!! The finance related posts in the past few months have been so helpful and calming, and based on comments, appear to be a relief to a lot of us! It’s so nice to finally see an answer to the emergency fund question that isn’t a canned response that seems written with no sense of the realities many of us actually face today. I do have to adjust still to save enough that would really make me feel more secure, but Paco’s answer makes me feel like that’s actually possible.

  45. Kate says...

    Related to the ’emergency fund,’ I think that the size of the fund also depends on your situation and monthly outgoings. Knowing that you spend X each month can help you consider how much you would need if your job ended (whether due to you ending the job or some other factor), and would give you comfort knowing, Ok, I have Y number of months of living expenses covered, which might then also be stretched by economizing. I’m often surprised that many people just don’t know how much they spend each month, and it’s really pretty easy to figure that out by pulling your bank statements / credit card statements online, even just into excel. It’s scary, I get it, but take that bit of time to know what you are spending.

    • Cooper says...

      Good point! Before we tried to create a budget, my husband and I spent six months just tracking our expenses in an Excel sheet. It was super helpful to have that information and know how much we actually spend before making decisions.

    • Rue says...

      It also depends on the nature of your job security! I’m a college professor, so it would be almost unheard of for me to walk in on a Friday and find that I am being laid off. But if I *were* to lose my job, it could be a year (or more!) before I had a similar position.

  46. JB says...

    Love this – especially re: married finances. My friends and I discuss a lot. My husband and I are completely separate – like my parents. I pay the mortgage and he pays the utilities, groceries, insurance, etc. It works out that I pay more, but I make more and we both view it as fair. I generally get the “big ticket” items like vacations and new vehicles, and I have the saving accounts for the kitchen reno (because I like to organize my bank account by purpose – hello, Type A). However, we’re the only ones in our friend group that does this. My husbands parents are completely merged to the point my father in law hands over his entire pay cheque to my MIL and she gives him an allowance! I cannot imagine, but has worked for them.

    I’d like to learn more about investing. Especially in company stocks. To me, I view it as a bit like gambling (fun gambling!) but I want to do it and don’t know where to start.

    • Cynthia says...

      Contact TD Ameritrade. You don’t need a lot to get started. It’s where my husband and I have our brokerage accounts. The stock market is a gamble, but savings accounts, even money market accounts don’t pay very much interest. Utility stocks are fairly safe, and choose stocks that pay dividends. Yes, you may lose money. We have, but it’s only on paper.

  47. Danielle says...

    This was awesome, thank you! Looking forward to more of these!

  48. Chelsi says...

    I love this new addition to COJ! Keep them coming!

  49. Sharon in Scotland says...

    What is a 401K?
    Pension?
    Investment plan?

  50. Marie-Eve says...

    This is such a great post! Thanks Paco!! In a future post, I would love to read on how to go back to school to change carreer when you have kids, debt, a mortgage, etc… I want to go back to university in the fall of 2019 and with my current salary, I cannot save money for the school years. I want to go back in a field that offers a higher income. Is this realistic? I am not sure how to make it work. I will turn 38 this fall and I don’t really want to wait longer. My husband has a decent income but not enough to cover all our expenses. Thanks so much again!

    • Meg says...

      I’m not sure from what you say if this is an UG or grad degree you seek. I’m a professor and would encourage you to look into scholarships and fellowships. Many are specialize and may have specific targets for career changers. Science is especially rich. For example, grad school should be no (or very low) cost in most sciences at most US institutions. Also, if it’s an UG degree, consider community college to get classes out of the way; CC is significantly cheaper in some states and there is a push to support students taking this path in the US. Many campuses have scholarship offices!

  51. Sydni Jackson says...

    I think that, once married, viewing money as “yours” or “mine” is bound to lead to disaster. Money problems are the biggest cause of divorce. You both need to be on the same page about how you spend and save, even though it’s not fun to have those conversations. If one person can’t control their spending, both people need to work together as a team to find a solution. Take a financial management class together, read a book, or listen to a podcast. So many people aren’t educated about how to use money wisely – learning more about how your money can work for you is empowering.

  52. Thank you so much for this, especially your comments about setting aside
    a separate allowance account. It’s funny how something that was so effective when I was a kid makes just as much sense as an adult, if not more so!

  53. Jennifer says...

    So excited that you’ve added this!

  54. Katie says...

    Yes!! Finances! I see lots of budget questions here and also wonder how people divide their money – the Frugalwoods blog has a reader case study series and the participants lay it ALL out there – perfect for the curious types. It was eye opening when I realized that a couple I perceived as extravagant/big money makers actually earned what we earn…just their childcare line item was miniscule compared to city living.

  55. mwana says...

    The last sentence is everything.

  56. Lauren says...

    Once you start saving money, what should you do with it? My husband and I use the “if you don’t see it you won’t spend it” approach that Paco suggests, but once it starts to build up beyond what you need to save in a savings account (aka the emergency fund) and once you have contributed to something like a Roth IRA, then where should you put it? What kinds of accounts would help you do things like save up for a home down payment or save for retirement that get a better rate of return than a savings account?

    • Cynthia says...

      Invest in the stock market. We have accounts at TD Ameritrade.

  57. Polly says...

    Yes to this!

  58. Alice says...

    Oh I am so Team Paco – love this new series! Such common sense, such good catch phrases! Yes!

  59. Jade says...

    I already love Paco x

  60. Nicole says...

    So excited this will be a regular part of the blog. Especially the reminder when it comes to shopping that “you are enough”. I’m sure I’m not the only one who struggles with shopping to be more, or feel more complete, or to impress others. Thank you!

  61. Chelsey says...

    I love this! Financial literacy is my passion and so happy to have the conversation happening in this space. Yes to the allowance and savings you work hard for your money you should be able to spend it without guilt.

  62. Thanks for this Paco and Cup of Jo team! One question I’ve always had is when people talk about building emergency savings, or saving 10-20% of each paycheck, are they saying this should be in ADDITION to what we are putting aside for retirement? I try to max out my 401k every year and because of that sometimes it is hard to achieve an additional 10-20% of savings from each pay check. Thoughts? xoxo

    • Liz Lemon says...

      I second this question! Also, is it 10-20% gross or net? I realize it’s not hard and fast but I always have so many more questions about this.

  63. Jenny Ronan says...

    Welcom Paco! I love your advice, it’s so no nonsense and straightforward. I’ll definitely be implementing some of your tips. Thank you.

  64. Lucy R says...

    Love this!!!!

  65. Jules says...

    Hot tip (or maybe you already know). Get an SEP if you don’t have one. It’s an IRA that lets you reduce your taxable income which is a great benefit/incentive for all the craziness and intense work that is self-employment. Google SEP taxes for more info.

    • Cynthia says...

      Yes!

  66. Priya says...

    Love this series! Thank you for posting about such an important topic!

  67. kash says...

    I would love some advice on banking beyond straight saving

    like, when people say “you should be investing”

    what…does that mean… ..?

    • SN says...

      Yes to this!

    • Cynthia says...

      Having a stock market account. Check out TD Ameritrade. We have accounts there.

  68. Kat O says...

    Also: Paco, you are amazing, and another resource that I love (for a lot of folks struggling with budgets) is Mr. Money Mustache (“financial independence through badassity”). It’s a tough-love site that will make you really rethink your consumer habits.

  69. Kat O says...

    I need someone to explain investing (especially how to get started with index funds) to me in *really* simple language – I’m a pretty smart person, but there are so many emotions around money that my brain just shuts off with these kinds of things!

    Re: the marriage thing, my husband and I divide our money with 25% of our paychecks going into a joint savings account (which we don’t touch), 45% going into a joint checking account, and 30% going into individual checking accounts, which we use for our respective student loans and any “frivolous” spending (ie, sweaters for me, computer whatsits for him haha!). It’s worked really well for us!

    • Step 1. Open a free low cost brokerage account. You have so many options in the USA.
      Step 2. Invest in a low cost ETF (no mutual funds) like Vanguard S&P 500.*
      Step 3. Keep contributing to that account, keep investing.

      * I have no affiliation with Vanguard, but I`m an old lady and this has worked for me.

  70. Alex says...

    Paco- yes… more!

  71. Nina says...

    Thank you SO much for this post. Finances and budgeting is a huge source of stress in my marriage (year 12) and I love Paco’s calm approach, it could not have come on a better day. I forwarded this post to my husband and I’m really hoping we can get on the right track. Thank you Cup of Jo team for being the sunshine of my week!!!

  72. Sarah McCafferty says...

    I LOVE THIS! Thank you for posting about finance. Women need to talk about money more.

  73. Erika says...

    Welcome! You are SO fun!

  74. KJ says...

    What a welcome additon to the CoJ blog! Can’t wait to read more!

  75. RLT says...

    This is REALLY great advice. I love all of it. Thank you!

  76. Diana says...

    Welcome, Paco! This is such a great series for CoJ to tackle! I’m curious about so much:
    -Taxes. We bought a house this year, and I know that’s supposed to provide some tax benefits…but what are they?!
    -Where do I start if I want to start investing some of my my savings?
    -I’m really interested in being a (very) small angel investor in a startup or small business, but where can I look for those opportunities?

  77. Help me Paco! I’m 24 and have never been able to get a credit card. I need one for the purpose of building credit, since my credit is nonexistent. Said nonexistence means I can’t get a credit card to earn credit. I have no debt (luckily) and have even tried to cosign a basic credit card at my bank with my dad (with great credit) and it came back saying there was a delinquent account- total bizarro and looked like a case of mixed identity. That avenue failed. I’ve applied for basic store credit cards and been rejected repeatedly for not having credit, being too young (they must have put in the wrong birth year) and a myriad of other reasons I have no choice but to find humorous. Solutions: I’ve heard mention about getting a gas credit card or signing up at a credit union with a security account or something, one where you put in money and use it like your debit card and earn credit this way. I’d love to one day sign my own lease alone with my own good credit so I’d love any and all advice on the subject.

    • Cynthia says...

      Check your credit report. There could be errors. A secured credit card means you have a savings account with money in it equal to the amount of credit you want on the credit card. You can’t touch the savings for a certain length of time. If you should default on the card, the credit union will take the funds out of the savings account. Look into it. Credit unions are easier to deal with than traditional banks.

    • Alyce says...

      If you’re getting reports back about a delinquent account, you have to go check your credit report. You may have been the victim of credit fraud. Request your credit report at annualcreditreport.com (which, per the Federal Trade Commission, is the only authorized website for free credit reports.).

  78. Claire says...

    This is one of the best things I’ve read on Cup of Jo- and there are so many good things here! ;) I am so looking forward to hearing front Paco in the future. As a 25 year old who recently moved in with her boyfriend, is going back to school, working full time, and trying to build up savings… this resonated with me! I love Paco’s writing style and sense of humor when addressing this topic. Thank you for another amazing addition to the site!

  79. Nora says...

    I am so excited for this new column! There aren’t enough good, non-judgmental opportunities to talk finances with one another, either in real life or even on the internet. It’s so interesting to hear about and learn from how others manage their money so differently, and yet in a way that works perfectly for them.
    The one thing I in this piece I would dispute is that nobody ever feels like saving- perhaps I’m a weirdo, but I actually get a lot of pleasure from budgeting conservatively and saving as much as I can. I love the feeling of security that comes from knowing I can handle anything that comes up, even more than I love having new things. To each their own!

  80. Amanda says...

    I like this column, but it also scares me because I know I am not as financially responsible as I should be. For example, my husband and I just spent half of our emergency fund on a vacation. It was an amazing vacation and well worth it, I think. But, maybe I shouldn’t think that way?

    I did put together a budget a few months ago but I don’t know how to stick to a budget. For one month I tracked everything we spent money on which was helpful but I feel like I can’t keep up with it. Then came the vacation and the budget went out of the window. Is the only way to stay on budget to track every single time you spend money? And if so, what’s the easiest way to do this? Writing it all down on pen and paper and harassing my husband every night about what he spent that day was tedious.

  81. Erica Nicksin says...

    Man, I almost didn’t even click on this and read it, but it was really nice to see a normal and informed perspective on money. I HATE everything about money, math, saving etc. and I do my best to keep us afloat. But then I see people like this and other business owners who can buy big fancy houses and not worry about bills all the time and I know we are doing something wrong, it bothers me. We make quite a bit but where it goes, no one knows. Lots of boiled peanuts and trips to Walmart that somehow consume all amounts of money possible. Oh and stuff for work. Guess I need separate accounts.

  82. Ooooohhhh I loves me some finance talk! It’s so taboo so seems to get shut down quickly if ever I am brave enough to bring it up in a social setting. If I had a super power it would be to know what people earn. I’m so intrigued by how people spend, why the spend, how much they earn, how they are comfortable living in debt (or if it does keep them up at night). I feel like everyone around me is regularly getting their eyelashes done, nails done, hair, clothes, gym memberships, and they’re working as supply teachers or baristas. Soooo…let’s see some bank stubs! I’m just so darn curious and love to talk money. This is going to be great!

    • Christine says...

      A Swedish American colleague once told me that in Sweden your pay stubs basically come on postcards. There’s so much less inequality that people are comfortable with everyone knowing what they earn. So different from the US!

    • Emily L says...

      Likewise! I’m such a nerd regarding money! I figured years ago that it was better to just dive in than stick my head in the sand.

    • Mary W says...

      You are so right. It’s the last thing in the world anyone will talk about.

  83. Tristen says...

    I love this: “Feelings, sit down!”

    Yes.

    • Erika says...

      Amen and amen. Love this. :)

  84. Lindsay says...

    Absolutely loving this addition to CupofJo! Just wanted to show my support :)

  85. Em says...

    “Feelings, sit down. I’m trying to do things with my life.” My new motto.

  86. Elizabeth says...

    Yes! So excited for this series!

  87. Daniela says...

    I’d love to hear more about filing taxes when you run your own business! I pet sit on the side of my job and have no clue what to do for taxes on it, and plan on starting my own business this fall as well.

    • Aimee says...

      My advice is to consult with a CPA or tax accountant as you’re setting yourself up to be fully self-employed. Have someone guide you on things like how to calculate your own tax obligation (it will be more than you pay as an employee), and when and how to submit those quarterly payments. They can also advise you on things like deductions, whether or not you need to establish yourself as an LLC, or if you need a tax ID number. Then, have them do your first year’s filing.

      Unless you have a fairly complicated situation, from that point forward you can follow this roadmap and file for yourself. Personally, I found the cost to meet with someone initially worth it for the peace of mind that we weren’t going to be hit with a nasty surprise come April.

    • Cynthia says...

      Sound advice, Aimee.

  88. M.S. says...

    Right now I am in a paycheck-to-paycheck situation, living as I do in a large, expensive city. While I don’t want to move, I do want to know what Pack suggests someone do when they don’t have much to spare. I am sure this is the case for a lot of readers. What should come first: 401K, debt repayment, or emergency fund? Thank you.

    • Jenn says...

      Check out the podcast So Money with Farnoosh Torabi. She talks about this exact thing all the time. Ask Farnoosh is her weekly Q&A episode and you are not alone with this query.

    • Desiree says...

      Great post!!

  89. Laura says...

    Love this post! I set up the automatic transfers a few years back and have slowly built up a little nest egg. My bank lets you rename bank accounts, so I renamed my nest egg account “Touch me and die”. Turns out the bank employees can also see my nickname. I’ve gotten quiet a few laughs out of them over the years.

    • Angela says...

      This is hilarious and am now going to go see if my bank allows renaming of accounts. :)

    • Lilly says...

      Oh man, I’ve named mine the F Off Fund (after this really great article years ago) but I like your way better! That’s genius!

    • Vero says...

      Touch me and die! This is delightful.

  90. Amber says...

    This is great — look forward to learning more from Paco!

    We have had a financial advisor for several years, and while we like the overall direction our finances are going, I’ve always had some skepticism & many questions. The problem is that I don’t know WHAT I DON’T KNOW, so I don’t know what to ask. HA! I would love to get Paco’s perspective on the following:
    1. Contributing to term life insurance as a method of saving for retirement.
    2. We seem to save a lot in the name of accomplishing our retirement goals (401ks, IRAs, etc), and although we like & trust our financial advisor, it’s not lost on me that he directly benefits from the money we invest through him/his company… I wonder if Paco has some insight into how we (as financial dummies!) can assess his stewardship of our investments.
    3. Actually, just any insight she has into working with a financial advisor and her advice for saving for retirement (aside from contributing to employer 401K).
    4. College savings for our children. We don’t plan on financing their entire education, but we’re ready to start putting some (not a lot) away for them. Suggestions on where to put it would be great!

    • Amanda says...

      I have these same questions! We have a financial advisor and he is really pushing us to invest in a whole life insurance plan (in addition to term life insurance). We keep trying to tell him we are interested but we don’t think we can afford it right now. We did sign up for the term life, long term disability insurance, and a 529 for our son. I’m starting to feel like he’s pushing the whole life so much because of the commission which makes me question all of the other things we just signed up for!

    • Lindsay says...

      I think you must be referring to whole life insurance as a retirement savings method as term life won’t do that for you. Just my 2 cents as this is total trigger topic for me ha-I got talked into whole life insurance when I graduated residency and was making my first real salary and got rid of it a few years later at a big loss. Its a huge moneymaker for your FA and I think for the majority of people does not make sense. We got rid of our FA and our doing everything on our own now but if I was going to use again I would use a fee only advisor (pay set amount 1x/year or whatever and be done with it rather than they get 1% or whatever they charge for all the funds they’re “actively managing”). Anyways, hopefully Paco will discuss in future because I agree, so many big things to know!

    • jules says...

      #4 – I can answer that based on what our (very good) financial advisor got us doing. A 529 account, preferably one based in UT as they have the lowest fees. (ours is something like my529.com) We auto-deposit every month and ask Grandma to give him $ for Xmas vs. another toy.

    • Kirsten says...

      Oooh I would love to hear about the life insurance thing! My father-in-law gave my husband a term life insurance policy as a gift a couple of years ago–I was like, wow, weird morbid gift, but I realized that I actually know very little about life insurance. My FIL is an economist, and does everything based on numbers, so I’m assuming this was a good financial decision for some reason–but I want to know more!

    • Meli says...

      Fee-only advisers! I’m newly married, both in mid-thirties. Paid $500 for a 2-hour session and found it immensely helpful. For it to work, you need to prepare well, and then actually execute the things your adviser suggests afterwards (not always easy). Love the control and education.

    • Cynthia says...

      Term life insurance is for a set number of years and only pays out if you die.

  91. Kari says...

    Excited to hear more from Paco, you’re awesome! Like others, I would love to see more practical information on investing options; both of the companies my husband and I work for are small, and don’t offer 401K’s. Would love to see how the money that we do save can work more for us.

    I am also so curious about how other people and families make it all work… we bought our first home a year ago in an expensive market, and are expecting our first baby any day now. It’s really stressful to consider all the expenses for our family, even when both of us earn good money. I’d love to see a breakdown of how people afford mortgage/rent when living costs in this country are increasing, the ridiculous cost of health insurance, lack of maternity/paternity leave, prices of childcare, student loans, etc. I get the sense that more people are struggling to make it all work and save, and I’d love to have more perspective!

    • Shannon says...

      I’d love this too! We moved our family to an affordable part of the country so I could stay home with our two very young kids. Even so, my husband and I look at each other every day and say, how is everyone DOING this?! Would love an actual answer to that question.

    • Maggie says...

      AGREE. We make good money – more than I ever imagined making – but have two kids (so two day care bills), live in a modest house near a big city, I had unpaid maternity leave twice, we both have whopping student loans, both of our families live far away so we spend a fortune visiting them (which does not count as vacation!!) – so we have to penny-pinch when it comes to clothes, fun, etc. and can hardly save. Heellllpppp!!!

    • Emily says...

      Ha, probably most people you perceive as “doing it” are barely hanging on, looks can be deceiving! We live in an expensive city, have 2 kids in daycare, and both work. Daycare is 35k (!!), and my salary barely covers it. We know that these few years are going to be very tight, so we just buckle down and deal. We both have side hustles in addition to our regular jobs, we don’t eat out and we don’t go on vacation. I don’t know what we’re going to do with all the money we’ll suddenly have once the kids hit public school!

  92. Heather says...

    Wow. I had to comment because, when reading the phrase “Finance can be fun” I audibly scoffed. But this was actually great and entertaining to read and felt way less judgy than almost everything else finance related. Way to go Paco and CupofJo.

    PS My husband is a HS teacher and, in our area, there is a push for financial math at school. This was done because the public wanted it (and it is a good idea). Just a reminder that, if you think something should be done in your community, you can go to a board meeting and speak! They might listen to you and if they don’t, you can run for school board next election cycle :)

    • Claire says...

      I had a financial algebra class my senior year of high school and it was great. I was so tired of learning calculus and geometry (things that didn’t seem terribly practical for my future). Now, knowing that there’d be real life application to what we were learning, I found so much more motivation. I can’t say I remember everything, but it was wonderful to be exposed to the stock market, how credit cards work, etc, at that age. I hope a class like that is a high school graduation requirement for students in the future, it’s so important (just like a health class is good for the body, finance is good for mental health, I think!).

  93. annie says...

    Hey Paco, can you recommend (here or in a future posts) sources you trust that you have found useful in educating yourself about investing? I’ve been investing, learning as I go, in the stock market, but sometimes I feel like I’m attempting calculus before learning basic arithmetic. Appreciate any book/column recommendations. Thank you!

  94. Nicole says...

    Yes! Love this new column. I stumbled through my twenties broke as a joke and am making up for it in my thirties big time.

  95. Jessica says...

    I love this! Such an important topic and I love Paco’s take and humor.

  96. Caroline says...

    I LOVE this series. ‘Feelings, sit down. I’m trying to do things with my life.’

  97. Kate says...

    You’re awesome! Love this series already

  98. Jessica says...

    Thank you for writing about finances!!! It feels so much less stressful comIng from this site. I am hoping for an in depth look at setting up a budget. How do people do it and keep up with it. I struggle!!

    • Emily says...

      I know people have recommended it before, but I just can’t help myself. YNAB is a FANTASTIC budget app! It stands for You Need a Budget. I used to do our budget on pen & paper, then moved to an excel doc and am now 4 years into YNAB and it’s my favorite ever. One thing I suggest is watching their online tutorials, even if you aren’t ready to get the app. Lots of good advice there!

    • Dimara says...

      Yes! We really don’t keep track and I feel like we could make changes if we saw all our expenses laid out. Also, any tips on the optimal due dates for bills? If you get paid on the 15th and 30th, when should you be paying bills, mortgage, etc.

    • Michelle D Hoffman says...

      hahaha — I also bit back (yet) another YNAB endorsement so I’m so happy to see that Emily cracked and plugged it. I will add that in my experience, the YNAB method works a lot better for transparency and tracking than the create-separate-bank-accounts approach suggested here. It’s been so nice to close accounts, eliminate clutter, and reduce bank fees — while knowing that the budget will stay firmly on track.

  99. Laura says...

    This is a great idea for a series! I agree with so many others: Paco, your voice is great and your non-judgemental advice is so appreciated.

    My partner and I currently live together and have a shared account and credit card as well our separate accounts and credit cards. We have drawn up our budget so that we pay proportionately to our income on some things (‘living expenses’ such as rent, utilities, gas, shared Spotify account, etc,) and pay 50%/50% on others (food and discretionary spending such as concert tickets, alcohol, etc.). This is under the assumption that if we were living separately, we might have different preferences for how much we would be willing to spend on fixed living expenses based on our individual salaries, but that we both love to go out and eat food and both of us are liberal spenders when in the moment.

    That being said, we contribute a set amount each month to cover food, alcohol etc. so that if we are overspending, it shows at the end of the month and we can re-adjust for next month. Having a shared credit card helps too, because we get to put the rewards earned back toward our shared expenses. I totally agree with Paco though in that it’s a definitely a relationship question. We are both happy with our arrangement but it didn’t come to be without a fight or two.

    For the future, I’d love to learn more about investments, as another reader has mentioned. I would also love to know more about how to discuss future financial changes with a partner, for example having a child or one partner going back to school.

  100. Lesley says...

    Yes! Just, yes.

  101. Kari says...

    Loved reading this. Smart advice. I totally need to lay off the social media/ads/click bait shopping!

  102. omg I love this so much. Paco’s voice and wisdom are much needed in my life and a welcome addition to this already fantastic blog! Looking forward to the next edition. :)

  103. Lauren B. says...

    Wow – Paco – you are an amazing writer! Bravo Cup of Jo for bringing her on!

  104. Alyce says...

    Paco is excellent. Thank you for finally starting real conversations about finances. This is a much more useful format than a sponsored post advertising a specific product that doesn’t really help women learn how to manage their money.

    I also think it would be really cool to interview people on how they manage money in couples. As I was getting married, I asked many friends how they did things, and why, and I found so many different examples! The reasons why were also helpful for what we actually decided to do, which was fully combine everything in one big pot. After figuring out our reasons why, it was a very easy decision to come to.

  105. Sara says...

    YES. This series is rad, she is awesome. Thank you!

  106. Alyssa says...

    Love this! I would really, really love to see a more in-depth article about combining finances with a partner.

    I live with my boyfriend and we keep everything separate and split expenses 50/50. Thinking about combining finances someday seems SCARY.

    I didn’t grow up with a lot, so as an adult, I have always been super careful with money. He, on the other hand, grew up more comfortably and now has a more lackadaisical approach to finance. How do people deal with situations like this?!

    • Alyssa, as a lady whose been with her man since the 90’s, here’s what works for us. We keep everything separate. He generally pays for stuff (bills, groceries, etc.) on a credit card that earns travel points, then sends me a bill for half. We’re both the type to pay off our credit card instantly. We both have our own money. So there’s zero resentment about his growing whiskey collection and my fabric/yarn hoarding.

    • Alyssa says...

      Thank you for sharing that! I like that idea.

    • Julie Kucinski says...

      Same situation. We have a joint account for all set household expenses, split the kid expenses (classes, health care, daycare, etc.) pre negotiate any shared expenses and basically do the honor system on dinners, drinks, day to day out of pockets with the “generally it works out” attitude. But my money is mine, his is his. If anything major happened (illness, massive windfall) I’m sure that would change but security is LIFE when you grew up without it.

    • Teegan says...

      I’ve been with my husband for nine years, married for eight. We’ve been separate the entire time. His last relationship was with someone terrible with money, so he was wary to combine, and my parents always had separate accounts. I love it. We trust each other not to do crazy splurges without discussion, but we also don’t have to worry about the other noticing little splurges. We split expenses according to what we can do, since my income has varied a lot as I’m mostly home with kids and working freelance/summers. Any time there’s a significant change in expenses/income, we talk about where we are and if anything needs to shift (I have a new car payment, so he took over the preschool bill, etc.). Also, I do more of the variable costs (saving for retirement and for vacations and stuff, groceries, misc expenses with the kids) and he does more consistent bills (mortgage, insurance, phone bill, etc).

  107. Denise says...

    This is my new favorite segment! I cannot believe how approachable Paco’s advice is and how many good questions are in the comments. I feel silly I never thought of both a joint account and a personal allowance account. Also I’ve consistently been unable to save a full year’s worth of expenses as just-in-case funding and I’ve felt bad about my inability to do so. It takes the pressure off to ignore the common advice and accept that I can goal smaller and still make myself more secure even with smaller goals.

    • Emily says...

      One thing my husband & I do is get a set amount of cash each month for our “no questions asked allowance.” My husband saves his and then occasionally splurges on a big purchase or expensive concert tickets. I tend to use mine for more impulse buys throughout the month. It also keeps my impulse buys in check – if I don’t want to use MY cash on it, then I probably don’t need it anyway. We put everything else on a travel credit card & pay it off in full each month. Currently we have enough points for 2 plane tickets. Just working on saving more in our travel fund for a fun trip without the kids.

  108. Clare says...

    LOVE THIS! More please!

    • Lea says...

      Love X2!!

  109. Kay says...

    I’d love a post about home buying. All about loans, mortgages, where to even start, etc. Maybe less likely, but I’m also curious to see how most people these days can afford to buy houses/come up with down payments. I live in one of the most expensive and competitive real estate markets in the country, and while my husband and I both have very lucrative jobs, we feel like we’ll never have enough saved to put 20% down on a $600k house (which is basically the bottom of the price range and gets you nothing here). We can easily cover a mortgage, but the down payment feels impossible. It’s one of those taboo topics but I’d love to know: Do most young homeowners (we’re in our early 30s) have family money or loans from family for their down payments? If you don’t have access to family money, are you SOL?

    • Julie says...

      This is a great question! I’m in a much less expensive market, but it still felt like a huge thing to save up for my previous down payment. I did it by taking on extra work (in this case, summer teaching at the college level), and because that money was on top of my normal salary, it was easy to put it aside for a specific purpose. Maybe some kind of side gig is an option for you?

      With good credit, some loan options only require 5% down (and, of course, the interest rate will make a big difference for whether you want the bigger monthly cost that comes with the smaller down payment). I’d love to see more advice on this!

    • Haylee says...

      I so relate to this! How to buy a house in a competitive real estate market–would love to hear some advice on that!

    • Allison says...

      It really depends on your salary and local living expenses but my husband and I have always tried to save around 50% of our earnings and have embraced renting until we felt financially secure. It has afforded us much more financial freedom to have our money invested diversely rather than in a single asset (aka house). We have 2 kids and are only now considering buying in our late 30s. In many markets, renters are essentially subsidised and you are not better off to own (from a $ perspective). The costs of home maintenance/property taxes plus lost opportunity to invest the funds tied up in the house mean that buying had better be very cheap or very long term in order to be a better financial decision. Once you factor inflation into the picture, houses are frequently a lousy return and very dependent on what your market is doing when you try to sell. My Dad’s advice was that “Houses are a lifestyle not an investment”.

    • CL says...

      Hey Kay! I’m a housing counselor by trade working in Minnesota. There are so many affordable mortgage loan products on the market that generally require a 3-5% down payment. Honestly most families can’t afford 20%! Check hud.gov to search for a home ownership adviser in your state. They’re free and will guide you towards a mortgage product that is affordable and is at market rate. Good luck!

    • Anne says...

      Yes, this would be a super interesting post! Speaking for myself, my husband and I managed to buy because 1) he saved very aggressively during the first five years after college, while I was in grad school, and 2) we moved way out of the city and managed a combination of commuting and working from home. Compromises were definitely made.

    • Emily says...

      Until I went to buy a house, I didn’t realize that basically no one puts down 20%. We put down 5%.

    • Sam says...

      Hi Kay! I also live in one of the most expensive and competitive real estate markets (SF Bay Area) and I thought I was never going to be able to afford a home here but my husband and I did it. For the 20% down payment in our first little home, my husband and I saved 80k. We were still short for what we needed so each of our parents gifted us $10k so that we would have the $100k down payment for our $500k home. We had nothing in our bank account after that and it was scary specially because we already had two kids. Fast forward two years, we sold the $500k home for $700k and put a bigger down payment on our current home which we feel will be our forever home. I feel that if you really focus (save) and have a little bit of help if needed like we did, it is doable to buy a home even in the most expensive and competitive places. My husband and I are not engineers or tech executives here in the Bay Area and we were able to do it! Hope this helps.

    • Sarah says...

      Hi Kay – you can totally make it happen and buy a house! I started aggressively saving for a down payment when I was 33, and five years later, I bought a house.
      I live in LA, am not married and didn’t have family money to help. I do have a pretty good job and a cozy relationship with my credit union. I put 60K down on a 500K house, so 12%. That means that I have to pay PMI (private mortgage insurance) as part of my house payment until my value to loan ratio reaches 20%. It’s about $175 a month. This is not an unusual way to finance and I do think that climbing on the housing ladder when I did will be more than worth it. My house was the bottom of the price range when I bought two years ago and still is, but has probably increased in value by about 100K.
      I think the best place to start is to take an honest assessment of your current financial picture and then go talk to a loan officer. A loan officer can tell you how much you need to save in your particular circumstance. Aside: Credit unions are the best – mine will hold my mortgage for the life of the loan, I will never have to deal with a random huge institution that bought my debt.
      Good Luck!

    • Lana says...

      Seconded! Also struggling with the same expensive housing market situation. Also – WHY is this a taboo subject? I feel like so many of my friends are starting to buy houses and I want to sit them down and just ask all the “hows?” and “whys?” but somehow I feel that I can’t….

    • Caitlin says...

      Hi Kay!

      I live in a much less competitive market, but am working towards the same goal of saving 20% for a $600k house. I teach, and my husband has a good job at a local bank. We are doing well but not raking it in, just had our first kid, and have not gotten any financial help from our parents aside from a very generous college savings gift for our baby. We did both earn scholarships for college, though, (and me for grad school) so we were extremely lucky/privileged to graduate with no student debt.

      We put 7% down on our first house ($210k) largely with the help of my husband’s first bonus. Since then we have been saving aggressively. Each month when we pay our mortgage, we set aside the same amount in a separate savings account to go towards our future down payment.

      We prioritize saving first, and automate it so that we never see the money in our checking account. Between saving for a down payment, retirement, and kids’ college, almost half (48% to be exact) of our income goes directly to savings.

      Good luck with your savings! It is always so interesting to hear what other people do.

    • Carly says...

      If you’re in NYC, then yes, a ton of it is a family gift. I spent some time looking earlier this year before deciding not to buy, and one of the first things the real estate agent I was working with asked me was if and how much of a family gift I could get to contribute towards it. In parts of NYC most of the available units are co-ops, which have a minimum of 20% down, plus co-op board can require you to have two years of expenses in liquid assets before they will approve you. So you actually need something like 35% to buy.

    • Em says...

      The smartest thing I ever heard about home ownership is if you are paying it off with a mortgage (as most people do), your home is a liability and NOT an asset. It’s an asset to the bank but a liability to you. That shifted my entire perspective recently!

    • Andrea says...

      YES! Same scenario.

    • Riley says...

      My husband and I bought a house a few years ago, and we were able to manage the 20% down payment because I inherited some money when my mom passed away. It’s not a fun reason, but I always think it’s helpful to know some of the circumstances that make it possible for others to own homes. Most of our friends in their early 30s who bought in this market (I’m in Seattle) also have unique circumstances. It’s so hard to break into real estate around here!

    • Kristian says...

      I had a TIL that I just had to share with you, as it might help, at least a little.

      Did you know there are grants for house buyers? Especially for first time house owners? Some are specific to where you live (I learned this through my sister, who lives in Denver and is looking into ones specific to that county). Anyway, might be worth researching?

    • Kay says...

      Thanks so much for all these thoughtful responses! I’ve heard that you don’t need 20% down, but my fear is that in this competitive market where lots of people are paying full cash (Seattle), will I even get a foot in the door if I don’t have 20% down? Re: family gifts, unfortunately that’s not an option for my husband and I (we both come from very humble beginnings, and when one of my parents passed away, I provided some financial support to my living parent… definitely no inheritance coming my way)…. so what happens if we come up $10k short? We have no one to borrow from. Even if I save enough for the down, I’m terrified of being 100% cash poor… for example I recently had around $5k of unexpected medical expenses that I was luckily able to pay without worry, so the thought of draining my bank account and not having that emergency money is really scary!

  110. Kara says...

    Such a great voice for this topic! Paco makes me excited to tackle my finances–when does that happen?! I’m so looking forward to these regular posts.

  111. Becca says...

    The best finance advice I ever got was from a financial advisor family friend, RIGHT when I started my very first full time job after college. He told me to immediately start putting a percentage of my paycheck into my 401k, and if at all possible to set it up to automatically withdraw before I saw my first paycheck. It might not actually process in time to come out of that first paycheck, but it’s vital you do it before you see the number, or you’ll convince yourself you can’t afford it.

    I was about to make 30K/year (in 2012) with student loans and NYC rent/expenses, but I followed his advice and set up my account to take money out of my paycheck right away. Over the years, every time I’ve gotten a raise or promotion, no matter how small, I would raise my contribution & rate I contribute to my regular savings account by at least 1% (and much more as my raises and promotions have gotten more significant). I can’t recommend it more – use any opportunity where your income goes up to increase how much you automatically “pay yourself first,” and you’ll never miss it. Completely life changing.

  112. Anne says...

    I would like to know more about to investments….like where to even begin.

    Love this series, and Paco de Leon is probably the coolest name of all time. :)

  113. Lorraine says...

    Loving this column – welcome Paco! This is such important content and makes a great addition to this smart blog!

  114. Lisa says...

    Love Paco’s advice and voice. Hoping you make her a weekly contributor. Much like the scale, I avoid looking at my bank account balances.

  115. Sam says...

    LOVE this series. My question: Once you have a solid emergency fund set up in your savings… what’s next? Right now I have ALL of my savings (other than what gets drawn into my 401k) in my one savings account. I know that I could be doing more than that (investing it… somewhere…?) but I don’t know where to start. Halp!

    • Julie says...

      I would love to see this as a topic, too! I’m right there with ya.

    • Karina C. says...

      hey! I have about 5 years in private wealth management so i feel decently qualified to answer this question. if you already have a solid emergency fund, definitely consider maxing out your 401k. that’s one of the easiest ways to invest because it gets deducted from your gross paycheck, there are no management fees associated with the account (other than the expense ratio of the mutual funds), and there are tax benefits that come with doing traditional or roth contributions. of course, this is assuming you have zero debt, b/c you should definitely tackle that first, esp. high interest debt. if you feel comfortable investing part of your savings, i would recommend only investing money that you don’t foresee needing for short term goals (anything within the next 5 years). with that money, you can invest in mutual funds through a low-cost online broker like vanguard, fidelity, charles schwab, etc. i think my #1 tip is that investing means playing the long game. if you’re not comfortable losing money in the short-term, you shouldn’t be investing that money. pick a few, well-researched funds that will give you exposure to a few different asset classes, and review your portfolio periodically. don’t freak out if the market drops 100+ points in a day. ultimately, investing should give you confidence and a sense of security because your money is working for you, rather than just sitting in a savings account earning next to nothing. good luck!

    • Samantha says...

      Try betterment!! I have a Roth IRA through the site, and also a “safety net” account. You can set the amount of risk you want, and where you want to invest (stocks/bonds). They have advisors and algorithms to make recommendations. The fees are very very reasonable!
      For someone like me who works for a small start up without retirement benefits, this was SUCH a great option!

    • Sydni Jackson says...

      YES!! Great question!

    • Frances says...

      Yes! I have the same question. (And I’m super excited about this topic)

  116. Cailin says...

    Thanks for the great advice! I have a question…when I have a little extra money at the end of the month and want to put it towards debt, how do I choose where it goes? Is it best to pay toward credit cards, student loans, car loans, etc. first? Or pay debt on a regular schedule and put extra money into savings?

    Thank you!

    • I’m the furthest thing from a financial expert as one can get, but I’ve heard/read a few places to start with the smallest debt and work your way up. That way, you feel a sense of accomplishment as debts get paid off instead of feeling like you’re slogging through quicksand.

    • Haylee says...

      Paco will know more than me, but I’ve always heard that it’s best to pay off the highest interest loans first! It makes sense because you save more money long-term that you would have been paying in interest (versus towards your actual balances). I’ve also heard that knocking out the smallest debts first is another good rule of thumb :) So for me, I put all my money towards knocking out my high-interest credit card debt first, and am now working on my school debt! I’d love to hear Paco’s take on this.

    • Everny says...

      I always got so stuck on this problem.
      Ultimately, you want to get out of debt and stay there, but if you don’t have savings to draw from, then it’s back in the hole. You’ve got to have momentum from both ends.
      You need to have money going towards debt, but also making sure you’re paying yourself enough that you don’t have to reach for a credit card in the first place.
      What I ended having success with was the following:
      I added up my debt, largest interest rates first. I tallied the minimum payments and added 25%. Then I scheduled automatic minimum payments on all of them, with 25% added to the highest interest rate one. Done. Didn’t have to think about it again. (Which also helped the stress level). I cut up all except one physical card (the one with the lowest interest rate) and I keep that one in the office at home, not in my wallet.
      THEN, simultaneously, I set up a new online savings account and scheduled small regular deposits to come out of my main checking every payday.
      I literally named it ‘Freedom fund’ to help me remember that staying out of debt IS important to me. That balance is there specifically and solely as a buffer between me and debt. If I have to have a crown replaced or the car repair costs more than the estimate, or any unexpected expense that I would previously charge, I go to that account.
      Now, real life happens and occasionally I’ve had bigger expenses than I had money in that account. If you have decent credit, it’s better to take a personal loan from your local bank than to use a credit card, because you can negotiate the interest rate and terms, whereas CC’s just revolve and can get out of control.
      (I was fortunate enough to have a family member able and willing to lend; I insisted on proper paperwork and fair interest to protect our relationship and that worked out just fine, too.)
      The bottom line is, YES use extra money to pay off debt, but also use it to set yourself up to stay out of debt. ????

    • Emily says...

      Whichever has the highest interest rate.

    • Samantha says...

      All of the advise I’ve ever heard is to pay off your highest interest debt first, which would most likely be credit cards. Pay at least the minimum on everything, but anything extra I’d put towards getting rid of anything with which interest rate.

    • Lisa says...

      Hi Cailin,

      Unless you have very little savings or are saving toward a big purchase that you plan to make in the near future (like buying a house), I would pay down your debt (loans) with the highest interest rate first. This is because the interest on those loans will likely far outpace any gains you might get from your savings (even if you invest it).

    • I’m not Paco :) but if you’re trying to pay down debt, you should put it towards whatever has the highest interest rates! I highly recommend you check your interest rates on all these sources, but your credit card debt most likely highest the highest interest rates between the three (CC interest rates are usually in the 13 – 18% range, whereas student loans and auto loans are usually sub 10%).

    • Cailin says...

      Thanks ladies for all your thoughtful responses! Credit cards it is…:)

  117. Katie says...

    I love this new column so much—thank you, Paco! My husband and I use a shared account for joint expenditures and contribute on a percentage basis, just as Paco describes. It has worked well for us so far (which is only a few years). Now, however, we just bought a house and are expecting our first—everything related to our future finances seems so mysterious and overwhelming! Saving up for the birth, figuring out how much maternity leave I should take (my employer offers some paid, luckily, but not much—can we afford for me to stay home unpaid for a bit?), and then of course the rest of this child’s life… it’s a lot to navigate.

    • Shirley says...

      My unsolicited advice would be to take as much time off as you think you can afford… you can always make the money back but you will never, ever have that time with your infant again. I have two kids and took 4 months total each, both with one month unpaid (and I know that I am lucky!) and I honestly wish I had taken more…. it will fly by and you will be back to work before you know it!

  118. Katherine says...

    Welcome, Paco! I so appreciate your approachable answers to these very pressing questions. Finance feels overwhelming to me but I am determined to not be one of those in the dark women who would be lost without the help of her husband (which is somewhat the case right now, as I’ve recently quit my job to become a SAHM). Looking forward to more of your input and advice.

  119. Maggie says...

    So excited for this new column, and welcome Paco! Love your voice.

    One thing that comes up time and again in my discussions with my spouse on finances is that one of us is much more fiscally conservative than the other. We have our emergency fund established, so each time we need to decide what to do with additional savings, there’s a bit of a battle on what to do with the money: mortgage, bonds/other conservative investments, or (horrors!) actually put it into something ever so slightly risky like mutual funds (eep!).

    Does the worrywart always win? Do we alternate 50/50? Fund a certain quota of mortgage, then move on to conservative vehicles, then less conservative? Would love to hear how others handle this!

  120. Katie says...

    What I’ve never fully understood is does that 10% minimum target for savings include retirement funds like 401Ks or IRAs, or is that separate? I’m at a place now where I can put 10% of my paycheck into my 401K, and then I try to save on top of that. Key word there being try :) but it’s nice to have that money automatically go somewhere safe and not have to think about it.

    • Yes, I have wondered that too. I have a lot of savings in RRSPs (Canadian 401Ks basically) but little cash savings…

    • Heather C says...

      Yes another vote for this! I would love some information on the more detailed guidance for savings, retirement vs. general life savings.

    • Clare says...

      I have this same question. In addition to our contributions to our retirement funds, we also have college savings accounts for our children that we contribute to monthly. We do very little saving outside of that unless we receive an unexpected bonus.

  121. Jennifer says...

    I love this post so so much! Thanks, Paco — looking forward to reading more in the future. :)

  122. Love this! I’m an entrepreneur running 2 businesses out of my Brooklyn apartment while also doing additional freelancing (I was also teaching for most of this year!), and ironically as the need came to be more organized with my finances I found it harder to keep up with. Hoping to jump back on the bandwagon of keeping my highly detailed excel spreadsheet soon, and this is a great reminder and motivation ❤

    • Jules says...

      Hot tip (or maybe you already know). Get an SEP if you don’t have one. It’s an IRA that lets you reduce your taxable income which is a great benefit/incentive for all the craziness and intense work that is self-employment. Google SEP taxes for more info.

  123. Amy says...

    I love this! I’m going to start implementing some of these right now. Paco’s voice is fun and relatable. I’m going to enjoy this series.

  124. Stephanie says...

    love this! Such great advice

  125. Kelsey says...

    Ah-mazing!!!

  126. sasha L says...

    Wow, brilliant advice here. Thank you!

    The only bit I could add is this: many things that we spend money on are actually discretionary, but we pretend they are not. If you are struggling making ends meet, or saving, look at where your money goes and ask hard things of yourself. Meat, alcohol, almost all clothing purchases, gifts, personal grooming, all discretionary, even though we tell ourselves things like “but my hair HAS to look good for me to look professional and that costs $x”. No. For the list above, there are always cheaper options, we might not like them as much, but they do exist. You have to be truthful with yourself if you want to find the money to be secure or fullfil a dream.

    • Cynthia says...

      Oh, Sasha…you are one of the ones who will retire when you want to and live in comfort and peace. You get it.

    • Lulu E says...

      so true. but so hard to adhere to.
      Love Paco’s post!

    • Felicia says...

      Amen, Sasha! My husband and I follow this exactly. When I first moved to DC right out of college, making nothing, I gave myself a $10 grocery bill per week. It sounds crazy but is totally doable if you’re very strategic with your shopping. I spent my first year in DC never eating lunch out once at work. On the other hand, I chose to live alone back then. It’s all about doing what we have to to make the balance works.

    • Sasha L says...

      Felicia, I agree, it’s about choices, and choosing consciously. We choose to live in a relatively expensive, but beautiful and suited to our outdoor loves, place. We chose to homeschool our kids, that lost second income was enormous. And now we choose for me to run a home preschool, which is my whole heart, but not a huge income. We also choose not to drink, eat out except on special occasions, take mostly camping vacations, and live very simply. But for us we also live really well. We have enough to own a beautiful home, have all the animals we want to care for and get to live in a magical place. I know others make very different choices that make them happy. But when one is confused about where her money goes, as she eats lunch out, with wine, on a random Tuesday, and orders her 40th pair of shoes, looking through lash extensions, she could be making more conscious choices that would lead to greater real happiness.

    • Diana says...

      SUCH a good point. I’ve been a financial counselor for many years and it was so tiresome to hear the old “oh I have to have manicures because I work in an office” like, unless you work for Vogue I highly doubt that is true. I do appreciate taking it one step further to look at things like meat, alcohol, clothing, etc. I have a 7 month old baby and it’s been interesting to see how many of the “must buy” things I can just delay purchasing until they are irrelevant.

  127. B says...

    Something I’ve been wondering about… I know I’m meant to save a lot. Obvs. But do I need separate categories? Like if I’m saving like mad for a house, do I also need an emergency fund in case I get fired? Or in that case would I just say the house can wait and dip into that fund?

    • Haylee says...

      THIS! I still haven’t figured this out. And which savings categories are more pressing to put money into (beyond the 401K).

  128. This was so useful and so fun to read. Thank you. And Paco, you’re a killer writer as well! Looking forward to more from this series.

  129. Kate says...

    Okay, I love this series already!! Part way through the answer to the first question I’m already laughing in my cube *and* learning some good tips. Welcome aboard Paco, can’t wait for your next post!

  130. colleen says...

    I was thrilled to read about this new feature earlier in the week and this post didn’t disappoint! Welcome Paco! I would love to hear more about investments vs saving and ideas about what to do with your money once you have a little saved up. Thanks again for this great addition to CoJ!

  131. MB says...

    This is awesome! I think I read an interview with Paco on Caroline’s blog ages ago and then forgot to sign up to her newsletter. I have a few questions that range from weirdly specific to broad:
    – When my father died I got an inheritance in the form of stocks that I’ve avoided doing much with beyond putting them in a mutual fund. Should I diversify investments in terms of not having all of it in stocks? Should I have some in CDs or bonds?
    – Because of going through graduate studies, I feel like I’m starting to earn money really late in life (I used part of what I inherited to pay bills since being a T.A. does not pay the bills). What should be the moves I take? When is it time to re-evaluate your finances? I hear that a few years before you retire is one of the milestone dates. Any general guidelines?
    – Which is better a traditional bank or credit union?
    – I’m starting a new job next year and after a year I will be able to take part in their retirement fund. How do these work? What exactly is a 401k and do you get to choose where that money goes? Does it work like an IRA where you put money and it gets invested?
    – what’s the difference between mutual funds, index funds and the ETF?
    – I’ve heard of ethical investment funds–my understanding is that they only invest in companies that align with your values. Which firms offer these?
    THANKS! From someone who WISHES WITH ALL HER MIGHT that her high school offered a course in CIVICS (because thanks to this administration I’ve finally learned more about how our government and constitution works) and PERSONAL FINANCE (because I’ve come to realize the importance education plays in savvy financial planning and decisions for those with and without a safety net).

    • Joanna Goddard says...

      oh my gosh, i couldn’t agree more that high schools should require courses in personal finance. i say this to alex all the time! i also wish high schools required courses on critical reading/thinking. would be so helpful as people head off into the world of the internet, newspapers, fake news, etc!

    • mb says...

      Absolutely agree! One of my weird embarrassments was the first time I had to do my taxes and realized I had no idea what ANYTHING meant. I felt incredibly sheltered and naive to my own disadvantage. I ended up having to pay someone even though I really didn’t have much income. My parents used a tax preparer and although that’s fine, I wish I had the know-how to at least revise and recheck the information. Adding to that all the questions that have popped up since, I feel convinced such a course should be required or a component of modern-day Home Ec.

      To your point about critical thinking and writing–yes! I teach college and with incoming freshmen you can immediately note the difference of quality in high school education. It’s precisely when students are asked to critically evaluate arguments or to differentiate between an opinion piece and a news article that I can sense who has never been confronted with this type of analysis.

    • Amber says...

      100% on the needed high school course, I say this all the time! Add to that things like navigating taxes, W4s, and health insurance. It’s all so complicated and we all just have to learn it on our own, usually when something bad happens that necessitates us to seek answers. My high school had required senior home economics, which was essentially how to bake a pie and make a quilt, with one now very outdated lesson on how to balance a checkbook (full side-eye over here).

    • CS says...

      Hi! Recent high school grad here. I’m going off to college in the fall and I know absolutely nothing about personal finance (as many of these comments suggest, a high school course would be widely appreciated). Does the cupofjo team + Paco have any tips for me and others at this (very confusing) point in our lives?

    • Alycia says...

      I can think of a lot of reasons why the U.S. doesn’t prioritize personal finance or critical reading or “life skills” for high schoolers.
      1. Teenagers do not care. They don’t care about regular math or reading, why would they start caring about stuff that “doesn’t even matter” largely because…
      2. They live with their parents who would have a fit. Could you imagine if a 16 year old came home and told their parents how they should be spending their money/savings/investments because they learned it from Ms. L, the personal finance teacher? Yikes! That could go in so many crazy directions depending on the school or area.
      3. The U.S.A. doesn’t value education at all. Some states don’t even require a history class to graduate. The adults in charge aren’t in any hurry to actually prepare our teens with real knowledge, because then they might actually use it and not take out huge student loans or even better, vote them all out of office.

  132. Amanda says...

    ?

  133. Ruth says...

    Love Paco’s voice and advice; looking forward to reading more. And yes–Feelings, sit down. I’m trying to do things with my life. so good!

  134. Lindsay says...

    Super helpful and I love her writing style! Looking forward to the next one. :)

  135. Sara says...

    Love Paco!

  136. Katherine says...

    I’m so excited for this series. :) Thanks COJ team and Paco!

    I’d love to see a post on how to find a good financial adviser. My husband and I have procrastinated for months. We have no idea where to start!

    • Sam says...

      I second this!!

    • Haylee says...

      Third!

    • Allison says...

      Look for someone fee-based, not commission-based (commisions are essentially a conflict of interest) and their fee will probably be about 1% of your portfolio annually and they should be getting you a return of about 5-7% annually.

    • Lindsey says...

      Yes!!! How much is appropriate to pay someone for this service?!

  137. Erin D LaDue says...

    Love her advice. Thanks for this important post.

  138. M. says...

    Already obsessed with this series.

  139. Anne says...

    Thanks for this! I’d love to read about how to use a credit card responsibly! I don’t carry a balance, but do feel like using my card lets me sort of lose track of how much money I have – every month I think I’ll get a sense of it when my paycheck comes and I pay off my balance, but then it starts over again. Do you know what I mean? Should I just stop using a credit card? (But I love the rewards on my Southwest card!) heeeeelp.

    • Sonia says...

      Anne, I have the exact same problem! I want the miles but I can’t keep track of my money at all when I’m putting everything on a credit card.

    • Carol says...

      Yes!!! I feel the exact same way about my credit card and would love to see a post on the topic! I always thought I was the only one.

    • Tiffany says...

      This is 100% me too! It’s a cycle I can’t break.

    • Anne says...

      Omg, same (down to the Southwest card….and name, bahahaha!).

      But for real, I do feel like I spend more freely with the card. Have yall seen that tweet that says, “A $20 bill is an adult $1 bill”? ‘Cause true – I can spend a ton of money $20 at a time.

    • Alyssa says...

      Yes to this! I would love to this question answered. I love getting credit card rewards but I feel like it’s easy to lose track and overspend. I always pay off my balance, but it often surprises me how high my bill is at the end of each month.

    • Alyce says...

      What helped me was working backwards and setting clear spending limits for my (and my husband’s) credit card. We have 7K per month after savings, and roughly half of it goes to set expenses, which means we have roughly 3500 that we can spend each month without getting into trouble. So, my credit card monthly limit is 2K, and my husband’s is 1.5K. (I have a higher limit because I do more household shopping.) If we stay under those limits, I know with certainty that we have enough cash on hand to cover our credit card bill in full, and I don’t think about it. My husband is pretty frugal, so rarely goes over his allotment, which often goes into savings that we pull from when I go over my allotment. I keep credit card apps on my phone and routine check the balance, so I know what’s going on. There’s no substitute for regularly checking the balance. You just have to do that.

    • Haylee says...

      Love this! I recently heard about a program called Debitize on a podcast I listen to. Every time you use your credit card, it pulls money from your checking account right away for that transaction and puts it in its own account. Then, a week before your payments are due, it pays off your bill using that money. The service is supposedly free, and then Debitize earns money from other services it offers. It sounds like a great way to get rewards but also make sure you’re not spending into a black hole! I just haven’t set aside time to look more into it. Might be worth it!

    • Elizabeth says...

      I use mint.com and it tracks all of my purchases I make on my credit card and all of my investments and cash. I can search transactions, run reports, or look at my expenses by category. Super easy to use. I’ve also heard good things about personalcaptial.com.

  140. laura says...

    could the next finance post include something about where your savings should go after you’ve set up your
    “emergency” account? I’ve heard all the usual opinions, but would love to read about Paco’s as well.

  141. Louisa says...

    I am so excited to see financial advice on Cup of Jo, but I’d love to see more data and research to support this advice! – do couples who share all their money save more? stay together? do a better job with retirement? Is there data on this? We have separate accounts and I think it encourages/allows me to spend more – not sure this is a good thing.

    And I get that all of these rules are ones that “some people just made up one day” — but presumably “some people” were educated people with a lot of experience and training that I don’t have. So, for example, are most people who lose a job unemployed for 4 months? 6? a year? Does unemployment kick in x% and you can usually cut by y% and so therefore Z months is a reasonable savings?

    I have trouble sleeping at night – not because I don’t save much (I think I do), but because I honestly don’t know if I’ve made good choices. It’s painful to watch so much of my income disappear into these accounts (529, roth, FSA, life insurance) and just not know. Am I overdoing it? Help!

    • Alyce says...

      More data won’t necessarily answer your questions, as there is no one universally correct way to handle your finances. So, for example, knowing how long the average unemployment last won’t matter if you happen to work in a very niche practice area where you know there are very few jobs available. Maybe your niche practice area means you can easily walk next door to your competitor and get hired. Or maybe your reality is that your salary is very high and you’ve set your life up in such a way that you can’t afford to take a lower paying job – replacing that salary may mean waiting longer before you land a job with an workable salary, so you need a larger emergency fund. The experience and training from financial advisers translates into being able to say with certainty – you must have an emergency fund. The exact amount though will certainly vary based on your unique circumstances.

      But, if you want more info, and given that one of your questions is are you overdoing it, you may want to look into Personal Capital, which is a great app that tracks all of your finances in one place (cash, investments, debt, etc.). They have a Retirement Planner feature that considers savings goals and major spending events (like college, home renovations, etc) and makes long term projections based on the historical earnings of your specific portfolio. It will also take into consideration how much money you want to spend in retirement, and makes projections about how long the money will last at that spend rate. It doesn’t erase all uncertainty, but it may offer more data to help guide your decision-making. After I started using Personal Capital, I felt more confident that I was meeting my long-term saving goals, and could relax more about my day to day spending. It doesn’t have to be perfect, just good enough.

    • Louisa says...

      Thanks, Alyce!

  142. Re the first question about cutting back on spending and limiting consumerism: this (absolutely true!) advice coming from this platform feels a little ironic, considering that this blog (that I enjoy reading!) aggressively promotes consumerism. Made me chuckle…wryly. xoxo!

    • Joanna Goddard says...

      haha i hear you, jennifer! our overall strategy is to feature some fashion, beauty and sponsored posts for people who are in the market for things (like bedding or face wash or sweaters), but also balance that with an overall practical, down-to-earth philosophy, including posts like “seven things i’ve worn a million times” (to illustrate that you can be happy with a smaller rotation of favorite basics) or how to travel with kids on a budget or $2 work lunches, etc. hope that makes sense! hopefully everyone can find something here they relate to. xoxo

    • Oh, I know! That’s why I enjoy reading this blog! It just made me chuckle, that’s all.

    • SG says...

      Agree! I rolled my eyes the other day when the dresses that were linked in the post were $200+! Who has the budget for these clothing items, other than those who make $500k+? After reading the financially-minded posts, I was thinking, so… what is the point of posting these exorbitant dresses? I completely get spending more on quality items, but honestly, I will never, ever, spend $200 on a frivolous dress, even if it is a dream dress! I shop very thriftily, but we also have a good amount in our savings accounts. We do spend on quality time and vacations for our family, and to me, it’s well worth it not to have the latest fashions, especially given the mark-ups.

    • Haylee says...

      I must say, I don’t feel condescended at! I think it’s fair to say that a lot of us (if not most) come to CofJ for the engaging conversation/ideas/content and not necessarily to shop, but as somebody who has tried too many times to start a personal blog and failed to maintain it, I totally understand that creating a space like this requires the efforts of several people full-time. I see it less as hypocrisy and more as kindness/attention to their audience that they are including a new segment on smart finances. Anywhere else, gigs that depend on readers’ support would encourage them to spend their money (for the owner’s profit), not save it. I’ve always felt that the CofJ team really tries to screen the items they share on here, and I’ve been happy with what I’ve purchased from their affiliates! Given that walking through the grocery store is an exercise in limiting one’s engagement in consumerism, I think it’s all about learning to stick to your budget even when it’s hard. I’ve deleted Instagram because I’ve bought one too many gold watches that broke way too early (cue memory of sponsored ad with woman traveling in Tulum wearing said watch), and it’s what I needed to do to exercise restraint. Here it’s different for me–I’m happy to support these women given how much I use and enjoy their content (and laugh at their jokes and cry at their stories). Okay, I’m going to stop shooting for the role of teacher’s pet hahaha :) just wanted to share my thoughts as a fellow budget-conscious consumer, as I feel that this criticism (in different words) unduly comes up *perhaps* too often.

    • Joanna Goddard says...

      thank you, jennifer!

    • mado says...

      Kara, that’s so harsh! This blog offers great content to readers FOR FREE. How else do you think the writers should pay their bills?

  143. Cooper says...

    Thank you for this column! I love Paco’s perspective and can’t wait to hear more from her!

  144. breanne says...

    i love this! my wife and i made a budget about 6 months ago and then stuck to it for zero days. money is hard and scary and i mostly hate it except for when i want to buy a cute baby bonnet. keep all the tips coming! :)

    • Emily says...

      Ha, stuck to it for zero days! Like many diets I’ve attempted as well… :)

  145. MA says...

    Great feedback. I love the idea of the allowance. I’m so glad to hear this will be a monthly column. I’m getting obsessed with our finances and sounds like Paco offers great perspective and easy-to-understand advice.

  146. Cynthia says...

    One of the best and most accessible articles on finance I have read. I am in the gravy stage of life (retired, comfortably living on savings and investments, no debt) but still enjoy these articles and know they’re so helpful for those years between 22 and 62! Look forward to hearing more from you, Paco!

    • Joanna Goddard says...

      congratulations on your retirement, cynthia! xoxo

  147. Caitlin says...

    Welcome, Paco! Love your writing and looking forward to hearing more from you!

    This is such a wonderful post and so well-timed – I am getting married next year and just the other day I was talking to a friend about how/if to combine finances. Talking about finances at all seems to trigger my fiance so I’m trying to come up with a game-plan now so we can tackle it together.

    Also – I already do the very first tip and having an automatic transfer set up is HUGELY helpful in building up a savings account. I just started with $50 per paycheck and over the years I’ve upped it as I feel comfortable. Reading this post made me feel like I’ve done at least one thing right when it comes to my finances!

    • Allison says...

      Unless marriage laws in the US differ from Canada in this regard, your finances are legally joint once you marry regardless of how you manage them in practice (Ie. You each are entitled to 50% if you were to divorce regardless of whose name is on the bank account). My feeling is why would I trust someone enough to marry them but not make joint financial decisions? Of course you can also have your own accounts for discretionary spending or personal peace of mind but I am puzzled why anyone would be comfortable merging lives and future plans but intend on keeping finances fully separated. (For those who do this and find it works, i’m truly curious why) Sounds smart to me that you are looking to discuss finances in advance because it’s one of those classic areas of insufficient communication in a marriage.

  148. LaurenB says...

    you have to say, ‘Feelings, sit down. I’m trying to do things with my life.’ — This is my new favorite quote!!!

    • Brittany says...

      Same! I love this line SO much. Writing it down and sticking it on my mirror, my computer, my refrigerator, my dashboard… everywhere.

    • Amy says...

      Same here! Best line in a great post. Saying it to my “I dont feel like going to the gym feelings” right now!

    • Heather says...

      Same!

  149. Heather says...

    Yaay! I’ve just read all of Paco’s answers! Paco makes managing money (something that has always seemed a little bit scary to me) seem approachable, fun and even exciting. As I look towards completing my graduate studies and moving into the role of a working professional I really appreciate any advice I can get on how to spend and save wisely – not just in terms of numbers, but in terms of how to enjoy life. Thank you Paco for sharing your wisdom with the COJ community. I can’t wait until your next post!