Just this week I finished reading Get Money: Live the Life You Want, Not Just the Life You Can Afford by Kristin Wong. If you have not yet read it, you definitely should. It makes me wish I had taken a course in personal finance when I was in school (or wish they even made a Personal Finance 101 class mandatory in my school years). In college I didn’t really know how to handle my money, so I just spent it on eating out, doing laundry, and buying expensive textbooks, and then when I quit the job I didn’t have a backup job or really have anything saved up for an emergency fund. It wasn’t until a couple of years out of college that I actually started caring about my own personal finance and realizing that I’d have to do a lot more than just pay off my student debt and then simply save my money; I would need to actually sit down and think about my financial goals for the future and then save specific amounts for those goals. Doing the exercises in Kristin’s book helped me better confront the topic of money instead of running away from it.
The first book I read before Get Money was The Financial Diet, another excellent book by Chelsea Fagan, who runs The Financial Diet website (it always has a lot of great submissions, so I totally recommend checking it out!) In The Financial Diet, Fagan talks about budgeting, investing, saving money and making more money. She talks about how she grew up with little money and worked constantly, and how her life changed completely when she got several credit cards and found herself in mountains of debt that she needed to pay off. The book is a great starter for anyone new to personal finance, speaking of myself, and it’s not a super long book. Plus, since it’s International Women’s Day, I thought I would highlight the work of a female personal finance writer. I just find it so empowering to read about women in finance because it makes me feel I, too, can take control of my financial situation.
Get Money, however, is slightly longer and goes into more detail about budgeting, investing and other things related to money. Like Chelsea, Kristin grew up with little money and worked many jobs as a teenager to make her own money. She opens the book with a story about how Santa didn’t send her any presents and she wondered why Santa didn’t give her any presents. When she asks her mom why she didn’t get any presents under the tree that year, her mom told her that Santa was busy and didn’t have time for everyone. Kristin grew up not learning much about personal finance, but of course she is not the only one who lacked adequate info about money. Wong says that because most of us Americans don’t really have a solid understanding of finances, we tend to think that money is something we should despise. According to Wong
most of us tend to think of money as intimidating, boring, or materialistic, and therefore, it remains taboo. It’s a lot like the creepy dude in your office who says inappropriate things and keeps asing you to join his touch football team. You know he’s there, but you really don’t want to associate with him unless you have to.Wong, xv
Because we lack an adequate understanding of how to manage our money, our attitudes affect the way we handle our money not just for ourselves, but in our relationships. In Chapter Five (or Level Five I should say. She calls the chapters levels, which I think is genius because it makes the reader feel like they’re actually an active part of the book rather than just passively reading about how to manage money), Wong talks about how each person has a different personality when it comes to handling their finances. Financial psychologist Brad Klontz says that there are four types of personalities, or scripts, that affect how we deal with money: money avoidance, money worship, money status and money vigilance. Money avoiders tend to think money is for greedy people and so they don’t want to deal with it. Money worshippers are just as they sound; they depend on money to fix their problems and determine their self-worth and happiness. Money status folks prioritize quality of life and so they depend on their net worth and ownership of prized things as a marker of high social standing and self-esteem. And the last script, money vigilance, means people who constantly save their money and don’t go out and buy new stuff all the time.
Honestly I appreciated Level 5 because it helped me better understand why I believed the things I did about money, and how it impacted my friendships and other social relationships. I found myself mostly in the camp of money vigilance because I like to save my money and I feel a sense of dread even when I go out even just once to eat at a restaurant. I also found myself in the camp of money avoidance somewhat because for a long time, I thought making money as a musician was selfish and that people should just play for free, so I never wanted to make money from my music because I thought doing so would make me a selfish, egotistical person. However, as I found out over time from playing with other musicians, it is absurd to assume that making money from your music (or even talking about money as a musician) is somehow selfish. For a lot of professional musicians who have to hustle constantly to pay their bills while living in cities such as New York or Los Angeles, music is their livelihood and they put bread on the table by teaching lessons, playing for orchestras, recording, and working other jobs on the side. Also, classical music is expensive, and you need to have money saved up for any repairs that need to get done, audition fees, travel fees. I myself am not a professional yet, but I get the vibe that this is what really happens when you pursue music professionally.
Assessing our own money personality is so important because when you get into a relationship with someone, if you don’t talk about money, it can create so many problems down the road. There is always a right time and a wrong time to talk about money; we have seen this in movies and TV shows, read about it in books, heard songs about it. If you and your partner have debt, you need to address how you’re going to work together to pay it off; otherwise, if the other person is not interested in talking about money, they might, more often than not, depend on you to fix the money problems in the relationship until you are sapped dry. Today I was watching an old talk that Suze Orman gave to an audience in Melbourne, Australia, and while the audience was gender diverse, she was mainly addressing the women in the audience, telling them that most, if not all, women say yes to everything without taking care of themselves (I am proof of that to some extent), and then their finances suffer because of it. If your sister or someone is depending on you to lend them money, do not give it to them because chances are, they won’t pay it back and then you won’t have any savings for yourself (another excellent point in this book. A friend and I were literally talking about why friends shouldn’t lend each other money just this past week). Now of course, not everyone likes Suze Orman, but I will say she does have a point though: in order to take care of others, you must take care of yourself, and that means socking away at least some of your money in a savings account for yourself. She even alludes to the “put your oxygen mask on then assist others” scenario, and tells women that normally they would put the oxygen masks on for other people instead of for themselves, but if something happens to that woman who spent all that time helping others while gasping and struggling for her own oxygen, then the kid or spouse won’t know what to do.
I also learned about the importance of investing in retirement. There are several options for retirement funds besides 401K, and each retirement fund has its pros and cons. But this chapter was really helpful because I was talking with a friend about me saving money, and he told me to put it in a 401K and was basically explaining to me a lot of stuff I didn’t care to educate myself on in terms of retirement accounts. When I read more about the retirement account options out there, I honestly felt more empowered than if I had just taken someone else’s advice for how I should invest my money. It is of course fine to listen to other people’s perspectives, but I have learned that when you do your own research on personal finance through books, videos, podcasts and other sources, you feel more in control of your money and your own self. There are various retirement accounts and differences within these types of accounts, such as Roth IRA (Individual Retirement Account) and a traditional IRA, an IRA for those who are self-employed (Simplified Employee Pension Plan) and Rollover IRA where you take the money from your old job’s retirement plan and transfer it to a traditional IRA.
Something I also didn’t consider when thinking about freelancing is taxes. I thought, “Oh, if I play some music gigs for money, I can keep all the money”. But after reading Level Ten on taxes and withholding, I learned how naive I was all along about taxes. Turns out you still need to report those gigs when you file taxes to the IRS, and they are still subject to income tax, even if it’s just something in addition to your full-time job. Also, unlike if you had a traditional employer, no one is going to withhold your taxes for you. At first I was bummed about not playing any paid gigs as a freelance musician, but now, looking back, I appreciate having read Level Ten because otherwise I would have been totally lost about handling tax season while doing freelance work. Wong also doesn’t shy away from the fact that quite a few celebrities , such as Nicholas Cage, didn’t pay their taxes and got in serious trouble for doing so. It was also helpful to read Level Ten because sometimes filling out tax sheets can be overwhelming, and even if you have tax prep software, it’s still helpful to figure out on your own what all those tax season sheets mean. Even though my employer withholds taxes for me, I still like knowing what’s going on with my paycheck and what’s going to happen to my money while filling out tax forms.
Overall, the book was incredibly helpful and I recommend it to anyone and everyone.
Get Money: Live the Life You Want, Not Just the Life You Can Afford. Kristin Wong. 297 pages. 2018.