Looking Back at Financial Moves in my Early Twenties
At twenty, I was in my last years of college, interning at a research lab and looking at entering "the real world." I'd already decided I would continue to live in San Diego and rent a place with roomies. I was shocked at how little I would be earning as a new graduate: $22,000/year. I thought a BS college degree from UCSD working in scientific research meant you'd earn enough to afford a place alone. No wonder everyone had roomies as young professionals! I couldn't imagine how I'd earn more over time, nor how I'd ever afford a house.
My dad gave me a solid guideline: no more than a third of your income should go towards housing, such as rent or mortgage. This meant I had to rent for $550/mo. This could get you a room alone if you were lucky, but more likely a shared room with one roomie. For the first few years of work, I was in living situations with 1-3 other people. As an introvert, this was rough. I would stay in bed until all my roomies left for work before starting my day, just so I could get some alone time. Luckily, research labs are very flexible about when you show up, as long as the cell line doesn't die and you make progress on your work each day.
Wide-eyed and bushy-tailed, I wanted to go into science research to cure diseases like cancer and Alzheimer's. I was even proud to earn so little because I thought that meant more of the grant money was going towards the research itself. When I learned my boss was earning over $100,000/year and living in La Jolla, I realized I was the naïve young fool. My mom had to convince me that it wasn't a bad thing to earn more money. In fact, she said if I had the money in my own pocket, I could decide how to spend or steward it. We both knew I wouldn't be living in La Jolla with $100,000. At the time, I was very actively going to church and proudly tithing 10% of my income. This upset my parents greatly when they found out, because they felt I was already earning peanuts.
Another piece of advice my dad gave me was to save 10% of my income, whether for retirement or as a buffer. The point was to save 10% of it for future needs. He also suggested saving it first, up front, into a savings or brokerage account so I wouldn't see it hit my checking account. I could pretend it didn't exist that way. If I saw it, I might be tempted to spend it. I was lucky the research job came with a 403b, which is like a 401k for non-profits where the matches are better because the salaries are worse. I set aside 10% of my pay because it was a 100% match up to the 10%. That's $2,200/year I'd put in, and the match was $2,200/year. I've never seen such generous matching since entering the corporate world with 401ks. From there, my dad suggested budgeting my income based on my ideal lifestyle for a year.
I wanted to be able to travel once a year with my family's annual vacation and have it be self-funded ($2,000-5,000). I wanted to be able to give $20-50 Xmas and birthday presents to a list of friends and family. I wanted to be able to date, and to pay my half of the expenses on those dates. I wanted to be able to go to a café a few times a week to sit and read, chai tea latte at my side and maybe a chocolate croissant. I wanted to be able to join friends for a burrito or happy hour at any time. I wanted to be able to tithe 10%. I wanted to be able to financially wean off my parents' support, including being able to buy another car when needed. At the time, they were still paying for my car insurance and cell phone plan. They had timed the car payments to end when I finished college, so I entered "life" with a paid-off car. After taking all that into account, I had to live on $1000/month and save the remainder for those lifestyle choices.
So, I cooked a lot of bachelorette meals. I'd stretch certain meals like Thai curry leftovers from a meal out with friends, which became a delicious 3-4 meals afterwards if I dumped it in the rice cooker with rice and a bag of frozen veggie mix. I would have water or nurse an iced tea during happy hours. I got really attached to the $5 Flame Broiler special (no longer available today... darned inflation!). I let my boyfriend at the time pay for meals if he really wanted to, which he did... toxic masculinity for the win! I never drove out of my way for gas or groceries... it had to be along the way to either work, home, or a social activity.
I kept getting laid off from the research labs because they would realize they needed someone with a PhD instead, who could bring more money into the lab via grant proposals and being able to do things like design experiments. I ended up unemployed for 4 months and I refused to apply for unemployment (rookie mistake) because I believed (falsely) that I was supposed to live on my savings if I could. I should never leech off the government if I can afford not to (nope, leech away). So I funded my own 4 month unemployment and kind of relaxed into it - hey, I could do this more! I could work for two years and take off a few months to be a bum! My boyfriend at the time did not like this attitude one bit. After getting jaded by research labs, I turned to corporate labs for the next job to appease my boyfriend.
I got a contractor job in a chemistry lab and learned about abusive workplaces. My bully had been there for 25 years and super proud of it. She told me to GTFO and so I did, gladly. The salary bump was crazy. Bullies are angels in disguise... like, deep deep cover. Like Alan Rickman. Around this time, I read the first 60 pages of What Color Is Your Parachute? It changed the way I interviewed and I'm pretty sure it's why I got such a good salary. This new corporate lab job gave me life-changing money: $42,000. I mean, It's like double what I was earning before, and I was definitely doing ok on it. It was yet another toxic workplace, but not as bad, so I stuck around longer. I just found ways to move inside the company, trying to find a part of the lab where my bully wasn't.
At this point, I was eating out when I wanted. I was down to sharing a place with one roommate, where we each had our own rooms (ah, luxurious lifestyle inflation!) and back in the dating game. In the onboarding for the company, I actually teared up at there being a 401k with a match and all the benefits... I just thought... this place loves its people! Soon after, we started getting regular raises that we had to keep secret - our team was special to receive raises and bonuses while all other people at the company were being given them every other year. This place was where I was able to begin learning about investing. They offered an ESPP (Employee Stock Purchase Plan) which would lock you in for 2 years. That's unheard of (I learned later) - most places do 6 months. It allowed me to set aside up to 15% of my post-tax income for investing into the company's stocks, which they would purchase every 6 months at 15% off the lowest price over 2 years (see what I mean about the unheard of 2 year lock in?!).
Most people I spoke to were selling them as soon as they bought them, since the 15% discount meant an immediate "gain" for their investment. I had learned about capital gains taxes though, so I wanted to get into a "qualifying disposition" by holding the stock for a year. I was trying to avoid paying the capital gains taxes on it. But it turns out the fine print in an ESPP says you have to hold it for 2 years to be in a "qualifying disposition." So I was shocked at the tax burden the year I realized my ESPP gains: $5000 owed at tax time. I was used to getting a refund, not a bill! Lesson learned. Never happened again. Also, because I was such a good saver, I DID have the means to painlessly pay that bill. My new boyfriend at the time was super horrified (he'd never been billed at tax time either) and could not understand how it only irked me as a lesson learned and didn't send me into the poor house.
When 2008 hit, it was glorious for those of us in the ESPP. Our company stock tanked and we could continue to buy it at 15% off that recession price for 2 years! The gains were silly. I spent 4 years at that company and had $50,000 in ESPP money (some of it my contribution to purchase it, the rest are the gains). Once I held for 2 years and realized the gains, I had cash I could invest again or... spend like a demon. But habits built over the years are difficult to break, so I looked to diversify my investments. Before diversifying, I was in a classic Enron situation: all my eggs in one basket.
Around this time, I was wandering a bookstore (one of my favorite things to do) and a title grabbed my attention: Nice Girls Don't Get Rich. I was immediately offended, intrigued, triggered, and desperate to know why the hell not. I mean, wasn't I being super good about my money? (Because of course the title was like a personal attack, Ms. Crazy.) I marched up to the book and rage-read it from cover to cover right there in the bookstore. Most of the chapters were dedicated to sad stories about women getting screwed by various parties, usually later in life, which I couldn't relate to. Only one chapter was for young ladies like me, and it was about what to do with the "extra money" after you've paid all your bills from your first paychecks. I saw the book as a call to action: learn how to manage money or else get screwed by other people when you're older. From there, I started educating myself, and making a long term financial plan.