My Personal Finance Manifesto

I've been investing since I was 2 days old. Granted, I wasn't choosing which stocks went into my college fund, but my parents regularly discussed investing. They were also passionate about community service and sharing knowledge and time with others. I'm not a financial advisor, and this isn't legal financial advice, but I am an open book and happy to share my experiences: good, bad, or indifferent.

Every person needs a Personal Finance Manifesto. You could call this your "Financial Values," "Personal Finance Plan," or whatever resonates with you. The key is to document your plan. When emotions run high—whether from excitement or fear—your plan becomes your guiding star. Sticking to a plan builds better habits and empowers you to make decisions within your own guardrails.
I was born in Texas, and my journey goes something like this:

• I graduated from The University of Texas at Dallas.
• I moved to another state. (Wisconsin is beautiful.)
• I had a health scare.
• I moved back to Texas.

When I decided to return to Texas, my employer took back the $1,800 stipend they provided for the move to Wisconsin, and I had to pay another $1,800 for return-movers. This was the first time I carried debt on my credit card. It took me almost 2 years to pay off the debt plus interest. During this stressful time, I decided I needed to do better. So, I created my Personal Finance Manifesto.
Lesley's Personal Finance Manifesto:

• I know where my money goes.
• I am a Saver.
• I am a Smart Spender.
• I love my Future Self.
• I stick to the plan.​

These core tenets guide my money management.

l know where my money goes. In 2006, I tried to balance my checkbook (yes, with a literal flip pad). Writing down expenses helped, but I needed more structure. I bought a budgeting template from YouNeedABudget (YNAB—they have an app now), which helped me sort expenses and see where I was spending the most money. I cooked more at home, rented fewer DVDs, and looked for ways to cut expenses to pay off my debt. Nearly 20 years later, I check my bank account and credit card almost daily to check my spending, as well as watch for fraudulent transactions. I schedule bill payments directly from my checking account whenever possible, so that I can plan for upcoming expenses.

I am a Saver. My first high school job paid $5.15/hr, and I (of course) spent most of my money at the movie theater. (I saw "The Matrix" three times that summer.) When I had my first job in college two years later, the novelty of practically living at a movie theater had worn off. With the money I had left on my $8/hr job, I decided to start automatically investing $25/month into a mutual fund. Today, every time I receive a raise or promotion, I give my contributions a raise, too.

I am a Smart Spender. Everyone makes decisions on how they spend or don't spend their money. Some buy new cars, antique jewelry, lavish vacations, or travel to DisneyWorld two (or three or more) times a year. None of these decisions are bad; everyone has different priorities in life. My husband and I used to take a nice trip every other year, but we compromise on other spending by living in the same house for over a decade and driving older cars. For big purchases, I value quality over cost, spending time in Consumer Reports, Wirecutter, and spreadsheets to ultimately come to a final decision. For travel, I use points from our default credit card for hotels and rental cars, allowing for nicer trips at reduced costs.

I love my Future Self. Every decision I make today impacts me tomorrow, and that means the impact is further extrapolated 5 or 10 or 20 years from now. Specifically talking investments, The Money Guy team calculated that every dollar invested 40 years ago is worth $88 today. The power of compounding growth is truly mindblowing! I have flexibility today I didn't have 20 years ago, and I'm excited about what that compounding and continued Future-Self Consideration will mean in another 20.
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I will stick to the plan. Money has a lot of emotional ties. In 2008, the stock market dipped 20%, and many sold their investments to stop the bleeding. It took 6 years for the market to recover, and we've had one of the longest bull runs since. Those that pulled their money out in 2008 missed out on 300%+ growth. Over these last 15 years, I've also heard "I'm waiting for the market correction to invest." Or in Feb/Mar 2020, "I'm just waiting for the bottom to hit." Time in the market is better than timing the market. You never know when the market is at its lowest, nor it's highest, so the best time to invest is now. I've been investing automatically for over 20 years, buying at both highs and lows, dollar cost averaging, and keeping to my plan. Historical returns suggest my investments will grow over the next 15-20 years.

There are lots of resources online for an appropriate plan/order of operations, but they all trend toward a similar set of guidelines:

1. Understand your spending, and create a budget.
2. Save an emergency fund. (Start with enough to cover insurance deductibles, preferably in a High Yield Savings Account.).
3. If you have an employer match (401k, SEP IRA, etc.), contribute enough to get the match.
4. Pay off high-interest debt.
5. Fully fund your emergency fund (6mo+ of expenses).
6. Contribute to an IRA (Roth if you are below the IRS income limits, Traditional if not).
7. Fully fund your 401k/SEP IRA.
8. Contribute to a brokerage account.

I have lots to share, so I hope to share a blog post weekly. What would you like to know more about? Ask in the comments or message me directly.

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