Conquer your student debt. Refinance now.
Whether lounging on a beach of white sand and bright blue waters, showing off a well-muscled mid-section or posting intricate and exotic meals, a growing number of young adults in their 20s and 30s are enjoying a carefree life of adventure and luxury — or so it seems.
The pressure of keeping up with the Joneses has soared to new heights thanks to the rise of social media and so-called “influencers,” while, in reality, many millennials are struggling to keep up with their debt. The average US household with student debt owes nearly $47,000 and the median net worth for an American twentysomething is just $6,500.
But it’s not all or nothing. There are ways to enjoy life and build wealth through smart money management, even if you can’t afford an exotic vacation or a car that’s less than 10 years old.
Live Your Best Life, Without Going Into Debt
Blogger Sahirenys Ortega Pierce built her Poised Finance + Lifestyle brand with that balanced approach towards financial goals in mind.
“Let’s be honest, we all want to have our cake and eat it too,” she said. “The problem with this is that it’s extremely overwhelming and unrealistic to do it all, especially if you’re trying to do it well.”
Pierce, who graduated with a BS in Finance from California State University Northridge, launched her brand after working for finance giants Merrill Lynch and MetLife in hopes of inspiring others to create the lifestyle they want for their financial situation.
“The biggest misconception about finances is that you have to give up your lifestyle to be good with money. That’s simply not true,” said the San Diego mom of two. “You can spend money on the things you love, just not at the same time.”
First, she said, mute or unfollow the social media accounts that are making you feel pressured to live a life that’s not for you. If you are friends with people who are flaunting their lives and overspending on social media, muting rather than unfollowing gives you a polite out.
“I find myself distancing myself from all versions of the Joneses without them even knowing it. This allows me to not seem rude, but also to focus on my peace of mind,” she said.
Remember that Social Media Influencers are Paid to Influence
Every time you see your favorite social media personalities spending money and living a life you only dream about, it’s important to remember that they are paid to represent that dream.
The vast majority of twenty and thirty-somethings don’t rake in six or even seven figures for posting a picture of themselves eating at a restaurant or swimming at a resort. It’s a business built around brands and heavily sponsored, curated content designed to look like an easily attainable lavish lifestyle full of that brand’s products.
Instagram influencer Valeria Hinojosa, who works with sustainable and conscious brands, told Huffington Post she makes up to $200,000 a year posting sponsored content. Kylie Jenner earns a reported $986,000 per Instagram post according to Hopper HQ’s Rich List, while influencer Eleonora Pons has an estimated net worth of $3 million. And the top 10 YouTube stars earned an aggregate $180.5 million in 2018, according to Forbes.
‘Enjoy the Journey, Not Just the Destination’
Living your best life doesn’t mean eating ramen noodles five nights a week and forgoing your morning cup of coffee while you save for a vacation or a new house.
“Give yourself a little fun money to enjoy the journey and not just the destination,” Pierce said.
Get started by building a strong financial foundation with a budget and a good banking method. Pierce created her High-5 Banking Method to help her followers keep their finances simple and straightforward. It works by separating your spending and saving efforts into five categories:
- Bills: A checking account you use to pay your rent, utilities, credit card bills, student loan payments, insurance and other financial necessities
- Lifestyle: A checking account you use to pay for your day-to-day expenses that are not considered a bill or utility. This includes everything from personal grooming expenses to a Netflix or Hulu subscription to birthday gifts to date nights.
- Emergency Fund: A savings account with enough money to cover you for a minimum of three to six months worth of expenses should you lose a job or experience an unexpected medical or financial crisis.
- Long-Terms Savings: A savings account (look for high-interest!) meant to collect money for expenses that are more than a year away. This could include money for a down payment on a house or money to start a family.
- Short-Term Savings: A savings account for big-ticket items you are hoping to purchase in the 12 months, including a down payment on a car, a vacation or a new TV or computer.
“With so many financing options to trick us into debt, it’s best to save up for our wants with purpose,” Pierce said. “You do this by separating your spending and saving efforts, without ignoring your lifestyle.”
Saving While Having Fun
Everyone has different financial decisions and priorities and their own version of what happiness looks like.
“I think it’s wild that we put this pressure on ourselves to compete with others when we don’t even want the same things in life,” Pierce said. “When it comes to learning about money, you can’t ignore real life. Your lifestyle does matter.”
For Pierce and her family, real life includes chasing two small children and managing her son’s medical needs from a congenital heart defect, all while making time for family fun.
In their house, having fun while saving has become a family tradition. They have theme-night dinners such as “Appetizer Fridays” when they cook their own restaurant-worthy spring rolls, flatbreads and wings.
They also create their own money-saving and enjoyable hobbies, including family photo shoots complete with props and DIY at-home spa days.
“These small traditions are fun and budget-friendly. Not because we’re trying to save money, but because we’re trying to make an experience without having to spend a lot of money,” she said. “So the next time you find yourself on social media with a serious case of FOMO, refocus on what you’re doing to get closer to your goals and start putting some action into your plans.”
Disclaimer: The opinions expressed by the interview subjects are not necessarily those of Earnest.