Two years ago, I gave a presentation to my office on how to manage your money as a young professional. Sound boring? The title was “Compound Interest is a Magic Unicorn of Awesomeness.”

Real live unicorn
Real live unicorn

Why was I giving a presentation about personal finance to my office of software engineers (of which I am one)? Well, I’m known as the finance geek. And compound interest is, in fact, just as awesome as a unicorn.

After Mrs. Frugalwoods and I bought a single-family house in Cambridge, MA (one of the most expensive real estate markets in the country) at the ripe old age of 28, my coworkers began querying me on real estate, debt repayment, 401Ks, frugality, and general “how to be an adult with money” questions.

(The best part? My colleagues don’t know about Frugalwoods and have actually suggested to Mrs. FW and I that we should “start a blog about frugality.” We smile, bite our tongues, and take it as a compliment. I’m glad people can smell our frugal nature from a mile away!)

My coworkers are mostly Millennials. With a few exceptions, my office is entirely under the age of 35! At 31, I’m often referred to as “the old man.” It’s a heck of a time be be in software engineering… but I digress.

While Mrs. FW and I managed to avoid many of the money pitfalls of the Millennial generation (through as much luck and good fortune as intelligent decision making), I have a front-row seat at work to the average Millennial profit and loss statement. And the numbers aren’t good.

The media is fond of describing Millennials as irresponsible brats who don’t understand hard work and have horrible personal finances. While I’m sure that holds true for some folks, most of my coworkers are honest, hardworking young professionals who never learned the basic underpinnings of how to live a successful financial life.

The Frugalwoods Soviet tank piston
The Frugalwoods Soviet tank piston

Something about growing up in the glory days of the ’90s gave us a mindset of plenty. The Soviets were vanquished, the economy was roaring, and gas was under $1/gallon. While we were playing Oregon Trail (or learning to program using Logo!), computers were revolutionizing the way work was performed in America.

Then the recession hit, wiping out what meager savings most Millennials had along with tanking their job prospects and permanently hindering their lifetime earning potential. Scraping by became the default, not the exception.

Being broke became not only socially acceptable, but almost cool (hello, hipsters). And somehow, that mindset persists despite the good jobs that many Millennials now finally have. My perennially broke, yet well-paid, coworkers being exhibit A.

At least that’s the story I like to spin about how our generation seems to have missed the boat on how to manage money responsibly.

But hark, fair internet friend. Do not despair. My experience with my friends and coworkers has shown me than plenty of Millennials will absolutely make the right decisions when presented with a plan.

The proof? I’m proud to say that after my presentation, my company’s employee 401k participation increased from 65% to 90%!

The Demystifying Personal Finance Series

Frugal Hound nose personal finance
Frugal Hound nose personal finance

Today begins a multi-part Demystifying Personal Finance series here on Frugalwoods. This series is all about how to assemble a sound financial life as a young professional, though many of the topics covered will be useful to folks of all ages. Much of this is cribbed from the powerpoints I created for my presentation, but with less swearing and more Frugal Hound photos. Frugal Hound gets embarrassed when her parents swear in public!

This series will also serve as a reflection of the steps Mrs. Frugalwoods and I have taken to stay debt-free (other than our mortgage), save 71% of our incomes, max out our 401Ks every year, avoid the lifestyle inflation trap, and map a plan for reaching financial independence in 2.5 years at age 33.

How many parts will this series have, you ask? Well, dear frugal reader, as of now there are 3 parts written and I’m not finished yet. So let’s say more than 3 and less than 50 :-).

What will this series cover? What won’t it cover!

  • How to take stock of your current financial situation without it being a giant bummer
  • Tips on building an emergency fund
  • Getting out of debt (mostly links to people who know this stuff waaaay better than Mrs. FW and I and who have personal experience with the process, which we don’t)
  • Investing for retirement the simple and logical way
  • How taxes work, and how to minimize them
  • Discussions on whether to buy a house as a young professional
  • Wills and insurance
  • Pets and relationships
  • Frugal Hound photos

My goal for the series is to create a resource to reference when Mrs. Frugalwoods and I are trying to explain the arc of financial responsibility to someone who is new to personal finance and wants to take charge of their money.

(While it isn’t directly aimed at teach any of you old financial dogs new money tricks… I hope it helps to frame your own conversations with friends, coworkers, family member, and friendly greyhounds.)


Frugal Hound is not a finance expert either
Frugal Hound is not a finance professional either

Things that I am not:

  • Certified Financial Advisor
  • Certified Public Accountant
  • Attorney
  • Clean-shaven

But seriously… I am just some guy on the internet and my profession by training is software engineering.

This guide is meant to engender curiosity and give you the vocabulary and the framework to confidently approach financial decisions and use your own judgement.

This guide is not meant to tell you particular stocks to buy or places to put your money. I’m not that kind of guy, and this isn’t that kind of guide.

Time to Talk About Privilege

I am a white male born in the United States of America. My parents both have college degrees and are not divorced. My folks also made good choices about money and never experienced any long-term financial disasters. Mrs. Frugalwoods’ parents also both have college degrees, are still married, and never endured any epic financial calamities. We both grew up in stable, safe, loving, and highly educated middle class homes.

AKA the game was rigged in my favor from birth, and I want to recognize that.

I think it’s easy to be judgmental–both of ourselves and of others–when we talk about the “right” financial choices to make. Even using words like “right” and “good” can cause us to slip into labeling not only choices, but people, as “bad.”

Frugalwoods, and this guide, is a judgement-free zone. If you’re in debt up to your eyeballs, that doesn’t make you bad or dumb. It just is what it is and you’re making wise choices for your future already just by reading this blog (it’s also OK if you’re only here for the Frugal Hound pics).

I’m not into labeling people. And I’m not a fan of dwelling on the past or passing judgement on another person’s actions. Let’s go forward knowing that people have complicated and deeply personal histories with money and that we can all do better in the future.

And so, with that in mind, let’s get started!

Demystifying Personal Finance Part 1


Step 1: Know what you have to work with

There’s no sense making a plan for the future if you don’t know what your current financial landscape looks like. This can be harder than it sounds, but it’s an essential first step. Plenty of folks have employed the ostrich method of financial management up to this point: head in the sand.

I get it. It can seem overwhelming, intimidating, and even embarrassing! But it’s time to figure out exactly what you owe and what you own. There’s really no point in doing anything else before you first assess what you’ve got.

Frugal Hound is here to help you make your list
Frugal Hound is here to help you make your list

Make a list of your assets and your debts:

  • Assets:
    • Checking, savings, and brokerage account balances
    • Retirement savings
    • Value of your car and house
    • Anything else of substantial value. (Be honest, don’t be counting your set of  Fiestaware dishes. For your reference, Mrs. FW and I don’t include any of our possessions in our list of assets, mostly because we tend towards very conservative estimations of our net worth. However, if you own something of true value, include it.)
  • Debts:
    • Student loans
    • Mortgages and HELOCs (home equity line of credit)
    • Credit cards
    • Lines of credit
    • Car loans
    • Personal/family loans

On your list, note the details of each line item. For brokerage-held assets like stocks and bonds, be specific in terms of actual assets held and fees assessed.

For debts, make sure to note the term of the debt (how long you have to repay it) as well as the interest rate.

Now make another list of  your monthly expenses:

  • Rent/mortgage
  • Utilities
  • Cable, phone, internet
  • Groceries
  • Restaurants and bars
  • Pets
  • Kids
  • Household supplies
  • Toiletries
  • Gas for the car
  • Medical/health
  • Clothes
  • Misc.
Frugal Hound says “use software to help you!”

For more possible ways to assess your monthly expenses, check out Mrs. Frugalwoods’ Uber Frugal Month Challenge, which includes tips on how to figure out where you spend your money.

Putting this list together can be arduous to do by hand, especially if you have multiple credit cards or bank accounts. So, I highly recommend using a software service to aggregate your spending across your accounts. It’s what Mrs. Frugalwoods and I do and we think it’s the only way to sustainably keep an eye on spending over time.

We use two different pieces of software to track our money:

  • Mint (good for an overview, but they haven’t innovated in years and it sometimes breaks)
  • Personal Capital (great for tracking investments as well as spending, innovating rapidly, but not as flexible on categorization)

Both are free and secure, so I’d  suggest you set-up both and see which one clicks with your financial paradigm.

(A full post on how we track our money, including details on both of these systems to come. For the time being, you can check out How We Manage Our Household Finances).

No Regrets, No Dwelling

The Woot Unicorn-Hound
Even the Unicorn Hound can’t erase past spending

The key in all of this is to internalize the reality that the past is over and done with. You can’t go back in time and un-spend money (much as we all might wish…). So don’t dwell on your bad decisions–and trust me, everyone has bad decisions in their financial past.

Instead, commit to yourself that you’re going to start afresh financially today (see Mrs. FW’s post about our 2014 savings rate, in which she discusses how we launched our journey towards financial independence and haven’t looked in the rearview mirror since). Just start and do it now!

Embrace the freedom that comes with allowing the past to teach you lessons without letting your past beat you over the head with a cast iron frying pan.

Step 2: Build an Emergency Fund

This is going to be short because I think it’s intuitive.

Life is full of little emergencies. A financial cushion is the difference between an inconvenient emergency and a ‘death spiral of debt’ emergency. When something unexpected happens (say a family member dies and you need to fly across the country last minute), you don’t want that to cause you to pay your rent late (fees!) or not pay your electric bill (lights=good).

Frugal Hound is annoyed at the thought of losing her job as a fang model
Frugal Hound is annoyed at the thought of losing her job as a fang model

More broadly, you want to be in the sort of financial position that allows you to be annoyed and not panicked if you get laid off from work tomorrow.

The common wisdom that an emergency fund equates to 3-6 months of living expenses seems pretty reasonable to me. I’d go for even more if you work in an industry that endures boom/bust cycles like homebuilding or oil.

Keep your emergency fund in a savings/checking account where it’s available but not too available. This is not an “emergency pay-a-bar-tab fund.” And if you do need to tap into the fund for a true emergency, prioritize replenishing it with your next paycheck.

Final Thoughts

While these first two steps might seem rudimentary or overly simplistic, don’t discount their importance. Without a clear, honest snapshot of your financial status and an emergency fund to cushion you from future debt, moving onto investing and retirement planning would be like running before walking.

Finances exhaust Frugal Hound

For Mrs. Frugalwoods and me, judiciously managing our finances is what’ll enable us to retire to a homestead in the woods at the age of 33. We didn’t win the lottery or make millions in the stock market (or even in the greyhound glamour shots business), we’ve just been seriously frugal, mindful, and aggressive with how we’ve tracked, saved, and invested the money that we do have.

There’s no ‘one weird old trick’ to building financial stability, it’s just careful, straightforward accounting and math-based investing approaches. Next time on the series, I’ll be tackling debt and the repayment thereof.

What first steps would you advise a financial newbie to take?

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  1. Nice primer to personal finance. I really like the boost in enrollment in your companies 401k after your presentation. I’m curious; why do you think more people aren’t actively searching for better ways of managing their money? It’s not from a lack of information, nor can it be access to that information. It seems to me there is some kind of psychological barrier and I wonder how you help people over come that barrier after the initial enthusiasm from a presentation has worn off.

    For the record, I would have attended that presentation solely based on the title alone! 🙂

    1. I think the timing of 401k signup is done at the wrong moment of employment. When someone joins a new job, they often have gone without a paycheck for at least a bit of time. For the average person, this is not good. They are scraping by. So when they have the option to reduce their first paycheck by contributing towards a nebulous future retirement… they bail and decide they’ll do it “once they are on their feet”.

      Then it becomes out of sight, out of mind. I find at least 30 somethings are oblivious to their own age. It’s not _that_ long until retirement, but it feels like forever.

  2. LOL, if I didn’t know how very much you love Frugalhound, I’d feel SO sorry for her and her many forced photo sessions, complete with adorably cute costumes. 😉 Seriously, though, LOVE this series idea. Can’t wait to read more!

    1. Haha, it’s true, she does have to endure a lot of costumes… but then she gets lots of treats :). And she seems to get the idea of the photo shoots too–she just stands there, I snap a few photos, and we’re done in about 30 seconds. So glad you like the series–thank you :)!

  3. With a headline like that, how could I not read! This promises to be enjoyable even if I do turn out to know all of it already 🙂 I agree with you that the general feeling of security in the 90s led to a fair amount of floundering. My parents, despite never being especially high earners, always told me that I should do whatever I wanted to do career-wise, and did the exact opposite of stressing that money was important in that decision; I always figured I’d do something artsy or nonprofity (and I more or less did take that path). I both think they were right (and really appreciate the lack of pressure to go into something lucrative) and wish that they’d been *somewhat* more concerned with teaching me about money (but they knew very little themselves beyond “don’t get into debt” — I don’t think they’ve ever made a budget, and they’ve accumulated a good amount of retirement funds through a combination of regular contributions and sheer dumb luck.)

    1. Very interesting–my parents were quite similar to your parents while I was growing up. Money was definitely not seen as a motivator for choosing a career path, which is probably why I ended up working in the non-profit field (and still do). How to invest and manage our money was something I learned after college, but, I am very thankful to my parents for instilling the frugal gene in me!

      That’s wonderful that your parents have decent retirement savings! They must be fairly frugal folks too then!

  4. Tracking expenses and income is definitely the first thing I recommend to people. As you described, there still is no one “super easy” way to do it. I have a process that takes about an hour a month and is done entirely in Excel. I’ve been meaning to write a post about it and share a template, but it would take some cleaning up to put out on the site.

    1. Yes to tracking expenses! There’s just no point in doing anything else until you know how your money is coming and going. I’d be interested in seeing your excel system–I hope you’ll post it sometime!

  5. I love the optimism that you’re exuding! I’m sure it had a great deal to do with the uptick in 401k participation among your Millennial co-workers. 🙂 I think a sense of enthusiasm and hope for the future can be a real motivator for making tough financial decisions.

    1. Thanks! Mr. FW really does have a knack for being very enthusiastic about personal finance, which is both endearing and really inspirational to me :). And, I hope people do feel optimistic about their finances–there’s always hope!

  6. Tracking expenses is totally the first step. When Mr SSC and I did that – we were shocked at how much our lifestyle had creeped up on us over the first few years of our marriage. Sometimes a monthly cost seems low and reasonable – but when you look at it annually, it can be shocking!!!

    1. So true! There’s nothing quite like hitting x12 on the calculator and thinking “oooooohhhhhhh.” We’ve had a few of those ourselves :)!

  7. Really looking forward to this series! (And I love the blog in general. I’m a fairly new Frugalwoods reader but I was hooked from the first post I read!)

  8. Ha ha, those are awesome pics of Frugal Hound! Seriously though, great thoughts here! I could not agree more that these steps are important albeit simplistic for some. We were having a discussion with a friend over the weekend who is struggling financially and many, if not most, of these were things we addressed with them – in addition to tracking what they’re spending. This info is all so vital because if you don’t know what you have, how you’re spending then how can you make any informed decisions?

    1. So true. I think it can be easy for people to overlook these super basic steps because they feel too simplistic, but, it really is crucial. And, that’s awesome that you’re helping out a friend who is in need of financial guidance–they’re lucky to have you!

  9. First of all I love how FH is wearing rainbow shoes! Were those on sale? I think for the brand new person just starting this journey, things can feel very overwhelming and maybe the idea of using even mint seems daunting, but it’s important to just START. Start somewhere…anywhere. I finally got going by just using a simple excel spreadsheet, because I gotta be honest, sometimes even mint confuses me. I think the starting part is probably the hardest when people are faced with a lot of financial challenges. Great tips and looking forward to the series!

    1. Hahah, you can tell I’m not very good at photoshop based on those unicorn feet… not to mention the random floating rainbow. But I couldn’t resist :)!

      You are 100% right about just getting started! I’m a huge excel fan too, btw…

  10. Awesome overview – I’m looking forward to the rest of the series. I’ve been playing the ostrich off and on over the past few years and am now getting serious about sorting out my finances. I’m not in terrible shape, but could always do better. I’ve been working on some spreadsheets with all of the info you mentioned above.

    This sentence: “The key in all of this is to internalize the reality that the past is over and done with.” really resonates with me – thank so much for that. It is easy to blame and beat yourself up over the past, but that is so counterproductive. I have struggled with this as well and I’m enjoying letting go, moving on and doing better for my future. This applies to so many things in our lives!

    1. Thank you, Laura! We’re so glad to hear you found it helpful–that makes me so happy! It’s awesome that you’re taking charge of your finances now and, you’re so right about letting go of the past and instead just focusing on the future. I often tell myself “eyes ahead” because the past is gone. Best of luck to you!

  11. Hey now, we sold our Fiestaware mugs from our set on eBay! They were the Tom and Jerry style which has a super small loop handle. Very hard to use. We were avoiding them and didn’t like how much space they took up in our cabinet.

    But I guess I didn’t include them in our “assets” when calculating our net worth either.. 🙂

    1. I hoped we’d get a Fiestaware fan ;)!! It’s true, you can sell your stuff so easily these days via the ol’ interwebs, which is a great point. We have some bowls that we’re avoiding these days because they’re square (looks cool but hard to actually, you know, eat out of 😉 ), so we should probably sell them…

  12. I kind of envy your office of entirely under-35 year olds. Until about two years ago, I was the only under 35 in my office! The average worker here is 55 and is busy thinking about their pension and social security payments! I would like to tell you these people are better prepared for retirement than the Millenials in your office, but if you have to keep working well into your 60s, despite the pension you could already be collecting, something is just not right.

    I love that you recognize that the game was rigged in your favor. You can only speak for your experience and your upbringing. As I’ve gotten older I realize how much white privilege really does exist. Despite coming from blue collar roots, I’ve had an upper hand.

    And I agree, for a financial newbie, tracking is absolutely step 1.

    1. Hah, thanks. The office being a bunch of millennials does have benefits. It’s both endearing and terrifying how not motivated by money most of them are. I wonder if it will stick with their generation as they age?

  13. Thank You for all the work yall do to send out this blog !!!

    I am totally ignorant about how investing works :

    Qtn 1. What happens to people that are 70 & just retired with a super small investment, &
    loose all the money they have ???

    How does that work ?
    If i saved $100,000– I could loose $100,000

    1. Ideally if a person was 70 they wouldn’t be invested in risky assets. Most financial advisors would counsel reducing risk as you age by changing your asset allocation away from stocks and towards bonds and fixed income.

      But if someone is retiring with a very small amount, like 100k, then they won’t be getting much income from that anyway. Plus if they are retiring at 70 they should be doing pretty well with social security. So hopefully losing that lump sum won’t wreck their retirement!

  14. Oh man, cannot get over the unicorn hooves! Every time I see these unicorn pictures I think of the movies I saw as a kid in the early 80s: Unico and The Last Unicorn (I really liked unicorns!). I’ve only seen each of them once, but I can remember some of the scenes in my head 30+ years later.

    How great to see your coworkers started their 401k matching after your presentation. I too wonder what was preventing people? Lack of understanding? Lack of urgency?

    I have been asked by two people (one was my sister, the other a friend) to help them with their finances. I suggest always to first track every single expense. Neither were able to get past that part. It was too hard (maybe Excel was their nemesis?), too cumbersome, too boring. But we couldn’t go much further because that was their roadblock.

    My dad was really bad with money (drug, alcohol and gambling addiction sadly). We were on food stamps when I was young, we got free school lunches, but then he made too much money to get those. Luckily my mom gets his pension after he passed away or she would be so SOL right now. He died with $6.13 in his bank account. We try to make light and say “he broke even so maybe he did it right.” So I learned what NOT to do with your money from very early on, but what to do with my money was all self taught.

    1. I too loved unicorns (I even had a collection as a kid) and adored The Last Unicorn! Oh the 80s…

      Mr. FW thinks that the dearth of 401k participation was partly lack of understanding, partly lack of urgency, and partly that people were starting their first job ever and so just not thinking about retirement at all when they filled out their HR paperwork.

      I’m sorry to hear about your dad’s struggles with money, that must have been so difficult for your family to endure. But, kudos to you for taking charge of your finances. It’s not easy to transcend a tough money upbringing, so I applaud you.

  15. I am looking forward to this series! I think it’s going to be very practical and useful! And as an aside, just curious (and forgive me if you’re already disclosed this), why do you and Mrs. Frugalwoods keep the blog anonymous? I am completely just wondering here! 🙂

    1. Thanks so much, Natalie! To answer your question, we’re keeping the blog anonymous for the time being because we don’t want to broadcast our early retirement plans to our employers :). But, we do plan to de-anonymize once we hit homestead status!

    1. Haha, she looks good as a unicorn, doesn’t she! She sort of looks like a pony, so it’s not a huge leap :). Woohoo to budgets and emergency funds!

    1. Yep, that makes total sense. Somewhere where you can keep up with inflation but still have instant access to the money in a true “emergency.

    1. Sometimes I feel that way in the software field! I don’t think I’m comfortable with it either… then again I’m the one talking about retirement so I guess that cuts both ways! 🙂

  16. “Compound Interest is a Magic Unicorn of Awesomeness.”- I think the adverbial form of magic is supposed to be magical.

    In all seriousness, this is a great starting point, and I will point this out to people when they ask me about money (I’m the finance person in my circles, but no blog). Additionally, anytime your life situations changes its important to review step one, and if possible try to predict your monthly expenses ahead of a big life change (this is easiest if you do just one life change at a time).

    1. Magical! Of course! Clearly our editor (Frugal Hound) was snoozing on the job… again ;).

      Glad to hear this might be useful to you in helping out your friends! We often find that we want to start conversations with these first two steps, so I’m looking forward to using this as a touch point too.

      And, you make a great point about reviewing step one anytime life changes in a big way. It’s always good to keep an eye on any and all possible lifestyle inflation creep…

  17. I remember playing Oregon Trail!! I was never good at it and always seem to run out of food and die within a few days of the journey. Anyway, as you know, my job is helping clients demystify money and it’s amazing how many people need help with that, but the reality is that we all have different backgrounds and most of us don’t get good money primers while we are growing up. The first step I take with clients is understanding where they are and what everything looks like and then yes, step 2 is making sure the emergency fund is sound. A solid emergency fund not only helps you build you net worth, but it prevents you from getting into debt trouble down the road.

    1. Oh no, Shannon, I’m sorry to hear of your Oregon Trail travails ;)! My people always got dysentery and my oxen seemed to always floated away down the stream… tough times.

      You make a great point about everyone coming from different money backgrounds. So important to first assess and figure out what you’re working with before creating a plan.

  18. Great ideas to get someone started. I appreciate how you advise others to not include personal possessions in net worth. We have debated this topic several different times. Mr. Maroon has a collection of possessions, of which he is very proud. The collection carries a fairly significant value, and one that should never really depreciate over time. He used to take the stance that the value should be included. However we have recently agreed that the value of these items is absolutely zero unless he is willing to actually sell them. Since that is not the plan, even a possession worth $1 million still holds a value of $0 if you always retain ownership of your prized collection.

    1. I think your approach makes sense–like you said, if you’re not ever going to sell it, then it’s effectively worthless (not in sentimental value of course, but in practical terms). That’s why we don’t count possessions. Anything that we own that’s actually worth any money is family heirloom-type stuff that we’d never sell anyway.

    2. Hi! Just found your blog a week ago and have been savoring all the posts. Hope you dont mind me posting on an old thread. I just went thru selling some heirlooms (high end mid-century furniture) and thought I’d share my experience. In summary my profit was much less than expected and was 6 months from decision to sell to receiving last payment. This was due to: waiting for an auction for my type of item, one item not selling, insurance, commission, shipping, fees, etc. Happy I did it but just saying possessions aren’t liquid assets.

  19. I wondered what you guys did to put away that kind of savings rate living in Cambridge. My guess was engineer. Husband had the engineer look w/ the shaggy beard and all. Engineers are their own breed… In a good way of course. 🙂

    Are you able to live off of one salary and 100% bank the 2nd person’s. That’s the ultimate. I’m not married, but that would be a goal of mine if I was. That’s how you retire at 33!

    1. Hah, yes, shaggy engineer. Guilty as charged :-). We live off a small fraction of our combine salary, less than either of ours individually. The power of combined finances is amazing, especially in a high cost of living place like Cambridge!

      It helps, but it is not a requirement. We have a good friend here in Cambridge who has a long-distance fiance. She has a small apartment here, so has many of the costs of a single person. And she’s totally killing it in the savings department.

  20. “Being broke became not only socially acceptable, but almost cool (hello, hipsters). ”

    Forgot to add the war on the rich, by a President who made it his goal to demonize people who have/had money. Of course all that money was not earned… Stolen by shady methods.

    Thus it’s cool to act like you have no money. Look at people like Russell Simmons. Rolls into an Occupy protest in his Bently like he’s one of the people. Then he’s out of there into his multi million dollar diggs in the rich Jersey suburbs.

    Now we need to have taxpayer subsidized college? Give me a break. There’s nothing wrong w going to a trade school. Working part time to pay. If I had known 20+ years ago what I know now, I wou’dve not gone to college + gradschool which was paid for by myself. Trades are the way to go. You can make very good money..

    1. Whether or not I agree with you politically (I don’t), I think we both can agree that whining about your situation and blaming others probably isn’t the way to future success. Try and figure out why you are so angry about things that you can’t change… and ponder what you _can_ change about your life.

      Interestingly, I recently had a similar conversation with someone on the other side of the political aisle who was arguing that they reason they were not doing well financially was because rich people and corporations were stealing money from working people. Maybe they are, maybe they aren’t. But there isn’t anything _I_ personally can do about it. So I choose to focus on things I can influence.

      Plus, let’s not forget, from a tax perspective it’s a great time to be rich: It’s hard to imagine a top marginal bracket of 70%!

      1. People that complain about “being kept down by the system” I have no respect for at all.

        I came out of grad school in 01. Got laid off by Sun Micro after four months. Had no money. Was selling Globes & Heralds on the streets of Boston and walking dogs in Charlestown. I had no savings and wasn’t moving home. Hustling to make money is what I did.

        Moved to LA in 2004 & 10+ years later my financial position is so much better off. But it wasn’t through government programs and handouts. It was through hard work and continuing to move forward.

        I’m sick of the whiners who say it can’t be done. If you are expecting some politician to be your way to the promised land you’ll always be behind. People need to get a grip.

    1. Thanks so much! I agree–personal finance doesn’t have to be super complex. There are plenty of pretty straightforward methods that folks can use to get a handle on their financial lives.

  21. They don’t teach how to manage finances in school, so even people with advanced degrees might have no clue. I didn’t for years. It’s not an excuse, but it’s really easy to not plan for the future when you’re just starting out and trying to move forward with your job. That’s really cool to be the financial guru for your office, and even more cool to have a dog who can double for a unicorn!

    1. So true–I didn’t learn a thing about personal finance in high school, college, or grad school!

      Mr. FW definitely enjoys being the finance geek much more than Frugal Hound enjoys being the unicorn ;).

  22. Great article! I LOVE that you acknowledge your privilege- so many people don’t, especially when it comes to money. I am 26, working very hard on paying off my student loans ($12,000 left out of $25,302!) and just beginning my personal finance journey. This series looks very promising and educational. I’m excited for the investing part- that’s my next big goal!

    1. Thank you so much! We think it’s important to acknowledge privilege since it’s a fact of life and we recognize that we’ve been extremely fortunate.

      Congrats on paying off so much of your student loans to date! That’s awesome :). Investing, here you come!

  23. I absolutely love this series! The pic of your pooch is adorable and you get props for talking about privilege. It’s something that is glaringly missing from most PF posts. I think the edict, “spend less than you earn” is a key place to start for a financial newbie.

    1. Many thanks, Melanie! Mr. FW and I know that we’ve been very lucky and we feel it’s important to acknowledge privilege–I appreciate the props :). And I totally agree with you, spending less than you earn is a wonderful place to start!

  24. Hi Frugalwoods 🙂

    Love your website. I was inspired by you to talk my husband into doing our own Uberfrugal Month, only spending $ on fixed expenses. We’re right in the middle of it right now and are having a blast, talking about stretching it out as long as we can.

    We’ve been pretty good with money but not as good as y’all. This is helping us pay off our student loans tout-suite.


    1. Hi Ruthie! How fabulous! That makes me so happy! I’m so glad to hear you’re enjoying the Uber Frugal Month challenge :). And, you can definitely stretch it out longer–that’s what Mr. FW and I do all the time :). Good luck on paying off those student loans–that’s awesome! Thank you so much for reading and commenting 🙂

  25. First of all, love the blog!
    Secondly, the problem is surely not contained to just Millennials. I have been a habitual saver and very good at living below my means, but I feel like I am the only one of my peers to do so, and we are late 30’s and early 40’s. I think they are all planning to work until they die because no one even thinks about contributing to the 401k beyond the company match, and they would rather spend all they have on restaurants that serve tapas (I don’t understand this trend…more money for less food on a small plate? I don’t get it!), wine, vacations, cars, clothes, and lots and lots of stuff.
    Thirdly, I agree with several of the other commenters that tracking your spending is vital to gaining control of your finances. This is a lot like tracking your food intake if you are trying to lose weight. Even if you don’t change any behavior, you will start to understand where your money (or calories) goes, and and knowledge is power. This knowledge can help you make better choices later, like foregoing a $10 and1300-calorie restaurant burrito to enjoy a $2 and 400-calorie burrito that you make at home. Making better choices will lead to greater savings and a smaller waist! It is a win-win!
    Fourthly, I just wonder if all this attention goes to Frugal Hound’s head? Or is she as humble and demur as she seems?

    1. I love the 4-part comment!
      1) Thank you so much! Glad to have you here!
      2) I agree with you 100%. I think that, sadly, bad money habits happen at all ages.
      3) Love that burrito analogy–that’s perfectly said. And, that’s why we eat all of our meals at home!
      4) “Demure” is the perfect word to describe Frugal Hound. She’s a very gentle and quiet beast and is soundly snoozing right now 🙂

  26. What a great series! I can’t wait to read the upcoming posts – almost as much as I can’t wait to see more Frugal Hound pics! (It’ll be tough to top the unicorn costume, though…)

    1. Many thanks! I don’t know what we’re going to do to top the unicorn next time… I’ve spent a good portion of my day trying to think of other mythical beasts she can be (using clothes and costumes that we already have… hmm, it’s TBD 😉 ).

  27. I’m looking forward to following along with this series. I am just starting my personal finance education, so this will be super helpful. Thank you!

  28. Just to make sure I understood this correctly. 1) Know your assets and expenses 2) Build an emergency fund of 3-6 months

    I know how difficult it is to paint the same picture for everyone. Are you making the assumption that most people Do Not have debt and they can go to step 2 and build up thousands of dollars of an emergency fund? Unless I misunderstood and you are in favor of Building 3-6 months of emergency fund before attacking debt? OR I missed some assumptions.

    I just really want to be clear on the steps you suggest. Love the series, I’m sure it’s going to be a fun read!

    1. It obviously depends on the situation, of course, but I usually see people do best if “more debt” isn’t their emergency plan and instead they build at least a small emergency fund first before tackling debt payback. It might not be the best mathematical choice, but psychologically it seems to give a major boost.

  29. I am now 45 years old, completely debt free including the house. Luckily I discovered frugality a while back when my children were small. I wish I knew what I now know about money when I was much younger. You have become my favorite website!

    1. Congrats on being completely debt-free–that’s a wonderful thing! That’s living proof of the power of frugality! Many thanks for your kind words about Frugalwoods 🙂

  30. As a 26 year old who definitely missed the financial responsibility train growing up and is now paying the price despite having a really well-paying job, i’m so looking forward to this series! I can’t thank you enough for your blog– your homestead goal is very similar to my own and, until I discovered your blog, I thought it would never be more than a daydream.

    1. I’m so glad we can be of help! And, I’m excited for you for your homesteading goal–very, very cool. Thank you so much for reading 🙂

  31. FH is a character of so many disguises it is hard to keep it straight. 😀 This just might be my all time favorite except for the pearl look.

  32. Amen to tracking expenses! When my husband and I first started taking stock of our money, we would look at our finances every month (after we’d spent all the money) in Quicken and freak out. (How are we spending so much on fast food!) As a first step, at least it was one in the right direction – figuring out where we could cut back. We’re in much better shape now that we’ve figured out budgeting and tracking expenses before we make them!

    1. Way to go on tracking and budgeting! You were very wise to review all of your expenses like that though–it’s so illuminating! The first month that we truly combed through our expenses, I was shocked. It’s a real wake up call!

  33. Thank you for acknowledging privilege. I too had the deck stacked in my favor — up until a disability took away my ability to work for several years. (Miraculously found a job working from home that actually pays well.) It was frustrating to hear about all the things I “should” be doing that I just wasn’t able to. (Severe fatigue issues plus depression kind of cramp my ability to shop multiple grocery stores, cook regularly, etc.)

    Anyway, I think the most obvious first step is the one you listed: Know your finances.

    And I love your second suggestion: Don’t dwell. As a depressive, I’m inclined to beat myself up all the time for things I can’t do that would save money. I’ve gotten better over the years at stopping that. It wastes good energy that could be used toward frugal efforts or just not hiding under the covers. Which I totally don’t do. Ahem.

    1. I’m so glad that tone resonated! I don’t think it gets said enough by folks who write about personal finance. I wasn’t sure how it would be received! I wake up every morning grateful for the good fortune I’ve had in my life.

      I’m so glad you found a job that works for your situation. Thankfully it seems like being location flexible is becoming more common.

  34. I’m a big believer in tracking spending, and I think Mint/Personal Capital is too passive for those with spending problems. I prefer pen and paper combined with a spreadsheet for long-term tracking. A public version of my new-and-improved tracking spreadsheet is viewable here:

    I also redesigned my grocery tracking with more detailed categories than before, to try and get a handle on non-healthy food spending:

    Hope that helps for any out there.

    1. Thanks so much for including those! I actually agree that physical record keeping can be good for forming new habits… I just haven’t been able to get my coworkers to buy into the hassle of carrying around paper and pencil!

      I’m digging the detailed grocery breakdown in your main budget. I’m curious how much of a reduction in your veggie spending you’ll see once the garden is producing. I think it’s harder to tell when the veg is lumped in with all the other grocery items.

  35. I have to tell ya, I really look forward to this series. It’s nice to learn from people who are walking the walk. Plus, you guys are so darned entertaining to boot! Plus Plus, those photos are SO adorable. Love that hound! 🙂

  36. Thank you, Mr. Frugalwoods, for acknowledging that you come from privilege. However, the biggest privilege you enjoy is not your money or race or gender or education: It’s the fact that you came from a stable family! Study after study in the social sciences has pointed to intact two parent families being the main factor in the future success of the offspring. Are there successful people from unstable backgrounds? Sure there are but when you come from a background that is focused on either physical or emotional survival, it’s harder to get an early foothold on stability.

    1. So true! And the real message is how easy it is to forget how much privilege each of us has. When you expand broadly enough, even the country we were born in has a remarkable impact on our likely future!

  37. I am so happy you are doing this serious I know virtually nothing about compound interest and your explanation of things are so helpful. Thanks for sharing your secrets I am not really in a whole lot of debt but I am a little naive of what to do financially since I just got out of school. I will take all the advice I can get

  38. Frugal Hound really does make personal finance more entertaining.

    This is a wonderful Personal Finance 101 outline. I tend to believe that the first step needs to be figuring out exactly what you’re spending your money on, along with getting a snapshot of your debt (if applicable) and assets. If you don’t know where you stand, you can’t really do anything about your situation. An emergency fund is a great next step. The great thing about this step, aside from having money for emergencies, is that you can start to slash your spending to accumulate the savings.

    1. Agreed–it really is tough to make any plans without getting a sense first of where your money stands. And, good call on slashing spending in order to accumulate an emergency fund!
      P.S. Frugal Hound thanks you kindly 🙂

  39. I love and subscribe to your blog but I have to say… I am very excited about this series. Looking forward to the next installment!

    Thanks for all you go!

    1. Thank you so much for reading! We’re so glad to hear you’re excited about this series :). There will be another installment before too long!

  40. My Bank of America account (checking, saving, credit card) has a “Tools and Investing” section with a spending tracker & a section to set a budget. I don’t know if other bank websites have something similar. I find it very helpful to see where I’m spending. 🙂

    1. That’s a great tool! I think anything that helps you track what you’re spending as well as your whole net worth in one place is very valuable. Thanks for sharing :)!

  41. Love your whole approach to financial life. I believe we should control our money, not let it control you. I’m from privilege but went hippy in my 20’s. Being poor for ten years after that taught me the frugal lifestyle that my depression-era parents took for granted. Now, at 66, I can appreciate how little things mean a lot over a lifetime and thank goodness for compound interest! I love your writing and points of view. Keep it up and keep helping the rest of us!

  42. I am so thankful that I found your blog!!! THANK YOU!! You are both great writers and explain things REALLY well. Wish we could be real life friends, but I’ll settle for subscribing to your blog for now.

  43. Hi, I am a Canadian reader very much inspired by your way of living (and sharing). I’ve been reading you for few years now. Have you heard of other tool than Personal Capital to work with since it does not work with canadian bankink just yet? Amazing blog. Thank you!

    1. Thank you so much! I’ve heard from other Canadian readers that they like using instead of Personal Capital. Good luck :)!

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