The thing about personal finance that is often underemphasized is just how personal it really is — and how so many of our financial choices are driven by emotion. Maybe you're a compulsive online shopper who knows you need to rein in spending, but can't seem to stop buying things when you're feeling low. Maybe you're stingy to the point that thinking of how to pinch a penny here or there takes up way too much mental space; you want to stop, but your brain won't let you. These aren't just poor spending habits. They're often related to intense, lifelong associations of money with difficult past experiences, insecurity in our childhood, and our deepest fears.
"There's so many hang-ups people have about money that are emotional," says Paco de Leon, personal finance expert and author of Refinery29's Taking Stock column, whose forthcoming book, Finance for the People, is out on February 1, 2022. De Leon believes that we are all told certain "stories" about money — like maybe that money is the only path to happiness, or that people without money are lazy, or that financial stability isn’t a right, but a privilege.
"There's such a strong brand of shame with personal finance," says de Leon. "I think maybe because I grew up queer and went to Catholic school for 13 years, I know what it's like to be told you're fundamentally flawed, and I know what it's like to reckon with that feeling."
Throughout the book, which is separated into sections about financial fundamentals, debt, investing, and more, de Leon explains that we've all internalized certain beliefs about money because of who we are and how we grew up. Coming from a wealthy family might mean that you had a head start on investing and wealth management resources. Or if you grew up in a setting where money was unpredictable and saw your parents struggle with bills, you might be unduly terrified of any form of debt no matter the context. Our perspectives on handling money are not just about crunching numbers and making a plan; often, they're not even rational. But that doesn't mean we should simply try to ignore these feelings; rather, we should consider why they exist in the first place. The goal in learning about personal finance isn't just to be better at budgeting or to save enough for retirement, it's to feel less anxious and less ashamed about money.
"It's so easy to tell somebody: Save 10 percent of what you earn... save 50 percent of what you earn. It's so easy to rattle off all these very practical pieces of advice. But what was crazy and kind of heartbreaking to me was watching people understand what they rationally needed to do, but they were so unaware of why they were driven to act against their best interests," says de Leon.
In order to get to a place where we can act as rationally as we think, she says, "we have to think about how we think. We have to think about our cognitive biases."
In one section of the book, de Leon suggests readers look at their budgets, not just in terms of how much they can spend, but in terms of how much money they need for their ideal lifestyle. What would their income need to be to attain that?
"It forces us not to just accept the default, which is what I was taught to do," she says. "I come from immigrant parents, and they were just like: You go to school, you get a degree and then you apply for a job and you accept the default."
De Leon also emphasizes not simply achieving a single goal or milestone, but creating automated systems and guardrails that help establish new habits — because we're human and fallible, after all, and need to make our own safety nets. "I think that Western society is way too focused on that photo for the 'gram — the end goal," says de Leon. "I think that one of the things that helps you actually achieve your goals, which is counterintuitive, is to release this tight grasp on an outcome and to just follow a lot of the process, because the process is all we have. You can't just love the outcome, because your day-to-day is the process."
Of course, that's not to say that a lot of money problems are only personal — they’re also structural. De Leon spends plenty of time acknowledging the inequality baked into our capitalist system. But until that system is radically changed, what can individuals do in the meantime? That's the question de Leon tries to answer. Early on in the book, she talks about a concept called the financial "shit sandwich." Every generation is served their own particular kind — for young people today, that shit sandwich might be called "late-stage capitalism." So what can we do about it?
"I think that I'm a very strategic thinker, so when I think about problems that I want to solve, I think about what problems I want to accept," says de Leon. "Because no matter what workplace you're in or no matter if you decide to work for yourself, you're going to face problems. So when I accept that there are just going to be some shit sandwiches in life, it at least allows me to look at the menu and try to decide, okay, what can I choose?"
"I remember sitting in the conference room when I was working as a financial planner, and I just felt like I was getting secrets," says de Leon. "The things that I was hearing, the insights I was getting are information that's normally passed around from, you know, a wealthy grandfather to a wealthy grandkid or something like that. Something inside of me felt like, Wow, I really have to set this information free."
"There's so much opportunity to have a different conversation, to share a fresh perspective, especially because I live in a world that wasn't built for me," de Leon continues. "I'm a woman living in a man's world. Short person in a tall world. Queer person in a straight world. And a brown person in a white world."
She believes that one of the things that the personal finance industry tends to be guilty of is "assuming everybody is at a certain level of income and that they don't have beliefs to work through," she says. "Traditional financial experts don't look at things outside of your paycheck that can impact your actual paycheck" — like systemic inequality, or emotional and cognitive biases around money. "And I think that's a huge flaw. I think so many of us are operating from a place of our own personal trauma, of intergenerational trauma, and societal trauma as well. Not recognizing our pain, I think, is a big failure, frankly, in the industry."
"I hope that people realize that they have the power to influence their own relationship with money," says de Leon. "They can change. Their potential for change is much greater than they think it is."