In her new book “Financial Adulting,” Ashley Feinstein Gerstley breaks down every personal finance topic you’d ever need to feel confident about your money.
As a money coach, previous financial analyst, and graduate of the University of Pennsylvania’s Wharton School, Gerstley says she felt like she didn’t know everything she could about money.
“I had this feeling that other people knew something about money that I didn't,” she says. She often asks the same question during workshops, "raise your hand if you think you should know more about money and personal finance," and every hand goes up, she says.
Policygenius talked with Gerstley about the new book and what she hopes readers will get out of it.
This interview has been slightly edited for length and clarity.
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Pg: Many people go through school without a personal finance course. How can that affect people’s ability to navigate their finances as an adult?
AG: There's so much shame and self punishment around money. In the first chapter of the book I list out the things we have working against us when it comes to money and a lack of financial education. There are personal finance classes now being offered in schools, but that definitely was not something that ever came up for me.
What I found from my interviews and my work in general is that parents aren't talking to their kids about money. It's not because they're not trying to — they want what's best for their children of course — but they feel like "who am I to teach them about this when I've made so many mistakes." I found there's this feeling that money is so stressful and people want to shield their children from having to deal with it for as long as possible.
Without a financial education and having to deal with money almost every single day in our adulthood — and it being too taboo to talk about — the finance world can feel very complicated. It all comes back to having some compassion for ourselves. It's no wonder we're not financially adulting, or we're not thriving in our financial lives when we have this much working against us. The goal is to help people muster up some compassion for themselves.
Getting started can be intimidating. Is there anything in particular people should focus on first?
I think about it in two ways. The whole concept of being a financial adult might sound like being a person who understands everything about money and never makes mistakes. But what a financial adult really is, is someone who is making money moves, who has plans, and who knows what's happening with their money.
A huge part of that is small consistent actions. When we're trying to level up in our financial adulting, it can feel really daunting. There's this idea that we have to completely transform or make giant leaps to make progress. Something I really try to reiterate in the book is that you can make smaller steps as long as they are consistent.
You’ll start to see these really build up to results. Try to break these steps down to the point where they feel achievable and approachable. Financial progress is often not linear in that if I'm saving $5 now it does not mean that it will take me 2,000 years to save up. Often our progress is exponential because we build up these habits. We start to see progress that motivates us. We add new money moves in there. If you’re just starting on your money journey, a couple areas I like to start are first thinking about what you want, like your goals.
That is so important because it drives everything else. For most of us acquiring a stack of cash might not be that motivating, but it's what we're going to do with that money. Having financial stability and peace of mind motivates us. A more tactical first step is to build an emergency fund to keep in a savings account in case an emergency comes up. So that would be like the first and foremost savings goal I'd recommend if someone does not have that set up.
Things are always changing. Our lives are changing. Our priorities can change, pandemics happen. A big part of financial adulting is trying to look at mistakes we made more objectively. You can definitely get upset but instead of ignoring the mistake, think about what you can do so that it doesn't happen again. Even though it might feel like a very small step to look at those mistakes, it can help you build those habits. That can make you feel a lot more confident that the plans you put together are going to happen.
A huge part of financial adulting is also knowing where your money is going. That sounds very simple, but it's actually really profound knowing where your money is going. Meaning you know how much is coming in, how much you’re spending and what's going with different expenses.
If you know how much you want to be saving for your goals, you can put a price to your goals and break them down based on how long it will take you to get there. That's what I call a financial plan and putting together that budget.
What advice do you have for people who experience financial stress?
Financial adulting is a lifetime journey. I've been doing this for 10 years and I interviewed 35 experts for the book. The cool thing is — we can always learn and improve.
For example, I interviewed Tiffany Aliche, the Budgetnista, who talked about having a health and safety budget in times of financial hardship. Essentially, go through your budget line by line and say, "do I need this for my health and safety?" If yes, it stays in the budget. If not, cancel it or call the service and say "we have to put together a plan or I can't make the payment."
When it comes to investing, we often think about the risk of us losing our money. But the greater risk that we don't often think about is our human behavior. The advice I heard over and over again is to invest for the long-term and broadly diversify in low-fee funds. The beautiful part about investing for the long-term is that you don't have to watch your investments closely. You can have the time to wait out ups and downs in the market. Setting automatic investments can protect yourself from yourself.
How else can people protect themselves from risk?
Insurance can feel like next-level financial adulting, but having insurance makes you feel so financially adult. I had the wonderful pleasure of interviewing Jennifer Fitzgerald, CEO of Policygenius for the insurance chapter.
We walked through the different types of insurance and it was great because Jennifer was able to give a ranking of the first and foremost type of insurance to get and who needs it. We also talked about the types of questions you should ask before you get insurance. In this chapter I walk you through deciding when to get it, who needs it, how it benefits them, and understanding the need for comparison before making that decision.
When writing this book, did you learn anything new about your relationship with money?
As someone who talks about money all day, you do feel like you get to this level of expertise. And what I learned from the book is that there's so much to learn, especially in topics like insurance or taxes and estate planning. It reiterated that money is a journey and you're always learning and growing. That was a defining thing for my money relationship.
We’re a personal finance site, so I have to ask: Why should people spend money on this book?
My first book “The 30 Day Money Plan” was very focused on budgeting and money mindset. What I wanted to do with this book is cover all personal finance topics. When I first drafted it, it was double the length. Instead of just having my own perspective, I had interviewed 35 brilliant diverse experts to teach me and the readers.
I think another thing that was really important to me about this book is the second chapter on equity and personal finance. I set the stage immediately — the world of money and personal finance is not the same, or even at all similar, depending on your race, gender, sexuality, or if you have disabilities.
It is such a critical context for the conversation and I think it’s often missing in the personal finance realm. My goal for this book is to have people read through it and learn a ton. But it can also sit on the shelf and serve as a resource. Maybe you don't need life insurance now, but when it is time to get life insurance, you can turn to the chapter on insurance and read the interview with Jen and get what you need to take that next step.
I hope it serves as a resource for people to come back to, or even if your best friend texts you asking "what is this tax term?" You can use the book for that. I hope that it's valuable many times over, not just in the first read, but then also again and again later.
Image: Courtesy of Ashley Feinstein Gerstley
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