I am a grown adult and I just learned what an annuity is yesterday. I knew what the word meant generally because it’s in one of my favorite Jane Austen quotes “People always live forever when there is an annuity to be paid them.” In the Sense and Sensibility, it is money given to in-laws, not a financial tool for setting aside a steady income for retirement.
Apparently, there are lots of different plans of paying for yourself and taking care your kids and your health and investing in long-term financial goals. I regret to say that I have spent very little time learning about most of them until recently.
When you grow up tight financially, no one ever tells you about anything about money beyond a basic savings account, and if they did, you had no mental place to store that kind of information. Online, there are many articles about saving and thriftiness, and while those are important practices, you actually have to have money to budget before a long-term budget makes much sense.
When I was living on my own in my mid-20s, I had a job at a store. It was paying fifty cents over minimum wage and I worked myself up to manager position, which was an additional dollar. I had two roommates and I drove an ancient car. I didn’t eat out. I didn’t buy coffees. I wore clothes that I had from before. I couldn’t ever get a full 40 hours of work a week because my employer didn’t want to have to pay for any benefits so I wasn’t covered for dental or medical at the time. Because I didn’t work a full 40, I also had a hard time keeping up a steady income, so I took a side-gig photographing weddings. That paid well, but the wedding business slows down precipitously in winter because of the darkness and rain in the Pacific Northwest. Between the cost of fuel and my cell phone and the rent and my very meager food budget, I was still falling a little bit behind every month. The answer was not reusing yogurt containers, I had to make more money.
My new part-time job became looking for a better job. That following spring, I finally got offered full-time office work that paid benefits. I still remember the massive relief of suddenly being able to pay for everything.
The budget that they talked about in articles now made sense because instead of being half of my income, my rent was only a third of my income, so I had money to save as well. I was also able to buy a safer and more economical car. It had better gas mileage and didn’t breakdown all the time. I also had health benefits that paid for my glasses and teeth. And there was a 401(k), something to put away for my future.
So my financial takeaway is 1. It’s important to make sure you are paid well and 2. Put in the extra effort to learn more about finance because there are better ways to live.
