What one conversation about toilet paper taught me about the personal finance industry
And how we can continue to change the way people think and talk about money
Below is an edited excerpt from the first chapter of my book, You Don’t Need a Budget: Stop Worrying about Debt, Spend without Shame, and Manage Money with Ease. On Dec. 24, I’ll celebrate one year since the book’s release, a moment I’m proud to have shared with all of you (and one I’m so grateful brought many of you here!). If you haven’t yet, you can read the full first chapter for free here, and you can always pick up the book through Bookshop, your local library or anywhere you find books. (It makes a great gift, if I can say so myself!)
Thank you so much to everyone who’s supported the book this year — whether you told a friend about it, bought a copy, checked it out from the library, asked your favorite librarian or bookseller to stock it, or simply continued to read this newsletter so I didn’t feel alone after the noise of the book launch quieted down. YDNAB continues to connect me with incredible people and let me hear new stories and perspectives on money, and I expect it to have a long life of changing the way people think and talk about money. Thank you for being here for that!
In 2015, I was hired for my first professional job: a staff-writer position with a fast-growing digital media start-up. I was stunned at the opportunity. I’d been toiling away for almost five years as sort of a freelance writer, rarely securing stable work and barely cracking $12,000 a year in income from writing and occasional stints in food service.
When I entered the personal finance industry, I was a veritable poster child for the millennial in need of an injection of adulting, the cute word my cohorts coined for coping with the crushing reality of coming of age into an historic economic recession. I quickly became comfortable being the dumbest person in the room, and I wasn’t shy about asking stupid questions — all in the name of serving readers facing similar circumstances.
Around six months into the job, I joined our nascent editorial team for our daily stand-up to pitch stories. Someone had found a Washington Post article about a study out of the University of Michigan about “why poor people pay more for toilet paper,” and we pondered covering the study ourselves.
For the study, Professor Yesim Orhun and Ph.D. student Mike Palazzolo analyzed panel data from more than 100,000 American households to track purchases of toilet paper over seven years. They chose this sundry because it’s a reliable measure for spending across economic circumstances: Toilet paper is nonperishable, and we consume it pretty consistently. We don’t go without it just because we’re strapped for cash, like we might go without new clothes or haircuts. And we don’t buy more when we have extra money, like we might with food or entertainment.
The study found that people with less money pay more for toilet paper, because it’s technically cheaper in bulk. When you have a cushion of money (i.e., your expenses won’t drain your account before next payday), you buy the 24-roll pack. But the 24-pack costs more in the moment than the four-pack. When you have only enough in your pocket for the four-pack, and your bathroom needs toilet paper, you’re not going to wait just because the math says the 24-pack is the smarter choice.
“Having more money gives people the luxury of paying less for things,” as the Washington Post puts it.
I was excited to cover this study. We didn’t talk about this phenomenon in personal finance, and I was delighted to see science behind the experience I’d had for years. I’d bought the four-roll pack. Honestly? Sometimes I’d bought single rolls of toilet paper at a corner store because I didn’t have a car to get to the grocery store where I could buy the four-pack. And in my city apartment, I hadn’t exactly had the ample storage space bulk buying requires. I wanted to plant a flag in the personal finance space for those of us who weren’t doing all the right money things all the time.
I wanted to plant a flag in the personal finance space for those of us who weren’t doing all the right money things all the time.
My coworkers wanted a different tack, though. They thought the story should be about how to avoid spending more on toilet paper, even when you’re broke. That’s what we did in the personal finance industry.
“We could suggest using a credit card to buy in bulk, then paying off the balance with your next paycheck,” one writer suggested. “We can explain how to figure out when it’s worth it to pay a little interest if it’ll save you money in the long run.”
“But what if you can’t get a credit card?” I asked.
“What do you mean?”
I wasn’t sure how to respond. What was missing from my question? I reworded it. “What if you don’t qualify for a credit card, so you have to buy everything with cash?” Then, considering my own 520-something credit score, I added more bluntly, “People who can’t afford 25 bucks for bulk toilet paper probably don’t have a great credit score.”
“Oh,” she replied, with empathy but genuinely surprised. “You really think so?”
I scanned the circle for others to back me up, but their faces all registered surprise, too. No one else had thought of this possibility.
My coworkers weren’t stupid or unsympathetic. They were brilliant thinkers who shared knowledge generously and made me smarter with gentle prodding and an eye for the questions readers would want answered. They were college-educated and experienced. They’d traveled to far reaches of the world and met diverse communities of people. They volunteered more than I did, donated to causes they cared about, got out the vote, and made fair-trade, eco-conscious choices whenever possible. We were the same in so many ways: ambitious women in our 30s obsessed with the written word and concerned with equality and the environment and other social causes. Until that day’s stand-up, I hadn’t noticed I was different from all of them in one stark way: They’d all been raised in middle-class1 families.
What did it mean for our readers that the bulk of our advice came from a middle-class perspective? For that matter, what did it mean for the readers of almost every publication that a vast majority of journalists are white men from the middle class?
The industry, I realized, isn’t serving most people well.
For most of our readers in personal finance media, their relationship with money is, at best, complicated. Far too few Americans have access to enough resources to feel secure in their options for food or housing. Others have more than enough but hoard it without a plan because of scarcity anxiety. Still others live a spendthrift life and get by fine, but are constantly nagged by a worry that there’s something they should be doing differently. Or their tenuous financial plans crumble at the slightest suggestion of trouble.
I used to tell people I was grateful to work in personal finance because what I’ve learned has helped me get my own money under control. Throughout my time as a staffer and freelancer in financial media, I grew a small IRA, built a $20,000 comfort fund, set up automatic bill payment, finally got a credit card and raised my credit score to above 750. But I’ve stopped giving financial literacy the credit, because I know the real reason my finances got “healthier” after I got that first job: I had more money. I took a job with a salary that quadrupled my income, and voila — I became a lot more “responsible” with money.
I’ve stopped giving financial literacy the credit, because I know the real reason my finances got “healthier” after I got that first job: I had more money.
I didn’t conquer budgeting or eliminate debt with extra fervor. I opened a secured credit card because I had the $200 to spare for a deposit, and my credit score shot up 100 points, opening a ton of doors. My income kept rising, tipping over $100,000 after I returned to freelancing, and the financial anxiety I’d experienced throughout my 20s miraculously vanished.
My colleagues in financial media and education often talk about the paradox that the people who need financial education most are the least likely to have access to it. But there’s an inherent condescension to that idea. It’s based on an assumption that poor people have a greater need for financial education, feeding a narrative that knowing the right set of rules unlocks the key to wealth.
That assumption isn’t borne out in the data, though. Increased access to financial education doesn’t necessarily mean improved financial circumstances later in life. Racial and class disparities in financial knowledge and wealth persist even among adults who had equal requirements for financial education in high school, and parental income remains the greatest predictor of a child’s income mobility later in life.
Financial education can’t overcome the systems and policies that create and maintain disparities — especially when that education is created within those systems.
The reality is that wealth begets wealth, and we exist in a system that perpetuates that truth.
A reflection, one year later
I wrote You Don’t Need a Budget to bring that truth into the conversation about personal finance, because we so rarely acknowledge it in this industry.
Yes, people are aware of the forces of capitalism and the inequalities in our society — but those macro realities don’t often trickle down into our micro conversations about personal money management.
Instead, personal finance media and education focus, as my early colleagues did, on helping us do the math to make the most fiscally optimal decisions. We ask when does it make sense to use a credit card?, but we don’t ponder whether the reader has access to credit or whether they have to use credit regardless of the math because they don’t have access to other resources. We pass on one-size-fits-all advice that ends up working for almost no one — ignoring what it really looks like to save for retirement or pay off debt in a society that doesn’t provide the support we need.
You Don’t Need a Budget and the ongoing conversations we have through this newsletter are my attempt to counter those failings of the personal finance industry.
We have to stop offering optimized advice that doesn’t work in real life and start hearing from real people about the real relationships they have with money. Though I like to share others’ stories and experiences, and I love encouraging experiments and trying new things, I didn’t use YDNAB to offer an alternative “better” way to approach your finances. This is what keeps happening in the personal finance industry, and it keeps missing the point.
We have to acknowledge the system we’re all living in and understand that the way each person survives this system is unique to them. As a financial educator, the best I can do is make the system visible for readers and help you understand your options within it. That’s what I aimed to do in writing YDNAB, and I hope the book offers that for readers who for so long have felt — like I did in that conversation about toilet paper — excluded from our cultural conversation about money.
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Note that this excerpt is from the book, which I wrote in 2023–24. I recently wrote about whether or not I should continue to make a distinction between working class and middle class:
So true, often the answer for money problems is money. I can teach someone how to portion a tiny pie but a bigger pie is really the answer.
strong piece!