27 Things I Learned About Money by 27

I turned 27 last week, or as my young sister likes to say, I’m three years away from 30. A lot has changed since I started Broke Millennial as a 23-year-old woman not even two years into my post-college life in New York City. My relationship with money has evolved. My knowledge has certainly sky rocketed. Peach and I finally live near each other – which brings a whole different set of money conversations to light! I started to read back through old posts and interviews as well as reflect on the direction I’d like to see both my career and financial life go in the next few years before 30. Hey, it’s my next significant milestone age. In this reflection I’ve come up with 27 things I’ve learned about money by the time I turned 27.

  1. How I value my time: Some of the things I used to do to pinch a penny seemed like the storyline of TLC show (hello freezing water bottles to put in my bed during the summer months). Sure, I still do some extreme frugal moves, but one thing that’s drastically changed is how I value my time. This sometimes has to do with convenience, like taking an Uber to the airport instead of the bus, and sometimes has to do with how much I charge for my work.
  1. Out-earning your partner when you’re serious, but not married, causes interesting financial challenges: Peach and I aren’t married, aren’t even living together, but the fact I have a positive net worth (he has student loans) and out-earn him sometimes causes interesting tension. It’s certainly made us talk through our money strategies and goals to an excessive degree – but that’s probably more credited towards my general love of personal finance. We have plans for how to handle money when we’re married, but what happens when you’re really serious but not legally yoked is a rarely spoken about topic.
  1. You’ll gravitate towards people with similar financial values: Maybe not in college and maybe not in your early twenties, but eventually you’ll start to see your circle of friends have eerily similar values to your own. Sometimes it’s seemingly silly differences like whether their club folks or dive bar aficionados and others it’s about whether they’ll accept “hey – want to just split a bottle of wine and chat instead of paying $15 for a single cocktail?” as a serious Friday night option. Or maybe that’s just getting older in general.
  1. Invest in yourself: Accumulating money to just sit pretty in investing or savings isn’t always the best option. Whether it’s picking up a new skill or using a big chunk of your savings to develop a short film that gets into TriBeCa (#shoutout to my sister) – investing in yourself is a risk worth taking. There are times I regret not taking a leap of faith and sticking to the traditional, safe path. Hopefully, I’ll feel confident taking my own advice at 27 (or at least by 30…).
  1. Dogs are expensive (and worth it): 26 was the year I made one of only two impulsive decisions in my lifetime and adopted Mosby. He came into my home as a slightly beat-up (probably 7-year-old) snuggly dog. I panicked immediately Mosby surgery after we got home and wondered how I could possible adjust my life around caring for another creature who solely depended on me. Now, I’m full-blown dog mama status (seriously, check out my Instagram). Mosby is insanely good for my mental and physical health – no backyard means lots of walks – but I do pay a price. He’s cost me $4,204.16 in almost a year thanks to an unexpected surgery, flying him with him on a few vacations, and my general over indulgences in buying him top-of-the-line food and treats.
  1. Opinions are a lot like… There are lots of colorful ways to end that sentence, so you can fill in the blank yourself! Everyone has an opinion with how money should be handled, spent, saved, invested or whether debt can be good or is never to be touched or if credit scores are imperative or Satan’s incarnation in the financial world. You need to develop your own opinion on financial matters. Yes, sometimes there is a right answer – like it’s important to be on the right side of compound interest. But sometimes it’s about finding what’s best for you and not just following the path of the latest financial trend.
  1. Personal finance is PERSONAL: Nothing like regularly sharing your opinions with a wide variety of audiences across multiple platforms to really reinforce how to put the personal in personal finance. I acknowledge that some of what works for me will not work for others, but just starting the conversation gets everyone moving in the right direction!
  1. For the love of God – set up your beneficiaries: It seriously takes minutes of your day to set up beneficiaries on your financial accounts. Your account might make it easy by prompting you to have a beneficiary under the account management tab or you may see the terms Payable on Death (PoD) for bank accounts or a ToD (Transfer on Death) for investments. Yes, your bank account should also have a PoD. This is just a kind way to save your family some serious angst if you meet your maker in an untimely way. I see it as an act of love. Otherwise, your money could end up in probate court! Even just a little money…
  1. It’s time to have a will: Yup, on a roll about death right now. Odd for a healthy 27-year-old woman, but hey, we’re all going to die. I realized earlier this year that it was time I ensure my money and special belongings ends up in the hands of my loved ones with no stress on their end. I also have stipulations in my will about where Mosby is to go and even have a special amount of money earmarked for his care. Plus, getting a basic will put together is simple and pretty cheap. P.S. Your beneficiaries do trump what you put in your will. So you might want to keep that in mind when you get married, have kids, etc.
  1. Everyone loves the term F@*k Off Fund (and should have one): This idea, while not exactly a new phenomenon, went viral in early 2016. While I’ve always be a saver, the concept of money specifically earmarked so I can walk away from a sticky situation is motivating. I don’t personally think of my F-Off fund as a separate account from my emergency savings fund, but the term is just way more fun. I should see if I can rename my savings account…
  1. Name your savings accounts: Speaking of naming savings accounts, do it! It’s my favorite simple trick to save money that isn’t automating. You’ll find yourself more likely to stick to a goal when you’re depositing money into your “EuroTrip” fund or your “Ditch this Job” account instead of “Savings Account”.
  1. Early retirement movement 101: I recently read an interview I did on another site a few years ago about the FI/RE movement as it was just gaining mass popularity. Woof, have my thoughts changed. While I still don’t think I’d feel financially secure with just a million dollars in the bank and a family to raise in my thirties or forties, I’m starting to better understand the financial independence/retire early movement. To me it’s more around lifestyle design ala Tim Ferriss and structuring your life to be able to work as you see fit and not feel the need to exchange your time for money in the traditional 9-to-5 sense. And wouldn’t we all love to be there ASAP?
  1. Sharing your net worth with friends is okay: Unlike other bloggers, I’m not open about my net worth on this site. 11401047_10152863018227411_7914065475825605415_nThere are a variety of reasons for this, but a big one had to do with not wanting people who actually know me (friends, co-workers, extended family) to have that much information about my financial picture. I didn’t want it to get thrown in my face that “yes, you can afford x,y,z” when I used, “eh, I don’t really want to spend money on this right now.” My values and other people’s values don’t always align, so it can frustrate folks when I’m unyielding about dumping money into something they find worthwhile. However, I did open up to a few people about my net worth recently because it felt like the right place and time. I also trusted these loved ones not to use the information as justification for trying to get me to do things in the future.
  1. Over-extending yourself is a budget buster: The biggest mistake I made at 26 was over-extending myself, a lot. This comes with both health and financial repercussions. A week into being 27 and things aren’t exactly going any better. It is a goal of mine this year to figure out when to say no and redirect some focus on self-care.
  1. You can’t fix (money) stupid – don’t be a 20-something idiot: Getting paid per clicks or just wanting to go viral is creating all sorts of obnoxious content. Some of my least favorites are the articles about money that help justify bad financial decisions in the name of YOLO/FOMO/insert any other dumb-dumb millennial acronym here. You don’t need to be blowing money to live a full life. Even in New York City! I know, I live here. Unfortunately, no amount of reasoning is going to fix stupid. It’ll probably take being 45 with no retirement savings and $40,000 in credit card debt to get the wake-up call that something needs to change. At which point, I’ll happily say, “told ya so!”
  1. Re-evaluate your budgeting style: I’m a fan of a budgeting style I affectionately call the “No Budget Budget”. It’s a bitIMG_3104 of a mash up between different well-known budgets with a tribute being paid to zero-sum budgeting without the focus on categories. I pay myself first (savings + retirement). Pay my bills. Then the remaining money can be spent as I see fit. This strategy has proved effective for me in the last few years, but it’s time to switch up my style. In my 27th year of life, I plan to give the zero sum budget it’s due diligence in an effort to double down even further on my savings goals and prepare for some next steps in my life.
  1. “Don’t let other people spend your money” is easier said than done: This probably got born out of the “Keeping up with the Jonses” era idioms – but sometimes other people are seriously going to spend your money. Looking at you attending weddings and the $15,000 price tag I believe is attached. Sure, I could say no – but I do genuinely want to attend many of the weddings to which I’m invited as well as stand up next to dear friends and family as they profess their love to their partners. Therefore, I save for other people’s weddings and know full well they’re really getting to spend my money…
  1. Have a long-term vision: Like most normal people, I hate the question “Where do you see yourself in X years.” Truthfully, I don’t really know. I have a couple hazy day dreams about where I’d like to see my life by 30, 35 or 40 – but I’m not sure what my #1 life goal really is. I save to be able to life without stress over paying my bills and to be able to take some nice trips, but mostly, I save just for the sake of saving. It’s important to start developing a long-term vision so there are actionable steps to start working towards. Not in a vision board sense, but in a lifestyle design and career building sense. It may mean needing to quit certain projects or pivot along the way, but it’s time to really focus in on what will make me feel fulfilled while also paying the bills.

    Lightening Round

  1. You can crack the coveted 800 credit score by just using credit cards as your only means of credit. You don’t have to have loans in order to build a good credit score. #humblebrag obviously.
  1. Lifestyle inflation is very real and very dangerous. Boost your savings as soon as that new paycheck hits the bank account.
  1. A cash diet is like eating clean (or juicing) for your finances and probably worth giving a try to make your bank account IMG_3167feel better.
  1. Never “give a loan” to a person with whom you are close. Give a gift with no strings attached. Awesome if he or she decides to repay you, but be prepared to never see that money again.
  1. Do a net worth check in at least once a month. It’s important for you to see how your investments are performing and if you’re really saving like you thought and (for those with debt) – how much progress you are or aren’t making.
  1. It’s important to talk to your parents about their financial situations, especially as they near retirement.
  1. Don’t offer people advice about their financial habits unless it’s solicited.
  1. Assuming life would be much different if you made X probably isn’t true. When I earned $37,500 a year, I believed NYC would be my playground if I made $80,000. I now earn more than $80,000 a year and I indulge every so slightly more than when I occupied the $37,500 bracket, but mostly I just save more.
  1. Money can indeed bring you happiness – to a degree – but sometimes it’s important to stop fixating on dollars and cents so much.
Posted in Millennials, Random Tagged with: ,

$15,000: The Price Tag of Attending Other People’s Weddings

“Hey – guess who got engaged today,” Peach asked.

My stomach dropped. Our combined dance card felt dangerously full already with seven weddings populating our calendars from May to November.

“Who?” I choked out.

Peach smirked, clearly messing with me.

“Not nice,” I retorted, while wishing I could cradle my travel savings account and whisper in soothing tones, “I won’t totally deplete you.”

Lately, weddings seem to dominate both conversations and my bank account. The onslaught started about four years ago when I’d just hit 23. That’s not to say I’d been wedding free for the first 23 years of my life, but I didn’t have to pick up the tab as card-carrying member of the Bank of Mom and Dad.

Planning for the inevitable

weddingSuddenly, entering my mid-twenties ushered me into a phase of life in which everyone around me seemed ready to get legally yoked to another human being. I was also a big girl with big girl paychecks – not to be confused with big paychecks -who no longer had an active account at the Bank of Mom and Dad.

After a year of five wedding invitations, and no end in sight, I decided it was time to stop trying to squeeze variable line item into my budget and instead give “Other People’s Weddings” its own savings account. It’s part of the reason I routinely joke that I’m saving for a wedding, just not my own.

Previously, the “Other People’s Weddings” fund served as my travel savings account, but considering most of my vacation had been co-opted by true love, the logic followed to just transition the account too.

The account gets funded by 25% of each freelance paycheck I earn. To clarify, that means I’m exclusively using side hustle money to pay for travel and focus my daytime job salary on other financial goals. Part of the reason I freelance is to subsidize non-essentials (in the sense of survival) like travel. I aim to have $2,000 to $4,000 available at any given time (depending on how many flights, hotels, presents and bachelorette parties I’ve recently attended).

On a few occasions, Peach and I have leveraged a wedding destination into a longer vacation. When my best friend got married in Dallas, Peach and I rented a car and road tripped with another friend to Austin the day after the wedding.

Always hitting the road and trying to be frugal

10301127_10152193203876137_4265397374233023556_nUnfortunately, no one seems to want to get married in New York City. Probably because the average cost of a wedding here is something insane like $70,000! So, that means I’m hitting the road for each of these invites and paying for accommodation.

Then I have to factor in the presents. The average present costs me about $75. To let you in on a little secret, I wait until holiday sales to shop registries because pretty much everyone registers at Macy’s. Macy’s loves to do sales for every federal holiday (President’s Day bonaPeach&Erinnza folks!). These sales often extend to registries. My biggest gift buying success thus far was $220 worth of gifts for $112 including shipping and taxes, which Peach and I split.

Let’s not forget about the outfit. A woman once said to me, “Facebook makes it so hard to re-wear outfits to weddings now.” I can safely say I do not care. A quick scroll through my photos on Facebook shows that I wear the same handful of dresses to everything, unless I’m a bridesmaid. Outfits for a wedding is an easy area to pinch some pennies. It can even be simple if you’re a bridesmaid by trying to buy the dress on consignment or via eBay, especially if it’s an on-trend selection.

The cost of coupling up

1974286_10152510929126137_6830303270171410366_oYou may be scoffing at my headline number of $15,000. I know – it sounds insane. Probably somewhere in the ballpark of what you’d want to spend on your own wedding. You alone may not tip the scales at $15,000 – but let’s consider that you’re likely to couple up either temporarily or permanently at some point during the peak of wedding invites. Your partner is going to have weddings to attend too, which means you need to fork over more money to travel and possibly for people you barely know.

You may decide to split up for wedding season – not break up, but just not go together. Peach and I have debated this on a few weddings; however, many of our weddings this year are family and mutual friends.

Here’s my thought process on cost:

These estimates are based off the personal experiences of a frugal person instead of national averages and surveys.

  • Attending the average wedding is probably going to cost you around $600 for travel + hotel + gift + miscellaneous things like needing to feed yourself.
  • You’ll probably be invited to at least 12 weddings during your mid-twenties to late-thirties due to a mix of high school friends, college friends, work friends, family and even second marriages. This gets you to $7,200.
  • Then odds are you’ll be invited to a few bridal showers and bachelorette/bachelor parties, so let’s toss in another $2,000 because you know you’ll need to travel.
  • Not to mention, you’re going to be a bridesmaid or groomsmen in probably a minimum of two weddings, especially if you have a sibling and your spouse (or future spouse) has a sibling of the same gender as you. That likely adds another $2,000 on top of the existing cost factored in earlier.
  • Now we’re at $11,200.
  • Your partner (existing or future) will be getting invited to weddings – so another $3,800 isn’t a crazy amount to anticipate in additional weddings.

Running my numbers

family wedding

Family photo: we’re actually missing a few

When I shared this $15,000 estimation with a friend of mine, she was quick to point out that I have a massive family. Both of my parents come from large Irish-Catholic families, so I have 31 first cousins before factoring in cousins by marriage. I’m towards the end of the pack in terms of birth order; so many of my cousins had tied the knot well before I became financially independent (thank, God!). Eight of the 18 weddings outlined below were (or are) family – so family doesn’t exclusively skew my estimates.

 

 

2012, age 23: Two* (approximate cost: $600)

Locations: North Carolina and Maine

2013, age 24: Two (approximate cost: $500)

Locations: Virginia and North Carolina

2014, age 25: Five invites, four attended* (approximate cost: $1,800)

Locations: Virginia, Texas, Upstate NY, Massachusetts and Maine

2015, age 26: Two* (approximate cost: $850)

Locations: Both Western New York

2016, age 27: Seven* (estimated: $3,100)

This is the first year I’m actually tracking every penny spent to get an accurate total.

Locations: Pennsylvania, Upstate NY (4), Vermont, North Carolina

Approximate Total: $6,850 — And I easily have another four to five years to go before exiting peak marrying years of my friends and remaining single cousins. 

* – include being a bridesmaid in at least one
Note: Some of these numbers are low because they were family weddings and my parents were kind enough to cover the costs of accommodations.

Just say no (sometimes) 

Screen Shot 2014-08-21 at 7.05.13 PMTotally horrified by the wedding apocalypse I’ve just laid before you? There’s a simple way to avoid paying the cost of a car for other people’s weddings. Just say no. Not always of course, but there will likely be some invitations to which it wouldn’t pain you to pass along some kind regrets. For the cripplingly polite, send a small present along with your well wishes.

Posted in Budgeting, Millennials, Relationships, Saving money

Your First Credit Card – What to Consider

Sponsored by Capital One

Picking your first credit card can feel overwhelming. There are hundreds to choose from and how are you supposed to know what’s best for your unique situation? Parents, older siblings and friends may give advice – but personal finance is personal. What works for your loved ones isn’t necessarily the best card for you. However, there are six factors you can take into consideration to narrow down your options and find the credit card that’s best for you as you start building your credit history.

1. Ditch the credit card fees

43% of our generation deem little to no annual fee as the most important factor when considering which credit card to get, according to a Capital One survey. This gut feeling is spot on.

There are lots of credit cards out there all with various benefits, but why pay an annual fee (or any fees) if you can avoid it, especially when you’re a fledgling adult just starting to figure out the basics of a budget? Plenty of cards offer no annual fee. Run far away from any company asking for an activation or startup fee.

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2. Be sure the credit card you select reports to the credit bureaus

A credit card serves as a simple, effective way to start building your credit history and score. It allows you to get into the coveted 700+ credit score group without taking on any debt (like loans), as long as you pay off the card on time and in full every month. However, you can only get there if your credit card usage actually gets reported to the credit bureaus – or at least one bureau. It’s likely any card you take out would report to at least one bureau, but it never hurts to confirm.

3. Understand the APR and how to read your bill

You want your credit card to work for you. It’s important to understand the terms, especially how the annual percentage rate (APR) on your credit card works. The APR will be the amount of interest you’re charged on those items you bought if you don’t pay off your card in full by the due date. Paying just the minimum due, or anything less than the full balance, will lead you down the path of paying interest. Be aware of the APR rates when you are looking for a credit card and factor it into your decision making. Or even better, just avoid it from the get go by paying off all your purchases on time and in full every month.

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4. Access to your credit score

There are plenty of tools out there allowing you access to your credit score, but it is important to find one that is not only FREE, but also offers more than just your number. These days, you can access versions of your credit score for free through a variety of methods, but one of my personal favorites is having access via my credit cards. Four of my six credit cards provide monthly credit score updates. You can also use 100% free tools like CreditWise from Capital One, which is available to everyone – whether you have a Capital One product or not. Tracking your credit score helps you see if your behaviors are helping or hindering your progress. It’s also an excellent way to detect identity theft if your score suddenly plummets when you haven’t changed your own behavior.

5. Fraud security

Listen, fraud happens. Even the most diligent among us might eventually get hit with a dose of credit card fraud. I myself have been victim four times on three different cards and it’s a pain. It would’ve been even more stressful if I were on the hook for any of those charges. Be sure your credit card comes with a $0 fraud liability benefit, so you won’t be liable for that $700 shopping spree someone went on in your name.

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6. Rewards shouldn’t be your focus – yet

Rewards are awesome. Trust me, I’ve done my fair share of traveling by leveraging credit card rewards. But focusing on rewards is more of purple-belt-level financial power, and as a first-time credit card user, you’re a white belt. Capital One’s Platinum MasterCard gives those new to credit cards access to a regular, unsecured card with no annual fee. Not only that, the card comes with added perks that will help you build your credit with responsible use, such as alerts and the ability to customize your payment due date.

Once you’ve proven to yourself – and the credit card companies – that you can handle monthly access to credit without getting yourself into financial trouble, then you can consider leveling up to a card with healthy rewards.

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How did you select your first credit card and what was most important to you?

Disclosure: I was compensated for this post for Capital One, but opinions and advice are my own. However, there are no affiliate links in this blog post. I will not receive payment if you sign up for any products mentioned in this article.

Posted in Credit Cards Tagged with: ,

Balancing Unequal Incomes in a Relationship

There’s banking when you’re married, banking when you’re single, but what about that awkward gray area when you’re single in the eyes of the law but you’re in a long-term, committed relationship? How exactly do you balance the books when one of you out earns the other by a significant amount?

This question has been on my mind a lot lately.

11695966_10153188079031137_7623772260791663767_nPeach and I aren’t married nor are we are even living together, but our finances are still intertwined in a unique way because we are dealing with drastically different budgets. Peach is a high school history teacher with student loan debt, while I have a full-time job plus freelance income and no debt. Even discounting the debt, there’s several tens-of-thousands of dollars between our annual incomes.

Our income and net worth disparity isn’t an issue for us day-to-day. I’m not a big spender and relatively low maintenance about what constitutes a fun night out. Peach is the same. We’re both relatively frugal and save to travel and indulge in an occasional expensive experience. We go Dutch on most dates or just alternate picking up the bill. And because we aren’t living together, none of our expenses are linked, except maybe Mosby – but I cover the cost for him 95 percent of the time.

Then a unique opportunity presented itself and for the first time our financial situations were the source of tension.

The invitation

A few weeks ago a good friend asked if Joe and I wanted to join her and her boyfriend and other friends in Vegas over Fourth of July weekend. My friend’s boyfriend is no stranger to Vegas and actually could get us deeply discounted rooms, even on a holiday weekend. She figured we could keep the trip relatively affordable on a $500 budget for four days – assuming we didn’t fancy ourselves gamblers (which we don’t). This would be my first trip to Vegas and I relished the idea of going with some friends who knew the ins-and-outs of the casinos and general merriment to be had.

The problem arose because this budget didn’t include airfare. Flying across the country on a holiday weekend isn’t exactly thrifty. But I had some frequent flyer miles to burn, but not enough to accommodate Peach in addition to other trips I have planned in 2016 and early 2017. I could also afford the trip if I needed to pay for it out of pocket because I specifically save for travel and usually have around $4,000 earmarked for trips at any given time.

10547708_10152365576876137_7387312402087983774_n

We’re talking professional guest/bridal party status.

When I first pitched the idea to Peach I’m about 90 percent sure he thought I was pulling a belated April Fools joke. We’d just been talking about how we were going to handle attending seven weddings this year and here I was throwing Vegas into our calendar? Peach, being the kind soul he is, didn’t immediately shut down the idea. He indulged my current travel fantasy for a bit before gently trying to bring me down to earth by redirecting my focus to the aforementioned seven weddings, the two bachelor parties, one bachelorette party and bridal shower, as well as a couple of previously booked trips we had to handle.

When what’s mine isn’t yours…

Then, I started to get defensive (in my head)…

I had already budgeted for all those trips and still had money left over to blow on a trip to Vegas if I wanted. Sure, Peach wasn’t asking me not to go, but my mind started to spiral with rebuttals anyway. Why shouldn’t I get to go if I wanted to go? He didn’t have to come if he felt it was too big a budget buster. After all, we’re not married. I can do what I want with my money. Sure, we’d talked about having a relaxing Fourth of July at home in NYC – but those plans weren’t set in stone.

As my brain stopped yelling in indignation, I recognized that I’d want him there with me to enjoy the experience together – especially with it being more of a couples’ trip.

If we were married…

The odd part of all this posturing is that I knew this conversation would be so much easier if we were married. If we were married then our money would be joint and it wouldn’t seem emasculating or slightly outrageous for me to pay for a trip, because again, it’s a joint pot. If we were married, then we’d have 100 percent transparency about our budgets and spending habits to see if we could mutually afford the trip. Currently, we’re pretty open in communication but there isn’t access to each other’s funds or regularly updates about our individual bank accounts.

13072778_10153767820061137_4997090207511301795_oBeing long-time partners who don’t share our finances does make certain aspects of life just a little more complicated, particularly because our incomes and net worths aren’t equally matched. I also hate to say it, but it’s seemingly a bit more awkward when the woman is the higher earner. It wouldn’t be strange if I was a man talking about taking my girlfriend on vacation, but somehow it can be emasculating if a woman pays for her boyfriend to come along.

Peach does an incredible job of being progressive about our current income disparities and doesn’t begrudge me for out earning him nor does he get defensive if I pick up a bill here and there. Then again, it’s likely this disparity in income may not last forever. You never know what the future will hold for either of us and therefore it’s important we don’t allow money to set up some sort of power structure in the relationship.

I respect that he chose a profession that’s incredibly important, but isn’t compensated the way he deserves. I respect we come from different backgrounds and the choices I made about college meant I graduated debt free and he ended up with student loans. I respect that we find value in different things and aren’t always going to see eye-to-eye on when and how to spend money. And right now, I have to respect that it just makes more sense for us to save our money (and take some down time between weddings) and do Vegas another time.

How Peach and I avoid constant arguments over money

  • We’re open about our individual financial situations and our current and future money goals.
  • Neither one of us is a spender – which means there isn’t tension about someone not keeping up.
  • We set budgets for most things we do like gift giving at Christmas and how much to spend on a vacation, so there isn’t unevenness.
  • We talk about finances quite a bit – more than the average couple I’d guess – so we’re on the same page.
  • I’m willing to pay a bit more if I want to do something for which his monthly budget cannot cover.
  • Peach is man enough not to be uncomfortable with the fact I out earn him and I’m now announcing it for the world to know.
  • We speak honestly about how we think money should be handled in a marriage, which gives us a framework for how our incomes will be used in the future.
  • I constantly appreciate and reflect on all the non-financial ways Peach helps bring happiness and balance into my life. He’s a stabilizing force and our different backgrounds do help keep me in check when I get a little too amped up about the importance of the almighty dollar.
Posted in Relationships

Take the Risk and Invest in Yourself

Nearly a decade ago I left for college with the intention of getting a degree in theatre and then bursting onto the scene in New York City as an actress. I didn’t fantasize about being famous, but rather about being in plays with social missions that would spark conversations and change public opinion. It’s no surprise I adored shows like Rent, The Vagina Monologues and Fat Pig.

It didn’t happen.

The biggest part of the reason it didn’t happen is because I never really tried. I went to a university with absolutely no notoriety in the theatrical world. I landed a lead as a first-semester freshman and instead of encouraging me it made me feel like there was no competition to push me and develop my chops as an actor. By the time I graduated, I’d talked myself out of even giving it a proper go and instead focused on finding fringe ways to experience the entertainment business without having to risk failure.

Then I landed as a page at The Late Show with David Letterman.

Spending a year of my life surrounded by aspiring comics, writers, actors and actresses who pushed themselves daily to create content and risk humiliation on stages around New York City just made that little voice in my head go, “See, you don’t want it badly enough. If you did, then nothing would stop you. Now get back to making this lady’s bone dry cappuccino.”

So, I let the little voice of doubt win.

After my gig in the often-not-so-glamorous world of entertainment ended, I snagged the first salaried job with benefits that would have me and then stumbled into a short-lived career in public relations. Thanks to the sheer boredom I felt about my then job, I returned to my childhood love of writing in my spare time (mostly because I could do it for free) and Broke Millennial was born.

While this story does have a happy ending, I offer it up as a cautionary tale about what happens when you fail to invest in yourself and follow your dreams. The reason I say this is because I’ve been able to live vicariously through a special person in my life and get a glimpse into the should’ve, could’ve, would’ve of my decision to avoid potential failure. That person is my sister.

13007291_10153745165556137_4197155523140332029_nMy younger sister (even though she doesn’t look it) of three years did everything exactly as I wish I had. She believed in herself. She invested in herself. She dragged herself through the trials and tribulations of freelancing full time and never being quite sure when she’d be getting another paycheck. She dealt with balancing paying gigs with the pursuit of creative projects. Then, at the tender age of 23, she found herself a co-writer/producer/director of a short film in the Tribeca Film Festival.

But let me go back to the beginning.

It all started on a warm summer’s day in 1992…nope, too far.

Cailin began her journey by making a risky college decision. She went to film school. This wasn’t just any film school. Cailin went to number one film school in the country: University of Southern California. Sorry, NYU – it’s true. Suffice to say, she had the talent from the get go.

Through four years of college, I fielded many a phone call from her questioning her career desires. Did it make sense to pursue not only a ridiculously competitive field, but also one not particularly kind to women? Would she ever make it or would she instead just turn to a desk job within a few years of graduating once all the hustling and working for free got old – and unsustainable? And as with all talented individuals, she dealt with some imposter syndrome and voiced concerns about whether or not she was actually good enough.

Then graduation hit and she left the cozy cocoon of USC in May of 2014 and started trying to make it on her own, or at least pay her bills.

The first year came with lots of highs-and-lows. She learned the hard truth about determining your financial value and how to market yourself and network for jobs. She realized how easy it was to set a price that meant you were actually making less than minimum wage because you’d pull 20-hour days. She learned she should’ve listened to her sister and filed quarterly estimated taxes. But she kept pushing, while occasionally calling to voice some doubt about her chosen career path.

During this time, Cailin and two of her cohorts from USC kept working a project born out of summer boredom. (Apparently getting inspired when you’re bored is a thing in the Lowry family). The idea was for a TV show focusing on four women in a band who weren’t boy-crazed and instead actually wanted to be successful. You know – like how we empowered women are in real life but never actually gets reflected on TV?

The three of them kept writing and re-writing drafts of a pilot episode as well as original music for the show. Eventually, they 12961413_10153742971106137_3902783143092027630_ostarted getting some attention and meetings with people that pretended to matter and thus created a “bible” aka a huge document with proof of concept that you’d take into a pitch meeting. Cailin would keep calling about these big meetings that seemed to go somewhere to a point, and then traction would just stop.

Tired of feeling like folks (or rather middle-aged-white-guys) just weren’t totally grasping the concept of Girl Band, the ladies took matters into their own hands and decided to invest their own savings, and capitalize on the friend economy of having other wildly talented friends who could pitch in for free, to create a pilot episode.

Months passed and rather on a whim, Cailin and her two co-creators decided to submit the film to the Tribeca Film Festival. The notion of being selected seemed absurd to these three smart, driven, talented women. So, Cailin went back to life as usual. Hustling to make ends meet while writing in her limited spare time and trying to figure out where exactly she wanted to go next.

Then the phone rang.

Tribeca came a calling and invited Girl Band to have its world premiere at the festival in the Shorts Program.

This is only the beginning. But the point is that my sister invested in herself, believed in herself and fought through the downturns in freelance life to keep pursuing her dream. There may be a day she decides to walk away from the entertainment industry, but I doubt she’ll ever regret investing her time, money and creative capital to make her dreams a reality. Because no matter what happens next, she’s already achieved the greatness so many of us only dream about because she was willing to take the risk. For that reason, and plenty of others, she’s a role model to me – even though she’s my little sister.

For those interested in freelance life, I offer you a little insight from the always witty Cailin:

Here is a partial syllabus for the class on freelancing I wish I had been given the option to take in film school:

  1. Much of your life as a freelancer will be spent chasing down money people owe you. Treat it as an entertaining hobby, like running or something. It’s brain/emotional cardio which is good because you never get real cardio.
  2. How to set up an LLC properly and when to do this, it’s probably before you start being taxed income on full production budgets oops.
  3. Don’t undersell yourself with your day rate, you partially determine your worth also you will one day hire a model younger than you are who makes $1,500 a day and a dog who makes $1,200 a day so…
  4. People are shitty and people are wonderful in equal measure (maybe this is just a life lesson).
  5. When a woman comes onto your set asking why/how you are filming at her home, you should remain calm and not suspect your location contact of committing fraud.
  6. Most people try to make themselves and their experiences sound more legitimate than they actually are, you probably aren’t as behind as you think. Also, sometimes you might find yourself doing this and it makes you seem like an asshole so stop.
  7. When you actually do something cool and people are nice to you about it and you’re all like “no, no, it’s not a big deal, it’s so random, I didn’t earn it” you are also being a bit of an asshole, say thank you and shut up.
  8. Tax season happens every year, it’s your own damn fault if you forget about it. You should’ve listened to your sister when she told you to start doing them quarterly.
  9. As much as it is your singular dream, it would be unfair to own a dog right now.
  10. It is possible to get sick of bagels.
  11. One day your Costco membership will pay off when the manager sees how much stuff you’re buying, comes over with big eyes and seduces you into becoming an Executive Member.
  12. It’s best to shop for craft services stuff really late at night due to no lines, but avoid the Hollywood Vons because shit goes down there past midnight slash in general.
  13. Do not post extras casting calls on Craigslist and expect anything but bad results or people who e-mail you once a day for a month.
  14. Be nice to everyone except for the PA who gets in a screaming match on the phone at base camp, you can be mean to him.
  15. If you upload a picture of yourself onto IMDb, your friends will find it and tease you relentlessly.
Posted in Career

A Simple Trick to Save More Money (It isn’t automating)

Save more, spend less. Earn more, still spend less. Those are the two ways you’re going to get advice about how to build wealth (and to me saving includes investing — should probably make that clear upfront). When people lecture about how to save more (myself included) the number one strategy is to automate, automate, automate. For those who never heard this sermon from on high, it means you’re routing a percentage of each paycheck into savings before it even hits your checking account. Of course anyone who took Psychology 101 can tell you this technic of stashing your cash before you see it increase likelihood you actually save instead of falling into the “whoops, spent too much and can’t afford to save again this month” mentality .

It’s good advice. Perhaps the best advice when it comes to efficiently saving. But there’s one more trick that’s even easier than automation: nicknaming your savings accounts.

The nickname strategy

saving moneyI’m not the kind of person who creates vision boards or believes in the power of “The Secret”. Wishing something true doesn’t work. Otherwise I could keep binge-eating Ben & Jerry’s and still have Gigi Hadid’s body. Action and diligence are what make a dream become a reality. And, I’ll acquiesce, a dash of visualization. Knowing why you’re saving instead of just participating in the action of saving keeps you motivated.

This is why I nicknamed each one of my savings accounts. The name on each account provides me with daily (yes, I check my cash on the reg) reminders why I’m stashing money away instead of routinely indulging in my desire to never have to cook.

Why I have multiple savings accounts

Instead of adhering to the K.I.S.S. (Keep it simple, stupid) mentality of personal finance – I do have three different savings accounts and two checking accounts spread across two banks. Part of the reason I keep money in multiple locations is to chase a high interest rate on my savings with accounts like Ally. If you’re only getting 0.01% APY on a savings account – then you’re doing it wrong. (I’ve earned $68.51 in interest on a single savings account from switching banks less than a year ago. #worthit)

The other reason I spread out accounts is to simplify how I can track my budgets. This might sound strange, and I recognize it decreases the interest I can earn by not putting it all in one pot, but I like being able to just glance at my travel fund and know how much I can spend on an impromptu trip.

Yes, this could all be meticulously tracked in an excel spreadsheet – but I opted for the multiple account method because it works for me. Remember, this is personal finance.

My (sort of uninspired) nicknames

I know you’re dying to know what clever monikers I attached to each of my savings account for that daily dose of motivation. I hate to disappoint, but they’re pretty run-of-the-mill names.

Honey Pot

The O.G. of my savings accounts received the cliché name “Honey Pot”. This account serves as my emergency fund and Mosby’s stash of cash. I do actually keep an excel grid for this account because I like to track Mosby’s expenses separately.

Travel

You can blame this lackluster nickname on my bank. Apparently “Other People’s Weddings Fund” was too long a name. This fund is used to pay for all trips, which as a mid-twenty-something is primarily weddings right now. I do actually use this fund to pay for all wedding-related expense such as gifts, travel, and bridesmaid necessities like getting my hair done. It’s lovely to be able to always afford weddings without it busting my monthly budget. 25 percent of all my freelance income goes into this account because none of my regular take-home pay subsidizes my annual adventures – or other people’s weddings.

Down Payment (and paying Uncle Sam)

Usually the healthiest of my savings accounts – until tax time – this one is meant to focus on my medium-term goal of buying a house. Frankly, I have no clue when that will be, but I figure I’ll want to own some land sooner or later. I tuck away 50 percent of all freelance income into this account. This strategy helps make sure I’m prepared to cut my check to Uncle Sam and the remainder will eventually help me put 20 percent down on a house.

And to think, I didn’t have a proper savings account three years ago. (Spoiler: I kept it all in checking).

Image taken from StockSnap

Posted in Saving money Tagged with:

The Money Pit of Overextending Yourself

“Put on your own mask before assisting others.”

I’ve heard flight attendants, or more recently the inflight video, state this line hundreds of times. The moral of course being you don’t do anyone any good if you fall over gasping for breath before you finish putting a mask on your child or panicking seatmate.

Currently, I’m flailing around in the aisle gasping for air and blocking everyone else from the emergency exit row. Or at least, that’s how it feels as I eat TUMS like its candy.

This hyperbolic imagery comes to you as the result of me overcommitting myself on several fronts. Running Broke Millennial and posting a minimum of once a week, handling freelance gigs (one of which is now Forbes!), taking CFP classes, working on a currently top secret project with a deadline and balancing it all around a full time job. It’s a classic entrepreneurial move. Instead of saying no to moneymaking and brand-building opportunities, I’ve just stopped caring for myself. This also turns into quite the money pit.

via GIPHY

Full disclosure: this is a bit of self-indulgent rant or therapeutic writing if you will. However, it can provide some insight for those interested in balancing freelancing with a full-time job or serial over-commiters.

How exactly is me having less time to go out and indulge in activities that would normally cost me turning into a money pit? Seems like being a hermit would be quite beneficial to the ol’ savings account.

Not for me thanks to the increase in ordering meals, eating junk and doubling my coffee intake. I may or may not be noshing on a chocolate Easter bunny as I’m typing. It should also be stated that after much effort, I just can’t turn myself into a morning person so I’m a night owl who stays up late to get work done.

MosbyI usually get home from work around 7 or 7:30 at which point Mosby immediately needs to get walked and fed (putting on his oxygen mask first). He deserves a long walk after being inside most of the day, so it’s about 30 minutes of my time to give him a mile or two walk and then feed him.

Now it’s 8:00 pm and I need to feed myself. Normally meals have been prepped over the weekend so I can just pop something healthy and homemade into the microwave or heat it up on the stove. Not so much lately. Weekends are dedicated to slogging through work and getting some errands done (like laundry). Not much time is left to spend three to four hours grocery shopping and bulk cooking meals.

So, I’ve been reduced to quick, often unhealthy, meals (partially because it’s what I’m craving) or ordering out to save some time and get to work. This has become quite the little money pit in the last few weeks as I’m used to spending about $120 max on food each week.

I’ve also been putting off a much needed hair cut and exercise is often a low priority item these days, which has left clothing feeling tighter than normal and energy levels drained. (And yes, I know, I could just prioritize exercise but it’s hard to get it up about going out on a run when you’re tired and the habit just isn’t there.)

After another day of not getting down to work until about 8:45 and needing to stop at 10 to give Mosby another long walk it hit me: I’m growing a business and I can’t do this alone.

It’s time to get my act together and hire an assistant (virtual or real) to help take some tasks off my plate and consider ponying up for indulgences like a dog walker for Mosby during the day, laundry service and Fresh Direct to nix the time spent doing and folding my own laundry as well as grocery shopping. It should be noted here, I’m a city dweller without a car and no washer/dryer in the apartment. So tasks like grocery shopping and doing laundry aren’t as simple as they may sound. This of course, will require spending more into the money pit. But it goes back to the notion of when is it time to stop being cheap? These are certainly practices I can cease when life settles down a little bit, but perhaps they’ll still be worth the cost in exchange for my time.

P.S. I decided to add another thing to my workload and figure out Instagram. I am a millennial after all. If you’re feeling generous and want to follow someone who will post money tips (and obviously dog pictures) you can find me @brokemillennialblog.

Posted in Millennials, Random Tagged with:

Should You Tell Your Friends Your Financial Picture?

Up popped a gchat screen and my friend asking if I had a few moments to answer a money question. Always happy to dish about finances, I obliged. For the sake of her privacy, I won’t get into the particulars, but she had a financial strategy in place and wanted my two cents about whether or not I thought it made sense.

“Are you comfortable giving me your specific numbers?” I typed.

“No, not really.” She chatted back.

Never deterred from a financial conversation, I continued to give her my opinion on the question by working with a hypothetical budget and giving her numbers I felt satisfied the situation. Aka me saying, “You need to have at least $15,000 saved before you consider doing this. If you don’t, then don’t do it.”

About a week later, while chatting with a different friend, the conversation inevitably turned to money (that seems to happen to me a lot). He divulged his savings information and I took pause.

“I tend not to tell people my net worth because I don’t want to deal with their responses,” I told him. “It’s annoying when people feel they can pass judgment on what I can or can’t afford because they have a snap shot of my financial picture.”

The truth is, I usually avoid telling friends my net worth because I never want to hear the expression, “Come on, you can afford it” come out of someone’s mouth.

His curiosity was piqued and, being one of my closest friends, he gently pressed for a little more information.

Finally, I indulged him and provided a reference point. (I hope to one day be able to say: my net worth is Scrooge McDuck diving into piles of gold kind of money.)

These two events have left me wondering at what point, if ever, should we be sharing our financial picture with friends?

While I’m all for ridding our culture of the taboo surrounding money, I still hesitate to share details with friends.

155HWe humans crave a good benchmark. You know the kind that says X percentage of people in Y age group have Z amount of money saved for retirement. You look at that metric and think, “suck it other 25 – 29 year olds! I’m better than 95% of you.” Or perhaps you think, “well, I guess I’ll work myself into the grave.”

Sharing your financial picture with friends in your age bracket, with about the same education levels and/or similar socio-economic backgrounds can feel like you’re all “whipping it out to measure up” – and you know exactly what I mean. This is because money, and our decisions related to money, is often used as a touchstone for our self worth and our intelligence. Not saying that’s right, just saying that’s how it is.

Except, I don’t want it to feel that way with my friends.

Personal finance is intensely personal. How we choose to spend money or save money or invest money or completely ignore money is our decision. I’ve had a lot of advantages bestowed upon me in life for simply being born into my family, with the skin color I have and given opportunities for quality education. Some of these advantages, like graduating college without debt, automatically put me financially ahead. While some of my friends started post-colligate life with -$30,000 or -$60,000 or -$150,000, I left with +$10,000 and kept building from there.

So yeah, when a friend tells me he saved $4,000 or another says she finally started investing or a reader emails to say he just paid down all credit card debt – I’m thrilled for them. I’m not mentally calculating how their accomplishments stack up next to mine, because who knows what could happen? Maybe my heavily invested net worth tanks this year, or I lose my job, or a medical issue arises and I suddenly find myself massively in debt.

To be honest, I don’t have an answer to my own question.

There is value in demystifying finance by being really open in conversations. The more we’re willing to go on record about failures and victories with money, then the easier it will be for everyone to have a high rate of financial literacy. But for the same reason my friend hesitated to share her real numbers with me, I often opt out of getting financially naked with all my friends.

Image from Gratisogrpahy

Posted in Financial Literacy, Millennials Tagged with: ,

When it Pays to Stop Being Cheap

“I think I’m going to make an impulse purchase.” 

“Erin, if you’ve been thinking about it for more than a few hours, it doesn’t count as an impulse purchase.”

(Recent conversation with a close friend – and I’d been thinking on the purchase for four days.)

When you develop a moniker like Broke Millennial, it gives people in your life permission to start passing judgment on your spending patterns – or lack thereof. Friends have teased me about my extremism as I can violently swing from penny pincher to Kanye West. There’s the fact I’ll treat Peach to fourth row orchestra seats to a Broadway Show but then I refuse to get an air conditioner in my apartment because it would drastically hike the monthly electric bill.

There seems to be no apparent rhyme or reason to when I make financial choices, except, I know the pattern: travel and time savers.

When it pays to stop being so cheap

Inspired by a post written by Cait of Blonde on a Budget, I started reading through some of my old musings. A 23-year-old, still dating Peach long distance, Broke Millennial waxed poetic about finding the glamour in riding the Greyhound bus from New York City to Rochester and back.

The 26-year-old Broke Millennial with a significantly larger savings account is here to tell you there is nothing but grit to riding the Greyhound bus.

A quick trip down Greyhound memory lane:

  • Man next to me had been recently released from prison (didn’t share what had put him in there) and he felt particularly chatty about his post-prison plans for six hours.
  • Woman boarded the bus, preceded to remove her shoes and unwrap a tuna fish sandwich.
  • Sleeping woman next to me (not stinky-feet-tuna-fish-eating woman) kept shoving into my side. When I refused to huddle up against the window and give her the entire armrest, she decided to start screaming at me in Thai at full volume.
  • Four frat boys (they did get off at the Syracuse stop) boarded the bus and pulled a 30-rack of Keystone out of their duffle and then got extremely inebriated.

Optimized-road rewardsNow, the former first-class flying part of myself was well served by the humbling experience of only being able to afford the bus if I wanted to see my boyfriend on an even semi-regular basis.

The current me cringes a bit at the entitlement in the fact I flat out refuse to board another Greyhound.

Before you judge me too harshly, I have a valid reason for upgrading to traveling almost exclusively via plane and occasionally rail or car.

Time.

Riding the Greyhound bus from New York City to Rochester often ended up taking close to eight (sometimes even nine) hours. The best time I’ve made in a car, even driving with Mosby, was six hours and 15 minutes. Flying takes about 3.5 hours door-to-door. It saved me approximately nine hours on a weekend trip to fly. Not only did this mean I could spend more time with Peach by staying later than 10 am on a Sunday, but it also maximized productive hours. I can’t tell you how rough it is to try to get anything done on the tiny space of a Greyhound bus with extremely touch-and-go WiFi access.

What’s your time worth?

Travel Three years ago I did everything possible to save a buck. I’d spend 40 minutes taking the bus to the airport instead of hopping in a cab or Uber for a six-minute ride that cost $12. I once made it from my front door to the gate at LaGuardia in 17 minutes, true story.

Then my mentality slowly started to shift as I upgraded my job while steadily building my freelance career on the side. With the increased income also came the realization my ability to earn more is tied to available time. This time needs to be utilized properly.

Embracing and controlling lifestyle inflation

Sure, increasing my spending to save myself some time can be seen as lifestyle inflation. In many regards, it is. So let me share how I am still allowed to claim myself a relatively frugal person.

  • 35 percent of my regular salary gets auto saved into an emergency fund and 401(k). A bit more gets saved with the use of Digit and other habits.
  • 100 percent of freelance income gets saved.
    • 50 percent immediately goes into a bank account set aside for paying Uncle Sam
    • 25 percent gets put into my Honey Pot fund and ultimately invested
    • 25 percent goes into my travel fund

Now, don’t go thinking I’ve exclusively morphed into some high roller. I still bring reusable water bottle on trips to avoid paying airport prices for some H2O and pack a lunch for the flight. I do my own laundry, walk my own dog, clean my own apartment, eat mostly homemade meals – not even with Blue Apron – and usually grocery shop over going the Fresh Direct route (wow, I’m a city person). Plenty of chores in my life could get outsourced, but I’m not that rich yet. But one can dream because I would really love to hire someone to handle the dreadful task of cooking.

Posted in Career, Saving money Tagged with:

Financial Pet Peeve: The Worst Credit Score Myth of All

There is a perverse myth that’s taken hold in our recently credit-score-obsessed culture. A myth so upsetting to my delicate feminine emotions, it leaves me longing for the days of fainting couches. This myth is doing damage to the already weakened bank accounts scores of millennials attempt to fatten each month. This myth is my Lord Voldemort, my Lady Macbeth, my Ivan Drago…you get the point.

Myth: Carry a balance on your credit card  

NO, God. NO. God, please. NO. NO. NOOOOOO.

There is absolutely no need to carry a balance month-to-month. To clarify, this myth suggests that you are not paying your balance in full. Instead, you pay at least the minimum due or an amount close to the total, but leave a little bit left to carry over.

Origin of the myth (well, my assumption)

Yeah, yeah I know all about making assumptions, but I’m pretty sure I’m right about this one.

There is a general confusion about carrying a balance and having a statement balance. A confusion the banks have no interest in correcting, because you misunderstanding what it means to have a balance verse carry a balance earns them extra money in interest payments.

For the love of God, don’t pay interest to the banks! You can build a strong credit score for free.

Truth: You need to have a statement balance, but pay it off on time and in full

You actually have to use your credit card in order to get kudos from your credit card provider that you’re a responsible borrower. However, the usage doesn’t count if you pay off your purchase the moment it posts to your online dashboard. For example, you just bought dog food in bulk for your adorable little budget buster and charged it on your credit card. It posted to your account three days later and you immediately pay it off.

This instant payoff tactic means that you’ll have charged $0 and owe $0 when your statement cycles. Even though you actually did use your card, if it doesn’t show as owed on your monthly statement then it didn’t actually happen. Consider this the “if a tree falls in the woods” of credit scores.

In the eyes of your credit card provider, this strategy means you aren’t irresponsible nor are you responsible – you just are.

The credit card provider reports to the credit bureau that you didn’t utilize your credit at all – which means 0% utilization. That’s like getting an incomplete on 35% of your credit score because utilization is a major factor in determining your credit score. 

So, what’s a diligent millennial hoping to build a strong credit score to do?

The easiest strategy is to make one or two small purchases per month. Then wait until the statement arrives and pay it off in full.

Screen Shot 2016-03-02 at 10.46.20 PMYou should be able to tell when your billing cycle ends by looking at your account online or the most recent statement. You can also set up text alerts, email notifications or an old school letter to ensure you don’t miss when the bill comes due. The black belts of budgeting will also feel confident enough to automate their credit card payments, so the bill is paid on time and in full. Automatic is also an easy strategy if you only charge a Netflix subscription and your cell phone bill, so you know exactly how much your statement will be each month.

Solution: Small charge. Wait for the bill. Pay it off on time and in full. Rinse. And. Repeat.

The other tip is to ensure you spend no more than 30% of your total available credit limit per month (that means no more than 30% of the credit available across all your cards). Brownie points if you stay in single digit utilization.

To make this personal, I have six credit cards with the following credit limits:

  • $11,000
  • $8,000
  • $4,500
  • $4,000
  • $4,000
  • $3,800

This equals a grand total of $35,300 in credit available to me each month.

I need have no more than $10,590 across my statement balances to be in good shape. Spoiler: this isn’t a problem.

Most months, I spend less than $2,000 on my credit cards and typically stay around 5% utilization.

Why does this matter?

Screen Shot 2016-03-02 at 11.13.58 PM

It matters because I’ve never had another form of credit in my life (no student loans, no mortgage, no auto loan, no personal loan) so this is the only way I build credit. And with this, I’ve managed to be a 700+ FICO credit score, and once even break 800, without paying a penny in interest.

All it takes is making a small charge and paying it on time and IN FULL!

Posted in Credit, Credit Cards Tagged with: ,

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