One of the best parts of working for TFD has been getting to know people from the personal finance community, both in person and online. Yet even though the community is growing all of the time, money still seems to be a topic that many people avoid. I’m thankful that TFD exists to talk about it at all, and that there are others we can turn to for frank money conversations. Erin Lowry, the awesome writer behind the website — and forthcoming book! — Broke Millennial, is definitely one such individual.
We’ve been fortunate to get to know Erin as a team, and we couldn’t have been more excited when she agreed to be our next subject for the 10 Big Money Questions series. Erin seems like one of those people who is so put together it could be intimidating — she spent much of her childhood in Asia, gained a firm idea of the pragmatics and importance of having a budget from an early age, and has a goal to beat her father to becoming a millionaire (!!!). But in reality, the money advice she offers is not exclusive to only people who already understand and like money — it’s for everyone. Her piece on the evolution of what a fuck-off fund looks like is a great read, especially if you’re still looking for inspiration to kickstart your savings. Some other particularly great articles include how she took the leap to work for herself full-time last fall, and how she gets “financially naked” with her significant other.
We cannot recommend checking out Broke Millennial enough, including the book, which you can now preorder on Amazon. Without further ado, here’s what Erin had to say about money!
1. What was your relationship to money growing up?
Money fascinated me from a young age, primarily because my parents were incredibly open and honest with the family finances. It never became a stressful or taboo topic in my house; in fact, I don’t have a single memory of my parents fighting over money. Because of how I was raised, I also became highly motivated to earn my own money at a young age.
2. Do you feel, looking back, like you got a good education about money, either at home or at school?
Yes, I feel extremely fortunate to have been raised in a home where my parents started talking to me about money early. At seven years old, I had my first basic lesson in economics, when my dad used me selling Krispy Kreme donuts at my mom’s yard sale as an opportune time to teach me about net profit. Then there was the rule that my sister and I had to pay at least 50% for anything we wanted (other than birthday and Christmas gifts), and that went from stuffed animals through college.
My parents never fought about money, and their willingness to talk about it also never made me feel like it was taboo or dirty or secretive. I naively thought most people were open about money until I graduated college and got out into the real world, where I quickly learned people didn’t think it was okay to talk about their salaries or budgets, or what they could or couldn’t afford.
3. If you have debt, what are your strategies and philosophies for paying it down?
I don’t have any debt, but my boyfriend (Peach) does. He’s carrying some student loans, so we’ve talked a lot about our strategies to pay those down if/when we get married. We live together and have dated for over six years, so marriage is on the horizon for us. Initially I felt really uncomfortable about the idea of marrying into debt, but if we waited until it was all paid off, then we wouldn’t be tying the knot for probably 15 more years.
After quite a few rounds of getting financially naked with each other and talking money strategies, we’ve created an attack plan for debt after marriage. Assuming our salaries now are relatively similar to post-nuptials, we would use my salary to pay for all our base needs (rent, cell phones, transportation, groceries, etc) and his salary would be split between a few savings goals and then just debt repayment. That way, we’d be throwing thousands of dollars per month towards his student loan debt and hopefully pay it off within two years after getting married.
We probably don’t have to be that aggressive, but I have a low pain tolerance when it comes to debt, so it would be better for our emotional and mental health as a couple to get rid of it quickly.
4. What is your current job (or jobs!), and how did you get to where you are today in your career?
Great question and a bit of a long story, so I’ll try to keep it tight! I currently work as a personal finance writer and speaker. I run the site BrokeMillennial.com and have a book coming out May 2, 2017 called Broke Millennial: Stop Scraping By and Get Your Financial Life Together. The primary way I earn a living through is through freelance writing and speaking engagements.
However, I actually started my career working as a page for The Late Show with David Letterman. It feels strange that with just six years since graduation my first job doesn’t even exist anymore! I worked as a page for a year and then transitioned into public relations for a bit. It wasn’t really a great fit for me and during that time my creative energies were feeling neglected, so that’s actually when I started Broke Millennial.
After about 1.5 years writing Broke Millennial in my free time, I actually ended up landing a job with a financial startup. I joined as employee number one and helped build the company’s blog from the ground up. I learned a lot about how to analyze financial products and developed a good B.S. meter with banks and other financial institutions.
After a little over two years there, I ended up going off on my own to be a freelancer and focus on building Broke Millennial as a brand and business.
5. When was the first time you negotiated for yourself, at work or otherwise? Can you tell us a bit about that?
The very first time I negotiated would’ve been in high school while shopping. I spent a good chunk of my childhood living in Asia and by my junior year of college we’d landed in Shanghai, China. Prices at local markets where you could buy purses, jewelry, clothes and other accessories were completely based on your ability to negotiate. Haggling with someone over the cost of a faux-Coach purse or North “Farce” jacket really helped me develop my negotiating skills, especially the walk away.
Like many millennials, I failed to negotiate my early job offers in my career. The first time I had a big negotiation success happened after my first year working for the start up. I felt I’d undersold myself with my initial salary request, partially because my anchor coming from PR was incredibly low (I only earned $37,500 in that job). So, I wanted to compensate in my annual review.
It started when my boss said, “Oh, yeah. We noticed you’re at your year mark, so we planned on doing a standard 5% bump in your salary.” I was the only employee in the office at the time, so a pretty relaxed work environment. I immediately countered and said, “I’d like to have a formal review and discussion about my compensation.”
After setting up the meeting, I went home and did a bunch of research about what people doing my job, or a similar jobs since I had a few titles rolled up into one, were getting paid in New York City. I took all this information and also created an outline of the various jobs I really did and how much each of those jobs individually would earn and came up with a price tag of wanting to be paid $20,000 more than my current salary. I included metrics of what I’d managed to accomplish in the first year and set goals for what I planned to do in the coming months.
I presented all this information in my review and ended up getting the raise!
6. What is something you understand about money now that you wish you had before you graduated from school and entered the “real” world?
Investing 101. In full disclosure, my dad did try to get me more interested in investing during high school and college, but I always just focused exclusively on saving. I really wish I’d done some basic index fund investing, or at least stocked money away in a Roth IRA when I started earning taxable income in college.
7. What is one of your biggest money-related mistakes that you’ve made? What did you learn from it, and what do you do differently now?
I consider waiting so long to invest as a money-related mistake. Because I grew up with all the personal finance 101 knowledge I needed and was really a saver by nature, it was never really budgeting slip-ups that got me. I did allow myself to be intimidated by the stock market, like so many other millennials, and I wish I’d gotten over that feeling earlier and started putting my savings to good use instead of just letting it sit in checking or savings.
This bothers me even more because I worked three jobs when I first moved to New York City just so I could avoid dipping into my savings. I did the page gig at Letter, which paid very little, so I supplemented it with being a barista at Starbucks and babysitting. I only earned about $22,000 that first year in New York City, but I still managed to be saving some. So to let it just sit there, basically under a mattress, after putting in all that hard work and sacrificing on social events — it just irks me.
8. What is one big financial goal you still have for yourself? Are you currently using any concrete strategies to pursue it?
Beating my dad to becoming a millionaire. Now, I always have to back that up and explain it better. When my dad was in his late twenties (so my age now), he set a goal to become a millionaire by 42. He started 100% from scratch with no family money or inheritance or comfy job lined up through family connections. He accomplished his goal. To pay homage to him and how he raised me to be financially literate, I want to beat him to his goal and make it to one million by 35. I feel like adjusting for inflation that puts me just a little bit ahead of him.
The strategies I’m using are living well below my means and aggressively saving and continuing to routinely invest both for retirement and in index funds. I also do a monthly net worth update to see how my goals are going and look for any tweaks that can be made.
9. How do you deal with financial setbacks when they happen?
The first step is to try not to fixate on my mistake and continue to chastise myself. You could say that step one is forgiveness. Then I try to asses how the setback happened. Did I miscalculate something, or just mindlessly spend, or forget about an upcoming bill?
Once I know the why and how, I do my best to set up methods to prevent it from happening again. For example, I do weekly 15-minute budget meetings with myself to prevent overspending on credit cards. It’s easy to swipe your card all month and think you’ve stayed on budget, until you actually open up the credit card statement.
10. What is your personal definition of success, and do you consider yourself successful?
I’d be lying if I said I didn’t want some level of recognition for my work, but I largely define success as getting to live a life on my terms. Being able to support myself as a freelancer right now is certainly one way in which I feel successful because there’s so much freedom and flexibility to pursue other interests, especially travel. I can work remotely or just elect when I want to take time off and I don’t have to be counting 10 or 15 vacation days a year. But, at the same time, I’ve been able to maintain the lifestyle to which I’d become accustomed before I launched into being my own boss. There’s no guarantee I can maintain this forever, and self-employment does have its downsides at times, but right now I do feel successful.