What's your approach to personal finance?
NerdWallet profiles a 29-year-old financial services representative who is working to pay down credit card debt incurred while being out of work for a year.
NerdWallet’s How Do You Do Money? series asks people from various walks of life to share their attitudes and approach to personal finance, with the goal of bringing transparency to discussions surrounding money. In this first installment we spoke with Andrew, a 29-year-old financial services representative living in Plainview, N.Y. This is how he does money.
What do you do for your main source of income? How did you get into that line of work?
I’m a representative for a fairly large financial services company. I had a recruiter from the company reach out to me via LinkedIn. I didn’t reply at first, but after the job search had gone on for a while I decided to pursue it, and it’s worked out OK.
About how much do you earn before taxes per year?
About $52,000 a year.
Do you feel secure with that amount? Or do you want to earn more?
It pays the bills for now, so I’d say I do feel secure, but of course I’d love to earn more. The good news is I have the potential to do just that.
Is there a path you’re planning to take to earn more, or is that just general potential?
Combination of both. As I progress at my job, I’ll be eligible to offer more products and services—right now I can sell insurance, and am studying for various securities licenses that will let me sell things like stocks and mutual funds. Also, as I build a client base, my pool will (theoretically) get larger as well.
Sounds like you’re on a good path toward earning more! Do you have any debt? If so, what for and how much?
I have a couple thousand in credit card debt I ran up over the summer when I was unemployed, for necessities like food and transportation. I used my savings on bills that would have consequences if I didn’t pay them (car, phone and the like), so anything else went on my card.
Was that your first time being unemployed, and how long did it last? Did your perspective on money change after you were unemployed?
I was out of work for about a year in college, partly so I could focus on studies. This time, I was out of work for around three months. Things were a little different this time because I have more responsibilities now than I did back then—you don’t realize how quickly money goes until there’s none of it coming in.
Do you think incurring that debt was worth it?
I’m not happy it’s there, and I’ve been paying it down, but my savings would have been totally tapped out if I hadn’t incurred it in the first place. It was the better of two bad options, I guess.
Unfortunately, that’s the reality sometimes. Do you have any savings goals? If so, what are they?
I’d like to get back up to six months’ expenses in my emergency fund, pay off the credit card debt I mentioned and earmark some money for travel and gifts.
How did you decide on six months’ expenses as the goal for your emergency fund?
Originally it was just general advice I’d seen online, but now it lines up with my disability insurance through work. My plan, that I hope I never have to use, is to live off that savings for the first six months until I become eligible to receive benefits.
How was the topic of money approached in the home you grew up in? What factors do you think influenced that approach?
My parents and I really never talked about money beyond “make sure you save something” and “be careful with debt,” which I think is because those are things they’ve struggled with and they didn’t want to see me and my siblings fall into the same trap.
How do you think that affected your attitude toward money and your personal finances?
I didn’t always follow that advice, so looking at it now, it’s made me realize that my parents are pretty smart people!
Has your approach toward personal finance changed since you left home? How so?
I’m a lot more conscious of making sure my living expenses don’t outstrip my income. I try to live on my last month’s pay, which helps when unexpected things crop up. They always do.
What is the best monetary investment you’ve made? This can include money spent on education, a well-fitting suit for job interviews, etc.
This may sound a little materialistic and might be missing the point of the question, but hey: When I’m shopping for something—clothes, electronics, shoes, etc.—I always do a lot of research beforehand to come up with something that’s well-made and will last a long time. Sometimes that means paying a bit more than might seem reasonable—$300 for a good pair of dress shoes sounds like a lot, but when they come with a lifetime warranty and can be sent back to the manufacturer to be resoled, the extra cost can pay for itself versus spending $20 on shoes at Target.
What monetary investment do you regret the most and why?
I got myself into trouble with credit cards and personal loans when I was younger and paid more in interest than what I actually spent the money on in the first place. I kept track of the interest, and looking at that number and knowing I could have saved it or invested it is what I regret most.
Besides what your parents told you, are there any other resources or tools you’ve used to learn about and manage your personal finances?
Lots of reading and research! I guess that goes with what I said about researching the things I buy—when I’m curious about something, I take the time to learn about it and see what makes the most sense.
What does financial stability mean to you?
Being able to live comfortably and do the things I want without worrying about taking food off the table or the lights going out. (Within reason, of course. I doubt I’ll ever own a Gutenberg Bible.)
Do you, or someone you know, want be interviewed? Email Heather.