Kelly is a self-proclaimed finance nerd residing in Boston, MA. She prides herself in living by the golden rule: always spend less than you earn (though that other golden rule about always treating others the way you want to be treated is pretty solid too).
This millennial graduated from Babson College in the spring of 2015 with a concentration in Finance and a passion for a great budget. She currently works in private equity and loves sarcasm almost as much as a good bargain. She also spends time writing about her financial habits and goals on her blog, Cents & The City. I had the opportunity of interviewing her for our Meet Millennials Series! Here’s how it played out:
What’s your relationship with money like?
I’ve always felt a strong connection with money: earning it, spending it and saving it. As a kid I was always looking for ways to make a quick buck: help out with some extra chores, wash the neighbors’ cars, rake their leaves, lemonade stands, you name it. I had a savings account at the local bank and loved watching the numbers in my account go up in my paper bank book – even if it was only by a few cents from interest.
Fast forward to today. I graduated from Babson College in 2015 and currently work as an associate at a private equity firm in Boston – still harboring my entrepreneurial spirit and excited to watch $ grow, even if it’s that of our portfolio companies.
How would you describe your current financial situation?
Amongst my peers, I am fortunate to be on steady ground in terms of my current financial situation. A lot of my friends graduated with student loans ranging from a few thousand dollars to well over six-figures (ouch). I was lucky enough to graduate without any student loans, but instead of splurging I take the same amount of money my friends spend on loans each month and I pay myself by adding it to my savings.
Even though I have a steady salary, I live well below my means and split roughly 50% of my gross income between my 401k and savings account each month. To those who know me, I am a notorious excel budgeting nerd who can’t fathom the idea of paying full-price (unless dire circumstances present themselves – yes clothes shopping counts as dire).
What financial advice would you have wished to hear when you started working?
One thing my parents told me (which I am very grateful for) is to start putting money away for retirement with your first paycheck. Regardless of the $ amount putting even a small % away from the start puts you on the right track. It’s easy to put off saving for retirement from the onset (30+ years is a long ways away) but with the power of compounding, those small $s can really add up. Putting it off for a few months can turn into a few years and once you do take a % out you notice it more than if it started from the beginning.
What financial achievement are you most proud of?
With my incessant frugality I managed to save 50% of my gross income over the course of my first year post-undergrad.
What expense can you not live without?
My gym membership – I know it’s ridiculously expensive ($260 / month) but it’s a splurge I’m willing to pay for. I’m a member of a CrossFit gym in Boston so I leave my apartment around 5:45 am to make it there by 6:30, workout until 8 and enjoy all of the amenities while getting ready for work. Not only are the coaching staff top notch but the community is incredible.
For me, health and fitness are extremely important (after all isn’t your body your most important investment?). I RARELY (to my friends dismay) blow my money on a night out, so the money I save on that side I put into the gym. Everyone needs a splurge item – and for me it’s the stress relief and personal development I get with my gym membership.
What expenses could you cut down on?
Clothes and shoes. Let’s be real – as a woman I could argue this either way. In order to cut back on spending in this category, I try to purchase versatile classic items that won’t go out of style as quickly and select higher quality items that will last longer. Note – this doesn’t mean I pay full-price! I always enter items I like into a shopping cart, or keep track of them with the Pocket App and routinely check for sales to get the best price possible.
What are your long-term financial goals?
I can’t wait to purchase my first property and build up equity as opposed to spending money on rent each month (rent pains me with Boston’s high cost of living). Watching my savings and investments grow only brings me closer to the down payment on my first place.
What are your short-term financial goals?
I absolutely LOVE to travel and hope to take at least one trip per year. Last year, utilizing Costco travel deals, I was able to take an incredible trip to Kauai in late September. When I’m stressed or feeling unmotivated I think about lying on the beach or exploring a new city. The experiences I’ll get through traveling motivate me to work hard and continue to save.
How do you manage paying off student loans and/or consumer debt? Any tips?
I only take on debt when absolutely necessary, or if a 0% interest rate presents itself. For example, after graduating college I went to Apple to purchase a laptop. They were offering 0% interest for 18 months if you opened a Barclays card and used it to purchase the laptop.
Instead of paying the $1k+ upfront, I spread the payments out over the 18 months (keep in mind I hadn’t started working yet so that chunk of change would have been a big hit all at once). This allowed me to keep more money in my savings account in case of an emergency, and I was able to earn 1% interest on the money sitting in the account. Win-win in my book!
What career path would you choose if money was not an issue?
Salary aside, if I could choose any career path I think I’d be a travel blogger. I absolutely love exploring new cities and learning the ins and outs of a new culture. If I had the $s to do that full time and blog about my experiences/ways to save money along the way I would be one happy camper.
Always, always, always spend less than you earn (obviously there are some exceptions with graduate school, lay offs, etc. but for the vast majority of us this holds true). There are only 2 ways to save more $ (1) spend less or (2) make more. We don’t always have the opportunity to control the latter, but by creating a budget and lifestyle where we can spend less, we will always have control over our finances and be able to handle what life sends our way.