Mike: Beverly, why don’t you start out by letting us know what you do.
Beverly: I’m a 24-year-old publicist working in New York City. My official title is “Senior Account Executive.” I earn $44,000 a year, but that’s very recent (within the past month). For most of my working career, I’ve earned between $18,000 and $30,000.
Mike: Tell me about what it was like for you growing up, and some of your experiences with money.
Beverly: I grew up in a relatively comfortable environment raised by my great-grandmother (I called her “mom”), who owned a couple of companies, a few rental properties, etc. We didn’t talk about money, so I didn’t know how much we ever had. I assumed that most people lived in houses that were too big, had multiple cars, ate dinner at restaurants quite a bit—nothing felt extravagant ever. Our vacations were modest, and I didn’t feel spoiled at all. When I got to high school, I was able to travel to Europe a couple of times. I knew that many of the people that worked for her (as well as many of my own family members) didn’t have much/enough money, but the idea that it was because of their own shortcomings (drugs, child support, “bad choices,” etc.) was pretty heavily enforced. I was told that if I worked hard enough, I could have/do anything.
Mike: Can you explain a little bit about how your great-grandmother ended up becoming your mother?
Beverly: Sure. My biological mother had me when she was 16. She had been occasionally living with my great-grandmother from time to time but wasn’t really in a place to care for a baby when she was 16. She left me with my great-grandmother while she was getting on her feet, but when she felt ready, I was already calling my great-grandmother “mama.”
I chose her, I think. My biological mom didn’t want to break us apart, so she sort of went on with her life. I’ve always known that she’s my mother, but it hasn’t been a Thing. My mom is my mom. That being said, I found out later that I wasn’t ever legally adopted or anything, so I had no rights to ANYTHING after my mom passed away when I was 17 (if there was a will that I was in, I wasn’t allowed access to it).
In the same kind of selection process, I also chose my dad. I don’t know my biological father, so I clung to the man who was around the most—my mom’s business partner, who I ended up picking to be my dad when I was a toddler.
Mike: Did you have an allowance?
Beverly: I wasn’t ever given an allowance when I was younger. I was given money for birthdays and Christmas and then if I needed it (going to a sleepover or whatever—my mom was always very afraid that I’d be caught out without money for something). When I was 14, I got a credit card with a mom-enforced limit of $125 per month. I got a credit card to use for gas when I turned 17. I guess my mom tried to help me learn to manage money, but it probably didn’t work out the way she wanted.
Mike: When did your mother pass away? Was this before college?
Beverly: Yeah. She passed away almost halfway through my senior year of high school. I actually found out the next day that I’d been accepted to college. At that time, I wasn’t even thinking about money, since I’d been told my whole life that I’d be “taken care of” if anything happened.
Mike: Were you left with money you could use for your college education?
Beverly: I thought I would be, but I wasn’t in the will or anything. But I was officially given a couple of life insurance policies that covered some of my living expenses freshman year. I also was able to cash out an IRA that had about $45K in it, which I used for tuition. I spent quite a bit of money foolishly the year after my mom died, but even if I hadn’t, I would’ve been SOL for the next three years of school, since I had been given hardly any financial aid. When my dad found out about all of this, though, he agreed to help.
When I turned 18, I opened two credit cards, which turned out to be a big mistake when I maxed them out two years later (having spent the money from before on tuition) and couldn’t pay them off.
Mike: What were the credit limits on the cards?
Beverly: One was $1,500 and the other was $1,200, I think. They’ve since accrued a ton of interest and gone into collections (before I had a full-time job). I’ve stopped getting calls though, which I hope is a good thing.
Mike: Have you looked at your credit report to figure out what’s going on with it?
Beverly: Now that I’m trying to be more of a grown-up, I look at it once a year. My score has stayed steady at 576—because of the collection marks, I’m sure. I’m hoping that if I wait another year, they’ll drop off and it will improve.
Mike: Have you settled with your creditors?
Beverly: I haven’t. I’m sort of in an “I don’t know where to begin” place with that. I was calling and trying to sort everything out for a while, but got faced with, “Oh, you don’t have $2,000 right now? Can’t you just ask your family?” They didn’t seem to understand that that isn’t an option for me or a ton of other people. And it feels like I’m only just now making enough money to be able to spend ANY money on myself/my life, and I don’t really want to pay a random creditor when I could use the money to fly home, you know?
Mike: Usually, you can negotiate a payoff that’s less than the balance, so hopefully you can eventually work this out. What did you end up studying in college? And what did your student debt turn out to be when you were done?
Beverly: I majored in English. I think my total debt is something like $36,000. In the last couple of years, I was able to get quite a bit more financial aid, but still nowhere near enough once my dad couldn’t pay for it anymore. At one point, I was working full-time as a receptionist, leaving for “lunch” where I would go to class, going back to work, and going to an internship or another class after work every day. And also doing whatever I could part-time to make money.
Mike: And your dad was helping out a little bit?
Beverly: At that point, no, he was only able to help up through my junior year (I was on the 5-year plan). The receptionist job thing was my senior year. I actually took a couple of semesters off so I could work more, but I wasn’t able to really save any money. I overdrew a LOT that year.
Mike: Where was the money going?
Beverly: I was paid $12 per hour, so I made around $1,200/month. Over half of that was taken up for rent and utilities. The rest went to flying home a couple of times a year, food, and paying down the balance that I still owed to the school. Also, I got into this weird habit where any time I had any money, I would spend SO much…I had no self-control, because I felt so restricted.
Mike: What were you spending it on?
Beverly: This was two or three years ago, so I don’t feel like I went out that much, but I guess I probably did splurge—or even buying a sandwich from Pret or something felt so naughty that I would do it to reward myself. It definitely all added up though.
Mike: So tell me where you were at when you graduated and how you figured out what you were going to do next.
Beverly: At graduation, I was working for a start-up (I’d transitioned to weekend classes and much less of them, which was a million times more bearable), making $30,000 as an executive assistant. I wasn’t paying off student loans because I was still in school, and my rent had (luckily) stayed the same for a couple of years. Things felt a LOT easier. I decided that I needed to make more money and actually get a job that was relevant to my interests. I’ve had about 90 internships in the six years I’ve been in NYC, so I know people working in just about every career that I might want to get into. I’ve also definitely learned how to hustle, so I’m fine with sending out my resume 80 times a day until something sticks, and sending ballsy emails basically requesting an interview.
So I finally got a job in a PR agency, and it’s been great. Mo’ money, mo’ problems is an actual thing, though. I started here at $34,000, then moved to $36,000, then got a big bump to $42,000 and now I’m at $44,000. In the past year here, though, I’ve had to keep paying back student loans (my payment increased with my salary) and decided to move into a bigger, more expensive apartment. And I have a cat.
Mike: Ah, the lifestyle creep. Do you live alone or with roommates?
Beverly: I live with one roommate (I was living with 2 and sometimes 2 of their boyfriends).
Mike: Can you dive a little bit into what your living costs are like? What your rent is, transportation costs, food spending—
Beverly: Also, when I was making much less money, I met my current partner who is English and was here interning. So now that we both have jobs/apartments/extra expenses, I’m factoring in three or four flights to England a year and a couple of trips home.
My rent is $825 including utilities. I actually just did a detailed budget today (inspired by that awful McDonald’s employee budgeting thing that suggests a person have two full-time jobs) and my expenses including rent are around $1,600/month. This includes necessities like rent, Metrocard and cell phone. It also includes stupid stuff like yoga, Netflix, Hulu, and “paying myself” money for savings, in an ideal world. It also doesn’t include food, because I still haven’t figured out how anyone knows what they’ll want to eat for the week, let alone the month.
Mike: You mentioned a lot of your money goes to travel—do you know what that typically looks like in a year?
Beverly: It makes me cry to think about. We split the flights in half, but it’s probably about $2,400 a year for each of us (sometimes we use points, plus money, which helps), and then whatever I spend while I’m there, probably $400-500 each time—ugh that’s a lot of money every year. Maybe four or five thousand?
Mike: You said in an ideal world, you would have money to pay yourself to put in savings. Are you able to put anything away at the moment?
Beverly: I mean, it’s in the budget (that I just made this morning), and I have an automatic savings plan set up. A lot of the time, though, I realize that I’ve overspent somewhere (probably on brunch or cat food or something) and have to transfer it back in to feel “safe” right before payday.
Mike: Do you have retirement savings?
Beverly: I had a 401(k) for maybe two minutes and I was putting in a dollar or something every paycheck. I think there’s $10 in there? My current company doesn’t offer a 401(k).
Mike: Do you talk about money with friends?
Beverly: A lot of my friends will say “I have no money,” but that’s about the extent of it. It could mean “I have $300″ or “I have 3 cents.” I never talked about money growing up, so it kind of feels impolite to bring it up in public.
Mike: When it comes to money, what kind of goals do you have right now?
Beverly: I would like to be making more of it, always. I want to improve my credit score (a lot). I also want to have a decent-sized savings account and maybe start putting aside money for investing in property at some point. That’s what my parents did, and it seems like it could be really fun.
Mike: How are you going about hitting some of those goals?
Beverly: I’ve written letters to the collection agencies to see where I’m at with that—I’ve just been too scared to send them. So that’s the first step. I’m also trying to really notice where all my money’s going, so hopefully I’ll have more to save.
Mike: And you’re still young, at 24, so you have time to figure it out. Do you talk about any of this with your dad? Does he offer advice?
Beverly: I haven’t really let my dad know how stressed I get about money sometimes. He’s 84—I don’t want to stress him out, unless it’s necessary. Also, his solution would be to just give me money he probably shouldn’t give away, I think. He didn’t go to college, doesn’t use credit, etc., so I think he feels like I have it together, or know what I’m doing or something.
Mike: Who do you go to for advice about money?
Beverly: The internet? That sounds ridiculous, but I really do Google any questions I have, read LearnVest, The Billfold, Kiplinger, etc. I have a few trusted, older friends who have had money problems in the past, so it’s inspiring to see that they’ve gotten past it, even if they aren’t directly helping me, or giving advice.
Mike: And it seems like you’re moving steadily up in your career and are pretty happy with it so far.
Beverly: Yes! Hopefully it will continue to move this quickly.
Interested in talking with Mike about your job and your money? Send a note.