Happy Monday. Are You Richer Than The Average Millennial?

I personally think The Billfold should take full credit for this. Or Logan should.

Anyway, please list your net worth in the comments.

(I keep typing ‘net worth’ as ‘net work’, omg.)


Four Stages of Financial Development

My friend Mark is the type of person who regularly reads the business section of the newspaper, and I often go to him for financial advice. He has a well-paying job and owns a house. So I was surprised to learn recently that he didn’t start out being very knowledgeable or responsible with his money. In fact, Mark started out with credit card debt and car payments, just like many of us. Since then, Mark’s way of thinking about money has shifted as he has learned more and entered new stages of life, or “stages of financial development” if you will.


Sobering Loan, Debt, Savings News; Or, Janet is Yellen at Us Again

We Americans are in dire straits. We need to pay people to find us roommates so that we can afford to live in grossly overpriced apartments on the outskirts of where the jobs are. Student loans are such a crushing financial burden, totaling $1.2 trillion, that an offshoot of Occupy Wall Street called Rolling Jubilee has started urging debtors to organize and fight back.

Americans have an average of about $30,000 worth of student debt, and one in ten borrowers default on their loans. According to Andrew Ross, a Rolling Jubilee board member and professor at New York University, this sizable group of people can make an impact if they act as a unit. … “Debtors often don’t identify their condition as permanent,” Taylor said. Unlike medical debt, which is usually perceived as unavoidable, “people with student loans feel like they made a choice. It’s their problem. They feel shame instead of outrage.” …

The long-term goals, group members say, are to challenge the very existence of student loans in the first place and advocate for free education. “There’s this strong sense in the United States of morality behind debt—that being a good person means paying what you owe,” said Thomas Gokey, 35, who has $67,000 in student loans and came up with the idea of buying portfolios on the secondary market for the collective’s first action back in 2012. “We hope to undermine this fake morality around debt.” Since the debt was bought for pennies on the dollar, he says, people “really don’t owe this debt at all. Someone is simply making a profit.”

The GOP blocked Elizabeth Warren’s student loan bill, again. And now Fed Chair Janet Yellen has some more grim news


Savvy Drinking: Is the Smart Buy the Best Value?

This Business Insider video (via Slate) points out that since cheap liquor is marked up more than pricier liquor at bars, it makes more sense to buy the expensive stuff. You’re spending more money but you’re getting a better value for your dollar.

It is true that knowing how much a draft is marked up (456%!?!) could really affect your ability to enjoy that glass of swill. (Sorry, beer.) But will you appreciate an expensive bottle of wine more because you feel like a savvy spender as well as a fancy-pants connoisseur? It probably depends on whether you enjoy expensive wine more than the regular stuff to begin with, and can afford it.

Beer is not only cheaper than a glass of wine, usually, it’s also less of a rip-off. Now if only it tasted better.

Bottom-shelf mixed drinks are as much of a rip off as draft beers. Good to know.


Saving Gangnam Style

The first time I saved over $10,000 in a year I was 26, and I moved to Seoul to teach English. I had previous experience teaching English, so I easily got a job at one of the more respected schools that mostly taught business people, with the occasional rich kid thrown in. My school was in an office building less than 100 yards from the Gangnam subway station, and I worked a split shift, which meant arriving at 6:30 am and leaving at 9 pm. In theory, you get the middle of the day off, but in practice, there were so many private lessons, most teachers worked throughout the day.


The Year We Saved $10K: Paying the Imaginary Mortgage

In the latest installment of the Saved $10K series, J A Y tallies up his income, expenses, and savings:

J A Y: I’ve always saved $20-30K/year on a salary of around $50K by cutting expenses without undue suffering. I’ll try to make up for “boring” with “numbers”—a strategy that has never, ever worked.

2007–2011 was when my goals were clearest. I had left my basement apartment and bought a house ($240K with $140K mortgage). It was my first experience paying interest and I wanted to pay it off ASAP.


I Have a Savings Account for the First Time in My Adult Life

I am bad at saving money, though I really shouldn’t be. I have been in enough situations in my life where a savings account with anything in it would have been a great help, and while I consider myself excellent at budgeting (or at least having a very clear idea of how much is in my checking account at all times), I generally subscribe to the school of thought made popular by 2 Chainz: It’s mine, I spend it.


The Year We Saved $10K: I Try to Live Below the Salt

Let’s start the morning off with a Saved $10K story that taught me a new idiom: living below the salt.

Ruzielle: This year is the year I have saved over $10,000, and I did it because I’m incredibly lucky and also, I have serious workaholic tendencies. I spend my days off scouring the internet to make extra cash on the side—read: mock jury research, usability research ($50 an hour? Holla!), focus groups, etc.—and I take any chance I get to work overtime. Two years ago, I worked three jobs to beef up my savings and because: workaholic tendencies. Right now, I make okay-ish money for an unmarried woman without kids or animal friends ($45,000 plus range). I’m also a unicorn—I have zero consumer and/or “life happened” debt, zero car payments, and zero student loans.

My job has a 401(k) (sadly, it’s unmatched) and they take away $200 a month. Plus I also save about 20-25% of my post-tax income and any money I make on side jobs goes directly to my savings account. I received a huge chunk of tax refund money earlier this year from educational costs; it was around $4,000, and most of it went to savings. Also, I’m part of a twice-yearly bonus program at work and you guessed it, the money goes to savings. The bonus checks vary in amount; I’ve seen $1,000 dollars, and the one I just received was $250.

My housing costs are reasonable. I live alone and my rent and everything included is a flat fee of $1,100. I’m a bit of a recluse so I don’t spend all my time going out to happy hour with co-workers or going out, period. I’m not one to engage in FOMO, no matter how much fun going to Vegas is, or going to a bar that just opened. I try to live below the salt, because I have that mentality that I work X amount of hours to pay for this sweatshop shirt or whatever, so I might as well pay myself.

This past couple of months, I’ve made a conscious decision to cook more and meal plan. I’m fixated on fancy grocery stores and tend to pay $5 for a small cup of deli chicken salad which I can make at home and do a better job on it. I used to eat out a lot more but I get more disappointing meals than satisfying ones, and I just paid $15 on it. So I’m trying to be better at not eating out and the savings are adding up.

I also have to re-emphasize how luck plays into being able to save money. My bosses liked me a lot so I’m always first in line for raises, promotions, bonuses; I have lots of co-workers who never get ahead or get bonuses like I do, and I feel incredibly lucky.


Saving Money Vs. Earning Money

Yesterday, a new AskReddit question popped up: “[Serious] Redditors, What are your top tips for saving money, or for earning a bit on the side?

The OP asked for serious answers, and Reddit delivered: use the library, learn to cook, make a grocery list, use coupons, save your change, pay yourself first, pack a lunch, etc. etc. etc.

The majority of the responses were about saving money, not about earning more. This is interesting because there’s nearly always a hard limit to the amount that any one individual can save. Whenever you get some list of how to save money by taking the bus, going to the library, packing a sack lunch, you always get someone who says “okay, I’m doing all of those things and I’m still broke.” I’ve said it myself. (This is another reminder to never look up my old blog from ten years ago.)

On the other hand, there’s not necessarily a hard limit to the amount of money that a person can earn. Or, to be more specific: it is hard but there isn’t a limit.

So it’s telling that the advice skewed so heavily towards saving money vs. earning money.