Mike: Would you like to introduce yourself?

Academic Advisor: I work as an academic advisor for a mid-sized state school in the Midwest. I have a master’s degree in counseling and student affairs. Specifically, I work with students to navigate their program and help out with any academic related concerns. I’ve been doing that for a few years, and previously I was the director of a residence hall for freshman students.

Mike: Did you always know that you wanted to work with students?

Academic Advisor: No, not really. My undergraduate degree is in biology. I was not, it turns out, a very good biologist. But as an undergrad, I was a residence assistant and I was good at that. I graduated in 2009, and it was a lot easier to find work in education than science. During my grad school experience and working in the residence halls, I really found a passion for helping students access higher ed.

Mike: So this is highly relevant as part of a discussion on the issue of what a college degree is worth, and what you gain from a college education. You essentially studied one thing (biology), but went on to do something not related to your degree.

Academic Advisor: Right! In terms of a degree as a gateway to a career, my specific educational path wasn’t very useful. However, the act of getting a degree still has value. I think the problem that a lot of students are having right now is that colleges are telling them, “Go to school, get a degree! It doesn’t matter in what!” And the economy and media are telling them that it matters a great deal what you get your degree in and that increasingly, a degree isn’t, at least economically, a great investment for a lot of people. I get questions about this a lot from students and families, which is new for my generation of professionals. No one questioned the value of a degree 10 years ago. Most of my day is filled with fielding student concerns, academic, personal, career, or even financial.

Mike: What kind of financial questions do you get?

Academic Advisor: Mostly questions about how to pay for college, or if I think they would be better off dropping out. Students are increasingly looking at their loans and financial reality and getting—rightly—scared. The problem is that I believe that college does still have value. I have to, or I wouldn’t be able to do what I do. I also get lots of career questions—graduation dates loom and students get freaked out and end up in my office trying to find a next step.

Mike: So let’s talk about your own experience. What is your student debt load, and how much are you earning now?

Academic Advisor: I owe $45,000, half to Sallie Mae and half to the Department of Education. I make $32,000 a year.

Mike: Do your student loans feel like a burden to you?

Academic Advisor: Yes, significantly. I pay about a quarter of my take-home just to make my minimum payments. I can still live fairly comfortably, but the thought of trying to save enough to buy a house, or even a car, seems daunting.

Mike: Can you provide a breakdown of what your budget looks like in terms of housing, groceries and the money you can use for fun?

Academic Advisor: Sure! I take home about $2,000 a month, rent and utilities is $800, and my loan payments are $500. I spend between $100 and $150 on transportation (I have an old Toyota and I try not to drive, but small Midwestern cities aren’t known for their public transportation). Once you add in my phone bill and a few other small bills, I have about $400 left each month for groceries, going out, and savings. That actually sounds like a lot more spending money when I look at it like that.

Mike: But you’re worried about being able to save enough and to do certain things? Like contribute to your retirement account? Does your school provide you with a plan?

Academic Advisor: Yes, as is, I have a (nice) roof over my head, and I can afford to feed myself and I have health care, so I’m well aware that I’m privileged in that. But it doesn’t leave a lot left over for saving for bigger things, like a house and my retirement. I do get a small 403(b) contribution from my employer, but it’s not enough on its own. On good months I’m able to save between $100 and $150, which is great! But not quite enough to do much with. Honestly, it makes me worry for the economy as whole, too. I know my situation is not all that dissimilar for a lot of people my age. It’s hard to believe in a economic recovery when the younger generations don’t make enough money to contribute in significant ways (e.g. through the housing market and investments). And it certainly makes it hard to imagine being able to afford a family.

Mike: When students talk to you about some of their fears, which may include things like graduating with so much debt and being afraid of not being able to find a job, what kind of counseling do you give them?

Academic Advisor: Yeah, that’s always a hard conversation to have because the problem is so systemic. I can work with them on career skills, resumes, finding experience while in college in the form of internships if necessary. Sometimes the advice I have to give is that they just need to find something, somewhere. Even if they think they won’t like it, or it’s not close to home. Because student debt—you can’t get rid of it, and at the beginning, any job that can pay the bills is better then defaulting on your loans.

The real advice, that I wish I could give (or that I wish was effective) is that this system has failed them. Failed us all, really. Education is one of biggest tools (or should be) for people to increase their standard of living, happiness, and increase the active citizenship of our country, and as is, people simply can’t afford it. I want to tell students to demand more of their university, and more of their state and federal governments. That the way we run higher education in his country is unacceptable. But, of course, that doesn’t help the student, in the moment, who’s having a crisis about their financial future.

Mike: Do you talk about your own situation with them? Because it sounds like that would be helpful and relatable—to talk about how your salary is lower than your student debt load, but you’re still finding a way to make it work.

Academic Advisor: Yes, I do, and that does help. And it’s a good anecdote considering I ended up in a field I never thought I would (or even knew existed, really). There are opportunities out there, and you can make it work, but it may look very different then you had originally thought.

Mike: Cycling back for a moment, do you find ways to talk about the systemic problems? Or get students to recognize them? Or is this just something that goes around unsaid?

Academic Advisor: It gets talked about with other professionals, and in our conferences, but rarely with students. I think a lot of us struggle with how to address it: in a constructive way, that won’t end up with us in trouble, and that will benefit the student. There are some great financial aid advisors out there who do their best to milk the system to get as much money to students as possible. I guess that’s another piece of advice to students: know your financial aid advisors. You should know them by name.

Mike: We talk a lot about the student loan crisis on the site. And having a conversation about it is a good starting point. Maybe you should tell students to check out our site! Just kidding. Maybe.

Academic Advisor: I do, actually! I always encourage students to do their own research, and I think the Billfold does a pretty good job of putting a lot of good information out there in a way that my students will actually consume it.

Mike: One thing I think about sometimes is that a lot of students who need help don’t actively seek it or don’t realize they need it. I remember visiting my college’s financial aid center a bunch of times and also meeting frequently with academic advisors—but only because I had taken that initiative. There wasn’t anyone around who was going to convince me to go, otherwise. Are there ways you try to reach out to the students who don’t take that initiative?

Academic Advisor: I do a lot of “intrusive advising” which is basically forcing yourself into the student’s field of view. I call students, stop them in hallway if I haven’t seen them in my office in a long time. I have 450 students, though, so it can be hard to reach everyone. We do, as a profession, spend a fair amount of time thinking about just that. How do we get students to come to us and take our help? Obviously, not all advisors take the time, but most of us care about our students a great deal. And as you can imagine, students have a tendency not to seek us out until they are pretty deep in trouble.

Mike: Do you track the students you counsel after they’ve graduated? Or have you been able to see how some of them have done? If they’re struggling, are you able to give them post-graduate counseling?

Academic Advisor: In some ways, yes. Our career center keeps track of our students somewhat, and I keep in touch with a few. Though, a lot of the time they fall off the map a little bit. But, yes, I can still provide some services post-college. Little known fact, actually: Most colleges career centers will do career counseling and resume/interview help for alumni.

Mike: Do you see a pathway to fixing the systemic problems? Are there people actively chipping away at it?

Academic Advisor: That’s so hard. I mean, we need to change the funding patterns for public schools, and that is matter of a lot of things coming together: activism, lobbying, supporting politicians who make education a priority. I think eventually something will have to change, or people are going to start leaving higher ed, and states have a pretty vested interest in keeping their public institutions open.

Mike: But you do discuss it at conferences, so you are figuring out ways to address it.

Academic Advisor: Well, we’re trying. Not all of us agree on the best method for making change, and even if everyone at a university agreed on something, the size of the institution, and the related moving parts, makes it difficult. I do think there’s hope – pretty much everyone agrees that the current system is unsustainable, so that’s a start.

Mike: And despite the systemic problems and the increasingly high costs, you firmly believe that college is worth it.

Academic Advisor: I do. It’s a life changing experience, and very few other experiences force you to confront new ideas in the same way. A successful college education demands a shift in perspective and understanding, and it remains one of the best ways, as a society, to address social justice, economic mobility, and civic engagement. We just need to find a way to make it truly accessible, for everyone.

Mike: So I personally think that college is worth it because I don’t think I would be where I am today if I didn’t get the education that I did. But I also know people who chose not to go to college and are doing well for themselves. So although I think that college is worth considering, I don’t think it has to be for everyone. What do you think about that?

Academic Advisor: I agree. I think it should be a realistic option for everyone. Not everyone wants that experience, or the experience isn’t right for them in some way, and that’s great. By not going to college you aren’t giving up on your ability to feel successful, or be educated, or to change in a significant way. And no one should go to college without being invested in it, just like no one who wants to should be restricted from it.

Want to chat? Get in touch.

Jake Smith is a name I’ve made up for the person who sent me this email:

I’m a physician in my early forties. I make $450-500K. I read a lot about finance and I know that technically I am in the 1%, but I don’t feel rich at all. I don’t know if it was the way I was raised or because for a time I was living paycheck to paycheck or if it’s because I have three kids (and hence, eventually will have three tuitions to pay), but I don’t feel wealthy yet. Maybe it’s because I live in an affluent suburb of a big city and most of my neighbors seem to be doing really well. I don’t know. Have you run across other folks like this?

I had not, personally. So we arranged to speak on the phone.

LS: Tell me about your money. How much do you make?

JS: I just got my tax returns back a couple of weeks ago. My total income was higher than I thought it would be—$570K. And it was pretty good last year as well. And after reading other conversations with “rich people”—one in the $300Ks, one in $100Ks, I was surprised they thought of themselves as rich.

LS: Which is insane, to me. Of course they’re rich! How do you define rich?

JS: I think of rich as not having to worry about money, not having to worry about retirement, not having to worry about saving for your kids’ educations. I have three kids and I try to save up for their futures, and my retirement, and even with my salary I don’t feel secure.

LS: Did you grow up with money?

JS: My father was a physician. I think he made a decent amount of money, but my parents never talked about it. My mom also worked. We lived in an affluent area, but my parents were pretty cheap—we never went on expensive vacations or had expensive cars. We did okay but weren’t living a lavish lifestyle. My parents were so cheap that my sister, also a physician, has rebelled against that and has a hyper-consumptive lifestyle—high-end cars, high-end clothes. I took the opposite approach and am frugal.

LS: Did your parents give you money when you were growing up? What about for school?

JS: They paid for our undergraduate educations, but I didn’t want them to pay for my medical school so I took out loans for med school. Paying for college was obviously very helpful, though when I was in college, tuition rates were much lower than they are now. I think yearly tuition and room and board at my state school was $7K. Now I think it’s three times that. But other than that we didn’t get any money from them, and I didn’t expect it. I think that’s a good thing. It allowed us to find our own way and work hard, and my parents are enjoying their retirement now.

LS: Did you go straight into medical school?

JS: I spent a year after undergrad “finding myself”—I travelled around Europe and South America, just had a really good time enjoying meeting people, experiencing new things, not studying. My parents paid for my tickets, and I mostly stayed with friends and spent money that I’d saved. Then I came back here and spent a year doing research in a lab, and then I applied to medical school.

LS: Do you still have med school loans?

JS: I do. It’s down to about $90K, which is the original amount I took out, but during residency and training, I deferred them and it ballooned to about $150K.

I was lucky enough to make a private equity investment into a health care company, and after that initial loan was paid off for this investment, it’s doing quite well and I’m making a good amount of money from that, so a lot of my income comes from that. The ROI I get from this investment is significantly higher than the 6% interest rate on my student loans. It was a calculated risk to make this investment instead of paying down my student loans, but in the end, it paid off. So now that things are going pretty well, I’ll probably pay them off.

LS: Can you explain how that investment works? Where did the money come from?

JS: I took out a business loan that I got through my practice, but I had to guarantee it personally.

LS: Where did you learn about investing?

JS: I learned from reading a lot, talking to a lot of people. A lot of the investing luck I’ve had has been being in the right place at the right time. It could have turned out badly, but it didn’t. I’ve made some investment mistakes in the past—I invested in industries that were unfamiliar to me, and I lost a lot of money. I don’t know how much—maybe a few hundred thousand dollars. I put my family through some difficult times. During that time, we were living paycheck-to-paycheck, even with my salary. I was making $200K a year.

LS: Can you explain how that works? That is so much money. Where did it go?

JS: We lived in a townhome that cost in the low $300Ks. For my salary that wasn’t expensive, but it was the losses in this business that I’d invested in that caused the situation. I was putting up a lot of my own money and then the business failed, and we had to pay back some loans, and by the time the books were all cleaned up, I was out of money.

LS: Was your wife working?

JS: She was then, but after our second kid she started staying home.

LS: Does she share your same stress about money?

JS: She doesn’t stress quite as much as I do. I’m lucky in that she’s really frugal and she’s prevented me from making a lot of dumb purchasing mistakes in the past. It’s good for someone like me to have someone like her to keep me grounded. She does worry about the money—less so now, especially since the past couple years have been pretty good. But we do worry about our children’s futures. What if they want to be a teacher? (There are a lot of teachers in my family.) The middle class is not doing well in this country, I’m not sure how they’re going to do if they decide to go into teaching.

LS: It sounds like you come from a family of physicians. Is that something you’d encourage?

JS: It’s lot of work, a lot of headaches. I love being a physician, but every year it’s increasingly difficult to deal with the paper work and the red tape.

LS: Did you choose the kind of doctor you are based on salary at all?

JS: No I didn’t. I chose my specialty because I fell in love with it. If it paid much less, I would still have gone into it.

LS: Are you still living paycheck-to-paycheck?

JS: No we’re able to save a good amount now. Since the financial collapse, I’ve become much more conservative. I’ve built up a two- or three-year cushion. I think the world economy is unstable—the impending Eurozone implosion, the asset bubble in China.

LS: Where is that money?

JS: Just in a bank account, it’s earning hardly any interest. Whatever the rate is is hardly worth mentioning. Even our financial advisor advised putting that in mutual funds or whatever, but I’m not sure what is going to happen. This way, I might lose 1 or 2% due to inflation, but I’m not going to lose 30%. Having said that, I’m going to use the next couple years to deleverage, pay down student loans, I have a couple investment properties with mortgage, and one with a high rate, so I’ll probably pay that down.

LS: Properties! Another layer.

JS: I bought the first property during my residency. We fell in love with a condo, and during the years were there, the value increased, and then we bought another condo, then another house.

LS: So your $570K, break that down from me, where is it coming from.

JS: Most of the money is from work—$320K. I think probably $50K is from our properties, and then $200K from my investments.

LS: In addition to your fat bank account, where else is your money?

JS: I don’t have an online brokerage account yet—I plan on getting one soon. But I do have a retirement account that my financial advisor takes care of.

LS: You mentioned tuitions earlier.

JS: We started a 529 about a year ago. I should have started a lot earlier, but yeah, we have that 529 for them.

LS: Do you talk with your friends and peers about these things?

JS: Yes, not in quite the detail I’m talking to you, not hard numbers, but we do talk about it. Some are doing well, some are doing worse. Many of my friends are in the middle class.

LS: Does it feel silly to worry about money when you’re making so much more than even people you know?

JS: I’ve analyzed my worry, and I think a lot of my worry is not just for myself—we’re all in this together. Maybe I read a lot. Maybe I read too much. It’s just the way things are going for our country isn’t great. I just read a good book by Mark Blythe, Austerity: The History Behind the Dangerous Idea. It explains that in the run up to the crisis, there was a lot of private sector debt, and it became public sector debt because of the bailouts, and he calls it the great bait and switch because the middle and lower classes are now paying for it through budget cuts/spending cuts. It isn’t the bankers, who caused the crisis in the first place, that are paying for it. I worry about my kids having to pick an industry where they think about how much money they’re going to make instead of something they love. If I was on an island by myself, I would not be worried. But I’m worried for my family, for my kids.

LS: Do you feel like your lifestyle reflects your income bracket?

JS: We are proud owners of new Toyota minivan, sleek and sexy. My wife has been loving the minivan, and my friends are making fun of me, calling me a loser and a hypocrite. I said I’d never get a minivan! We also have a Subaru and I have a “entry level” Lexus (It was $32K). Average cars. We have a nice home in a good neighborhood in a good school district. I think our mortgage is in the low $700Ks, which is a lot, but it’s less than double my income. If you read The Millionaire Next Door, that’s what they recommend.

I will say, once we did move to this area, there is a palpable pressure to keep up with the Joneses. When I drop my kids of at school, every other car is a Range Rover or a high-end BMW, Mercedes, Lexus. For a while I began desiring a Range Rover—my next door neighbor has one. My wife nixed that idea but I kept pining for that. Then I was like, these cars are $80K, they get 17 mpg on the highway, I don’t need it. Especially since my car is seven years old and is not giving me any problems.

I was very stupid with the Lexus. I got it seven years ago and I leased it. I was under the impression that when you got a business car you had to lease it. Then I talked to an accountant, and found out that wasn’t true, and after the three-year lease ended, I ended up buying it through the business. That was nice because it’s a tax write-off. We got a 0% loan for the mini van.

LS: How are you teaching your kids about money?

JS: Our kids are both in grade school, and we started doing allowances this past summer. The older one has a bank account, and when she’s saved money, we go to the bank. I didn’t really have that. But I’ve read in books where they recommended doing it for kids, teaching them the value of money, the value of saving, the value of not taking on debt to pay for things. It’s mostly to teach them about money.

We had credit card debt for about a year when things were tight, but we were able to pay that off. I use a credit card for everything, and we pay it off every month. We do it for the points, for plane tickets.

LS: Do you ever feel like you are over cautious? I mean, you are making so much money. So much more that the vast majority of other American households.

JS: I think the years where I was wondering if I could make it until the end of the month—I think those years scarred me. If I were single, it wouldn’t have been as bad, but there were people that were depending on me, and I felt like i was letting them down. Now, even when there is a surplus, I feel like I’m letting them down. My income is certainly not guaranteed—you hear of NFL players who are bankrupt after five years. I know it’s very easy to squander what you have.

LS: What do you feel like you splurge on?

JS: After the baby was born, our house became a center of chaos, with the older kids and school and homework and the baby requiring a lot of attention, and we decided to hire a personal chef to save us time, and it’s been great. She’s worth her weight in gold. She comes once a week and cooks three meals for us. Because she makes a lot of food, it ends up being about five dinners. So most weekday evenings, we don’t have to think about dinner, it’s prepared. It’s a little bit expensive, I’m not sure how long we’ll keep it up.

LS: How much does it cost?

JS: It costs around $300 a week. Which is a lot. I know it’s a lot. Even before the baby came, dinner was always stressful; we knew when the baby came it’d be doubly so. We don’t have a nanny or an au pair and our parents don’t help out that much—we’re mostly by ourselves. So we did some research and happened upon this personal chef. She also does the shopping. It’s only been a couple of months.

LS: What do your friends think?

JS: I think I’ve mentioned it to one or two of them, but it’s not something I would advertise. I look like an average guy and the things I do with my hobbies are not congruent with the lifestyles of the rich and famous. It’s almost out of character. But this is one thing that is a luxury, and I think it’s okay for now.

LS: When did you start reading books about personal finance?

JS: I read Mortgages for Dummies and Personal Finance for Dummies in the mid-’90s prior to buying my first condo. Because we did not talk about money in my family, I was ill-prepared to start thinking about money and investing and buying homes. So I did my homework and learned about the whole process. In grad school, I had delusions of grandeur until I read the Millionaire Next Door. That book and other books like it are great for teaching us how to live under our means and for reminding us that material things are often meaningless and that a life pursuing status symbols can often lead to a debt filled existence.

Two years ago I read The Two-Income Trap by Elizabeth Warren (now senator from Mass.), which really rocked my world. She shows empiric, convincing data on how the middle class is becoming increasingly hollowed out by the rising costs of health care, education and houses. This is the primary reason that the middle class is falling behind and not because they are overspenders. I agree with her that overspending is not the primary reason for our country’s current situation. However, I think that she does dismiss the fact that we do live in a consumeristic culture. I mean, I have known lots of people stretching to buy big homes/cars, things that they could not easily afford. (You don’t have to buy the Range Rover SUV when a Hyundai SUV will do just fine).

LS: Do you have a plan to make more money? More properties, different investments?

JS: One of the reasons I have a lot of liquid reserve is so that I can make investments. I’m doing my homework right now as another opportunity to make a private equity investment has presented itself. It will take some time to research this thoroughly enough for me to be comfortable in making the investment. The returns should be higher than the interest I’m currently paying on my debts.

This is why I’m not going to pay off my student loans in one fell swoop (though I plan to be more aggressive about paying it off this year). I will eventually open an online brokerage account so that I can start buying public equities. It will mostly be in the form of ETFs, index funds. I’m not an expert in stock picking, and so will likely pick funds that follow the broad market and buy more shares in these funds every few months or so (dollar cost averaging). I’m going to start small and slowly build this up as this is the area of investing I have the least amount of experience in. But, with all these investments, I still do not want to drop below at least a two-year cushion of living expenses.

LS: What would it take for you to feel like you were rich?

JS: I don’t know the answer to that. In college, before I had a job, before I was working, the six-figure mark was a goal for everyone. And now I’ve hit the half-million dollar mark. I don’t know if I’d feel rich if I ever met the seven-figure mark. I think the important question is, can you still be happy, regardless of your income? Maybe it’s not so important to feel rich. It’s more important to feel happy and content.

LS: But still, you’re worried.  What are your feelings about the economy right now—when did you start feeling so worried for the future? What initially inspired that?

JS: Well, we’ve had quite a turbulent start to the millennium haven’t we? At least in a geopolitical and macroeconomic sense we certainly have. Look at what’s happened. We had 9/11, two boom/bust cycles, two wars, a prolonged recession that nobody saw coming, and now a growing student debt bubble. What’s going to happen next? Yes, the stock market is booming and housing is making a comeback, and there is certainly a layer of calmness at the moment. What belies all of this however is still an ocean of latent instability. We live in such a globally interconnected world that it is frightening. I’ve read Freefall and The Price of Inequality by Joseph Stiglitz. Both were very eye opening, you should read them.

On more of a personal level, this past decade has been a turbulent one as well. My best friend passed away, other friends have been laid off, I’ve had physician colleagues go bankrupt, and the recession has not been kind to some of my extended family.

Nothing is certain, nothing is guaranteed and your life and your fortunes can turn in a heartbeat. I think that’s why I’m worried—not just for me, but for my family, friends, and for all of us really. (Or maybe I’m just a closeted doomsday prepper!?)

See more interviews with people about their money

What can be learned from Fitzgerald’s tax returns? To start with, his popular reputation as a careless spendthrift is untrue. Fitzgerald was always trying to follow conservative financial principles. Until 1937 he kept a ledger—as if he were a grocer—a meticulous record of his earnings from each short story, play, and novel he sold. The 1929 ledger recorded items as small as royalties of $5.10 from the American edition of The Great Gatsby and $0.34 from the English edition. No one could call Fitzgerald frugal, but he was always trying to save money—at least until his wife Zelda’s illness, starting in 1929, put any idea of saving out of the question. The ordinary person saves to protect against some distant rainy day. Fitzgerald had no interest in that. To him saving meant freedom to work on his novels without interruptions caused by the economic necessity of writing short stories. The short stories were his main source of revenue.

Fitzgerald, as we learn from this terrific American Scholar piece, was also paid no less than $1,000 per week during his Hollywood years and had an annual income of roughly $500,000 a year when adjusted for inflation. [Thanks to Michael McGrath for the pointer.]

Previously: Jane Austen

Mike: Why don’t you introduce yourself.

Single Mom: I’m 42 years old, divorced, and a single mom of three elementary school-age kids. I work in the administration of a non-profit. I live in a Maryland suburb of D.C.

M: How much are you currently earning at the non-profit?

SM: I earn $40,000 a year, and that is supplemented with child support that I receive from my children’s dad—about $1,500 a month.

M: Do you also have benefits?

SM: I have health insurance. It was a hard decision to make on whether or not to get insurance for myself. My employer pays two-thirds of the premium, but even the one-third I pay takes a significant bite out of my paycheck. I have it for now, but I may have to drop it. I don’t have any retirement benefits or anything.

M: There aren’t retirement plan options like a 403(b) or anything like that at the non-profit?

SM: No, nothing. I work for a very small non-profit. The budget and staff are both very small so the insurance isn’t even a group plan. I had to find my own insurance and I submit my premium bills to my employer.

M: How long have you worked at this particular job?

SM: I have been there since last August. I was working in the private sector prior to that, earning a bit more in salary and benefits but I was laid off. I was unemployed for just under three months before finding this job.

M: Do you have full custody of your three children?

SM: No, I do share custody of the kids. But I am responsible for paying all the child care costs, which has translated in practice to me paying all school-related costs: lunches, field trips, equipment, as well as the before and after care costs.

M: I’m sure that’s very difficult to do as a single mother living on your salary. How do you make it work?

SM: It is very difficult. I definitely live paycheck-to-paycheck and that’s not an exaggeration. My bank balance by payday is often $0. I have no savings at all. My priorities as far as bills go are rent and childcare. I am lucky that I don’t have a lot of credit card debt, but even without that I can’t always pay all my bills. I have a very strict budget that I stick to. I can’t always pay utility bills in full, but I have figured out how much I have to pay to keep the utility companies from shutting off my service. My gas usage is higher in the winter, but goes way down in the summer so I am able to catch up on that bill by the next winter. I rent a very rundown house in a good school system and pay below market rent. Even then I have negotiated that rent to keep it low—not asking for a lot of work to be done, doing work on the house myself, etc.

I have really learned to negotiate a lot. For the summer, I simply could not afford the cost of full-time care for all three kids—it was more than I earn! So I contacted the child care provider and was very frank about my situation and was able to work out an arrangement for payment that allows me to keep them in child care. Then there are bills that I just can’t pay. I was saddled with a large debt in my divorce and I have just no money to pay that with—I know it will catch up with me eventually but for right now my priority is keeping my kids sheltered, fed and cared for.

I stick to a strict budget as far as groceries. I make menus, never shop without a list and rarely have “treats” for the kids. Our big night is when I order pizza and watch a movie on Netflix. My kids are growing so fast and I really can’t keep up with buying clothes for three of them so I have learned to swallow my pride and ask for donations. I belong to a listserv of single mothers and just put it out there that I needed clothes and received a lot of donations which got us through the winter.

I don’t take vacations—alone or with the kids. We rarely go out and when the kids are with their dad, I don’t go out. It’s very isolating because not having any “extra” money means I can’t go out and socialize.

M: Can you break down some of the numbers for us? How much do you allocate toward rent and utility bills, child care, and things like gas and groceries?

SM: I pay $1,480 per month in rent, $1,386 per month in child care, and I usually pay about $75 to gas and electric, though as I said, my bills are often higher than that. I keep my groceries to $400 per month, and that includes things like toiletries and household supplies. One of my children has some medical issues so I pay around $100 in medication for him per month, I do have Internet and phone and basic cable, which is bundled and has recently gone up in price to $130 per month so I will most likely have to cut back that service in some way..

I try not to drive too much—I take the bus and metro, but that can even be expensive during peak hours. I have a prepaid cell phone and only pay $25 per month for that. My phone is very old but I am planning on keeping it for as long as possible because the plan will increase by $10 if I get a newer phone. I pay about $150 per month to credit card debt. One is a card that I have closed and I am paying off the balance. I am almost done paying it. I negotiated with the bank that issued the card to pay a lower monthly amount in but it has taken longer to pay off

M: Do you have student loan debt or other debt besides the credit card?

SM: Well, that’s complicated. I personally do not have actual student loan debt but while I was married, my husband and I consolidated our loans with the Department of Education. Since I had the loan with the DoE, we consolidated in my name. He got his master’s overseas with private loans so he had a lot of debt. In the divorce, that debt landed with me since it was in my name. So there is a $48,000 student loan debt that I have for an education my ex-husband got. I have been able to put it in forbearance and even deferment when I was unemployed but it’s in repayment now. I have not been able to pay one penny of that debt. I have to deal with it but it seems so daunting, I am just incapable of figuring out a solution.

M: Your ex-husband is not making an attempt to pay off that loan?

SM: No, he is quite happy that he doesn’t have to pay it!

M: That’s terrible. Is the loan sitting there accruing interest?

SM: Interest and late payments. I have been getting calls from the company recently and they offer to “help” me figure out a payment, but the reality is that I don’t have anything to give them. You’ll be happy to hear that the master’s my ex got has allowed him to earn a great salary, though!

M: It’s really unbelievable. Have you looked into legal help with it?

SM: I am in the process of looking into that. I have been trying to find the a copy of the original paperwork I submitted to consolidate, which would list the loans and prove that they are not mine. I no longer have that paperwork and the loan has been sold so it’s hard to figure out where that record is. I’ve also looked into Chapter 7 bankruptcy because I’ve recently read that in spite of popular belief, it can be possible to dispatch student loans through Chapter 7. But as I said, it’s so stressful and daunting—I’ve ignored it for too long. I’ll add that I only have a B.A. from a state school.

M: I’m glad to hear there’s some hope of getting that loan discharged. What did you study, and how much was your college education?

SM: I have a degree in theater—very useful, I know. But I started college at 17 and wasn’t ready so I dropped out. By the time I figured I better get a degree, I was so close to the theater degree and, since I was paying my own way, I figured that was better than nothing. I don’t really remember how much my education cost. I got a combination of grants and loans but it wasn’t much, as I said, it was a state school and I had in-state tuition.

M: You’re living paycheck-to-paycheck now, but has it always been like that?

SM: When I was married, things were definitely better. We were pretty solidly middle class. We had our financial struggles, but were doing fairly well. I used to have a savings and a small retirement fund, but I had to cash out and spend it during the divorce.

M: And I’m sure you’re really caught up living in the day-to-day, but do you also think about things like retirement? Do you no longer believe that’s an option, or are you figuring out a way to do it?

SM: I just can’t think about it. I know that I will be one of those people who works until they drop dead. It’s just not my reality. My priority is my kids and making sure they have a better future than I have. I feel like I’ve kind of just given up any thoughts of having a better life for myself, and really just try to focus on my kids.

M: What kind of life did you have growing up?

SM: I was raised in a pretty typically middle class environment. My siblings and I weren’t spoiled but we never really wanted for much. I have learned in my adulthood that my father was not very good with money. He spent what he had and was no good at saving, which has left my mom in a less than great place since his death. I worry that I have inherited that trait. I mean, sometimes I wonder if I should be making my finances work better—if it’s not that I have a low salary and high expenses, but if it’s also that I am just no good with money.

M: But I think raising three children on what you are earning is quite an accomplishment and deserves recognition. Do you not agree?

SM: I do feel a sense of pride that my kids don’t know the struggles I go through. I am particularly proud of the fact that they never knew I was unemployed—nothing about their lives changed.

M: After your father passed, your mom was left in less of a great place because he wasn’t good with money. How is your mother now?

SM: I mean, he always managed to pay the bills, but he was a very generous guy too—he just didn’t plan and save for retirement. So my mother, who is in her early 70s is still working.

M: Are you close with your mother? Do you talk about money with her?

SM: I am very close to my mom (though not physically—she is in the Midwest with the rest of my family). I try very hard not to discuss my financial situation with her, though it comes up because I am not able to take the kids to visit, etc. We do discuss her finances a little and I know she’s not in a horrible place but just not in great place. I don’t like to discuss the extent of my financial struggles with her because I don’t want her to worry, and I don’t want her to feel the need to give me what little she has and needs.

M: Do you also worry about her? Since she’s still working?

SM: I worry, but see some of her problems as solvable, she is just hesitant to do things like sell her house and move in closer to my sister. That would be a big help for her. She is fairly good with money. I think she just never took charge while my dad was alive, and she seems to be doing OK. I do think she would prefer to stop working and she is trying to figure out a way to make that happen.

M: You said something pretty bleak before in that you have given up on having a better life for yourself, but talking with you so far, you seem like a very resilient person. I know that your income is the biggest barrier at the moment. Are you thinking about ways to earn more money? Do you have the spare time to look for a better-paying job?

SM: Yeah, I guess I am resilient. I feel like I have to be for my kids. I am always thinking of ways to earn extra income. I have often in my working life worked a part-time job in addition to my full-time work, but that was while I was married. It’s tougher to find the time now that I have blocks of time without another parent around. I would be working just to pay for babysitting. I would love a better paying job but have concerns about my tenure at jobs. I was not at my previous job very long (about 12 months) before I was laid off, and I haven’t been at my current job for a year yet, I want to build experience and a bit of longevity because I think in the longer term, that would help me get a better job or advance my career.

M: Do you have the sense that the situation you are now is not permanent? That you believe that there will be a time when you are no longer living paycheck to paycheck?

SM: Honestly, I don’t. I think about where other people my age are financially—home owners, retirement accounts, college funds—and the amount of catching up I would have to do just seems impossible. I do tend to think of my situation as just the way things are for me—not in a “victimy” way, I take responsibility for the life choices I have made that have put me here—but I think I am just too far behind in terms of financial health to ever be in a significantly better place.

M: You mentioned that things were easier when you had another parent around to help with parenting duties. Do you think having another partner to help out in the future is something that could happen?

SM: No, I don’t. For a variety of reasons. One of which is my financial state. I feel that I would be bringing someone down if I partnered with them, financially I mean, and I don’t want to do that. I mean, there are other reasons I’m not really looking for another marriage or partner, but the financial reasons are something I definitely think about.

M: What is your social life like? Are you able to do simple things like meet a friend for coffee?

SM: I don’t have much of a social life to be honest. It is a struggle to do even little things like meet for coffee or lunch and definitely no money for a night out. I live in the suburbs and my single friends live in the city and among my friends who are parents, I am really the only single person. So I’m kind of in a gray area in terms of friends and not having the means to go out doesn’t help.

M: Because of this gray area, does that mean you’re lacking a support system that could help you do certain things? For example, having a friend who could look after the kids while you went on an interview or a networking event?

SM: For the most part, that is the case. I do have some neighbors and friends who have helped out on rare occasions, but really no one who could help on a regular basis. I don’t have any family in the area, as I said before.

M: Do you ever consider moving back to the Midwest to have a better support system of friends and family around?

SM: I would love to! I want to! But, because of custody laws, I am not able to relocate unless I gave up custody of my kids, which I would never even consider. I would love to be in the Midwest. It’s much cheaper to live there and I would love to be closer to my family.

M: That sounds like it would be ideal for you—to be able to move to the Midwest where things are cheaper and to have a family support system and your children with you. Is there no legal pathway to make this a possibility?

SM: Unfortunately, no. And I spent a lot of time and money trying to make this happen when my husband initiated a divorce. But the laws are such that unless my ex consented, I cannot take the kids out of the area to live. And my ex will not consent so I have to stay in the D.C. area.

M: So if your ex wanted to move, he’d have to get your consent as well?

SM: Yes, that’s correct.

M: I imagine it’d be difficult to convince him that moving would be good because it’d mean providing your children with a better situation?

SM: I really tried that approach during the separation/divorce process, but he was adamant that he wanted the children to remain in close proximity to him. And I do think it is important for the kids to have regular time with both parents, so I can see the point. But it was very difficult because I didn’t want to move to this area, but did because he got a job here. I mean that while we were married he got a job in D.C., I had no desire to move here, but did so to support him.

M: It just seems totally unfair that it appears like he gets to have things the way he wants them to be (though I know you already know this).

SM: Yeah, it was an eye-opening experience for sure. I try really hard not to be bitter about it.

M: I know you have to go pick up your children soon, but I would love to know if you see some tiny bit of light at the end of the tunnel—because I do think you are resilient and resilient people figure out how to get to a better place, even if there’s a bunch of hard tiny things you have to do along the way to eventually get there.

SM: Well, I guess the light is that my kids are fantastic and I really believe that they will have great lives and do the things they want to do. I struggle a lot, I do, and I think about what might have been or what I could have done but I guess at the end of the day if all I manage to do with my life is raise great, good people, then that’s a pretty big accomplishment.

M: I’d love to follow up with you maybe a few months or a year from now to see how you are doing if you are open to that.

SM: Yeah, that would be cool. I tend to hope for the best but expect the worse—so you never know, things could be better in a few months or a year. I’m sorry that this was so bleak.

M: Not everybody’s story comes with a tidy, happy ending. This is the reality of things, and I think it’s important that we can show that. So thank you for being so open and taking the time to talk to me.

Previously: Living on $15,000 a Year

Interested in having a conversation about what you do, how much you earn, and how you make it work? Get in touch.

Mike: After reading some of the conversations we’ve had with high-earners, you got in touch with us and said you wanted to talk about what it’s like to not earn a lot of money. Can you introduce yourself?

Broke Person: So, I’m 25, I live in the Midwest, I work and live at a camp/environmental learning center, and I earn just shy of $15,000 a year. It’s pretty seasonal work, so I earn most of that between late April and early November. The winter can be pretty lean in terms of what we do for work, so most of us supplement it with a second job. Last year, I was a nanny for some family members, and this year I spent a lot of time traveling back and forth from where I live to where my mom lives (about six hours driving) and scrounging for extra jobs here and there.

M: The federal poverty guideline for a single person is $11,490, and you are above that, but not by a lot.

BP: Well, that is the amount I filed for last year. I think I’ll earn a few thousand more this year because I have signed up to be a substitute teacher as well. I also have an extra six weeks of work at camp because I’ve been doing some maintenance work while somebody was out for surgery recovery. Because I live here, I’m paid a daily rate, which is $80 a day. That also means that I am currently living rent-free, which makes a big difference. I made about the same before I started this job, but also was paying rent from my salary, which was rough.

M: Can you talk a little about that? When you don’t earn a lot of money, I’m sure every dollar counts. Does it help to live in the Midwest instead of say, New York, D.C. or San Francisco?

BP: Absolutely. I did live in a city during this time, but definitely not a super-expensive coastal city. I was working retail, and my typical paycheck was about $450, I think. I paid $400 in rent, about $300 in student loans each month, which doesn’t leave much behind. For the most part, I was really enjoying myself at this point in my life: It was my first time living in a city, I had been living with my mom for about a year before that working for the same company and being pretty miserable. So in general, my lifestyle was on the up-and-up. I didn’t have a car, so I was biking around and taking public transportation, which when you’re first starting to use just feels so great, until about the 8th time a stranger tries to ask if he can be your man at the bus stop at 5:15 a.m.

M: What weren’t you able to do on what you were earning?

BP: The things that really sucked about having so little cash were not being able to go out with friends without asking them to buy you food or drinks, which is pretty humbling and embarrassing at times, and something you avoid by not being social sometimes. After rent and loans, my next biggest concern was food, and for the most part, I was fine. But when you’re broke at that level, you start to get pretty single-minded about food. When my roommate (who was at a similar income level as me, but had student loans deferred due to her job) would invite me to her parents’ house for dinner, it was always a relief in addition to all the normal reactions you have to a dinner invitation. When there was free food in the break room (this would happen about once a month), you sort of plot how much of it you can get away with eating so that you don’t have to spend money on food that day, or can save your packed lunch for the next day. For example, on pb&j day in the break room, you immediately eat a sandwich, with more than reasonable amounts of peanut butter on it at the beginning of your break, so that when you make one again ten minutes later, most of the people who saw you eat the first sandwich have filtered out of the room and you don’t feel judged for taking more than your share. I also would run out of money and have no cash and no money in my bank account occasionally for two to four days before a paycheck. If we were low on groceries, I would make toast from the butt ends of bread and fry an onion to eat with it, or buy Ramen for lunch at work with change from our change jar (17 cents!).

My co-workers and I noticed when the store we worked at raised the price of a single banana to 24 cents. A good friend of mine and I quit this retail spot for new jobs at the same time, and we would text each other things about our new jobs that seemed astounding to us. One of the things she noticed at her new job was that if you came in to work on a Saturday, the boss just ordered pizza for everyone. That was a revelation. At my current job, I eat for free a lot, because we have some programs where kids stay overnight and are fed, and I gained 20 pounds in the first six months, probably from overeating, which I’m pretty sure I do because I spent that time hoarding opportunities to eat for free. I mean, the price of bananas rising didn’t make a huge difference, but it was remarkable—a thing we talked about. I don’t think I would notice that now, with all of my access to free lunches.

M: Do you and your friends talk about money? You talked about having to ask your friends to help pay for you when you go out and how humbling that is, so I’m guessing that these friends can afford to do so and that they’re living at a higher income level than you. How do you navigate these relationships?

BP: I’ve been lucky to always have a few friends that I could depend on to talk candidly about money, and that I have mostly felt comfortable doing so. I think a lot of my comfort negotiating unbalanced financial relationships stems from a childhood friendship with someone whose family was much more financially stable than mine. She was always willing to finance entertainment for us when I couldn’t, and lent me money for tickets to concerts a couple of times so we could actually buy them ahead of time. Mostly, this was money her parents gave her, and I would pay her back from the jobs I worked in high school. But the important thing was that we talked about it, and that it generally was my decision to pay her back. We just wanted to do these things together, and figured out a way to make that happen.

As an adult, my close friends know that I don’t have money, and many of them are in similar situations. I think the thing that varies the most are people’s levels of debt. I do have friends who make significantly more than me though, and sometimes they buy stuff for me. Mostly this is in the form of meals or drinks out, although it has also happened when I’ve traveled to see people. I’ve told friends “I can buy my plane ticket, but you’ll have to feed me while I’m there.” I don’t usually agree to go out if I don’t have the ability to pay for myself, definitely not without saying “Hey I’m broke, I can’t really go out this week.” Sometimes, friends offer to pay so that I can come anyway, and sometimes, when I’ve gone out anticipating paying for myself, they’ll offer to pick up my tab when the check comes around. I have a few friends in particular that have been pretty generous. A couple of them know they earn significantly more than me, but have also spent time making terrible money or using all their income to pay off debt.

The thing that has been tricky to navigate is keeping these relationships honest, and not expecting my friends to pay for stuff for me. There have been times when I’ve ended up putting things on my credit card that I didn’t intend to because I anticipated somebody else offering to pick up the check and they didn’t, all because I didn’t want to say that I was too broke to go at the outset. Those nights are not my most fiscally responsible decisions. Also, some people with money are way more generous than others with their broke friends, and it can be hard to let yourself be okay with that. There are times I have to remind myself that it isn’t the responsibility of everyone around me to make things come out more egalitarian. I definitely believe that people’s money is theirs to do what they want to with–I’m grateful when that includes helping me out, but I do occasionally have to coach myself to not feel like friends SHOULD be paying for me. It can also be hard to feel and show gratitude without overdoing it and letting yourself feel inferior. My friendships shouldn’t make me feel bad about myself, even if I can’t really get them back next time. Sometimes I’ll buy when we’re at a cheap place, or just getting one round of drinks, or getting ice cream instead of food. Being gracious can be challenging, and it’s unfair (and not good for my friendships) if I say “Oh, I’m broke” with the expectation that somebody will pay for me just because I said it.

M: Can you talk about your student loan debt, what kind of school you went to and if you feel like you got what you wanted out of your education?

BP: I went to a private liberal arts school (which I doubt people will be surprised by), and I did really, really enjoy my time there. I graduated with about $28,000 in debt at a time when it was abruptly much more difficult to find a job in my field specifically, and in general. I don’t think I would make the same school choice again from the perspective I have now, but I don’t exactly regret my degree or the school I went to either. There are some things I DIDN’T get from school that I probably needed but didn’t realize at the time, though. I think more honesty about the likelihood and rates of tuition increases from the admissions staff may have changed my choices.

I had the opportunity to go to a state school in my hometown with no debt for about $1,500 a semester, if I recall correctly, but the programs, faculty, distance from home and all of the brochure-ready things from the private school were so much more appealing! I ended up paying the same cost up-front due to a hefty academic scholarship, plus the maximum amount of federal aid, but I took on a debt load that got larger every year. My first year in school, the tuition price tag was something like $27,000 a year, but by my senior year, it was $36,000. I think that even at 18, I would have known the amount of debt I had to take on to do that was unreasonable. I was aware that because it was a private school, tuition wasn’t frozen, but I had no concept of how quickly it would rise. The other thing that I think I missed out on was intentional career counseling. That was something that was available, but I didn’t take advantage of. That school costs even more now, over $40,000.

M: What kinds of careers were you considering before you graduated?

BP: Teaching, in a really crowded subject area, which I didn’t even think about or hear mentioned until about my 7th semester. I applied for jobs after I graduated—probably not as aggressively as I should have—but nonetheless, I was seriously looking, and despite graduating with honors from a regionally-recognized school, didn’t get a single interview. I know people who applied for hundreds of teaching positions at this time and were interviewed at just two or three schools. I didn’t do that, but I did consistently apply for teaching and other relevant jobs, including lots of part-time stuff and things I was clearly over-qualified for over the course of about two years before I found something part-time with the organization I work for now.

M: And since you wanted to get into education, you knew you probably weren’t going to be earning a lot of money right after graduation? Did you think a lot about what you wanted or needed to earn?

BP: Honestly, no. I had a general concept of what teachers made, especially to start, which at the time (and probably still) was about $25,000 a year. I also knew that if I worked in rural or poor urban areas, I would most likely be able to have a good chunk of my student debt forgiven. I didn’t think about it a lot though.

M: When you found the job market to be particularly challenging, and found jobs that didn’t pay too much, did you consider moving back home with your parents to save money? Was that an option?

BP: During my student teaching, I was living with my mom, and I spent another 10 months after that there as well. I moved out to go to a city, be closer to friends and have more job opportunities. I wasn’t happy in my hometown, not really because of living with my mom, but because I felt stuck in general. I worked with kids who had been my students, which did not feel great. My mom also was not in a great financial state, so I was paying her some rent (less than I did after moving) and taking care of my own expenses.

M: Do you not have health insurance now?

BP: I do until I turn 26, through my mom’s workplace, which I pay her for. Then there’s some mumble mumble Obamacare something happening at my job, which may or may not apply to me, based on some complicated stuff with hourly requirements vs. a daily salary that none of our supervisors are talking about yet, probably because they don’t have any more clue than I do whether we’ll qualify for insurance. I’m pretty sure I will have a gap before whatever that is kicks in (if it does).

So I will be figuring that out this summer. I have had a gap in insurance before, which didn’t really mean anything because I was lucky enough to not get sick, and I got insurance at my retail job before I was desperate for new eyeglasses, then some legal thing changed and I could get back on my mom’s insurance by the time I left that job.

M: Since you’re not earning a lot of money, are things like savings and retirement far from your mind at the moment?

BP: I do have some savings right now, about $1,000. I debate whether this is a good financial idea, because I also have $2,500 on a credit card. I used it to pay for incidentals on a trip to west Africa I went on a couple years ago (the trip was mostly paid for by other people, but not entirely), and to visit friends, once on each coast. I also occasionally use it irresponsibly to buy dinner or booze out when I’m out of money, but want to hang out with people anyway. I have been much better in the last year at paying it off aggressively and only using it when I know I’ll pay the amount I put on off before the end of the month. I like having savings though, because then when my car stops working, I can take it to the shop.

I feel like being poor often means all of your stuff is half broken, and I would prefer to be able to fix the big important stuff without using my credit card. I also will lose my lovely free housing if I leave this job, so I like knowing that I could actually afford a deposit and first month’s rent if I suddenly got a job that paid better, but didn’t pay better until four weeks after I started. I really don’t like carrying debt, and most of the time I have money left from a paycheck, or money that’s comes in outside of my budget (like tax returns!), I use it to pay down my credit card. It should be paid off by the end of the year, according to my Excel chart.

M: Good ol’ Excel.

BP: Yes, because I am a nerd. I don’t track all of my expenses because that is A Lot of Work, but I do auto-deposit into several savings accounts for specific things, and I made a chart to show me how much money I will have in those accounts for the next six paychecks or something. This is mostly a tool to keep me from constantly borrowing money from my savings account when I want to buy stuff. If I do, I will have to make some red numbers in my chart sometime, and watch my financial dreams of being able to replace my computer when it inevitably stops working, or taking a trip with my sister or whatever else tick back down and take another two months. I also use this handy thing I got off of the Consumerist forever ago to track my student loan payments and see the date many years in the future when I will be debt free, unless I had to buy a car or something before then. I will, probably—my car is twenty years old.

M: Can you lay out how much you typically spend on things like groceries, utilities or dining out in a month?

BP: Groceries are a total crap-shoot, because when I’m working a lot, I’m also eating for free a lot. Last month, I paid $200 for groceries, but really busy months when I’m working 12 days in a row regularly with 2-3 meals for free, it’s probably more like $50. Last month I spent $100 eating/drinking out, which is fairly typical. We don’t pay utilities because we have a fraught arrangement where we perform extra duties in lieu of rent and utilities, which are mostly reasonable but sometimes sort of crazy. I pay $35 a month for my phone, and don’t drive much because I live at my workplace, so I buy gas for about $50 a tank every two to three weeks. My health insurance costs $85 per month, and my roommates and I rotate our Internet bill around, so theoretically every four months I pay $45 for Internet, although we only decided to get it a couple months ago. I almost never shop for clothing, or anything else like electronics or whatever people at higher incomes spend their cash on, I guess I don’t really even know what people buy.

M: Do you think you’re finding a way to make it work, or have ideas of what you’d like to do next to start earning more money?

BP: I think so? The work I’m doing now is really great, even though the pay is terrible, and after spending my first season here just figuring out what is happening, I’ve started to get some experience managing programs and designing new stuff. I never got into teaching to make tons of money, because there is a lot of intrinsic awesomeness about hanging around kids, and providing them with cool experiences.

After not applying for jobs because I was so relieved to be here, I’ve started looking again, but in a much more direct way. I think what has been changing is not so much my odds of getting hired somewhere that does a better job of paying the bills, but that I’m doing a better job of figuring out how to develop the skills I have into more marketable things. And with some of the perks of my current position, I don’t feel like I’m drowning very often, the way I did when I worked in retail. And I do hope that I find something soon that is full-time, with health insurance, that is a job I feel good about doing. While poverty (or near-poverty) sucks a lot, I’m lucky to have some specific resources that make my aspirations to be not-poor feel attainable, if not now, then soon.

Interested in having a conversation about what you do, how much you earn, and how you make it work? Get in touch.

I’m talking to people with trust funds about their trust funds.

Logan Sachon: Tell me about you and your trust fund, Person With a Trust Fund I’m Going to Call Janet Funk Even Though That Is Not Your Name.

Janet Funk: I’m 33, married, have young children. I’m a technical writer making about $65K a year—which is twice the median income in my city—and my husband makes about the same. Our family lives modestly. We have a credit card, car payment. We worry about how to pay tuition for our young kids’ schools.

I have a trust fund that was originally set up for me by my grandfather in the early ’80s and has a complex set of ramifications that dictates how the money is allocated and distributed.

My trust fund was set up to be released to me in three phases. One-third when I was 25, half of what was left when I was 30, and I’ll get the balance when I am 35, which is in two years.

LS: When did you find out about it?

JF: I first knew that some money was there when I was applying for college, but I didn’t know how much or where it was. My parents told me that “grandpa money” would be covering my college expenses in entirety, and I shouldn’t worry too much about tuition charges when picking a school. Still, I got merit-based scholarships and the “grandpa money” covered the rest.

By the time I was 25, I knew there was more money than just for school. That’s when I got my first allocation from the trust—a check for $45K. We decided to use my allocation that year as a downpayment for our first house (about $30K) and put the rest in a college plan for our daughter ($15K).

LS: You weren’t tempted to spend it?

JF: My whole life I never had access to this money, so I just put it somewhere else essentially that I couldn’t access it. I’m glad I did it. But there have been a couple of times that I have asked my mother to “release” extra money, for house repairs, which she has. But I hate asking. I just hate it.

LS: So your mom still controls the trust.

JF: Right. My mother thinks that being blissfully ignorant makes my life less stressful. She’s wrong. I’m the kind of person that wants to think long-term. That wants to plan ahead for my children’s future by having numbers to make well-informed decisions.

Based on the stipulations for the allocations I’ve received so far, I think the value of my trust after college expenses was probably about $200K—but I don’t really know, even now. I’ve never seen a statement or a balance.

I’m still very resentful about being in the dark about my trust. It makes me feel like a petulant teenager when I think about it sometimes. I’m 33! I made it this far! I’m doing great! But I just have to lay down my ego, and just let her keep being my financial controller in this aspect of my life. It was hard for me to swallow for a while. Ironically, at age 33, with two years to go, I’ve finally just let that go. Sorta.

All those years of “potential mistrust” kind of get to you. But I also know that it was my mother’s father that set all this up, and she is dutiful about his wishes. She had the “power” to just write me a check on my 18th birthday and forgo all the trust rules, but she stuck to it.  Because that’s what my grandfather wanted. And I respect her for that.

LS: I’m surprised you have a balance on a credit card.

We could pay it all off, but we don’t. Because we’d still run it up again. I want to chip away at our $5K of credit card debt, and look forward to having it paid off. Maybe it’ll be all the more sweet when we do, because I’ll know I didn’t take the easy way out, and just throw trust fund cash at it.  We just try to live like the money in the trust isn’t there.  It’s a cushion, and I hope we’ll never ever REALLY need it.

LS: So do you think about the money? Talk about it?

JF: My husband struggles with my lack of communication about money. He also thinks it’s ridiculous that we have postponed a family Disney vacation because we just don’t have the extra funds. I do think my grandfather who earned this money would certainly smile if I used $5K to take my family to Disney World.

Parents have to be confident that they’ll raise their kids to be responsible with money, whether it’s 20 bucks, 200K, or 2 million. But I guess the harder question is how to do that. I have three young kids. Chances are they won’t be getting a trust fund. My parents gift them each about $5K a year that goes directly into their 529 college funds. I want them to grow up not having anxiety about finances and be able to make informed decisions about money. Is that possible? I hope so.

I don’t want to sound whiny or entitled. But, it’s so important to feel empowered by information. And with secret trust funds, that’s really hard to do.

I’m talking to people with trust funds about their trust funds.

LS: Tell me about your trust fund, Person With a Trust Fund.

PWTF: I always knew there was money being set aside for me by my parents, padded with checks from family members. I found out how much it was when I was 16 and started working, and then took control of it two years later, just before our Great Recession, or whatever it’s being called.

LS: Was that money meant for something specific?

PWTF: There weren’t stipulations regarding my trust, but I always felt that the money was basically for a down-payment for a home, or for a car, or for an emergency. My parents had a separate education fund that paid for my university.

LS: How much was in it?

PWTF: When I gained control over the account, I had something like $60K. It was spread between in various accounts: savings, stocks, bonds mutual funds, and a retirement fund. Apparently there had been more, but the accounts took a hit when the dot-com bubble burst, and then again after the terrible performance of the markets post-9/11.

But still, to me it was a tremendous amount of money, and it’s grown. Through some aggressive saving and smart moves courtesy of a financial adviser, I’m now worth a squeak over six figures, depending on the market.

LS: Whoa. That’s some big growth.

PWTF:: Yeah, I’d made it a goal to save and to contribute, to manage it well. When I officially reached six figures I was really proud and told my parents and my brother. They were really happy for me.

LS: So you talk to your family about money?

PWTF:: Yes, my family does talk about money. As kids my brother and I each received an allowance of $25 —an unbelievable amount to us. Every week we would get two dollars in cash, put three dollars in a jar for our chosen charity, and then and deposit $20 into a savings account. We used a teller—no ATM for us—and learned how to do archaic things like fill out a deposit slip. So that was my early experience with managing money—what to spend on ourselves, what to save, and to make sure we also had money to give. How to act in a bank.

Now that I’m an adult and in charge of my own money, it’s a lot more informal. I don’t have a check-in process with my family on my net worth or anything. But I still talk to them about it. I was considering buying a home last year, and so I really had to take stock of what I could afford, and what I was willing or able to take out of the fund. I did a lot of number crunching with both of my parents and my brother (he’s an accountant). With their help I decided that my career is still too unstable to buy right now.

LS: Have you used any of the money?

PWTF:: I have only taken money out of this account twice, to pay taxes on freelance income. Both times I’ve done that as a loan to myself and paid the account back.

LS: Why pay it back?

PWTF:: Because I was able to. I had a reliable income at the time, and was proud to pay myself back.

LS: And your brother has a trust, too?

PWTF:: Yeah, and there’s a gender thing happening there. My brother was definitely given more cash gifts and in larger amounts cause he is a man and expected to have a wife and family to provide for. Whereas I was often given jewelry and so on. My community is pretty conservative like that.

LS: You said you set goals to grow the the money, but do you think about it a lot?

PWTF:: There’s a big difference in my mind between this money and the money in my everyday checking account. In general I live as though I don’t have this money. Most of it is tied up in long-term investments and hard to get to. But I’m still pretty unsettled by and uncomfortable with the amount of it.

LS: What about it unsettles you?

PWTF:: Most of the reason why the money unsettles me is that it’s a very large amount. I don’t consider myself great with money (this is relative), and I don’t consider myself super rich (again, relative)—so part of me is scared of screwing up with this money. I’m definitely worried that I’ll make a bad decision and lose it all, or that I’ll do something else ruin my “nest egg.”

It also makes me uncomfortable because for a long time I believed all parents tried (and succeeded) at creating savings for their kids. A little head start, as it was referred to, in my family. It’s only recently—like in the last five to eight years—that I realized the extent of this little bubble I lived in in. And that’s led to some some “privileged person’s guilt” about it.

If you have a trust fund or don’t have a trust fund and want to talk about your money, hit me up: logan@thebillfold.com

^{“Basic City, Virginia, 2:44:54PM, Summer 2009 Cardinal,” by Stacey Evans}How Charlottesville, Va.-based freelance photographer Stacey Evans does money.