Subscribe to the newsletter!

saving

The Rocky History of an Emergency Fund

What has your history with an emergency fund been like? I share my experience over the years having one.

Emergency funds are kinda hot right now, don’t ya think? Well not really…people have most likely had them for a long while. There has, however, been an increase in posts discussing the nagging but super important topic of emergency funds.

The discussing of these surprisingly not so common savings accounts got set off by a Billfold post on The Story of a Fuck Off Fund.

Age 12: Budding Business Owner?

My first real tango with the aspect of an emergency fund happened when I set out to start a business. I was 12 years old, had just finished 6th grade and felt ready to conquer the world. Sort of.

My mom owned an assisted living business and had just opened a new location. I pitched the idea of having a candy counter to serve the residents snacks and promptly got to work

I had separate bank accounts for my regular savings and my business money. I started buying the snacks in bulk to save money and from there I understood the importance of having a “buffer” in my accounts.

Every month I would stash away some of the money I made and put it into my savings account to be used for “a rainy day” or a business investment, as my 12-year-old self liked to call it.

Age: 18-20 University Life

My years at university consisted of going through different shades of broke. “Being worried but still sort of okay” type of broke. “Not having a lot of money” type of broke. “Oh my gosh, am I going to overdraft” type of broke.

My emergency fund fluctuated a lot during this time. Emergency funds were an ingrained aspect in me because of my car. Faced with the aspect of having to pay for repairs, oil changes, registration, and car insurance costs, I knew very well how expenses could sneak up.

I made it a habit to always have at least $1,500 in an emergency fund during the time.

Present-ish day

For a while after graduating university, I worked a job I that was really exhausting and draining both physically and mentally. During this time, I made solid efforts to not let the job become a long term thing.

In addition to job hunting, I started contributing more and more to my emergency fund. For a while, I contributed a good chunk, until my student loan repayment started. Then I was stuck at a cross-roads.

Contribute more to my emergency fund (it was still small at this point) or pay off more of my student loan debt? What was the “right” thing to do?

After reading a dozen or so articles, I decided to make big payments on my student loan debt, but still contribute a sizable amount to my emergency fund. It’s all about personal circumstances and priorities. I figured out what would work for me.

I am so glad I did. 

My job started to become unbearable, I had a decent size emergency fund, and an opportunity to move overseas for a while presented itself.

I still find it funny how a story on emergency funds went viral around the same time I was making a plan to quit my job without a solid new job lined up.

I quit my job, went to an interactive technology festival, went to Oregon, then started my new job in Thailand. My emergency fund was my friend during those few short weeks, when expenses started to pop up.

Thank you emergency fund. I’ll never stop giving you attention 🙂

What is your history of an emergency fund? How much or how many months of expenses do you consider is necessary to have in one? 

Dealing With Friends Who Are Bad With Money

How to deal with friends who are bad with money.

Friends who are bad with money. Either they splurge too much, save too little, or have a YOLO mindset when it comes to their finances. They need help.

I recently got done having a binge of the second season of The Unbreakable Kimmy Schmidt. Awesome show with just the right level of wackiness and humor. I also watched the 1994 Winona Ryder film Reality Bites along with a new indie film called Temps. 

All great stuff that had topics related to starting a new life, finding one’s goals, quarter life crisis frenzy and in some way involved the every golden topic of money.

Back in March, before I departed to Thailand, I sat at a friend’s apartment and discussed all the things I was budgeting for when I arrived in Thailand.

Me: I’m just worried about the various unexpected expenses I will encounter. What does your monthly budget look like? 

Friend: *confused stare* I don’t have a budget. I mean, I save money but I don’t look over my expenses or anything.

Me: *stares in confusion for an undetermined amount of time*

Everyone has tales of being around people who are bad with money, myself included. While there certainly are people who are badddd with money, many people just aren’t good with their money.

[tweetthis]Many millennials have the basic “saving is important” mindset down, but not much else[/tweetthis]

Let’s go through an anecdote. One of my friends has been working at her current company for nearly five years. A year ago she went full-time with them. Being a full-time employee, she got a slew of benefits: health insurance, paid time off, and a 401k with 4% match.

Want to take a guess whether she signed up for the 401k or not?

She didn’t.

I had another friend who had a severe misunderstanding of what “treat yo self” meant when it came to splurges and shrugged it off by saying she put money into her savings account every month, so all was good. No, no, all is not good.

How do you help friends who are bad with money? How do you help them set money goals and understand concepts like 401k’s, IRA’s, Index funds, and more without boring them?

Don’t offer advice unless asked

This is the biggest thing I have realized when it comes to dealing with friends who are bad with money. Being a young twenty-something (I’m 21), I want to to tell them all the things when it comes to practicing money management in your twenties (which, let’s be honest, isn’t a whole lot since I’m learning myself).

You want so bad to help them, to sit them down and explain the basic concepts of compound interest, the magic power of a 401k and IRA, and developing a solid emergency fund.

You shouldn’t do any of this though, unless they ask you (whether directly or implied) for help. Only friends who solicit advice are the ones who actually want to get better with money.

Talk about your money experience

People constantly want to see how something relates to them. How they can apply something to their life.

Whenever I talk about my money experiences (both good and bad), is when my friends relate the most to it and start wanting to get better in their own lives.

Back in university, I talked with a friend about the small, but growing emergency fund I had and how I was glad I had it when it when a few unexpected car repairs came up. I discussed how I was able to save while on working a low-wage job (something she was also going through).

Often times, I found I most often had a “money breakthrough” with a friend when I discussed a personal anecdote.

Like many things in life, becoming better takes practice. Money, whatever way in comes in (being debt free, making a higher salary, etc.) isn’t the goal. It’s all about making it work for you!

How do you deal with friends who are bad with money? What ways can you help them? 

What is Your Needed Internet Speed?

What internet speed do you really need? Use the handy infographic to help you figure out!

What is your needed internet speed? The speed in which you can comfortably browse your favorite website (Buzzfeed?) or send an email to grandma or to watch your favorite Netflix show.

In a former life, I worked for a telecommunications company. From my stint there, one thing stuck out to me: many people really don’t know what internet speed/package to get and usually end up paying more than they need.

Misconceptions and confusions run abound. I have the 6 mbps package. That’s fast, right? I just upgraded to the 75 mbps turbo package! Super fast internet for me!

Nobody likes to pay more for something they don’t really need, right? Heck yeah, right! Gotta save those nickels and dimes.

Below you will see a nice little infographic I put together to help you figure out what internet plan you really need.

What size internet package do you need? Check out the infographic to find out!

The casual user: If you’re a person who just needs simple web browsing, some Netflix (standard definition, SD), streaming Pandora or Spotify and sending basic emails then a low package will be more than enough to fit your needs. A 3-6 mbps internet package is good for a single user.

Moderate users/couples: A 6-12 mbps plan will work for people with a needed internet speed package that allows them to send big emails with many attachments, watch Netflix or YouTube without the annoying buffering, and online gaming. This package is good for 1-3 users.

Families/work from home types: A 12-25 mbps speed will work great if you do work from home or have a family of people using the internet.

Now this post is about finding out what internet package/speed works for you. Finding out and comparing service providers is another thing you will need to do. This can usually be a stressful and time intensive endeavor.

Some quick tips as you go through it: Understand companies quality of service greatly depends on regions (remember that when reading online reviews! Ask people in your area.) and don’t forget to look into local companies as well.

What internet speed do you currently have? Is it fitting your needs without breaking the bank?

My Commencement Address to College Graduates

commencement address to college graduates

My commencement address to college graduates…

I had an realization while busy at work, this month (May 2016) would have been the month I graduated from college. I didn’t graduate this month though, I graduated college 1.5 years ago.

On a warm December day in 2014, (winter in Texas wasn’t much of a thing) at 20 years old, I walked across the stage in an over lit auditorium and accepted the university diploma for my bachelor’s degree. (people have questions on my early graduation, I’ll answer them in a later post).

I remember be crunched up in the tiny auditorium seat, listening to the commencement speaker talk to us graduates about starting our new lives and taking chances on things. She gave the usual warm and fuzzy closing remarks about reaching such an accomplishment and wishing us the best on our new endeavors.

And that was it….

After she finished, we got our diplomas and left the building.

The commencement address wasn’t bad, I really enjoyed it, but there was something missing about it. Speaking about entitlement wasn’t the missing part. I’m not part of the group of people who constantly shout “We NEed to TeLL KIDS ThEY R NOT SPECIAL!!!!!”

I was inspired to write this after reading Think. Save. Retire’s piece on college commencement. There is one big thing I would tell to people graduating university and stepping ground into “the real world”.

Don’t drink the Kool-aid: don’t blindly follow what everyone else is doing. Figure out what works for you.

[tweetthis twitter_handles=”@colinashby”]Don’t drink the Kool-aid: don’t blindly follow what everyone else is doing. [/tweetthis]

So often I see recent grads taking jobs they hate, buying new cars with money they don’t have, doing the minimum on their student loans, and generally not being conscious and intentional with their choices.

Despite being done with formal education, they are are still following a syllabus. A syllabus they haven’t even fully examined.

They get a certain job because that’s what they think they need to do, they buy a new car because that’s what’s seen as the right choice, they settle with paying the minimum balance on their debts because debt is seen as normal.

It’s odd how so many people follow it, then later when they want to change things, they’re weighed down by all the baggage they took on.

Don’t fall into this. Things I would like to add:

  • your job does not define you
  • know your worth and understand your strengths and weaknesses (yeah…it’s more than just a job interview question)
  • The life you want, no matter what it looks like, has a price tag (Stefanie O’Connell)

Your job does not define you

What do you do for a living? It’s one of the first questions people ask upon meeting you as an adult. We put people into labels and categorize them because it’s somehow easier.

Your job does not define you, no matter how much you hate or love it. This idea is in part perpetuated back when you were a senior in high school and socially forced decided to go to college.

You NEED to go to college. You don’t want to be a server or do a “menial” job for the rest of your life! (because obviously college is the surefire golden ticket to a great job, right…)

Our identity needs to be centered around our interests, personality, and skills, not our job title. After all, working at a job only takes up part of your life, how do you live in the other parts?

Know your worth and understand your strengths and weaknesses

It isn’t just a question you get asked in job interviews.

Confidence, assertiveness, and knowing your worth are hugely valuable traits to have and learn.

Towards the end of my university career, as I continued to apply to more places, I was offered an internship at a media communications company. The company was a well known company in the area and seemed like a good place to  expand my skills more.

Then, after a good interview, I found out it was unpaid.

You will get lots of exposure and a chance to build your portfolio! – interviewer

It was an opportunity I would have taken as a college freshman with little experience, but I was a senior, confident in my skill set, and already had a portfolio. I turned it down.

Be assertive in your future endeavors and know your worth. Be honest with yourself about what your strengths and weaknesses are.

How can you strengths help you move forward? What weaknesses do you have that you feel are holding you back? Figure them out and start working on them.

The life you want, no matter what it looks like, has a price tag

This is an awesome quote from millennial finance expert Stefanie O’Connell.

O’Connell graduated from university with a degree in theatre and spent the next seven years living the starving artist life as a professional stage actress. Over the years, she has built up a business as a freelance writer, millennial finance speaker, and author. She’s #breakingbroke (love a good Breaking Bad pun 🙂 ) and wrote a great article on becoming a six-figure artist.

So recent university graduate, I’m here to tell you money is a key part of your life, you can’t ignore it or have a passive eye on it. Don’t just go to your parents for financial advice either. Actively managing, saving, and growing your money will help you splurge on that passion project you’ve been wanting to try, it will help you move away from that dreaded job you hate, and it will make you feel more relaxed and not always stressed about money (nobody likes wondering whether their going to overdraft on their account).

Being proactive about your money and being savvy with it will be a key ingredient in helping you propel forward and reach your goals. Don’t ignore or put it off. Start today.

So university graduates, congratulations on accomplishing a big milestone. While your degree isn’t a ticket to success, it is an accomplishment in and of itself. Good job.

As you set out into the world, remember to not drink the Kool-aid. Examine it, add your personal flavoring to it, and make it suit your taste.

 

What would your message be to recent university graduates? What do you wish you had been told at your commencement address? 

 

Financial Lesson My Parents Were Wrong About

financial lessons from parents

I feel the need to clear the air. I like reading about people’s journey with money. A lot of the endearing stories detail how the individual’s personal finance journey came to be. There are tales of being high in debt, maxed out credit cards, frivolous purchases later regretted and so on.

The stories unveil how parents or a financially sound voice of reason came into the light and kicked them into gear towards getting better with their money. The stories are passion filled and inspirational. It makes me feel less than jazzy about sharing mine.

My interest in getting better with money was inspired in part by a feeling of languish I had as a kid.

My parents made a good living throughout my childhood. My mother ran her own nursing home type business and my dad happily worked (and still works) for the same employer since he was 20 years old (37 years and counting! That doesn’t happen much anymore!).

However my parents lived a live influenced strongly by consumerism. They bought a wayyyy bigger house than they needed, constantly added unnecessary additions, put a lot of stuff on their credit cards (and didn’t pay in full every month), and were big on lifestyle inflation. My siblings and I lived a fairly frugal childhood on the other hand, weird…

I love you mom and dad! Despite all the knocks I’m about to take towards your personal finance attitude…

1. Credit cards are evil and should be avoided

I want to apologize to the polite Wells Fargo agent who I turned down every time when she tried to help me apply for an (actually good) credit card while I was in college. You the real MVP. 🙂

I was afraid of credit cards and turned them down at every turn due to advice from my parents to avoid them. Both mom and dad had a history of carrying credit card debt. Due to their constant hate-fueled talks towards credit cards, I viewed the piece of plastic as the devil’s advocate.

After getting my first credit card last year, I found out they are not all that bad! They actually have some solid benefits to using them (besides the obvious building credit thing 🙂 ).

2. Buy your cars new

“You’re better off buying a car brand new. With used cars, you have no clue what you’re going to get.” – my dad

I get where my dad is coming from when he said this. I don’t want to go drop a few thousand on a used car with 153,000 miles that might cause me more problems than I want down the line. The best bet? Buy pre-owned/new-to-me vehicles.

New cars depreciate so much in value in the first few years. My brother and his wife have both bought pre-owned 1-2 year old cars with low mileage and were able to save several thousands.

Better tips? Buy your vehicle with good ol’ cash. If you do finance, don’t get it through the dealer. They always try to make more money off you through the financing.

3. Buy a house, renting is just throwing money away

Yeah…my parent’s opinion on this changed when they tried selling their house in 2007, right as the housing market crashed.

Reading up on Afford Anything’s take on the rent vs. buy debate and Lifehacker’s take on it, reaffirmed me to not feeling bad for putting off homeownership for a while.

4. Money can’t buy happiness

It was ironic my parents always said this considering they bought several new cars, hot tub, extensive home renovations, and filling up the house with a lot of material possessions.

It weird how this saying is repeated over and over, as if happiness and making a good living are mutually exclusive. They aren’t…

Money can buy happiness to a certain extent. Being broke is expensive and time-consuming.

I partly get where the saying comes from: don’t work a job you hate just cause it pays good, there is something great in living with less, and so on.

However flat out saying money can’t buy happiness isn’t completely right. Having a lil’ extra to put away for a rainy day doesn’t hurt.

What financial lessons, either good or bad, did you learn from your parents? Have they carried with you throughout the years? 

1 … 3 4 5 6 7

Disclaimer