Money Talk with a STEM Guy on the East Coast Who Loves His Dog Even While Admitting that Getting Pets is a Terrible Financial Investment
Who are you and how old are you?
I am a 26 year old man living in the East Coast. I work at a university in one of their STEM research labs as a data manager.
Tell me about your background.
I grew up on the East Coast, went to a well-known university about an hour ago, got my masters degree in the field that I'm working in now, and have been doing what I've been doing since then. I grew up in a lower to middle class family with my mom and two brothers. My dad passed away when I was 7.5 years old from a car accident and my mom had to raise the three of us herself. She struggled because she had been working menial-type jobs before my dad passed away but then worked to get her nursing degree in order to earn more money. My dad's passing and subsequent upbringing had a huge impact on how I look at the world today. I'm a lot more aware of privilege and different class structures than perhaps most people my age.
What does your financial situation look like? If you don’t earn money through a “normal job”, how do you support yourself?
I work in the STEM field making a decent salary for the area I live in. I also blog extensively about the college I went to and because of it, was actually hired by a local newspaper to write articles for them. It was a complete surprise and not something I had been looking for. I write for them in my free time and am paid for every article I write.
How do you define rich?
Someone who makes three times the local median income every year and who has physical assets equal to five times the individual income level.
Did you grow up with money? How did your childhood conditions about money affect how you behave?
Money was always tight when I was a child. As a result, I am very pragmatic about spending and very uncomfortable with debt. As mentioned, my dad passed away when I was 7.5, and my mom subsequently got her nursing license to make money. Unfortunately, when my dad died, not only did my mom then become the sole breadwinner of the family, she also had to deal with the debt my dad left behind from the failing drugstore that he started and ran. She did her best given the situation she was put in.
Did your parents give you money when you were growing up? What about for school?
I never had an allowance. I got $500 when I graduated from high school and $1000 when I graduated from college. My mom always made it clear to my brothers and I that if we didn't get scholarships to go to college, we weren't going because she didn't have any money saved up for us to go to college.
Do you still have school loans?
I graduated from college in 2010 and didn't have any school loans from my masters program because I was on one of those "work-study" programs. I am proud to say that I paid off all of my college loans in May 2014. I actually only started paying my college loans after graduating from grad school so I paid them off pretty quickly.
The college I went to had a generous financial aid package for me, and I had some scholarships. I only owed $12,000 for my first two years and my last two years were completely free.
Where did you learn about investing?
I learned bits and pieces from college, talking with you (the editor of Money in my Life!) and another friend of mine, and reading the financial news on Bloomberg, Businessweek, and CNN Money.
What does your family situation look like?
My mom is still working as a nurse. She unfortunately has nothing in her retirement funds. She always thought (and still thinks) she will drop dead at age 60 and so having retirement money isn't necessary. I think that she just doesn’t understand money and prefers to keep her money "under the mattress," a common thought process among blue collar workers. I also have two brothers - one owns and manages an electronics store while the other is a naval officer.
Do you and your partner have similar financial habits?
My girlfriend is also very frugal and pragmatic about expenses, just like me. Neither of us likes the idea of spending more money than we need to.
If/when you have children, will you put money away for their college tuition? If so, how much?
I will definitely put money away for them, but I think they should be responsible for some of their college tuition as well. I'm thinking that I'll cover maybe about half of their college expenses and they'll have to cover the rest. This will teach them to be smart with their money and realize that getting an art history degree is not the best idea.
Do you feel like you are living paycheck to paycheck? If so, do you feel that way due to your lifestyle?
I don't feel like I'm living paycheck to paycheck because I save a lot of money. However, I do feel a lot of discomfort when I see my bank account drop below a certain amount. I currently use the robo-advisor Betterment which withdraws money from my checking account twice a month, I maintain a 4-6 month emergency cushion in my bank account, and put money in my 401(k) at work.
What was your most regrettable purchase?
It's the little things that get to me like using the wrong credit card at the gas station - "If I had used card X instead of card Y, I would have gotten 5% cash back instead of 1% cash back!" I've never had a financial decision that I've regretted because I do a ton of research ahead of time on anything that I buy.
What was your best purchase?
Paying for my college degree
Do you feel like you have a financial habit that’s out of the norm (or at least something that others have commented on)?
I love clipping and using coupons, which is something that is not too normal for a 20-something male. My girlfriend teases me about this and will often give me the coupons she finds in those Lean Cuisine boxes - "Here's a $1 coupon for your next Lean Cuisine! I know how much you like these!"
Do you feel like your success now has anything to do with luck or being in the right place at the right time?
Yes, I definitely think I'm where I am due to luck. I happened to see the job posting for my current job even though it was only online for a week. I applied, interviewed, and got the job offer in less than 6 weeks . Everything happened very fast, and this job has been amazing so far. I keep telling myself how lucky I was to have found out about this opportunity during the very narrow time frame that it was being advertised.
How much investing do you do, if any?
I currently put away 14% of my salary toward Betterment. I also put money in my 401(k) at work.
Do you feel like your lifestyle reflects your income bracket?
I'm a bit more frugal than many folks in my income bracket so no, my lifestyle doesn't reflect how much I make.
Have you ever jumped income brackets (either going from low to high or vice versa) and how did your lifestyle change?
I went from being part of the working class to being part of the middle class once I began working. As a child, we never went on vacations. Air travel was such a foreign concept, and being able to fly to visit people or go to weddings was something we were not able to do. There’s more financial security in my life now but there’s nervousness about building up assets.
Do you talk to your peers and family about money?
I don’t like talking to my family about money because my mom can’t keep her mouth shut and will brag/talk to her friends about anything money-related. She always asks me how much I make but I never tell her exactly how much it is. I just tell her I make a comfortable living. I don’t talk about money with my siblings.
Do you splurge on anything? If so, what was the last splurge and how much was it?
I bought a new mid-size sedan recently. My old car had 134,000 miles on it and needed too many repairs. It was literally falling apart and was getting to a point where it just wasn't safe to drive anymore. When I was looking at cars to buy, I set my purchase price to be between $12,000 - $18,000. I paid 75% upfront for my sedan and will pay off the rest in monthly installments.
I also got a dog about a year ago and probably spend about $80/month it, not counting vet trips and other expenses that pop up. Getting a dog is definitely a terrible investment because it's not making money or anything, but I really love him!
Do you have a plan to make more money?
I have no active plans now. Getting hired to write freelance articles for the local newspaper was completely unexpected and a very nice surprise. I expect to increase my salary by 4% - 5% in the next year. If it's a 3% or less raise, I'm going to actively start looking for other jobs.
What would it take for you to feel like you are completely rich?
I would say getting paid about $110,000/year. That would put me in the upper middle class where I live.
In terms of money, what was something you did in the past that you could do differently?
I wished I had invested more when I was younger.
What is your strategy for moving forward now in regards to your big goals in life?
I'm not sure if I will be living where I'm living now in the next 1-2 years so I don't plan to buy a house at this point. I'm thinking about about possibly getting a masters degree in real estate because I blog about it so much. We'll see!
What is this?
An anthropological look at how people think about money. Created and edited by Star Li.