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Breaking the cycle of feeling financial stress

Overview:
Where are you from? suburb of New York City
Where do you live now? Still in the suburbs
What do you do for work? I’m a corporate insurance broker, I do insurances for businesses
Do you have any side hustles? I have my own tutoring business that has been fun, and I also tutor with a third party freelance company. I am also super active on reselling sites, Poshmark and Mercari are my top two. I also do astrology and tarot readings on the side. It isn’t as popular as I would like it to be, I would love to do more of that.
Salary (if comfortable sharing) over $100K but still under Roth IRA limit ($139K). This is a recent pay bump. I graduated with my MBA in May, and landed this job in July. My previous salary was $85K.
How much student debt are you tackling (or have tackled)? I have $20K in student debt from my MBA. I graduated with $30K in undergrad debt, and I paid that off. The bulk of my student debt is in my mom’s name, and she qualifies for Public Service Loan Forgiveness.
How did you start your early career? I went to college for a very specific major, actuarial science. Not math or stats. That got me into the insurance world. From there, I did a ton of networking my senior year of college. My college was in Rhode Island, a lot of the job opportunities my school’s career center had were either in Boston, Providence, or Hartford. I knew I wanted to come back to Manhattan, so I took networking upon myself, and started making connections in NY. With that networking effort, and leveraging my very specific degree and internship experience. I was able to get my first job out of college, at the largest insurance broker in the world, Marsh.

What was your financial situation growing up, and how did it impact your financial decisions moving forward?

Definitely middle class. My mom has her bachelor’s degree and my dad has his associates. They both have working jobs, my dad’s a chauffeur and my mom is a teacher’s assistant. I knew some of my friends had a lot more and some had a lot less. I never wanted for anything, my parents gave my sister and I a great life and I am so grateful to them. However, I always knew that money was a stress. I knew my grandparents (my mom’s parents) had financial stress.

[Moving forward] I see it as a generational thing, and I knew I had the tools to change that course. They went from starving in Europe to starving immigrants, to sort of okay middle class, no health insurance, to my parents, to me. I really want to run with that situation, I feel like my grandparents and even their parents for the past 100 years leading to someone in the position I am in. (Need help getting started on your wealth building journey? Our membership provides personalized guidance to make a long-lasting shift in your money mindset and habits.)

Can you tell us a bit more about your financial progress and what your goals are?

During the pandemic with the student loan freeze, I was able to focus on my car payment. I bought a brand new vehicle in August of 2018, about a month after leaving Marsh and heading for a new job and new commute. I was making double payments to try and cut back on any interest that may accrue, even though my interest rate was only 3%, I still wanted to get it done. When the student loan freeze happened, I decided to really double down and pay off my car. Which I did in May of 2020. So a solid year of triple payments on the car, and maybe I should have saved some of that money instead, but I was really happy to get my title from the DMV. Now, I’m turning my attention to investing since student loan payments are frozen until May and I no longer have my car to pay.

I maxed out my Roth the past two years, and plan to do so this year, while I am still under the threshold. I want to take advantage of Roth IRA’s while I can.

I’m making an aggressive savings goal for the full $20K. Which is bananas but I already have $8K saved up. I’m thinking between now and May, if I really focus and ramp up the savings goal and maybe don’t do anything else, I should be in a good position to make a lump sum payment before interest starts up. And then I will be debt free, which is also bananas!

What are some money habits you’ve adopted?

I track my spending. I have a free app on my iPhone, and I think it might be on Android too. It’s called Spending and the icon is a little wallet. Every time I spend a dollar or more, I’m tracking it with categories, such as eating out, shopping, rent, fuel, etc. Every time I’m spending anything, I’m immediately tracking it on my phone. Other people do an excel spreadsheet. I don’t find the time to sit down. I’m much more of ‘my phone is always in my hand anyway.’

Another habit is paying my credit card off three days early. Because then by the time it posts, holiday, weekend, whatever, by doing it three days earlier, it is always there on time no matter what. It really helped my credit score. I got burned a couple of times with the late payment, which is what made me discover the habit.

I pay my car insurance for the full year. I got $100 off by paying it at once and it was easier for me to pay it upfront and not think of it.

What’s your piece of money advice?

Be kind to yourself. We are all still living and we all have things that make us happy every single day. We shouldn’t let these types of things (student debt, personal debt) really weigh us down. We should make a plan and do the best we can, but letting it linger and letting it hurt you, is something I would really like to let go of for my own self and I wish that for others too. (Money is stressful. That is why we’ve built a free community of women to support each other. Join our free community here.)

What inspired your wealth journey?

I went to a big public high school, and they had this two year program that took 25 people. I applied and was accepted! It was called Academy Finance, it is a national program that you can bring to different high schools. Learn more here. A lot of the program was about budgeting, understanding interest rates. I attribute my wealth journey to the program. Going to college, I knew the type of salary I needed to realistically pay off my student debt.

Once I got my first job, I was really focused on paying down my student debt. ( Our student debt tool can help to see what options you have and give you a game plan that works for you!) I had the plan forming in my head all through college, so I knew what I had to save. Since then, I’ve been mind on my money. I lived with my parents, I didn’t do the whole move to the City, even though I wanted to. I know that a lot of my friends did and they weren’t able to save as much.

I’m ready to continue making good decisions and lay the foundation my parents did not have.

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