Personal Finance Interview with David Carlson on Money Management for Young Adults
Personal finance is just that: personal. Which is why David Carlson, founder of Young Adult Money, has trouble recommending specific money-management goals or decisions that his peers should be making. Thankfully, he humored us.
"For the sake of the question, I think that every young adult should be thinking about what they want their life to look like and what it will take to achieve that lifestyle," he says. "Most of the time achieving these goals involves increasing income, which is why I stress this topic on my site."
In addition, David advocates that that his peers try things like tax-advantaged retirement accounts, learn how to save money and make dollars go further, and establishing an emergency fund.
We recently caught up with David to learn more about his site and get his thoughts on what else young adults should be doing with their money.
Hi, David! Tell us about Young Adult Money. When and why did you start the site?
I started Young Adult Money in July 2012. I first thought of the idea a year before that and spent considerable time planning and debating whether to start the site or not. I had worked for another personal finance blog in the past and had launched (and ended) other projects. I started this one because I wanted to share personal finance-related content with others that was unique and provided value.
Who should be reading it?
Young Adult Money targets the 20- and 30-something demographic, but I know people who are in their 40s and 50s who regularly visit and comment on posts. As far as content, we are heavy on increasing income and saving money, along with many other common personal finance topics.
How did you come to be so passionate about personal finance? What's your background in this area?
I was a finance major in college and I've been working as an accountant for nearly four years now. My interest in money, finance and business started well before college though, and I've always been fascinated with income and how people are able to create passive income streams. That has led to my being passionate about personal finance, especially for those who are early in their careers and personal finance journey.
What's the biggest lesson you've had to learn about money? What happened and how did it transform your thinking?
The biggest lesson I've had to learn about money is that nothing is as easy as it appears and a little bit of luck is always needed. There isn't one particular event that has taught me this, but throughout my experiences of paying down debt, starting a career and trying to build a business has all made it pretty apparent that unless you work hard and work smart you aren't going to get anywhere.
What do you think are some of the specific challenges that people in their 20s and 30s face when it comes to money?
I think student debt and trying to reconcile dreams with reality are two specific money challenges that people in their 20s and 30s face when it comes to money. Student debt can put a big dent on your monthly cash flow and can be hard to deal with when you are first starting a career.
Reconciling dreams to reality is more about having to deal with the fact that you will need X income to have your dreams become a reality, whether it's having a new large house for your family and entertaining, or being able to travel the world. Having dreams is easy. Making them a reality is a challenge.
What do you think are the most common mistakes or miscalculations people this age make?
The most common mistake people in their 20s and 30s make is being unrealistic. For example, if you make $40,000 a year and your career track tops out at about $80,000 a year, it may not be realistic to take a blowout vacation every year, have a cabin/vacation home, have a huge house, etc. Sometimes you have to sit down and think about how you can change your situation so that your goals line up with your income. This may involve changing your goals, changing your income, or both. It depends on each individual situation.
What do you think are the easiest and/or most lucrative ways people can make some side income?
This one is tough because it varies so much depending on the individual in question. People have such a wide range of skills and lifestyles that it's hard to say that one or two ways of making side income are the easiest or best.
I wrote about characteristics I look for in a side hustle in the past and the two big things I stressed are that it be location-independent and that it has the potential to be outsourced or sold. One reason blogging is a popular side hustle is because you can do it from anywhere in the world and, whether people realize it or not, the website can be sold if you get sick of it.
I think side income should generally help with your full-time job as well. For example, if you are a freelance writer as a side hustle you are gaining transferrable skills to just about any job where you have to write (even if it's just emails). If you work with certain software at work you could contract out your skills in the spare time. A side income that helps you develop skills is the ideal side income.
Where do you think are the most obvious things people can be doing to save money?
This question is easy: learn about couponing and deals. Some say they don't have time to coupon, which is fair, but if you can save even $20 a week from couponing you are saving over $1,000 a year.
Another way to save money is to brew coffee at home and review how much money you spend going out to eat. It's incredible how much money can go out the door each month from getting coffee, drinks and eating out. If you spend a lot on this expense category you need to cut back or seek out better deals/promotions to keep spending low, or both.
What are some of your favorite money management tools or resources?
I personally visit about 20-30 personal finance blogs every single day so I would definitely recommend checking out personal finance blogs if you are looking for general advice. Most, if not all, of the blogs I visit also visit Young Adult Money on a daily basis and frequently leave comments, so check the comments section of any Young Adult Money post for ideas of other bloggers to check out.
For general personal finance management I have heard good things about Planwise and I know many who use Mint on a daily basis to manage their finances. For couponing you can't beat Carrie Rocha's website, Pocket Your Dollars. Carrie matches coupons with deals/discounts and then puts together shopping lists of the best items to buy each week.