Personal Finance Interview with Erin Lowry on Millennials and Money
Think a 7 year old is too young to learn about net profit? Erin Lowry's dad didn't.
"I had a little doughnut stand during my mom's yard sale, which my dad had given me seed money for by buying the doughnuts," she says. "After I counted up my haul, he had me pay him back for the initial stake and pay my little sister for being my employee."
This tough-love attitude about money extended beyond Erin's early entrepreneurial ventures. Her parents taught both she and her sister how to balance checkbooks and often asked that they pay for 50 percent of the toys they wanted.
The family's openness about money has made Erin comfortable with managing her own budget and has fueled her interest in not only furthering her financial education but also sharing what she's learned with her peers through her blog Broke Millennial.
"I know true independence can come from mastering money, investing and being prepared for my future," she says. "In turn, I want to see my generation -- and future generations -- feel the same way about their financial health."
We recently checked in with Erin to learn more about her site and get her take on the biggest challenges facing young Americans today.
Hi, Erin! Can you tell us about Broke Millennial? When and why did you start your site?
I started Broke Millennial in January of 2013, which kind of makes it seem like some sort of New Year's resolution but it wasn't. The inspiration for my site grew out of a series of conversations with friends about money -- mostly about how we didn't have any.
As a New York City dweller not working on Wall Street, I've had to learn to live on a pretty slim budget. Fortunately for me, my parents raised me in a home where money was never a taboo topic. I've always been comfortable discussing and handling finances. Once I started realizing that others didn't feel the same way, I wanted to do something to help.
Many of my millennial peers seem to dislike money because they believe it's complicated or intimidating. I wanted to use humor, sarcasm and a lot of personal stories to make basic financial concepts accessible to people who wanted to learn but weren't sure where to start. In the process, I want to increase my own financial literacy.
Who should be reading it?
While it's called Broke Millennial and is targeted at millennials they aren't the only target audience. Anyone who wants to learn about finance through a storytelling style should be reading my site. I also encourage intelligent discourse in the comment section and always appreciate when people let me know their own opinions or experiences on a topic.
Can you tell us a little bit about your background? What do you do? Where do you live?
The short version or the long version? In short: I grew up as an expat living in Asia, came back to America for college and now I live in New York. I moved here right after college graduation and originally worked in entertainment then wandered into public relations for a bit. Now, I'm working for a finance-focused startup here in New York City called MagnifyMoney
It seems like so much of the news focused on Millennials centers around how they're all living in their parents' houses or that they're self-entitled or self-absorbed ... but how would you describe your peers? Is "Generation Me" an accurate description or a big misconception?
There certainly are self-entitled, basement-dwelling members of my generation but it doesn't define us. In some ways, the excessive "You Can Do It/You're All Winners" mentality we were raised with has created a generation of entrepreneurs and innovators.
What do you think are the biggest financial challenges facing young adults today?
Debt. American millennials are, on average, horrifically in debt due to student loans or misused credit cards. Thanks to the debt load, it's being predicted that our average retirement age will be 73. Frankly, I'd rather not have to work until I'm 73. I'd prefer to be able to do work I find fulfilling because I've financially set myself up well in my youth.
I harp on saving for retirement a lot because many of my peers neglect starting the process because they feel trapped by their debt load or don't see it as a priority. Millennials (or anyone) with access to a retirement fund with an employer match should be taking advantage of it from day one.
If you could recommend your peers do one thing with their money today, what would your tip be?
Get in the habit of saving, even if you can only afford putting away $5 of your paycheck. Developing the habit young will make it easier to squirrel away more money when your paycheck increases. After people start saving, I recommend they get over any fears about investing and do more with their money than leave it sitting in a savings account.
What are some of your current financial goals and what are you doing to work toward them?
I'm trying to expand my knowledge about investing. I've started doing a lot of reading on the subject as well as dabbling in some "investing for beginners" type moves.
What is one of the biggest financial mistakes you've made thus far ... what have you learned from it?
I've picked financial products (credit cards or bank accounts) based on general information or (gasp) their clever marketing instead of really examining what's best for my financial situation. For example, if I want to get a credit card to maximize rewards then I should be picking one that either offers 1.5 percent or gives more points for purchases in categories I actually use. Anything that gives points at gas stations are irrelevant to me as a New York City dweller.
What's been one of your biggest financial victories so far?
It's a fact I'm very open about on my blog. I picked my college based on scholarship offers, which allowed me to graduate debt-free. I've avoided any consumer debt by utilizing my credit cards wisely and living below my means.
Eventually, I know I'm likely to take on debt (say for a mortgage) but being debt-free has made it much easier for me to survive living in New York City.