Money: We want to make more of it, spend less of it, invest it effectively and get the most out of it...but we don't want to talk about it. Jason Vitug founded Phroogal to crowdsource advice about money and get us talking about what we spend, how we spend, and how we can do more with it. He spoke with us about building the site and the social taboos around money.
What led to Phroogal being founded?
Phroogal is my passion project and labor of love. I've had my fair share of financial mistakes and debt burden. I also worked in the financial services industry for years as a teller, customer service rep, branch manager, mortgage sales to vice president. It was really a culmination of those experiences and the opportunity to travel around the country doing workplace financial literacy seminars.
I was really proactive in trying to find solutions for myself, and I discovered so many people had the similar questions. This has led me building the largest financial knowledge base. After four months, we have over 14,000 questions and answers.
Why is there such a social taboo surrounding money?
Money conversations rarely come up at the dinner table or casual conversation. We are taught early on that it's not proper manners to talk about money. No one needs to know your business. It's your money.
This thinking leads to our inability to openly talk about our financial situations, whether we're seeking ways to improve it or ways to share best practices with others. So if you're talking about how much you've made in the stock market, you're bragging. If you're talking about how you can't make your car payment, we fear the judgmental look.
Money is equated with status, and as humans, we have this idea that we need to compare ourselves with others to gauge our own happiness. We may feel inadequate if we opened up about our financial situation, so rather than talk about it, we smile, grin and bear it all.
What are some of the most common questions you get on the site?
Some of my favorite questions are things like, "How can I travel the world with not a lot of money?" Or the more philosophical money questions such as, "What's your definition of wealth?"
But the most common searches are focused on credit reports, credit scores, investing and product reviews. It's been quite interesting seeing thousands of queries on improving credit reports to finding ways to start investing. We see both ends of the spectrum, with people looking to regain control of their finances and those ready to take the next step and start investing.
What are some common personal finance misconceptions you see floating around?
The idea that retirement is a number that's defined by the government. I often see people talk about saving for your retirement and to envision the life you want and all the things you want to do at age 70. For most of us, we can't see past our 30s, so we aren't incentivized to save. We need to shift the conversation in help people envision the life they want to live today all the way up into their golden age.
Being aware of our spending and prioritizing our goals is important to truly reach financial independence.
If you could go back and answer one financial question for your younger self, what would it be and why?
Should I buy this BMW? I bought a brand-new BMW 3 series fully loaded with payments of like $600. Add on NJ auto insurance premium of $4,000/year. It was ridiculous. I would tell myself to buy Google stock instead.
I had the mentality if I worked hard and made money, I should buy whatever it was. Well, that's exactly what happened, and that was the only thing I could afford.
There was a commercial awhile back where they showed this pizza delivery guy driving around in a BMW while these other kids were driving around in Toyotas having fun. Yup, I'd tell myself, "Don't do it."
Where do you see personal finance heading? Will we be more honest and open about money in the future?
I'm excited with the growing number of personal finance bloggers because I truly believe people learn best with stories. The more stories are read, the more people can relate and apply those lessons to their own situations. There is also a growing group of mindfully aware personal finance folks. I do see more people talking about habits and desires that really go deep in the problem with overspending and debt.
Being open about money is happening now. My family and friends are already talking more about money openly, and I can see that through my Facebook wall and Twitter feed. Even on Phroogal, people are asking with some anonymity to get others weighing in. Also, there are financial tech startups that are applying social integrations into their budgeting apps. People are crowdfunding their dreams and openly sharing their financial situations.