Russell Kith is the main contributing author and manager of Money Street Smart, a website dedicated to helping others "get street smart on money." He writes many articles and blogs, both on his site and around the web, on investing, saving, retirement, taxes, credit cards and also travel. With regards to the latter, he also works at a small adventure-travel company in Calgary, Alberta.
With his street-smart advice and ability to explain financial topics easily, we thought it would be great to feature him onto the Mint.com blog and ask him a few questions.
Tell us a bit about who you are, what you do, what you're passionate about and why.
My two passions are travel and personal finance, and I enjoy writing about all aspects of personal finance. Why am I passionate about these two things? Well, firstly travel keeps you young, humble, and it's always a great learning experience. For example, if anyone wants to learn how to negotiate for better prices, I'd recommend taking a trip to South East Asia or India. They're relentless there. Haggling is part of their culture and it's a great learning experience. Secondly, my passion for personal finance comes from discovering how to stretch dollars while in school and travelling. After graduating from McGill University with a degree in commerce, my sense of adventure took me abroad to explore several countries while picking up odd jobs wherever I could to make ends meet, and now I just do it all the time.
I also love working online, sharing personal finance and life tips I've picked up along the way, and helping people save money. In fact, I've just recently started another site with a good friend of mine called SumoCoupon. It's a place where people can go to find and share free coupons for online stores to help them save money. It's still in it's infancy right now, but we have big visions for the site and hope it reaches a lot of people looking to save.
What is the number one thing you say to people when it comes to managing debt?
"Self-discipline. Set a goal and commit to it." If anyone asks me how I managed my student debt, or my credit card debt when I had it, it's simple. I set a realistic goal for myself, and I stuck to it. I reduced my spending and worked hard to pay it back, in full, as fast as I could.
Living out of a backpack for several years turned me into a bit of a minimalist (I prefer spending money on experiences over "stuff"), and having a bunch of stuff kind of stresses me out anyway, so that makes it a bit easier.
I've always hated being in debt. It makes me uneasy knowing I owe someone else money. Whether you owe $20,000 in student debt or $500 on your credit card, the first thing you need to do is write out an achievable plan, then stick to it. Without a plan, it's easy to fall into the trap of spending on things you don't need. When you have a plan, it's easier to cut out those things you don't need. There will be setbacks, but as long as you have your goal in mind and you're committed, you'll get there.
How does the present culture stop us from getting out of debt and following our passion?
The present culture engraves in our minds that material possessions are what is important. That's so far from the truth. I lived out of a backpack for nearly two years with as little as I could and it taught me just the opposite.
In most cases, it's a matter of needs and wants. If we educate the people around us to question their purchases rather than reacting purely on impulse, everyone would be able to pay back debt a little faster, or save a little more. Without debt hanging over your head, your passions and ambitions become a possibility rather than a illusion.
How do you encourage people to manage their personal finance better?
I like to keep it as simple as possible. In the end, we all want to generate wealth. Wealth is created by increasing savings over time. Savings are created by spending less than we make.
Income - Spending = Savings
Savings + Time to grow = Wealth
What is the one factor in this equation that you can have the most immediate control of? Spending. Maybe it's your rent, car payments, insurance, phone bills, entertainment, etc. Whatever you are spending your income on, monitor it, and reduce spending in areas you can, and you've just taken your first step to generating wealth in the long term.
How do tools like Mint.com help people to do this?
Mint is awesome. I've used it for years, I think it's an incredible tool and I recommend it to everyone (and no, nodiv paid me to say this). I think the best part about Mint is the ability to get a real-time bird's eye view of your financial situation, set goals for yourself, and really gain control over your finances. If you're not great with monitoring your spending and you wonder where all your money went at the end of every month, you can see where it all went!
You can then set yourself spending budgets in Mint and check up to make sure you stick to them. The best part is you can do it all for free. Mint makes it super easy to see an overview of your finances in an organized manner, or a quick detailed breakdown with just one click. You're missing out if you're not using it, trust me.
How do you encourage guys to think about their financial future without them feeling overwhelmed or not smart enough to invest, save, or think about all their banking fees, credit card fees etc.?
I get this question all the time. Money can be an intimidating thing and there are is so much information out there that it can really overwhelm people and scare them away from taking action to improve their financial situation.
In terms of investing, I always encourage people to start early, even if it's just $10. Set up an account and start to learn. When it comes to investing, I find that many young people put it off for so long because they're unsure of what steps to take. The most important one is the first one, so go do it now!
I also encourage guys to check out the personal finance community online. It really is amazing. There are hundreds of awesome blogs with firsthand stories about saving and investing, credit card and bank account comparisons, reviews, etc. If you're willing to put in just a little bit of time, you can find tools and resources online to help you make the best decisions possible. If you have questions, there are so many places you can ask. I love the Reddit personal finance community for that. There are just tons of people there willing to help answer questions if you have them, or you can email me anytime via the contact form at Money Street Smart. I usually respond within 24 hours.
Also, an absolutely awesome book to read, and my favorite when it comes to advice for exact steps to take to improve your financial future, is I Will Teach You To Be Rich by Ramit Sethi. It's really helped me and I wholeheartedly recommend it to anyone who wants to learn how to take control of their money.
Do you feel it's easier to manage our finances these days with the tools that are available to us?
Absolutely. Instead of compiling a huge spreadsheet of every transaction you make and carrying a notebook and pencil everywhere, we can use tools like Mint. It's a super easy to use tool and you'll figure it out in no time. It will take you a few minutes to get your accounts synchronized and budget set up, but after that you're golden.
What is the main reason people get into unnecessary debt?
Unnecessary debt is spending money you have don't have on products or services you don't need. I think so many people take on unnecessary debt because they think that the way to happiness is through material things. That's what the genius marketers have led us to believe.
But you don't need to buy in. I heard someone mention to their child when shopping the other day, "Don't spend money on things you don't need because you won't have money for things you do need." I think it is extremely important for parents and teachers to educate our youth on spending within our means. Everything is at our fingertips these days and spending money can be as easy as a click.
If you don't want to get into unnecessary debt, take a long hard look at your spending habits and ask yourself which ones you regret or could have gone without. Next time something like that comes up, make the smart choice.
How do you know you've "found a good deal" with something?
I'm a huge stickler for value. I don't concern myself so much with the price of a product or service, but rather whether I feel satisfied or excited for what I'm receiving in relation to what I'm spending. When I do splurge or spend money (within my means, of course), I try to do so on things I'm passionate about and always research to make sure I am paying the best possible price. I love price comparison websites and I always spend a few minutes to see if I can find some sort of discount online. I absolutely love bartering-friendly markets; it's a thrill trying to get the best bang for your buck.