Personal Finance Interview with Sherry on Paying Down Debt
Blogger Sherry of Save Spend Splurge is passionate about personal finance, but she's not interested in telling her audience about how to save money at the grocery store or how to trim their utility bills or why coupons are the greatest invention in the history of shopping.
Instead, she likes to examine "moneythropology," a term she coined that refers to money and how it affects us socially and emotionally (to get an idea about what she means, check out a recent article she wrote about the difference between North American and European approaches to debt and saving).
"I find it endlessly fascinating to read about how people react to money which I consider a tool, and how it affects their lives," she says. "It is interesting because it's the only topic left in the personal finance world that is not boring and has not been flogged to death!"
We recently checked in with Sherry to get her personal finance story - including how she managed to pay of $60,000 in student debt in just 18 months and get her take on why everyone should care about money management.
Hi, Sherry! Tell us about Save Spend Splurge. When and why did you start your blog?
I started this blog in March of 2013, but I actually had two other blogs before (one that was personal finance as well) that I started in 2006 as a way to chronicle my journey out of $60,000 of student debt.
I sold that blog in 2012 and vowed to leave the blogging world but it has proven to be too irresistible to stay away! Now I'm back for good.
Who should be reading it?
My topics are pretty varied but are as follows: money, investing, style/fashion, travel, career, minimalism, entrepreneurship, life/news and personal topics
I write a little bit about everything but the common theme is usually money, and I try to tie other topics back to money.
Those who should be reading are anyone who is interested in money, particularly its social impact but not in boring, bland pieces of advice such as how to use coupons or how to live frugally by pinching pennies because I am not that kind of money blogger.
They might also be interested in my blog if they don't want to be reading about strictly money all the time without a break.
Note: I write about money in general but I also get into tougher, more technical subjects like investing in an attempt to educate people who are good at saving money but scared of investing it; I try my best to make those subjects as easily understood as possible.
How did you become so passionate about personal finance?
I never learned how to manage it until I graduated college and got my first "real" job. It was at that point that I realized I owed $60,000 in student debt, had no plan or clue as to how to pay it off in the quickest amount of time possible.
I also came to the realization that I had never budgeted or thought about money for the long term in my life!
It was a crash course for me in how to save for retirement and I devoured every article related to money on the internet in an attempt to catch up for my years of neglecting my finances, and it is how I discovered that personal blogs talking about money existed and thought I'd start my own.
From there, while writing for the blog, it ballooned into a true passion of mine.
I cleared my $60,000 debt in 18 months, discovered I am a shopaholic and decided I wanted my money to work for me, not the other way around.
Now I am 30 years old, have around $200,000 as my net worth, and have worked less than 50 percent since I graduated, having taken half of my working years off so far in between to travel the world for months at a time or just to relax.
I love my life as a semi-retiree and this is the perfect example of how money impacts your life and the decisions you make.
Why do you think more people should pay attention to personal finance?
It's a basic life skill -- no one should care more about your money than you and it'd be silly to assume that you will wake up one day after 40 years of neglecting your money and have enough to retire.
I wish someone in school had pulled me aside in elementary and taught me some basic personal finance principles and this is what has made me so passionate to try and get others to care about their money too.
You paid off $60,000 in debt in 18 months ... what was the moment you realized you didn't want to carry the weight of that debt? Why was it important to you to pay it down?
The day I graduated and opened those letters detailing how much I owed, I saw how much went to the principal and how much went to interest and was shocked I was paying a few dollars a day just for the privilege of having borrowed all that money!
I had also never (truly) been in so much debt in my life, having avoided even a single red cent in consumer debt scrupulously my entire life, and I felt an obligation to have a clean slate in terms of finances before I could start my own life so to speak.
It was important to clear it because I'd have to pay it off anyway, so why give the banks more of my hard-earned money just because I was slow and lazy?
How did you devise a plan to pay it off?
I created my own automated budgeting and expense tracking tool which I now sell online (and donate the proceeds of), and with that budgeting tool, seeing the impact of my decisions on a daily and forward-looking basis really changed the way I saw my money.
With that budgeting tool, I forced myself to learn how to budget, track my expenses and figure out ways to make money and cut back as much as possible.
I also became quite creative near the end and ended up stumbling on a plan to basically live in hotels where my work projects were located and to opt to not travel back home.
This worked out perfectly because client loved having someone local, it cost less than if I were to buy plane tickets to fly home each week, and it let me pretty much have $0 in living expenses, so I put almost every penny of my pay toward my debt, upwards to 90 percent each month.
It was also around that time that I discovered I could live out of a little carry-on for months at a time and became a minimalist.
After that experience, what's your philosophy on money now?
No one should care more about your money than you, so you have to play an active role in learning how to manage it for the long-term which includes learning how to invest it, not just how to save it.
Don't blindly and passively leave it to others to manage your money for you, even if you trust them -- that is just sheer ignorance and laziness.
Saving and spending less is just one part of the equation, the other is to grow it.
What's the biggest mistake you think you've made with money and what have you learned from it?
My biggest mistake is not being frugal in college; had I clued in and picked up even an inkling of common sense that I would have to eventually pay back this debt I was taking out to pay for my education, I would have lived with roommates and lived a lot more frugally.
Now I can't really say I choose to live frugally but when push comes to shove, I am pretty determined and can buckle down and live on very little. Just this past month (March 2014), I spent less than $500 for living expenses.
I've done it before, I can do it again.
What's your favorite piece of money-saving, money-making or budgeting advice?
For maximum impact on daily money management, nothing beats tracking your expenses to learn where you are wasting your money.
For maximum impact for your financial future, invest your savings as early as possible in a diverse portfolio of low-cost index funds and don't assume buying a house is the best way to invest your money.