Financially Audacious Series: Kate at Goodnight Debt

Happy fall ya’ll! Hope you’re enjoying all the many splendors that the beginning of this season brings. I am thrilled to bring you another guest for the Financially Audacious Series: Kate from Goodnight Debt. You may notice that the questions match all of those from the first interview (featuring Meghan Jankovich here), but that’s because I am intrigued with everyone’s approaches on how they got started, and the ways they save for retirement. When you ask people the same questions on the topic of retirement, you’ll recognize everyone’s got their own great way of doing it! In fact, Kate is currently debating whether she should go full force and max out her 401(k) – NICE! Did I mention she also paid off $45K in student loans in just one year?! This girl is awesome. After you check out Kate’s interview here, make sure to head on over and check out her post “Should I max my 401k?” and all the other great posts she has to offer. As this Financially Audacious series progresses, I’ll be delving into even more financial topics beyond retirement with some seriously incredible individuals.


 

Let’s face it…saving for retirement isn’t necessarily inherent by nature, and we all have to start somewhere. What inspired you to start saving for retirement & when did you get started?

I’ve always been a saver. When I was a kid, I got more joy out of counting the contents of my piggybank than spending any of it. When I was 16, my dad and I talked about investing some of my savings. I put $3000 into a mutual fund and haven’t touched it since. This account is currently worth ~$8500. Watching the balance ride the waves of the financial crisis took away my anxiety about investing and let me invest with more confidence when I made my triumphant return to the market as an adult.

I started actively saving for retirement in 2013. I was consolidating savings accounts and one of the accounts had nearly exactly $5500 in it. I was dipping my toe into learning about Roth IRAs and the power of time when it came to investing. It felt like a sign that I needed to put the money into a Roth IRA. I’ve been maxing out my Roth IRA ever since.

Sometimes envisioning your goals for the future can put everything into perspective. What do you envision your future retirement to be like? What will be your typical day?

Tough question. I haven’t thought this far in detail.

I would love retirement to be a constant trip. I would love to slow travel the world. Pick a location, spend 1-3 months exploring and then move to the next location.

Oftentimes it’s challenging to maintain saving for a goal that’s in the future. How do you maintain the momentum to stick to it (tips, tricks, methods)?

  • If you are eligible, sign up for a 401k/403b immediately. You should sign up on the first day of your first job. There is no better time to start than now.

  • Increase your savings every year. Do this during your annual review. If you never see a larger paycheck, you can’t miss it. Many 401k systems allow you to automate your increases. Also, don’t overestimate how much pre-tax contributions will impact your paycheck. Increasing your 401k contribution by $50 pre-tax will not lower your paycheck by $50. Try increasing the percentage. See what that does. You can always lower it later.

  • Automate! Thankfully, 401k payroll contributions are automatic. However, IRA contributions can also be automated. If the contributions are automatic, you can’t forget!

  • Set Retirement Baby Steps. Most people can’t max out all their accounts with their first job. It takes time. Define your Baby Steps and follow them. The most common progression is 401k match> Max Roth IRA> Build up to Max 401k. Every year, try to save a little more.

  • For non-retirement goals, I use separate savings accounts. I have a separate savings account for Travel, Emergency, House Savings, and Car Replacement. It is easier for me to stick to my savings goals when they are separate. With this system, I can be conscious about how much is available for each goal and make progress accordingly.

What savings vehicles and/or services do you utilize to save for retirement?

I’m pretty basic. I have a Roth IRA through Vanguard and a 401k at work. I use a spreadsheet to track my progress every month.

Say someone hasn’t started saving for retirement yet, how do you suggest they start?

Vanguard Target Date Funds. Stop thinking about it, just do it. Target Date funds are available in a 401k, IRA or Roth IRA. You can worry about proper allocation, fees and sufficient contributions later. The biggest step is to start.

Also, trust the system. So long as you aren’t investing in anything crazy, investing works. Pick a strategy, execute the strategy and give yourself 3 years to surrender to the market. It’ll go up and it’ll go down, but give yourself 3 years before you change course. Selling because you are scared is the worst thing you could do.

Do you find people around you (friends, family, communities) are also into the idea of saving for retirement?

Most of my friends are too underwater with student loans or trying to earn a livable wage to worry about retirement today. When money comes up with them, I try to focus more on general tips to save to help them get ahead. Retirement saving conversations are on the back burner for now.

If they do have the money, I’ve found they have analysis paralysis. I’ve tried to help there when I can. For example: My best friend is debt free, makes good stable money and had a huge savings account balance. She has a 403(b) but hadn’t paid much attention to it. We had a date night last year, went through all her 403(b) options, increased her contribution and opened a Roth IRA. It was a very productive date night 🙂

If you wanted to talk and learn about saving for retirement, what are some of your favorite resources?

I don’t have a favorite resource. I’ve found that good financial management is overwhelming if approached all at once. It takes me 3 or 4 exposures to an idea for anything to sink in.

For someone starting out, I’d send them to Rockstar Finance. Saving for retirement is one piece of a big puzzle. A general exposure to personal finance and conscious money management will go a long way.

What’s your #1 go-to tip when it comes to saving for retirement?

Automate it. If you don’t have to remember to save for retirement, you are much more likely to do it.


Thank you so incredibly much, Kate for stopping by! Make sure to visit Goodnight Debt for her wisdom & all things revolving around ‘learning to deal with money like an adult.’ 

Until next week & Happy Halloween!

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Craft Beer: The Case of Value

You may have discovered (in person, or online) that I have quite a love held for craft beer. Leave it to residing in the beautiful Pacific Northwest abundant with hops, or the fact that Portland is the U.S. city that has the highest amount of craft breweries per capita – there are several other reasons why I choose to fork out a little extra for the value I receive when choosing craft beer vs. macro-brewery options. Now, this isn’t to say that I scoff at the big guys in the industry…I just have more reasons as to why I go for supporting the craft beer industry. In fact, I’m not quite alone! According to a Time.com Money article, “43% of millennials say craft beer tastes better than mainstream brews…” and there’s a strong correlation of sales in the craft beer industry booming as millennials reach the age of 21+. Here are my 5 reasons to show the case of value for craft beer – cheers! (*insert beer mug emoji here*)


1. Craft beer provides one seriously awesome community

When you head to a public house, brew pub, beer fest, etc., you’re bound to meet a wide array of individuals that either a) seriously enjoy drinking craft beer OR b) got drug out with friends but took their first sip of craft beer & decided never to go back to mass produced beer again (even if they are just starting out by drinking a Pale Ale, Blonde Ale, or Pilsner). Regardless if you fall in the “a” or “b” category, everyone is just so dang happy and wants to include you. One of the traditions at the Great American Beer Festival is that the whole convention center joins in shouting a resounding “Ohhhhhh!” when someone accidentally drops their tasting glass. Mortifying? Maybe a little. But that doesn’t stop people from roping you in to take a shotski tasting at the next craft breweries booth (even if it’s an absolute stranger). Or when kegs tap out at the Oregon Brewers Festival, everyone breaks out in song (Do you know the song? No! that’s okay, just pretend like you do and you’re one with the crowd). Public houses also bring everything into one: incorporating great food, live music, conversation, and benefits/fundraisers in communities. So no need to think that craft beer is just limited to those that wear button down flannels, sport intricate beards, and give out “hipster” vibes – this community welcomes all & wants you to be a part of it!

2. The U.S. economy is benefiting greatly from the craft beer industry

And I really dig that concept. Just in 2014 alone, this industry contributed 424,000 jobs, as well as $55.7 billion dollars in the United States (Brewersassociation.org). I like to think that with every sip I take of a craft beer, I am contributing to a rapidly growing industry that’s generating dollars & career opportunities for many people. I’m pretty pumped to see what the stats & figures will be for the year 2015, because I’m sure it will surpass those of 2014. At home brewers, entrepreneurs, and those passionate about the craft are coming out of the woodwork and starting small brewing operations that are reaching astronomical growth in just a few years time.

3. Many choose to take on home brewing (can you say side hustle)?!

Many that get involved with the craft beer industry take on home brewing as either a hobby, or to pursue a passion for the craft (also refer back to #1 how this expands upon the awesome community). Did I mention home brewing could be a ridiculously great side hustle? Talk about home brewing specialty beers for friend’s weddings, creating seasonal ales for gifts, and just generating all around savings once your friends discovered you’ve made the best Chocolate Coffee Porter they’ve ever tasted (yay for at home dinner parties accompanied by home-brewed craft beer)!

4. My craft beer purchases support the company I work for

Shameless plug: I work for a company that manufactures plastic handles to multipack product. We have handles that several craft breweries in the U.S., Canada, and beyond use for their packaging needs (check it out). Whenever I purchase from our customers, it’s a win-win! It supports their business as well as the company I work for. The value is provided for not just me as the customer, but also to the businesses involved with this industry. It beats blindly purchasing an item that I have no affiliation with.

5. Let’s raise our glasses for I.T. (Innovation and Tastiness)

Did you hear about the yeast Ninkasi Brewing sent up to space, then brought back to Earth to brew their specialty release Ground Control? I took one taste, and just for a minute I felt like Matthew McConaughey in Interstellar (or I guess more-so Sandra Bullock in Gravity). Or, how about the fact that there are several beer tasting festivals dedicated to barrel aged brewing – I’m talking beers aging in wine, whiskey, tequila barrels…you name it. Not to mention, the creativity of mixed ingredients: from chocolate, to fruit, from oats, to Australian hops, from caramel, to herbs. The innovation & creativity is infinite as more craft breweries create collaborations, single barrel batches, special releases, and award winning beers. Now I can’t fail to mention, above all…craft beer is just so dang tasty. 


So for all my craft beer lovers out there, what are some of your favorites? For those of you who have other drinks of choice, do you choose value regardless of cost? Let’s raise our glasses in the comments below!

 

Financially Audacious Series: Meghan Jankovich

I’m incredibly excited to kickstart a new series called Financially Audacious at GenerationYRA! I wanted to find a way to highlight people that are doing some seriously awesome things to kick their personal finances into high gear. I like to call these people ‘financially audacious‘ because on the contrary, they’re actually finding ways to put their money to work (not the negative money matters that you see portrayed in the media). I know there’s quite a large population that’s finding ways to strengthen their financial game plan, and I hope to feature many of them here! Personal finances can be accomplished in a multitude of ways. Through this series I hope that you find different tips, tricks, and ways to tackle your personal finances from different perspectives.

Kickstarting this Financially Audacious series, I got a chance to interview my friend Meghan Jankovich, a self-proclaimed personal finance hobbyist. Specifically, we focused on retirement savings: where to start, how to keep the momentum going, and sources to use for your savings. Enjoy what you read below? Make sure to follow Meghan on Twitter: @mjankovich – she provides a wealth of insight & articles geared towards personal finance matters & retirement!



Let’s face it…saving for retirement isn’t necessarily inherent by nature, and we all have to start somewhere. What inspired you to start saving for retirement & when did you get started?

My responsibility with money and retirement can be first attributed to my parents. If there were items I wanted that weren’t necessities, I saved for them myself with money earned from babysitting. Even before I was old enough to babysit, I was given a money ‘bank’ with three different sections for ‘Needs’, ‘Wants’ and ‘Savings’. This idea of delayed gratification and separating short term vs. long term spending really resonated with me.

I learned more specifics about personal finance through various internet resources – especially because the financial crisis and recession happened while I was in college. Building on those lessons from childhood and the economic situation, I started a Roth IRA during my first job post college, and I also signed up for the 401(k) plan. In that job, there was no employer matching so my first priorities were paying down student loans and focusing on my IRA.

Sometimes envisioning your goals for the future can put everything into perspective. What do you envision your future retirement to be like? What will be your typical day?

Great question! Because I love to travel, I want to be able to continue to enjoy exploring the world in retirement. With that knowledge, I am inspired even more to save because travel is an extra expense on top of living expenses, potential healthcare costs, and other retirement basics.

I hope that I don’t have a typical day in retirement. I hope that I will have the financial freedom to spend ample time with my family and friends, read books and take classes, pursue hobbies, travel the world, all while also having days doing nothing except simply enjoying delicious coffee at a cafe.

Oftentimes it’s challenging to maintain saving for a goal that’s in the future. How do you maintain the momentum to stick to it (tips, tricks, methods)?

It can definitely be challenging, especially for many young adults who have a lot of student debt or have had trouble finding jobs with livable wages. In my opinion, you have to strike a balance between taking care of yourself in the present while also thinking of yourself in the future – due to compound interest, the best asset Generation Y has right now is time. So even when it gets tough, I remind myself that (a) even small amounts set aside in your 20s add up over time (b) my future self will thank me.

What works best for me is to have my savings automated. If your employer offers 401(k) matching, make sure that you contribute at least enough to get the full amount. Because it is taken out of my pre-tax paycheck and automatically invested, I don’t consider it as part of my take home income at all. For my IRA, I have a monthly automatic payment that I just consider one of my bills (it’s a bill investing in myself – so I’m happy to pay it!).

For non-retirement savings, my tip is to have separate savings accounts dedicated to specific goals. Make sure that your bank does not charge for this service, but for me having a physical separation between ‘Emergency Fund’ money and ‘Travel’ money works as a good psychological check in preventing accessing inappropriate funds. As a bonus, if you use Mint or other savings apps, you can tie the separate accounts to different goals and measure your progress.

What savings vehicles and/or services do you utilize to save for retirement?

I use a 401(k) and a Roth IRA. For me personally, because I am at the beginning of my career, I like having both pre-tax retirement savings via the 401(k) and also after-tax contributions via the Roth IRA. Tax diversification makes sense to me at this point in my life – because taxes have already been paid in the case of Roth IRAs, in retirement I won’t have to pay taxes on money withdrawn from that account.

Say someone hasn’t started saving for retirement yet, how do you suggest they start?

I would say start simple. If you have a job that offers a 401(k) plan, reach out to HR for more information and sign up at the next enrollment opportunity. If you’re not sure how much you can afford, there are free online calculators that help you see how it will impact your paycheck.

If you don’t have a 401(k) or matching, I recommend starting an IRA at a low fee company. For your retirement accounts, tax advantages give you a huge opportunity for savings but watch out for fees!

Do you find people around you (friends, family, communities) are also into the idea of saving for retirement?

I think it can sometimes be uncomfortable to have conversations about personal money in the U.S., even with close friends and family. I am willing to talk and I discuss when it comes up, but it’s not a subject that I encounter a lot in real life. That is one of the reasons why I was drawn to social media and Twitter: to find communities and resources excited about retirement savings. I hope that we build more financial education into our lives and conversations become normalized.

If you wanted to talk and learn about saving for retirement, what are some of your favorite resources?

I use news sources (Wall Street Journal, New York Times, Bloomberg Businessweek, Fortune), articles from industry and academic experts, bloggers, Twitter – really with the internet there are endless opportunities for learning and engagement. I want to give a special mention to Khan Academy as not only do they have great personal finance resources, but also their mission to make education accessible is amazing. Their section on investment vehicles, insurance and retirement includes many videos for those curious about the implications and definitions of different retirement choices.

What’s your #1 go-to tip when it comes to saving for retirement?

Just start. I know it can be intimidating, I know you have a million reasons why you haven’t started yet – but just start now. Set aside small amounts monthly and you can always increase as you go. It’s a marathon and not a sprint but you do have to start somewhere. The time is now.


Interested in trying out a new Retirement Calculator that can help organize how you save & maximize your contributions? Check out Personal Capital’s Retirement Planner. It’s absolutely free to use when you join Personal Capital!

Thanks, Meghan for stopping by Generation YRA! Have any questions about retirement savings? List them in the comments below!

Think you’re Financially Audacious? Feel free to contact me at Alyssa.Windell@live.com – I would love to feature you here!

*The following links listed above are not affiliate links. Just free services & tools that are available for all to use to help with their retirement planning!

On Par With Your Retirement Game

In your 20’s, the concept of retirement can be one that’s difficult to grapple with. How can you focus on saving for a future when even just 3 years from where you are today seems a vast distance? I’ve talked before about the struggle I’ve faced with the illusion of retirement to reality. Even with that push-pull thought process, I want to create a place that encourages the savers of today to get their game plan ready for a glorified retirement in the future.  Sometimes some of the best ways to break down a complex idea is to find things in life that are analogous to the theory. Today, I’m bringing forward the game of golf & what may happen along the way as you’re gearing up for your retirement (for the sake of shortness, we’re sticking to 9 holes and not 18).


Hole 1

You look down the fairway and see that yellow waving flag in the distance. That waving flag signifies the destination of retirement. It’s a par 3 and you’re feeling the pressure because it’s over 200 yards to get to the hole. How in the heck are you going to get there when it seems like your shots at the range have been falling short every time? But you’ve got a great support group with you, and clubs in your golf bag to help you get there. You feel encouraged, and you’ve been preparing to take on this course. You tee up by setting up your first account to get to some retirement saving (whether it be a 401k, IRA, or other investment vehicle).

Hole 2

Just getting warmed up as you make your way along the course. Hole 2 is kind of like the first couple years of investing and saving for retirement. It’s a new playing field – investing that is, and you’re not quite sure what to expect along the way. For the first couple of years the stock market may be doing well, while the following year it may be quite volatile. You get a feel for the course, and start selecting the different clubs/tools necessary to get you further along the fairway (how should I diversify? how can I get the right mix of stocks, bonds and cash?).

Hole 3

You’ve somehow managed to land yourself in a sand trap. Sometimes while saving for retirement, you may face some unexpected setbacks. Even though you’ve landed in the sand trap/setback, you still have the opportunity to make your way to the end goal – it doesn’t matter how many strokes it may take. Perseverance and patience are absolutely key. Most of setting aside money for retirement is a mental game, and not about the actual numbers game. Grab your sand wedge, plant your feet in the sand for that shot, and hit it right up close to the hole. The best part? You get to erase your foot prints in the sand with the rake, just like how you can brush away any setbacks of saving you may have faced and move on. The rest of the course is waiting.

Hole 4

Someone shots “fore!” as you contemplate ducking for cover. There will be distractions preparing for retirement along the way, but don’t let them get to your head (literally & figuratively). Although the unexpected may occur, it doesn’t mean you’re going to pack up and leave the course. You’ve still got 5 more holes (or several years in terms of investing) left to play the game! Many moments of triumph, and potential pitfalls can occur along those next few holes/years.

Hole 5

You just managed to get a birdie (1 under par for the hole)! You’re staring to feel that high as your asset classes and investment choices are experiencing great returns. You recognize that you have a lot of time left in this game, and decide to adjust your strategy to take on more risk. More time in the market allows for more time to make great returns. You decide to weight your portfolio heavily in stocks and ride out the course and market with determination.

Hole 6

Well shoot…you’re ball just landed in the lake and you face a penalty. It seems you’re portfolio is down, but you attempt to avoid looking at the scorecard too in depth until you reach the end of the game. Historically, the market will always bounce back and gain even more returns than what happened prior. So before you get down about the fact that an alligator potentially swallowed your ball (“give the ball, alligator!”), you know there is still time to make gains on even the most challenging parts experienced of your game.

Hole 7

Unreal, you just got a hole in one (this is a goal of mine, and I’m sure for many too – if you’ve gotten a hole in one before, you better leave me a comment below letting me know all the glorious details)! It’s been several years of preparing for retirement, and you’re completely on track with your goals. Maybe even better than you anticipated. All those years of focus and savings are preparing you for hole in one euphoric feelings such as this.

Hole 8

You’re nearing closer to retirement, and suddenly you get a bit more of an energy kick. You decide to tone down your strategy to be a bit more conservative for this last hole/couple of years. Slow and steady will get you to where you need to be. The hyper focus is real as you prepare to embark on this new journey of retirement in your life. Time to finish this game!

Hole 9

The last flag you will take a look at for the day. Are you ready to finish the game of retirement savings on what you’ve been working towards? All the goals, strategies, support, savings, investments and tools combined have allowed you to qualify for this moment. Maintain your focus, and the strokes will get you there. Then you can pull out that scorecard and observe all the weak spots and greatness that allowed you to officially retire. It doesn’t take perfection to accomplish your goals for retirement (just check out how you had 7 strokes on one hole, but managed to get 2 under par on another). The course can seem long, and the game of saving along the way can be full of potential mishaps and surprises. It’s up to you to put your mental focus front and center to accomplish the savings you want for retirement.


Do you think the game of golf is like saving for retirement? What sports come to mind that are analogous to retirement saving? Have you ever gotten a hole in one before? Let’s begin the conversation!