Money Masters: Young Finances

This week’s Money Master is LaTisha Styles of Young Finances. LaTishsa has made a name for herself as the millennial money expert with a forte of making finance simple. She has been featured on major websites, such as The Economist and U.S. News and World Report.

LaTisha has a great voice brings personal finance to her generation like no one else is doing today. The millennial struggle is unique and millennials face an uphill battle with finance, especially those who have or will graduate with a mountain of student loan debt. For them and their less financially burdened peers, LaTisha is there

1. What’s your story?

I started my financial journey at a young age. When I was a pre-teen, I used my allowance money to buy candy in bulk and sell it to my friends at school. My dad supervised my early entrepreneurship and helped my sister and me learn the basics of making money work for us. However, even though I learned how to earn money, I never really learned how to manage that money. As I grew older and reached the legal working age, I started working at McDonalds. Each time I got paid, I spent the money on stuff. Back then I wanted designer clothing. I also spent my money on random things here and there. At the end of a few years, I had nothing to show for it. Then I went to college. I was lured into opening a credit card after seeing a stand of free t-shirts. Because I had no money management smarts, I quickly racked up over $22,000 of credit card debt. I started my blog Young Finances to help young people avoid the same mistakes I made. During that time of teaching and learning, about 3 years, I paid off all of my credit card debt. Now I continue to teach budgeting basics, easy investing, and smart ways to build financial success.

2. What’s your point of view, as a personal finance blogger?

There are a few general viewpoints in the personal finance blog world. The same way that big name issues divide Democrats and Republicans, these important issues either divide or unite personal finance bloggers. However, we bloggers are typically respectful of each other’s views and we know that personal finance is indeed personal, meaning, there is no one size fits all. With that in mind here is where I stand on the basics of saving, debt, credit cards, and investing.

Saving: I believe in saving to spend. There are two categories of spending, short term spending and long term spending. The way that you divide your cash into those categories is the start of a budget. I personally use shorter term goal saving to save for an emergency fund, then actual fun; in my case it’s travel. I use longer term saving to save for retirement.
Once my immediate goals and longer term goals are set, I spend everything else. My budget is about as simple as it gets and it almost can be defined as an anti-budget.

Debt: I believe there is good debt and bad debt. As a person that grew up in a median income household, I likely would not have had the opportunity to go to school had it not been for the student loan debt that I borrowed to go to college. I consider that good debt. I went to a state school where the cost was pretty efficient. I do not consider private school debt as good debt. My definition of good debt is the smallest amount that you need to leverage yourself into a better position in life, especially if that leverage leads to better opportunities down the road. For me, college was that. I consider everything else bad debt. Credit card debt that is carried from month to month is certainly bad debt in my opinion. A jumbo home loan when there was a smaller home available is a bad use of debt and so I consider that bad debt. Obviously the definition of good debt and bad debt even in my opinion will vary depending on the situation. As I said before, that’s just personal finance.

Credit Cards: I do NOT believe credit cards are evil. In fact, in a solid budgeting plan, you can earn money using credit cards. The key is to pay your cards in full each month and only open a credit card with a simple rewards program. I prefer cash back because I do not open multiple cards just for the sign up bonus. I like seeing the cash that I earned each month when I sign in to my account. It works for me and it helps me build credit as well.

Investing: I believe that in the context of a solid saving plan, investing is important for long term growth. For the typical person that does not understand how to research individual stocks and has no desire to, I believe that a passive investing strategy works best. However, it you have the energy, time, and are willing to learn, then active investing can provide better returns. The time required is usually more time than any typical 9-5 worker has. In the long run, a passive investing strategy with an account that rebalances is all most investors need to participate in the markets and benefit from long term growth and dividends.

3. In one sentence, what’s one piece of sage advice from your personal finance background that you’d like to share with our readers?

Pay yourself first, spend less than you earn, and when all else fails, earn more.

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