海角大神

狈别谤诲奥补濒濒别迟鈥檚听听series asks people from various walks of life to share their attitudes and approach to personal finance, with the goal of bringing transparency to discussions surrounding money. In this installment we speak with Yaffa Fredrick, a 24-year-old managing editor living in Brooklyn, N.Y. This is how she does money.

What do you do for your main source of income and how did you get into that line of work?

I am managing editor for听World Policy Journal,听a foreign affairs magazine that covers underreported issues across the globe. I鈥檝e always been fascinated with the political sphere, while simultaneously in love with the written word. This position is ideal because it allows me to combine my passion for effective policymaking with the art of long form reportage.听 In college, I studied political science and media, and during my junior year, I interned for听World Policy Journal. Though I spent the next few years working in a TV news space, I was excited to return to WPJ when the position opened last August.

Would you like to be doing something else instead?

Right now I鈥檓 fairly content in my day job. I get to work with young writers across the globe, curate a magazine from start to finish, and even dabble in my own short form reportage from time to time.听 In the future, though, I鈥檇 like to transition to a larger journalism space with a stronger digital platform. It鈥檚 wonderful to have top-notch content, but it鈥檚 even better when that content can reach millions.

About how much do you earn before taxes per year?

$70-75k.

Do you feel secure with that amount? If not, how much would make you feel secure?

Not entirely. I still tutor and听freelance听quite a bit because New York City is so incredibly expensive. The rent on my two-bedroom in 鈥渂rownstone Brooklyn鈥� is just slightly more than one-third of my income after tax鈥攁nd that figure excludes utilities and Internet. I haven鈥檛 determined the best figure, but I鈥檝e been told rent should be no more than one-fourth of your take home (pay). If I operate under that assumption, then I鈥檇 need to make closer to $100k.

Do you have any debt?听

I鈥檝e paid off all my college loans so the only debt I carry month-to-month is on my听Bank of America Cash Rewards听card. I think, at this very moment, I have about $300 to pay on that card. Oh, and I recently pulled out my Lord & Taylors card so I owe about $70 for my makeup splurge at the Laura Mercier counter.

Do you think incurring that debt was worth it?

I certainly believe my college education was worth the small debt I incurred, but I鈥檝e also been fortunate to be steadily employed since graduation so I鈥檓 of the belief that the degree was worth the cost. In terms of the credit cards, my debt is very manageable. Even if I don鈥檛 pay the entire card(s) off each month, I have the capacity to do so. And meanwhile, I鈥檓听

Do you have any savings goals?

听I do! I鈥檇 love to听听on a one-bedroom in Brooklyn. My mom raised me to believe in the importance of having equity, and property in New York seems like an ideal form of equity (I, of course, say this with a very primitive understanding of what equity actually means in terms of long-term financial security.)听 I should note that my mother also encouraged me to open a 401k at my first job, and over the last three years I have made consistent contributions to it. Though retirement seems like a very distant goal, I would like to live as comfortably as possible when I do close up shop.

What is a question that you鈥檝e had related to your personal finances, either in the past or recently?

Should I be paying off my entire credit card bill each month, or is it 鈥渁cceptable鈥� to carry a small balance from month to month?

NerdWallet has previously addressed this question听.

Are there any resources or tools you鈥檝e used to learn about and manage your personal finances?

I had a free trial with LearnVest a year ago that helped put my spending habits into perspective. I鈥檝e tried Mint, but I鈥檓 kind of old school with my budgeting. I have a running Excel spreadsheet, where I chart my expenses each month鈥攔ent, food, entertainment, etc. And I check it every so often to make sure my projections and my actual costs aren鈥檛 too far apart.

How was the topic of money approached in the home you grew up in? What factors do you think influenced that approach?

My mom was a single mom for most of life so she was an expert at听鈥攑erhaps less by choice than by necessity. She taught me the importance of building personal savings, a retirement account, and as I mentioned above, equity. Though I never knew exactly how much my mom made, she was very transparent about the costs of paying her mortgage, sending me to private school, paying for summer camp, etc.听 But I think the most important lesson I took from my mom was the art of the hustle. She taught me that if my day job wasn鈥檛 paying me enough to support some of the activities I really wanted to engage in, I could take on听听to supplement my income.

Has your approach toward personal finance changed from the time you left home and how so?

I think the biggest reality check I had was when I graduated college and moved into a glorified closet in downtown Manhattan. I鈥檇 been raised upper middle class, and suddenly I couldn鈥檛 afford the lifestyle I鈥檇 grown accustomed to. It made me bitter鈥攍ike I鈥檇 been set up for disappointment鈥攂ecause working for city government (my first was at the Manhattan DA) was never going to afford me the same lifestyle. And so I took on four or five side jobs to try and earn a better income. As a result, I was working 70-80 hours a week, but having zero time to enjoy being a 20-something in New York. Several years later, and I鈥檝e found more of a balance. Yes, I still tutor or babysit, but I鈥檝e figured how much I need to earn to cover basic expenses and enjoy the city that never sleeps. I take on fewer gigs; I prioritize; and I鈥檝e mastered the art of Excel budgeting.

What is the best monetary investment you鈥檝e made?

My听Amazon Prime听yearly subscription鈥攆or less than $100 a year, I get everything I could possibly need to order delivered to my door in less than 48 hours. Did I mention I鈥檓 slightly impatient?

What monetary investment do you regret the most and why?

Does rent count as an investment? For two years, I paid close to $1,500 a month to live in a 10脳6 room鈥攏otably the size of a solitary confinement cell鈥� in the bougiest neighborhood in New York. Now I pay less than that for a room triple the size. I wish someone had told me the rent was too damn high, and I should鈥檝e moved to Brooklyn at 22.

What does financial stability mean to you?

I think this definition has evolved with time. At 22, it meant covering my rent and transportation costs without having to ask my mother for a monthly donation to the Bank of Yaffa. Now it means earning enough to cover the basic expenses, while also building out a personal savings account and a听鈥攁nd affording the occasional international trip.

What financial accomplishment are you most proud of?

I actually read in a听听that young people should ideally be putting 15 percent of their earnings into retirement accounts (feel free to correct me here), and I鈥檝e structured my finances as such that I am now doing that. It鈥檚 given me that warm, fuzzy financially responsible adult sensation.

Are there any questions you鈥檝e ever wanted to ask a financial advisor?

Is there value in a personal savings account with a negligible interest rate, or should I be moving my money into mutual funds?

We asked听, a CFP from 狈别谤诲奥补濒濒别迟鈥檚听, about Yaffa鈥檚 questions and this is what he had to say:

The determiner here should be the eventual use of the funds.听 If the funds are meant to be used as 鈥渆mergency鈥� or 鈥渞eserve鈥� funds, then leaving it in savings, even with today鈥檚 meager returns, is going to be the best choice. If the funds are meant for the longer term, like retirement, then moving them into investments that shoulder more risk is probably appropriate.听 What鈥檚 good for the goose may not be good for the gander, however.听 Be sure to consider your own tolerance for risk with every investment that you make, keeping your time horizon, goals and need for liquidity in mind.