Archives for March 2014

I Am Stefanie OConnell, Founder Of The Broke And Beautiful Life, And This Is How I Work

My grandparents were storytellers. I could sit down with any of them and become engrossed in their words. I loved their insight, experience, and thoughtfulness. That love of learning about others continues, and now I’ve been spending some time interviewing the best of the personal finance community (like the founders of Budgets Are Sexy and Modest Money).

Surprisingly, it’s a tight-knit group of writers and financial experts. Some are certified financial planners, while others (like me) are experts in another field. The latter feel like the Supermen of the personal finance world: regular employees by day, financial bloggers by night.

Today, I have the privilege of interviewing one of the top financial bloggers, Stefanie O’Connell from The Broke and Beautiful Life. Her work has been featured around the top personal finance sites, and even on Frugaling. Here’s my interview with her:

What inspired you to begin TheBrokeAndBeautifulLife.com?

Oh, lots of things:

I spent the first several years of my acting career on tour where we would get a per diem for housing, food, and other day-to-day expenses. My goal was not only to live entirely off that modest allowance (rather than dipping into my salary), but also, to save as much of the per diem as possible. Unemployment is an inevitable reality in the acting world. Every job ends, I knew that going in, so I prepared accordingly. By implementing this strategy, I learned lots of ways to scrimp and save that I felt I should share.
Some actors are terrible with their money. I knew it would make for an uncomfortable working environment if I walked up to them and told them they were being stupid with their spending, so I decided to write about it instead.
I heard so many stories about actors in Broadway shows who were left with zero savings when the show closed because they had inflated their lifestyle so much during that time. (The minimum salary for an actor in a Broadway show is $1,807/week; yep, that’s some serious spending).

All in all, I just wanted to spread financial literacy in the acting community. If anyone needs to know how to budget well and make money last, it’s actors.

How did people (friends, family, etc.) react when you first started?

I’m not really sure. I think people may have been skeptical because they knew I was a “theatre person.” I don’t think anyone ever expected me to make a career writing about money.

What was your experience with design, code, web work prior to starting your site?

The Broke And Beautiful Life Screenshot Website — *Screenshot of TheBrokeAndBeautifulLife.com*

Zero! I started out on a free blogger template. After toying around with that for a year I decided to get a logo, hire a designer for the site, and setup self-hosting. As soon as I made that financial commitment to the blog, I suddenly felt committed to myself as a business owner–I needed to make the investment worthwhile.

What advice would you give to those thinking about starting their own site?

Two things:

Define what you want from creating your own website. Are you looking to start a business? Are you looking to have a hobby? Do you want to use it as a portal to market yourself or your service? Are you looking to make a lot of money? Clarifying your goal for the site will help guide a lot of your initial decision making.
Embrace your YOU. When I decided to transition to a self-hosted site, I hired a blog coach to help me figure out where I wanted to go with it. After talking to her for five minutes she said, “I’ve read through your entire site and I didn’t know until just now that you were an actor.” I had been afraid to pigeonhole myself and make myself irrelevant to non-artists, but the truth is, it’s my perspective and experience as an actor that sets me apart from all the other finance sites out there. Heck, that’s why I started writing in the first place!

How do you make money from your site?

While I make a fair amount of money blogging, it’s mostly from freelance writing (hire Stefanie!). My blog has served as a kind of active, online portfolio/resume to get me jobs writing for other websites.

Going forward, I’d like to generate more from the site itself through affiliate income and direct advertising. I’ve got a little bit of that going on now, but maximizing that earning potential is definitely my next big goal.

What do you think you’ve learned from your readers and fans?

I am a huge fan of alternative perspectives. Reading through the comments on each of my posts is always exciting and enlightening. I truly value the different opinions I come across, even when I don’t agree.

How can somebody in lower incomes best overcome financial hurdles and prosper?

Everybody has challenges, some of us more so than others, but the steps for overcoming them are universal: S.M.A.R.T. goals coupled with defined action steps. Chances are, you already know what you need to do, as Nike says, “just do it.”

Who are your financial role models?

Honestly, it was Suze Orman who really got me interested in my finances. I read her book, The Money Book for the Young, Fabulous & Broke, and I was hooked; not necessarily because she had some life changing techniques or advice, but because I found her engaging and interesting. That’s what I hope to do with my blog, engage people enough that they want to take control and learn more.

What personal finance sites do you read?

I once tried making a list of all the blogs I read on a regular basis and it just got to be too long. Somewhere between 50-100 (maybe more), and they’re all fantastic in their own way.

What else would you care to share with the readers of Frugaling?

One of the big messages on my site, and one that you’ve undoubtedly heard before, is balance. I’m all about pursuing dreams, while earning income, saving for the future, and living in the present. You can have it all if you’re willing to prioritize. I don’t do the daily latte, but I’m going to Europe next month. It doesn’t feel like a sacrifice when you’re thinking about the big goals.

Want to read more interviews like this one? Read the entire interview series here!

3 Mind Tricks To Enjoy Life And Strengthen Your Budget

By Frugaling 9 Comments

That's me. I'm an extrovert. Can't you tell? — *That’s me. I’m an extrovert. Can’t you tell?*

I’m an extrovert. When I’m around crowds of people, I feed off the energy and feel excited to be alive. In a college town, with little else to do than drink yourself silly or try a new restaurant, I frequently opt for a moderate balance of both. Unfortunately, this is a black eye to my carefully crafted budget.

Participating in these social romps are one of the highlights of my weeks. Meeting new people and getting to know someone on a deeper level – there’s nothing better! But let’s face it, they do take a toll on my ability to pay off more debt. Sometimes I wish I could have the best of both worlds: social time and the frugal life. Thankfully, there are some simple mind tricks that help keep me within my budget and enjoying the company of others.

Pretend it’s a necessity

Most visitors to Frugaling are likely a part of two camps (look at me already dividing people): those who need to reduce their expenses and make more, and those who want to reduce their expenditures. If you don’t need to trim all the excess from your budget, you’re usually less inclined to do so.

The motivation for creating and following a budget is highly determined by your financial situation. The more stability you have, the more likely you’re going to be comfortable spending money on a night out with friends. Nonetheless, my guess is that if you visited this article, you at least want to reduce your expenses.

Maybe you have a little emergency fund, a great big checking account, and/or a sizable investment portfolio. Being frugal may be a life choice more than anything else. For me, I need to get my budget balanced, but I have this generous wiggle room that the federal government taunts me with: student loans.

When I’m out on the town and could pay even more for food, I think about my aim: I don’t want more loans. That places me somewhere between choosing frugality and needing it. For me, the trick is pretending like it’s a necessity to stay in budget.

For instance, let’s say I had $300 this month for food. That budget included everything from restaurants, fast-food, and even supermarkets. If I hit $300, I’m out of money for this month. More importantly, if I pretend and remember that that limit is a stopping point before catastrophe, I’m going to be very careful about where I put my money next. By pretending it’s a necessity, I realize how great the consequences of my actions can be.

Predict, plan around your social desires

Despite tricking my mind into realizing the necessity of a solid budget, there’s a humble need to share and socialize. Somehow, I want that to be filled. If most everyone is venturing off into the little downtown nightlife, I’d like to be able to go with them. Unfortunately, this is rarely friendly to my budget.

A night out on the town that includes dinner and drinks at a couple bars may cost about $40-50 after tips. Done once a week, and that eats away $200 a month from my budget. That’s not an option!

The trick here is simple: Know both your social and financial needs before the invite comes and night sweeps you away. If you’re gearing up for a fun, late, Friday night, there are a couple things you can do that will really add up:

Eat at home, before you go out. Maybe get an appetizer when you’re at a restaurant with friends.
Like those kooky college students always do: pre-game at home. By the time you’re out on the town, you’ll be ready to drink water instead of another expensive booze concoction.

Stories beat stuff

The great country of New Zealand has a wonderful advertising campaign to attract tourists. Ads feature young people skydiving, eating exotic foods, and experiencing the diverse geography of the Hobbits’ native land. All of the marketing centers around one tagline: “Stories beat stuff.”

All they’re saying is that you should get over materialistic wants and show the world what you’re made of! Rather than collecting another display piece for your home, a luxury car, or buying expensive jewelry, try running around, taking a random road trip, or flying to another country! Let these experiences fuel and motivate careful decisions regarding your budget.

It’s important to gain those experiences because ultimately they can help perpetuate and fuel a well-balanced budget. Debt destruction is easier when you’re psychologically well and whole. I guess what I’m trying to say is that every now and then, that night out on the town is a short-term loss for long-term gains.

Find A Roommate And Financial Freedom

By Frugaling 4 Comments

As a student, I feel like a pinball getting smacked around from location to location. I’ve moved about 9 times in my adult life. I’ve lived with significant others, friends, acquaintances, and even by myself. I trekked across campuses, cities, and the country. After two years living alone, I found a roommate and will make my tenth move this summer. Today, I wanted to spend some time reviewing my current and future living situations, a hesitancy regarding roommates, and the effect on my budget.

My Man Cave

Two years ago, when I received my admission to graduate school and decided to move to the Midwest, I was ecstatic, but clueless about housing. I didn’t need much – just a roof over my head and basic utilities. I jumped at an opportunity to live in the university apartments. I hadn’t seen the outside or inside of them, but the price ($435 a month for a one bedroom) was unbeatable.

*Look at these digs! Perfect for a window air conditioner.*

What I found was both decrepit and lovable. The apartments bubble with rust. A perma-dirty linoleum floor greets my toes when I slide out of bed each morning – you never get used to the cold. The faucets run a yellow/red when they’re not run regularly. My circular thermostat doesn’t account for certain parts of the apartment, which seem to be unprotected from the harsh, Midwestern cold. Cinder blocks are stacked high on the walls, painted over in what can only be assumed to be lead paint. A thick coating of asbestos lines the ceilings.

Despite misgivings, it’s my home, and I love it. Actually, I find it comical how much I don’t want to leave my current apartment, and I’m only leaving because the university is demolishing them.

Forced to move again, while balling on a serious budget with severe time constraints, seemed impossibly difficult. Then, the university notified everyone that new apartments were being built in time for my departure from the old ones. I could just move right into them!

Luxury Living At A Price

Over the last decade or so, the university considered a construction project to repair and rebuild the flood-damaged, aged, asbestos-filled apartments. Year after year seemed to pass without resolution. When I moved in summer 2012, I heard the whisper of change – a private bidder on public lands.

Then, a resolution quickly swept over the university apartment system. New buildings, contractors, and contracts would be drawn. The private company would revitalize this community with opportunity, design, and (supposedly) affordability. Tenants would see a brightened exterior and feature-filled interior. The costs would unfortunately need to increase, but we were assured they’d be manageable.

Something seemed askew about allowing private bidders onto public, university property, but the messages seemed positive. A few months later I found out the price: $875 per month for a one bedroom. In other words, more than 100% what I paid when I first moved!

Despite balling on a budget, I resigned to the fact that my 60-70 hour workweek wouldn’t enable me to tour many places. I would accept whatever they required. I signed a lease last year, much to my dismay and confusion. How could the university charge $875 per month for student housing?

Wake Up And Smell The Budget

Even though the price of rent was steep, I relished my independence, at the expense of my budget. I wanted to be frugal, but not that frugal. This new rent would decimate everything I worked towards over the last 10 months. I balanced my budget and created a tiny surplus for each month. But paying $875 a month would mean losing about $3000-4000 per year, plus student loans with at least 6.8% interest APR. I can’t even calculate the true cost of this decision.

Over the course of this semester, I’ve been working hard at not working. Essentially, I reached burnout, and to counteract these notoriously awful feelings, I decided to spend more time going out with people. Being able to socialize and meet new people has been one of the best experiences of my life. It’s kept me sane amidst my crazy-busy life.

Thankfully, meeting people also meant finding those in similar situations: looking for roommates. Over time I found someone that was excited about living together and could afford to split a two-bedroom apartment. The mental math was easy: rent would be $550 per month.

The challenge for me was realizing my prejudices towards having roommates. In the end, I realized that opting for the expensive rent was a cop-out to finding a roommate and managing my delicate budget. The reality was that I didn’t have independence until I was free from debt. I’m looking forward to having a new roommate, paying off even more student loan debt, and freeing myself from the burden of an unbalanced budget.

What have you done to save on rent, housing, etc.? What do you think about living with roommates? Any recommendations for me?

The New Cadillac ELR Commercial: A Corporate Dream Of Consumerism (Video)

By Frugaling 4 Comments

Bill Maher is known for his polarizing opinions and uncensored diatribes about right-wing politicians. He’s an amalgamation of environmentalist, socialist, philanthropist, talk-show host, and comedian. While I seldom agree with his polemics, I feel like his opinions help me become a more well-rounded, critical-consumer of news.

Each week he films Real Time with Bill Maher, brings on about 4-5 guests, and does a brief standup routine. In one of his segments this week, he targets the car company, Cadillac. The brand is known for luxury vehicles and generally appeals to a higher-income bracket.

This commercial was too funny, disgusting, and wrong to avoid sharing it. While humorously filmed and brilliantly acted, the commercial suggests that Americans are special because we take less time off than other countries, work harder than everyone else, and get “bored” with scientific accomplishments.

The company and actor propagate a dream of consumerism that is your reward for all this “hard work.” Instead of enjoying more time with your family, taking a vacation, helping a charity, or saving for an early retirement, the dream is the all-new Cadillac ELR.

Hopefully your family, time, and life are worth more than this new car:

Archives for March 2014

I Am Stefanie OConnell, Founder Of The Broke And Beautiful Life, And This Is How I Work

What inspired you to begin TheBrokeAndBeautifulLife.com?

How did people (friends, family, etc.) react when you first started?

What was your experience with design, code, web work prior to starting your site?