An Interview with Kira of the Penny Foolish Blog

This is the 1st of a series of interviews HelpYourMoney.com is doing of other personal finance bloggers. The questions in each interview are the same. These finance bloggers have some great tips and I want to personally thank each of them. Enjoy our first series of interviews!

An Interview with Kira of the Penny Foolish Blog:

1. Can you please introduce yourself and tell us why your started your personal finance blog?

I’m a 22.5 year old science nerd who just graduated last year from college. I know I’ll never make a bzillion dollars a year so it’s important to me to try to make the best with what I have!

I started my blog basically because my boyfriend was getting tired of hearing me talk about money. I think a lot of us don’t really have any friends in our real life that we can talk to about money, at least not for very long! So I’ve really enjoyed “talking” with the other PF bloggers about money and getting it out of my system so I don’t drive anyone else batty.

I originally started learning about finance because when I started my job, I was given a 403(b) and I thought, well damn, I’d better learn something about that. I’ve always been entrepreneurial - if I needed more money, I would go out and make some - but I guess it never occurred to me before then that you could SAVE it.

2. Do you feel you are on the right track to reaching your financial goals and what are they?

My most immediate goal is to finish saving up an emergency fund of $2,000 and then save up at least $5,000 for a house downpayment.

My goal by 30 is to have saved at least $75,000 for retirement alone, and by retirement age I want to have at least $2 million. Since I’ve only been saving for about a year now, I don’t really know if I’m doing as well as I could be - but I feel I’m doing a lot better than I would be without blogging.

3. Do you work in the financial industry? If so, do you want to share where?

No, although I’m starting to wish that I had taken some classes in college on finance. I work in clinical research for a state university.

4. If you had to recommend just one financial related book, what would it be?

Everybody and their brother has read The Millionaire Next Door, but I really enjoyed it because it kind of gave me some solid findings about things I had thought for a long time (i.e. don’t give your children too much money, don’t spend all of YOUR damn money) and some proof that these kinds of tips really did work out and made people financially secure. I’ve never been a big buyer of “stuff” so I got a kind of voyeuristic thrill out of the stories about people who spend all their money and have flashy lifestyles but ultimately aren’t very secure.

5. If you had to recommend just one financial related magazine, what would it be?

I don’t really read a lot of financial magazines, but I think that it’s very important to look at the sort of things you read outside of finance and see how they are directing your life.

It’s not really getting you anywhere if you spend an hour reading about how to allocate your IRA if you then read shopping magazines (evidently this is a new niche market, basically glorified catalogs) which then make you feel deprived because you don’t have all that new cool stuff you didn’t need because you didn’t know it existed five minutes ago, but now you feel like you never get to do anything fun, and we never have nice things, and my aunt just got one so why can’t we, and magically you never end up putting the money in the IRA.

I think that simply keeping more of your own money is the biggest task for most people, and they need more advice about it, than all the financial advice in Kiplinger’s or BusinessWeek, which is only good if you have saved some money to invest in the first place!

6. If you had to recommend just one or two financial related websites (besides your own and that is not a blog), what would it be?

I think BankRate is a really useful website simply because most people can’t do mortgage payment calculations in their head! Playing around with financial calculators is a key way to become more aware of the time value of money, and of how much things are really going to cost you in the long run.

7. What is one of the WORST financial related decisions you ever made?

Last year I had a work-at-home second job writing flashcard programs for medical students, and I made over $7,000 doing it. But I have no idea where any of that money went. Some of it was spent on furniture for our bare apartment, but we also ate out WAY too much, and generally just spent it like it was never going to end.

The project suddenly ran out of money, and since I generally was in a spend-then-make cycle, it ran out of course right when I had a big credit card bill to work off. I’m only now going to be completely paying that off, and the project ended over six months ago. I still kick myself thinking about all the money that I wasted - I could have HAD my house downpayment by now if I had been smarter about it and not acted like it was going to last forever.

8. What is one of the BEST financial related decisions you ever made?

To switch from using a credit card for all my purchases to a debit card.

I have a cash hemorrhage problem - if I take out $40 from the ATM, I have no idea where it went in a week. Having money in my hand makes me feel wealthy - so you can imagine how I feel with a $4,000 credit line. I didn’t buy excessively, but I felt that we could’afford’ things a lot more than we probably should have. So about five months ago, I switched entirely.

I had been using my credit card for all purchases and then paying it off at the end of the month (and had been getting further and further behind) to filling my checking account at the beginning of the month and then sticking only to that money. I am unable to keep any more money in the account than what I can spend - no $1,000 buffer for me! - but it works very well since I check my account every day and I know that if I spend it now, I won’t have it later when we need more cream cheese or something. So now I usually end up with some money left over, instead of going over my budget for the month on the credit card.

9. Do You Trade Individual Stocks and If so recommend your favorite 3 to 5 picks?

No, I do not trade individual stocks. I bought 8 shares of one stock to get a Sharebuilder promotion and I just got so bored with it that I sold it six months later for a $10 total loss. However, I do love mutual funds!

10. If you could give our readers just one financial related tip, what would it be?

Don’t spend all your damn money!

Seriously, find a way to trick yourself into thinking you make less than you do. The other day, I was almost surprised to find out how much I make per month - because from day 1 of my job, I had at least 10% of my salary going into savings. My full paycheck never hits my account, and I’m taking steps to ensure that even bills money never hits my “spending” account. So by whatever means necessary (direct deposit, 401(k), multiple accounts) get your money away from you before you even see it.

11. Is there anything else you would like to share with our readers?

I think it’s very important to always remember what it is you are saving your money for. Even if you are saving it for an object such as a car, remember why it is that you want that car and what it is going to get you.

Your money is not there to look pretty in your account - it is always giving you something, whether it is groceries, a vacation, or simply a feeling of safety. The more you remember what it is that your money is FOR, the more you’ll want to save it.

>>Visit Kira’s Penny Foolish Blog.