Zeroing in on managing my $35k to $100k salary By: Nina Singh
Things I learned about money thanks to my parents who manages rich people’s assets for a living Five years ago, I arrived in Los Angeles, by way of New York, and was making $55K annually. One of the many reasons I left New York was because financially I was spread too thin and the idea of slaving away to barely sustain myself no longer seemed appealing. Working in fashion and keeping up with my peers required balancing my shopping habit with social indulgences while ensuring I had enough for basic necessities like food and shelter. Like many, that required I take on credit card debt to “supplement” my income. As you can imagine my savings was non-existent as I put every extra penny towards the payoff of my several thousand-dollar credit card bill. Though at times I felt “reckless” in my decisions, I kept my debt at a level where I would be able to pay it all off by making a few lifestyle tweaks. Because of this I never found myself drowning or completely in over my head. I attribute this to growing up with a mother who works in wealth management. My parents were financially savvy and spent within reason. They instilled healthy spending habits in my sister and I at a young age. Towards the end of middle school my parents gave us a monthly allowance for clothes to teach us the importance of budgeting. In those days Abercrombie and Bebe were the big splurges, but with only $50 to spend each month we quickly realized our money could not support the wardrobes we aspired for. Fast forward to Los Angeles where I was focused on changing my habits. With a goal of becoming more fiscally responsible, this childhood budgeting exercise came in handy. But before I could craft a new budget I needed to understand the current state of my spending. So, I began by evaluating one full year of expenses and categorizing every activity. This once would have been a tedious process, but fortunately many credit cards provide end of year statements categorizing all expenses. After dumping it all into Excel, I was left to do a quick audit, recategorizing where needed. Next, I dropped in my debit card expenses and voila, I had a snapshot of where all my money went in 2014. No surprise to me, in the variable expense bucket I was spending a lot in the “entertainment”, “dining” and “clothing” categories. I then spent half a day sitting with this expense breakdown and began making a priority list. The purpose of this exercise was to find ways to save more, but without 44
