• Kavya Ravikanti

Caroline Chan: Don’t Skip the Guac, Focus on the Big Wins


Photo by Irene Kredenets on Unsplash


Today we have, Caroline Chan*, a young professional who works as a product manager for the government.

Occupation: Product Manager Salary Range: $140K Location: Washington D.C Big Expenses/Debts: Home Mortgage Monthly Expenses: Spotify, Netflix, Amazon Prime, Phone Bill, Cable, Internet, Wi-Fi

Kavya: Tell me a little bit about yourself! Where did you go to college and what has post-grad life been like? Caroline: I went to UCLA and I graduated in the spring of 2014, so I’ve been in the workforce for about five years now. I’ve spent the first 4½ years at Microsoft full-time and then most recently I’ve been in government for the last six months,

The first two years I was living in Seattle, in a studio, and I was living on my own. Around the two-year mark, I bought a two-bedroom, two-bathroom place. I rented out the other room so I had a roommate for the last few years I was in Seattle. I had to take out a loan, think about mortgage, learn about “home planning” and all that kind of stuff. Buying a home was a future forward-growth investment for me.

Then, I decided to take a job in government, which meant I left Seattle and I moved to Washington D.C. I rent an apartment in D.C and rent out my apartment in Seattle. It is a nice passive income that covers itself and subsidizes a part of my rent in D.C as well. The job that I moved here for is a government job, so things like a relocation package or moving expenses are pretty much non-existent, which was a big financial change from Microsoft.

When was the first time you thought seriously about managing money? For me, it was my dad sitting me down after my first job in college and then talking me through ways to invest my money. Financial independence definitely kicked in the first year after graduating, but in terms of consciousness around money, going through college and having internships was my foray into understanding the value of money. I held down odd jobs and paid internships throughout my time at UCLA. However, it obviously wasn’t enough to cover all of my student loans, rent, housing, supplies, and textbooks.

I come from an upper-middle-class family, so growing up as a teenager, I had a reasonable allowance. I didn’t live a lavish life ether, but I didn’t necessarily think about saving money and my finances until I was older. I definitely appreciate the upbringing that I had because I now realize how hard it is for a family of four to pay for school, college, and all of these other things.

The first time I had a budgeting wake-up call was when I did a film internship at Disney in Times Square, New York City. My brother was living in NYC at the time, so I basically lived on his couch for three months free of rent. The internship only paid $10 per hour so after a whole day of working I only made $80. I realized that I would spend $25 on lunch which was essentially 3–4 hours of work and that wasn’t even considering the fact that I wasn’t paying rent and wasn’t factoring in transportation costs or living expenses.

I quickly realized that I needed to make a lot more money to continue living the lifestyle that I wanted to live, which somewhat influenced me leaving the entertainment world and going into tech. I realized in entertainment the payscale is more of a jump. Most people working in entertainment take somewhere between $40–70K a year, but then once you become an art director or a producer, then you’re making $120–150K. However, in tech you come in making at least $85–100K and the increments are more like steps rather than a jump. So in that sense, I felt like my [Disney] internship was definitely a “come to Jesus” moment, like am I really about to spend the first 10 years of my career trying to climb out of the assistant coordinator ladder of the entertainment world.

This completely changed my mental model and plays into how lucky I feel now because for certain disciplines and jobs it’s not just about talent.

There are weird incentives that define how some roles are valued over others. Sales and marketing are a great example of this. Financial growth and incentives in sales are nearly three times more for someone in sales when compared to marketing. However, to a certain extent, their roles are quite similar.

To what extent did this realization about salary and how different jobs are valued influence how you decided on your first job out of college? It definitely influenced my decision. There are zero financial literacy classes in college. Most people get their knowledge from their family if from anyone at all. Nobody tells you that if you want to study Psychology and want to stay in that field, you’re probably going to have to get a Ph.D. or a Master’s, maybe even both. Even if you do that, on average you’re going to make about $60K a year. However, even if you’re not an engineering major but do a MOOC (massive open online course) and learn computer science on the side to become a developer, you can at least make $80K a year without ever having to go to school again.

This is never told to us upfront. We’re told to chase our passions and cultivate our interests but in today’s market society, we actually have no idea how different skill sets are valued until much later. This can be a good and bad thing. However, we often don’t understand how these things work until you’re in a job and realize you want to be making a little bit more money.

If I had known this sooner, I would have probably picked a different career path earlier on. It’s also not my parent’s fault or the previous generation’s fault because they don’t know any better either. I think there’s just a challenge here, with the current generation and the new generation in terms of what we should be valuing (salary or passion), and it’s all just a grey area.

Let’s go back to when you first moved to Seattle and were financially independent for the first time. What helped you get on track, what systems did you try and what were some of the challenges you faced? I would say that to date there is no budgeting app that has worked for me. I’ve tried them all. I tried Mint, You Need A Budget, every native banking app or some new interesting service, but across the board, I have not found an app or experience that I have actually been able to stick to where I end up making better decisions or budget better.

The only thing that has worked for me is to save a lot of money unconsciously. At Microsoft, I maxed out my ESPP* and my 401K every year. Just by the nature of maxing it out and putting it on auto-pilot, I’ve saved close to $100K each year through financial engines and growing my money on Fidelity.

I have definitely tried to consciously track and save money outside of these financial engines, but it has been really hard for me to do that. The auto-pilot mechanisms have worked best.

*ESPP = Employee Stock Purchase Plan is a program where employees can purchase stock at a discounted price. Learn what 401K and other financial terms mean here.

Why did you choose to go with Fidelity over other services? No other reason than that it was one of the brokerages offered by Microsoft for 401K matching. I was given a couple of choices, and Fidelity just happened to be the one that was really popular amongst a lot of people in Seattle.

HOT TIP: The important thing is that you choose one and set it up as early as you can.

Did you consult any resources or anything to help you better understand things? I like to read generically about ETFs and I thought about getting a financial planner for a bit. I came to the conclusion that financial planners were worth it if I was making and managing a lot more money.

My brother works on Wall Street, so I talked to him about things and picked up a general understanding of diversifying my investments. Between reading about ETFs, investing in the housing market, and diversifying my portfolio, I would say that is the extent of the research I did. All of these are not ways to make money quickly but rather ways to build wealth over time.

Fidelity also has really low-cost trades. If you are buying a couple of grand worth of ETFs and you’re holding them for 10+ years, then they just grow on their own. Currently, I am putting a lot more money into my mortgage as that is something I need to pay off.

ETFs* = exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. Think of them as a group of different kinds of assets that you can purchase to help you diversify easily.

HOT TIP: Long-term investment options are really low maintenance as you can usually set them on autopilot and then are good to go.

When it comes to your day to day savings, are there any mechanisms you follow? This has changed over the years but a generic piece of advice I was following early on was the 50–30–20 rule where you save 20%, use 30% for your wants and the rest (50%) is for living expenses and the necessities.

I think it’s been harder to actually live life according to this rule because it’s a lot of work to track. I sort of self-manage how much I’m trying to spend on vacations, nights out and eating out. In my job right now, I am easily going out for dinner or drinks almost every day of the week. This racks up over time, so meal prepping for lunch to save money helps me try to balance it out.

I would also say that I am in a situation where, whether it was Microsoft or now in government, I think I am already making enough to live a reasonably comfortable life. So with that, I told myself I don’t want to live the kind of life where I’m counting my money when I think it’s more than enough.

I almost think people care a lot more about their promotions and their salaries/bonuses in the first two years out of college. Once you get a few years into your career, which is where I am right now, pretty much no one cares. You are going to go through stages where you may take a job at a pay cut. A lot of friends are doing that right now and I did that when I took the government job. But then you will also bounce back — it ebbs and flows.

The happiness delta between $150K and $170K is honestly not that huge. But when you’re first out of college, there can be a lifestyle difference between $100K and $120K.

So there comes a certain saturation point where counting your money just becomes a waste of time. I also live under the philosophy that I’m probably going to die with a million dollars in my bank account, so what am I really saving for? Especially when it comes down to decisions such as attending a friend’s wedding in Hawaii. It can be really easy to say no I’m not going to go to that, but at the end of the day, you’re really saving money so that you can take spontaneous trips like that. 30 years later you might have more money, but no weddings in Hawaii to attend. I guess I live a reasonable YOLO financial model, basically on the assumption that I’m going to make more money in the future and that life is short. I’m probably not the most responsible person when it comes to day to day expenses but it has worked for now.

How do you think your relationship with money has changed from college to now? I think that in college, I spent a lot more money on things I would buy multiple times. I would go to Forever 21 or H&M and spend $200 on a lot of clothes. But as I have gotten older, I buy fewer things that are more expensive. Instead of buying four $30 jackets, I’m going to invest $200 on two jackets. So in that sense, the quality has increased and quantity has decreased. Before I would buy a $12 pair of shorts with something fun on them, now I wouldn’t buy those shorts unless they would be in my wardrobe for the next three years.

What advice would you give your college self when it comes to money? I would tell my college self to find an apartment that had cheaper rent. In college, you don’t really understand the difference in a place when you spend $1000 on rent vs $1200 per month. $200 a month in college goes a really long way and the difference between having in-unit laundry vs laundry on the first floor is minimal. College is also the time where you can slum it out on things like that.

Rent is the biggest corner you can cut because everything else you’re never actively thinking about. It’s never going to be let’s go to this bar instead of that one because it’s cheaper. Most college bars have standard rates. A night out in West Hollywood would run $40–50 between drinks, a hotdog, a Lyft, a cover and there isn’t much you can cut there.

I think as far as college money management goes, it would probably be too much to get a grip on all of those different categories. So I think the one-hit-wonder is getting your rent right because it’s the most expensive expense you can control. Tuition, health care, etc. are all part of a system and out of your control.

That’s a great piece of advice! So jumping back to the present day, when you made the decision to take the government job, what changes did you make in your personal finance management? There were the initial costs of just moving and adjusting to a new city and lifestyle. That took about three months to adjust to as you’re going to have a lot of one-time costs. I had to buy a couple of suits and skirts for my new dress code and furniture to fit my new apartment. Since they aren’t recurring it will balance out and you view them as living necessities. It is definitely hard to calculate this upfront but thinking about it in advance does help.

I am also spending a lot more on self-care and working out because I have less work-life balance now and these are necessary. Whether it is a massage, therapy, a yoga/cross-fit/spin class, I am spending more on things I didn’t before.

Rapid Fire

What tools/apps/services do you currently use to manage your finances? As I said, no tools or apps have really worked for me. You can think of all the ways to save money on a micro level, skipping the guac on your Chipotle Bowl or only doing one drying load for two loads of laundry, but the most meaningful ways to save money is by tackling the big things like rent.

For me, I started focusing on how much am I spending on my mortgage back in Seattle, how much on rent in DC, how much am I bringing in by renting out my place in Seattle, and how much am I putting into my savings mechanisms.

The apps help you with micro-interactions. They show you how you spent $5 at Starbucks today and at the end of the week that you have spent $80 on coffee. But unless you are willing to let go of coffee or switch to making it at home, there’s not much you can do and it just becomes a cost of living.

How much of your income do you save annually? Somewhere between 10% to 30% between the different savings mechanisms.

What credit cards do you use? Costco Credit Card HSBC Premier Credit Card — travel and international US Bank College Card Corporate Cards from Microsoft/Government



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Most personal finance blogs only share stories of the people who have it all under control, save 50% of their income and retire early. While that is impressive, most of us don’t live our lives like that. Some of us want a career and some of us just need our almond matcha latte every morning. However, we all still face the same woes when it comes to managing our finances.MoneyStoriesis a series of interviews with young professionals and recent graduates sharing their stories on how they have and are navigating their personal finances.



*Name changed to protect identity. Disclaimer: Views, thoughts, and opinions expressed in the text belong solely to the interviewee, not the author, and not necessarily to the author’s employer, organization, committee or other group or individual.

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