• Kavya Ravikanti

Building a Financial Plan Without Budgeting - Ina Kumar

This week we have our very own Ina Kumar, a service year member at AmeriCorps and a content producer for YNB 😃 She shares her no-budgeting approach to finances and her strategies for building her investment portfolios.


Occupation: Service Year Member at AmeriCorps

Age: 26

Salary Range: $15,000 stipend

Location: Pittsburgh, PA

Student Loans/Debts: $0

Monthly Expenses: $600 (general expenses while living at home)


Kavya: Tell me a little bit about yourself? Where did you go to college and when did you graduate?

Ina: I was born in Pittsburgh and went to college at Drexel University in Philadelphia where I graduated from in 2016. I studied finance and supply chain management. After graduation, I moved to New York City to work at Thomson Reuters.

Kavya: What was post-grad life like for you?

Ina: It was dream since I was little to move to New York City. Although I knew it would be an expensive decision, it was a dream I wanted to fulfill. I didn't want a job offer if it wasn't in New York. I moved there one month after graduating to start at Thomson Reuters in their 18-month rotational program with 21 other recent graduates.

Kavya: What's your first financial memory? When was the first time you thought about finances for yourself?

Ina: I was 16 and had gotten my first retail job at a women's boutique at our local mall. I remember my biggest shock being how much was taken out in taxes when I was making just a little bit over minimum wage.

Kavya: Taxes take us all by surprise! What did you do with the money you made?

Ina: The money I was making during the job was personal money to spend in the short term on things like going out to dinner with my friends.

I didn't actually start thinking about my finances until I was 24. This might be sort of unusual in that I wasn't thinking about my finances right when I started my first job. However, I really wanted to live it up my first two years in the city and not worry about budgeting at all.

Kavya: What changed for you at 24 that made you start taking your finances seriously?

Ina: I gave myself from 22-24 as personal fun time and I don't regret it at all.

Those 2 years was part of my timeline, almost an ultimatum of sorts. I knew going in that not thinking about finances couldn't last forever.

At some point, I had to get serious about it. For me, that timeline was 2 years; for someone else that could be 6 months or 3 years, but I recommend having a set end to that timeline if you plan to do something similar.

Kavya: What were some of the changes you made at age 24 with your finances?

Ina: I have a checking account, savings account, investment account, and retirement accounts (401k and Roth). I always wanted to have $X in my checking account at all times. I also didn't want to have a stringent budget since I knew that system wouldn't work for me.

I was receiving annual bonuses every year and I would take that entire amount and put it into a savings account. Then, I would phase that amount into my investing accounts. So I would put $1,000 one month and maybe $300 the next month. I didn't invest it all at once and I would also max out my 401k and IRA accounts each year.

I basically came up with a high-level strategy but I didn't have an excel sheet or budget I was using.

Kavya: Has your system changed since the one you created at age 24?

Ina: Surprisingly, most of my system has stayed the same. I still try to keep the same amount in my checking account at all times. Even though I was unemployed for 6 months and then took a huge pay cut with my current role, I've been able to never let it dip under my minimum amount.

Currently, I don't feel stressed about my finances in any sort of way since I have that safety net in my checking account. I also have a decent amount of money in my investments that I can take out money from if I need to.

I'm planning to go to grad school next year so I need to think about changes to make as that comes closer.

Kavya: Tell us about your investing philosophy and how you get started?

Ina: My main piece of advice is to start small. Start with a very popular company like Apple, Alphabet, Facebook, etc, and put an amount you are comfortable with into that stock. That's what I did to start and built on top of that, I didn't rush into it by any means.

Working in finance helped as well since I saw the behind the scenes of how data on websites such as Reuters was curated and calculated.

Now I do a lot of research on my as well. I check in on financial news when I can such as CNBC and try to stay up to date. I like to look into companies that I believe in or am interested in. Do I think they are going to profitable in the future?

This is how I've built up my portfolio over time. I started out with individual stocks and then added in ETFs, mutual funds, and bonds. I personally haven't gotten into options trading since they are fairly advanced and require a substantial amount of research before you can really get into them.

Kavya: How do you approach your retirement investments vs personal investments?

Ina: My personal investments are very growth-focused since my time horizon is almost 40 years or so. I focus on high-risk companies, specifically in the bio tech space since that's the are I've done a lot of research and there's a lot of up and coming things in that space. I also invest in stable value-adding companies that have been around for a long time such as Johnson & Johnson and Procter and Gamble.

For my IRA account, I am more conservative in my IRA to balance out my other primary portfolio which is a mix of high risk and stable value. Even though I have a long time horizon, I wanted to make sure not everything I invested in was exactly the same; it was important for me to diversify the way my portfolios are managed.

For me, it was more important to be conservative in my IRA account because its specific purpose is to fund my retirement in a tax-advantaged way. I didn't want to "play" around with that money and take many risks. I would rather do that in my personal brokerage account.

Finally, for my 401k there were very "set" portfolios to choose from and very few; it'll vary employer by employer. I didn't have much of a choice, but I did for my IRA and personal brokerage account which is why I took specific steps when thinking about them.

Kavya: Something a lot of 20 year-olds struggle with is lifestyle creep, how did you think about your spending in your early 20s?

Ina: Living in a city is really really expensive, especially coming from a place where the cost of living is substantially lower. However, I am a very conscious person in general and don't really go through life on autopilot. So by design and because of my job, I didn't really spend any money during the workdays so I would treat myself Friday nights through Sunday. I didn't want to overthink my spending on the weekends since during the week all I was doing was working and making money.

When I turned 24 and wanted to re-think my finances, I implemented the high-level strategy that I laid out earlier. I certainly had to be more conscious of my living expenses. That was the one variable I felt that could be changed easily enough. In a sense, my rent was "set" and I decided that I wanted a certain amount in my retirement accounts.

Recently, I've moved home and have been contemplating starting grad school next year so I've had to reconsider my spending once again. I believe that whenever you have a major life or career change, it's important to consider the financial implications and how you can adjust. I decided to live at home to save as much as I could knowing that it would be for a short period of time until grad school.

Kavya: You mentioned thinking about going to graduate school next year. That's a large financial decision, how have you been thinking about it?

Ina: Aggressively saving and not spending my money has been the main change I've made.

There aren't as many scholarships for MBA programs as there are for undergrad. It's just the nature of how the system works (getting an MBA is seen as more of a want than a need).

There are more external fellowships available though, which I've spent time researching and am currently applying to in order to help ease the burden of grad school. These fellowships center around leadership, diversity, first-generation, and so on.

If you plan to go back to your company after grad school, they will typically fund it, with some additional rules in place. However, since I'm not doing that, I've had to think of other options and that's where fellowships come into play. I want to assess this before considering any potential loans. I am not opposed to the idea of loans, as I believe the ROI will pay off in 5-6 years.

Kavya: If you could give like your college self, one piece of advice, what would it be?

Ina: Don't be scared to dive right into your finances. In college, I was scared of not knowing anything to the point of I didn't even really want to know how much was taken away in taxes from my paycheck. However, if you sit down and try to understand the concepts of what's happening it's not that scary and a very learnable thing. So don't be afraid to dive in.

Kavya: What are some mistakes that you've made with managing your own money.? What would you suggest people avoid doing.

Ina: I think I spent way too much money on transportation/commuting. There was a point where I lived in New York City but I had to go up to Connecticut for work. The travel expenses were coming out of my pocket and they added up quickly. Not only was the financial expense eating at me but also time = money. When you're taking a job, make sure you think about the cost of transportation and commuting and if that's something you have to pay for or your company will cover for you. Don't be afraid to ask these questions in your excitement for a role or a job.

Kavya: People are often worried about making the wrong decision with their money and there can be a lot of fear around money in general, what's your response to that?

Ina: You can always bounce back, things are going to fluctuate no matter what. Look at how things have gone this year alone and unexpected things are going to continue to happen but you can bounce bank.

Another thing that helps the fear is my checking account balance which acts as a safety net for me.

Rapid Fire

What credit cards do you own and why did you get those ones?

Chase Freedom Unlimited - great customer service and great cashback

Bank of America Travel Rewards - no fees when I'm abroad

How much of your income do you save annually? Can you break it down amongst different financial vehicles?

PRE-AMERICORPS: My entire annual bonus would go into savings in February then get phased into investments. If we talk about pre-tax everything, the bonus was about 20% of my income stream in any given year. The other 80% would be my salary.

I spent 35% of my income stream on rent in NYC, 15% on living expenses (food, going out with friends, transportation, gym), and 40% on savings.

In total, that is 60% towards savings in any given year (40% from salary and 20% from bonus). The bonus goes directly into savings and then is phased into a mix of investments. The remaining 40% would be split as follows: 30% to my 401k (matched by employer) and 10% towards my IRA, retirement account (contribution limits are lower for IRA's than 401ks in any given year).

If I ever needed to adjust my living expenses to account for making sure I had that threshold amount in my checking account, I would do so from that 15%. That is where the 15% was held.

DURING AMERICORPS: Things had to be adjusted. As career changes occur, it's important to revisit your financial allocation. I no longer have a bonus and I am now currently living at home; I spend approximately 50% of my income coming in on general living expenses (gas, shopping, peloton membership).

The other 50% is put towards saving. This is slightly lower than the 60% prior but it's important to remember that I took a significant pay cut so I needed to adjust accordingly for my living expenses. I'm not offered a 401k benefit through my employer (always important to ask), so it is on hold for now. I put all of the 50% into my retirement account, IRA. I received a bonus in February from my old employer, so I am working with that as I phase into investments this year.

If I ever needed to adjust my living expenses to account for making sure I had that threshold amount in my checking account, I would do so from that 50% living expenses.

What tools/apps/services do you use to manage your money?

Chase You Invest - commission-free trading and allows me to have my credit card and debit card all in one place

Resources you'd recommend?

How to Be a Financial Grown Up - Really great book of money stories with well known and famous people talking about their financial grown-up moments that touch on friendships and wellness with money that you might now have thought of.

Get stories like this one and more delivered to your inbox by subscribing here. We want to hear from you, tell us what you thought of Ina's story here.

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, some of us want a career and some of us just need our oat-milk matcha latte every morning. However, we all still face the same woes when it comes to managing our personal finances. MoneyStories is a series of interviews with young professionals and recent graduates sharing their stories on how they have and are navigating their personal finances.

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 any other group or individual.

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