Why Bringing in A Financial Advisor Made Sense - Karen Francois
This week we have Karen who shares the mindset shift she had to make when running her own business and why she chose to bring in a financial advisor.
Occupation: Brand Visionary + PR, Founder of Cois Creative
Salary Range: $60,000 - $75,000K
Location: New York City
Student Loans/Debts: ~$20,000K
Monthly Expenses: $3,000 - $3500 - Sublets, Food, Transportation & Travel (Pre-Covid)
Kavya: Tell me a little bit about yourself? Where did you go to college and when did you graduate?
Karen: I'm 25 years old from Miami, Florida where I went to Florida International University. I technically didn't graduate since I left college before my last semester to move to New York for a job and I’ve been here since.
I started working in marketing when I was 18, doing digital marketing for a real estate company. This made me change my major from art history to marketing because marketing is a creative way to impact how people think and create themselves.
I left college to take a job in NYC at a startup that created luxury supplements. I networked with gyms that we could partner with and quickly got promoted from intern to marketing manager.
Later I wanted to learn more about how marketing and PR connect, so I started working at a fashion PR company that represented Asian brands globally, which was great to learn how creating a community was done on a global scale.
After a couple of months there, I worked with Alamo Records in their lifestyle marketing team, and eventually, I left to start my own agency. I wanted to work with creators of color and see how I could use my network and my community to elevate them.
Kavya: How was the transition from college life to work-life? What was that like for you personally and financially?
Karen: It was crazy because I have never been great with my finances. It's not that I'm an overspender, I'm just not super married to my money sometimes. I had to teach myself to recognize my worth and not strain myself beyond what I was financially making.
When I first got out of school, I thought I had to show up and show out, so I constantly pushed myself to be the best. I also had to remind myself that I'm still learning and that I'm experiencing all of this for the first time.
When I moved to New York, I was able to move in with family which alleviated a lot of the financial burden but I still had to learn how to be responsible with the money I was making. Especially when I made career decisions that included pay cuts.
Kavya: What steps did you take to learn how to be responsible with your money?
Karen: I initially reached out to my siblings who are great with their money and they sent me budget worksheets that were helpful.
Ultimately, it just came down to me cutting costs wherever I could. When I made the decision to go to a lower-paying job, I thought about “What do I not need to be spending on?”. It was winter in New York at the time, which made it easier to cut back on expenses as well.
I was able to use the relationships I had to supplement the financial cuts I made. The relationships I had with the gyms allowed me to keep up my workout schedule and not pay for a year's worth of gym membership.
I'm also big on travel but that was another place I had to cut back heavily.
Kavya: When you were choosing your next job, it looks like money wasn’t the motivating factor?
Karen: It's always been more about the experience than the money for me. It's something I struggle to find the balance between as well. Being connected to my work is important but I also need to bring in an income.
Opportunities that are great financially come along, but I always need to ask myself, does this align with my long term vision? When I took opportunities that were great mission wise but not financially, I had to find ways to supplement my income.
I wouldn't recommend this, but in undergrad when I didn't have money, I wrote papers for other people. Even after undergrad, I continued to write papers for PR firms and others to supplement my income.
Kavya: When you made the decision to start your own agency, what did you do to prepare yourself? Did you just got for it or was it a planned out process?
Karen: Before starting my own agency, I took a sabbatical to start the transition of working for someone else to freelance work. The sabbatical was also because I never really took a break after undergrad since I threw myself into my career.
I was in Paris at the time, so I took some time off there to iron out my vision for the agency. I figured out a lot of it but, to be honest, I didn't necessarily flesh out the financial side of it completely.
I did have to make some difficult decisions in the process. There were a lot of things I want to do with my agency but I had to remember that I was just one person and that I couldn't do everything at once.
Kavya: What were some of the difficult decisions that you had to make?
Karen: I actually don't have an apartment. I was really nervous about that decision because it was crazy to think about not having a home base. But as someone who travels so often, it was a realistic financial decision. Often, I'm only in the city (New York) for 2 weeks out of a month and when I'm there I'm working and meeting with people the whole time.
I started to just sublet when I was in town and that really helped cut costs, but it definitely wasn't easy as someone who loves stability.
The other difficult decision was about what projects I could take on. Sometimes there were really awesome creatives I wanted to work with but they couldn't necessarily afford me. I had to find a balance of sometimes choosing money and sometimes choosing the work. Since I wasn't paying $1300 a month for rent, it was easier to choose work over money at times too.
Since I didn't have as many years of experience as other people do before they open their own agency, I had to take some losses sometimes to prioritize learning so that I could build my agency.
Kavya: What does your financial system look like right now?
Karen: It’s a work in progress as I recently brought on a financial advisor to help me out. I also hope to bring on an accountant to further help me straight out things.
It was a conscious decision after realizing I didn’t pay enough attention to the financial side of both my business and my personal life.
By not paying attention to where the money was going, I couldn’t take advantage of opportunities for business write-offs. I decided it was worth investing in someone who could help me figure all of this out without it being another thing I had to handle myself.
My advisor was also helpful in figuring out health insurance and looking into what’s possible as I’m thinking about getting a home base soon.
Kavya: Do they manage your personal finances and investments as well?
Karen: Yes, they manage both my personal finances and my business expenses. I lost my mom recently but she was really great with her finances unlike me. She prepared for my siblings and me to have a financial plan so my advisor is also helping me put that plan into motion.
I was initially overwhelmed with what I should do with this lump sum of money I was fortunate to receive, but my advisor has been helpful in taking me from survival mode to leveling up with my business.
As much as I loved working with smaller creatives, I wasn't always seeing a positive return with that. So they helped me make sure that I could take on the smaller creatives but also have a foundation for myself to fall back on.
Kavya: How do you think about your day-to-day expenses? Do you budget or do you just look back on your expenses to see if you’ve been staying on track?
Karen: For the most part, it's looking back at my expenses but I also do try to be mindful during the day-to-day spending.
Because of the pandemic, I'm not spending that much money anyway, however, since I do travel a lot, I try to be as aware as I can at the moment. It’s so easy to be in the hole for a couple of grand if you’re not aware.
Having conscious conversations with yourself is important. I’ve realized the hard way that sometimes an option that might take a little more work to put in place, might actually end up saving you a lot more money at the end of the day.
Kavya: What is one piece of advice that you've received that's really helped shape your relationship with money?
As a freelancer, pricing is super important. Often as a minority creator, you get low-balled a lot. So it’s having a lot of conversations and educating myself about what others are making and who’s paying what.
I need to make sure that I'm not short-selling myself so that I don't end up spending more money on a project than what I'm bringing in.
This is also important so that my price increases aren't jumping from $100 to $2,000 all at once even if I'm worth the $2000. Not being afraid to be upfront and confident about my rates is super important.
Kavya: People are often worried about making the wrong decision when it comes to their money and personal finances, what’s your response to that?
You just got to make the decisions. I've made a lot of bad financial decisions and I have grown from them and am conscious of the fact that it was a bad decision. It's not a failure on my part that I made a bad decision, it just means that I have to be more aware of where my money is going and being realistic.
If I didn’t get up, wipe my tears, and keep moving forward every time I failed, I wouldn’t be moving forward at all. Failure is just part of the game.
What credit cards do you own and why did you get those ones?
I got an OpenSky Visa since I need to build credit.
I used to think: “If I don't have credit how can I have bad credit?” but I have learned how wrong I was about that. Not having a credit score is essentially not existing for the past 25 years, so I got this credit card to finally start building my credit.
Where does your money go? What saving mechanisms do you have in place?
Last year, almost all of my money went back into my business.
This year, I've been a lot more conscious and I'm building up my rainy day fund.
This came into light when my mom passed away. If I was working for another company I could have taken paid time off, but when you work for yourself there is no paid time off. But I had to take the time off because of what was going on in my personal life and I didn't want to be worried about not being able to afford what I needed.
I'm really glad I took the step to start building my rainy day fund before she had passed away because I have been able to take the past 3 months off to rest and also figure out what my business is going to look like moving forward.
Resources that have helped you learn about personal finance?
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 almond 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.