Michael Reynolds: Advice from an Uber Driver and Starting Early
First up, Michael Reynolds*, a young professional who works in operations at a startup!
Occupation: Operations Lead at a Startup (1 of 4 full-time employees!) Salary Range: $45K — 65K Location: College Town Big Expenses/Debts: ~$10K in student loans Monthly Expenses: Spotify, Cell Phone, NY Times Subscription, not Netflix (thanks mom)
Kavya: Tell me a little a bit about yourself! When did you graduate and what has post-grad life looked like for you? Michael: I graduated from UVA in 2016 with a degree in computer science but knew pretty early that I wanted to do something different after graduation. I now work in operations in the ed-tech startup space and I absolutely love my job and what I get to do every day.
I’ve been on my feet fully for about a year and a half. It wasn’t until 6 months after graduation that I had my job fully figured out. It took another year after that for me to feel fully settled.
I work in the same city that I went to school in but I really do feel like I moved to this city once I started working as I had to deal with a lot of the adjustments and hard “adulting” stuff of post-grad life.
When was the first time you started to take personal finances seriously?Was it when you were in your first job or was it something you thought about throughout college?
My mom made me start thinking about money when I was 14 years old. She set up a bank account for me and handed me a debit card (I thought it was a credit card at first).
I had just started working part-time at a local camp. She said, “If you’re going to get paid you are going to have to start managing your money.” She mandated that I save a certain amount but I could do whatever I wanted with the rest. It wasn’t a lot but it was fun to go to Subway and Caribou Coffee on my own.
In college, in many ways, my financial situation felt very middle-of-the-road. My mom helped pay for my tuition and a little bit extra (to cover groceries or rent) but I had to take out some loans to cover the rest. Not nearly as much as some people but not as little as other people. So, I had to work throughout college in order to make it work.
So that constrained some of the things I could do in college but also drove a lot of choices like to go and work in an effort to figure it out.
So what did you do to figure it out? So I worked throughout college — I never waited tables because I stubbornly looked for things that would get me more practical work experience. I also think they paid me a lot less because of that.
I had to be careful but never super frugal throughout college. It was because I was willing to put so many hours to work outside of college which certainly impacted my social life and classic “college-y” things.
As great as my mom was about helping me set up a bank account and doing that with me early, she never really got hands-on or into the nitty-gritty with me. I’ve generally appreciated that but looking back, a little bit of hand-holding would have been nice. But, this forced me to figure things out on my own. And I think, ultimately, that was really good for me, but it took me some extra time.
What kinds of things did you feel like you had to figure out for yourself? Nobody talks about it, but since we don’t really use cash anymore it’s very easy to feel like you’re not spending money because you’re just swiping a credit card. You aren’t physically watching the money go away. It’s very easy to be like “Yeah, I’ll grab a coffee or I’ll grab another drink or sure I’ll go on that trip”.
So if you’re not actively paying attention to what’s happening, you have no sense of how much money you are actually spending every month. The only thing you know is how close to zero you are.
Even now, it’s still really hard to pay attention to that stuff sometimes and not just be like, “Ah screw it, I don’t wanna make my lunch for tomorrow, I’m just gonna go buy it.” But you do that 10 times a month and it adds up.
It’s always easier to not think about it. I’m a really detail-oriented person, but these are details that are easy to ignore a lot of the time. So what’s a good system for that? That’s the part, I don’t think I have perfected or figured out quite yet.
Right after college, I had to think about money and be more frugal than I ever had been at least for a few months while I was figuring out what I was going to do full time.
Would you say your experience with money in college influenced what job you took? Was it something you factored or prioritized? I don’t think it changed what job I ended up taking. I had a contract freelancing job for a little while, which paid me enough to live but barely. But it did shape my approach to post-grad money. I remember overspending in the first week of out of school. I did the math and realized I wouldn’t have any money left if I kept spending like I was.
It also brought up all these horror stories that I had heard of recent graduates who were moving back home, which I did NOT want to do. I told myself I wasn’t going to be one of those horror stories. My student loans weren’t going to start for another 6–9 months, and I knew many people had figured this out. I told myself it was just a game and I treated it like a game. It’s one of those things that I feel like is designed for you to trip up. But I figured, I’m a productivity nerd, I figured out how to never miss an email, I can figure out how to manage my money. I’m not gonna be a recent grad horror story.
I entered the internet rabbit hole when I went to do research into all of this stuff, with credit cards. I heard you should get a credit card when you graduate and then I realized there weren’t just 3 options but there were 300 options. How do you know what to pick?
That introduced me to travel hacking and thinking, “Woah I can travel for free if I figure this system out.” I found that there literally was a game and if I played it well not only am I going to be a better manager of my money, but I would also be rewarded with a free trip to San Francisco!
So that initial experience of having barely enough money to live led me to figure out how to own this thing.
I’ve gotten a raise since then, but for the first year and a half, I was paid the same amount. I think there’s a dance that comes with that too because it’s a steady income, you get the same amount every month, and that can trick you as well. It can be easier to overspend this way because you expect this big, sum of money deposited at the end of each month. I’ve always managed to catch myself, but it’s been a tricky thing.
What do you think really helped you get back on track and feel comfortable as you move forward? When I was in the freelance job for three to four months, I started just being obsessive about every purchase, like to the point that I think it caused some anxiety. I made this ridiculous spreadsheet that was averaging out all my expenses. What’s the average cost of my lunch every week? Can I bring that down by 50 cents? And so for a good two months, I knew where every single cent was going because I was scared.
I have always wanted to and I think I always will work for a startup but with that comes some uncertainty around pay. Looking back now I can say that there was some calculus going on in my head. It’s like if you’re going to work at a startup, you have to be good at your money. You can’t spend money willy nilly and have uncertainty around salary for some months.
So that (the spreadsheet) gave me a sense of control, and I eventually could go to the grocery store and have a general sense of what I could buy and know how much it would cost. I would also think, “I’ve gone out to eat once this week, I can go out two or three more times and be okay.”
That initial rigor kinda helped me get my head on straight but I’ve never gone back to that. Then, I got my full-time job offer for the start-up I am working at now, so that paid more and gave me a little bit more flexibility.
Funny story, during the contract job, I had this one Uber driver for a ride. I’ll never forget this guy. It was a long ride so I was making conversation and it turned out that he was a student at VT studying financial planning. I had just graduated and asked him to tell me what I should be doing. He was like, “Do you have an IRA?” And I’m like, “What’s an IRA, I don’t know what that is.”
He’s like, “Oh dude you need to get on that.” and he continued to talk my ear off the whole rest of the ride home and I was just listening intently. I thought it was a bizarre sign, you know?
I went home and started to look into IRAs. I realized it was just another game and that I could figure it out. It was ridiculous to me how much research I had to do. I had to figure out what all these terms meant and like who the hell cares about what happens when you are 65. But eventually, I think I figured it out and I set one up through Wealthfront.
I think both of those things (IRA and credit cards) set me on my path. They set up my approach. I’m an ops guy, I see everything as a system for me to master, so I treated this the same way. But, it definitely took some will power to go back to that budget every month and be like okay so what’s the damage.
Can you tell me a little bit more about the system you have in place now? So I still have a spreadsheet, but I don’t refer to it as much. It tracks all of the regular expenses or estimated regular expenses. I have my rent, phone bill, and all my subscriptions in there. I also have automatic deposits set up for Wealthfront, which allows me to treat saving and investing as another bill.
Whatever is left I just see as spending money for the most part. Some people would argue I could save whatever is left every month. I don’t do that, even though there’s a feeling that I probably should. At the end of the day, I am okay with how much I am saving.
I think money freaks people out, and I have certainly been freaked out from time to time. But I think seeing it as a tool and to recognize within bounds, you’re allowed to live your own lifestyle and that is okay.
So currently, I have a rough number that I can spend in a week on incidentals and just for fun stuff — spending money for food, movie tickets, etc. I basically just keep track of that and then I go, “Oh I spent a little bit less than I thought this week or I spent more this week”, and I intuitively adjust week to week as I go.
It’s still really hard to account for things like clothes. How do you budget for random purchases like socks? I’ve tried a lot of different types of budget software but have not found anything that works super well.
What services have you tried? I’ve tried Mint like THREE times. I’ve also tried Level Money, but none of them are set up to account for the cycle of credit card bills. It’s very easy to accidentally get behind because you’re spending next month’s money if you aren’t careful.
What would you say is your attitude towards money now? Do you feel more settled and financially stable? Where do you think you are right now?
I got a raise four months ago and that has helped. I feel like now I have breathing room and some room to make mistakes in a way that I didn’t before. I also feel more settled. I’ve graduated two and a half years ago and I know what my job is. I know what my life outside of college feels like and I actually think these things go hand in hand.
A lot of my mental stability around money comes from having mental stability around a social life and professional life. I think if you’re freaking out about one thing it’s hard not to freak out about the other stuff too.
It’s hard working for a startup or a small company and also not knowing where you’re going to be in six months. You can have X dollars in your savings account, but you can also ask yourself, is that going to be enough if X happens. That is hard to answer and is a little scary. I pay off my credit card in full every month and things like that give me some degree of comfort. I feel a lot better and just more confident and collected than I did six months ago. I have a lot of friends who graduated, and they’re all still kind of freaking out about it. I either see people that are kind of obsessive about it like I was at first or people who are just afraid to touch it (their finances) at all. I think the fear in a weird way encourages people to be frugal, but it also encourages people to not own it and master it.
The people who are awesome at this stuff, they see money as a tool. It’s not a controller and it doesn’t have to be. What a different mindset, you know? It’s like this is something that can work for me, not something that I have to work for.
I think you have to have a certain level of comfort in order to feel that, but I think even when you’re living paycheck-to-paycheck, that mindset shift can be pretty powerful. Like this is something I can control. This is just like learning how my car works, or even learning a new productivity tool for my Mac. These are things a lot of people my age are good at, but they are terrified of money.
What advice do you have for students in college? What would you tell your college self about managing money?
Money can be a tool, not a monster. Think about it as a really hard class that you also really liked in college. It was hard at first, then you studied your ass off, you got good at it and now you can talk about it. That can be money too.
That may not solve huge financial problems or tons of student debt but it can prevent you, at the very least, from making dumb mistakes and at best accelerate getting you towards a better financial future.
Another one would be to start early. The power of compound interest is REAL. Had I started a little bit earlier, I would already be seeing the effects of that in real dollars in two years. Having a credit card early and building credit is a super helpful tool as you move forward. Not only are the perks great for traveling, but I also think having a credit card early helps you manage money better.
What are some mistakes that you made managing your money and what would you suggest other people avoid doing?
One of the early challenges I faced came up when I moved into a new apartment with no furniture. I didn’t think about budgeting for buying a kitchen, a bed, and a dining table. I don’t think of this as a mistake in retrospect but more so ignorance and not knowing how to plan for some of the bigger, less regular purchases in life.
I also didn’t understand payment cycles and how credit cards really worked. So I got pretty close to paying interest on debt I was racking up but luckily I never did. The system is essentially designed to make you fail so you have to be careful.
Give yourself some time to experiment and understand how the systems work. At first, you don’t totally know what’s gonna happen and what costs are going to come up but that is okay. I would also add that with time, just like everything, you’ll get clarity. Some of it is just being patient.
It’s like showing up to college as a first-year and being upset that you don’t know what your major is. If you met a first-year upset about not knowing what their major was going to be and what their capstone would be on, you’d tell them to stop freaking out. There are definitely higher stakes, but I don’t think we lend ourselves the same level of space right after we graduate.
Do what you’re comfortable with, but to a point. You also don’t want to use that as an excuse to not deal with any of it.
What tools/apps/services do you currently use to manage your finances?
I have all of my banking related apps: credit card, bank, Wealthfront on the home screen of my phone. I put them where my social media apps used to be. I also put screen timers on my social media apps, so this all lead to forming a habit of checking my personal finance apps every day. I would procrastinate on work and check them obsessively. In a weird way, it has helped a lot. It’s rare that I don’t go a day without checking at least one of them.
I don’t use my spreadsheet as often as before, but I still do check it and update it from time to time.
I do have a better sense of what my numbers should be when I check and that has just come from building a habit of checking my apps. By having it on my phone, it’s in my face so I have to pay attention to it.
How much of your income do you save annually? I used to save 6% of my income and now that number is closer to 10–12% of my income. This is divided between my Roth IRA and Wealthfront investment savings accounts.
What credit cards do you use? I have 5 credit cards: Chase Sapphire Reserve — all travel and dining Chase Freedom Unlimited — all other purchases These are the two I would recommend most to other people. American Airlines Card from Citi Bank — gives me free checked bags American Express Platinum Card — I got it for the signup bonus and all the other little perks: free breakfast at some hotels, and other perks that pay for themselves Chase Freedom — easy to earn points with
Any resources you recommend? The points guy — they are great for people who have gotten past the basic learning curve of credit cards and travel hacking and then they are an INSANE resource. Wealthfront also has great explainer articles on their blog.
*Name changed to protect identity.
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