I am thrilled to announce this week's Let's Talk Money guest. This week's interview is with Jason from the very popular personal finance blog known as WorkSaveLive. Follow along as Jason introduces his family to you, and shares his personal and professional points of view on money, including his interesting experience with penny stocks.
Please provide a brief introduction about yourself and your personal finance blog including when you created your blog. If comfortable, please share if you are married and how many children you have.
My name is Jason Larkins. I’m a Financial Advisor and coach: I primarily help people with retirement planning and asset management, but up until a few months ago my primary job involved coaching couples on a 1-on-1 basis through the Dave Ramsey program.
I started my blog, WorkSaveLive, in November of 2011 after finally succumbing to the peer pressure of one of my close friends. Given that my passion is to teach people how to properly manage money, starting a blog gave me the ability to expand my platform and reach more people than I could have ever imagined.
I have been married for 2 ½ years to my wonderful wife and we don’t have any kids as of this moment. However, whenever I do these interviews, I always feel the need to throw some love out to my BIG baby, Gunner (a 160 pound Bullmastiff).
How did your mom and dad spend money and how did that affect you?
I certainly believe that the responsibility to teach children how to manage money solely falls on the parents’ shoulders.
There is little doubt in my mind that if YOU struggle with money, then it’s highly likely your children will do the same.
I love my mom dearly, but growing up as a child I was never taught a single thing about managing money. There was never a mention of a budget or being financially responsible. We never had conversations about the economy, investing, or saving for retirement.
In-fact, any time that I saw her spend money it was typically by using a credit card. I know she had large amounts of insurmountable debt and did have to eventually file for bankruptcy.
Obviously I’m aware my financial problems weren’t solely because of my upbringing, but I do believe they attributed to my lack of understanding of how (and why I need) to balance a checkbook, live on less than I made, save for emergencies, and plan for retirement.
Do you think joint or separate checking accounts are appropriate in marriage?
Having coached quite a few people, I don’t think there is any way you can have a truly healthy marriage and completely keep finances separate.
In reality this comes down to how you view marriage though: do you view it as ‘you are now one’ as the pastor often says?
Or do you view it as two sole proprietors that simply live under the same roof?
There is a reason finances are the #1 cause of divorce in this country and that’s because we’re all different. We have different values, upbringings, goals, and ways of managing money.
However, marriage is about compromise and working together (in all regards) and if you can learn to do that with your finances then I believe it only enhances your relationship.
Have you ever lost a large amount of money in investments?
A large amount of money is a relative phrase, but I have certainly lost a lot of money (in my terms and where we’re at in our lives).
In my more careless days, I used to trade penny stocks – like many people, I always wanted the “get rich quick scheme.” I failed to understand how you truly build wealth and I thought the only way to get there was to hit the jackpot. Maybe I didn’t fail to understand it, maybe I just didn’t want to build wealth the old-fashioned, proven way…you know, working hard, living on less than you make, and investing properly. (Who wants to do that?)
About 4 years ago, when I was 23, I rolled-over an old 401(k) into an IRA and started choosing my own investments. I was invested in some good mutual funds with a long-term perspective, but then a few friends told me about this “AWESOME” penny stock.
Well, I invested in it and turned my $3,000 into $30,000 over the course of a few months. Since this is a question about losing a large sum of money, it’s needless to say, but I held onto the stock (hoping to make more) and ended up losing all of the profit within 2 weeks of its high.
How important is planning for retirement to you?
Even before I became an advisor I realized the importance of planning for retirement; frankly, one of the main reasons I became an advisor is because I’m extremely concerned about my generation and their (in)ability to save for their own retirement. Pensions are long gone and relying on Social Security (which is projected to deplete its reserves by 2037) is just a bad idea.
For fun, let’s look at a hypothetical example:
Assume James, a 30-year old single guy, made $36,000 per year after taxes. Let’s also say he doesn’t start saving for retirement until age 30 and he’d like to retire at age 60.
Without relying on any trusty old pensions and not planning on Social Security being around, James would NEED to save $1,151* PER MONTH ($416 into a Roth IRA and $735 in his 401(k)) to be able to retire at age 60 and maintain the lifestyle he was use to living!
*Assuming 9% average rate of return, 3.5% inflation, living off 5.5% of his nest egg, and a 20% tax bracket in retirement.
That is over 30% of his gross annual pay!
Understanding that these numbers aren’t just make-believe, yes, I do place retirement planning at the top of my priority list.
If you had a friend or a co-worker that was in debt come to you for financial advice on how to get out of debt, what are the first 3 steps you would suggest for them to work on?
Considering this is what I do as part of my job, and knowing how I personally was able to get my financial life in order, the first step that I would tell them to do is GET ON A BUDGET!
It’s impossible to get a grip on your finances without knowing how much is coming in each month, how much is going out, and how much is left over.
Once they’ve determine what their TRUE disposable income is, then I’d encourage them to increase that number by doing the only 3 things that any person can do: increase income, decrease spending, or sell things with payments attached.
After they’ve decided on the sacrifices they’re willing to make (or that may be necessary), then I’d tell them they should:
1. Get $1,000-$5,000 in a small emergency fund before paying extra on debt.
2. Use Dave Ramsey’s Debt Snowball method to pay down debts as quickly as possible.
Thanks for the awesome opportunity, Sicorra! I’m thankful that you allowed me to take part in this series you’re doing and I hope your readers enjoy the Q&A!
Jason, It was a pleasure to publish your interview today! Thank you so much for sharing personal aspects of your life, as well as your professional knowledge in regards to personal finance. I have no doubt that many people will find this helpful.