Getting into good financial shape

Last night, I went to see Alex von Tobel, CEO of Learnvest.com, speak about her new book (which I wasn’t going to buy, but it was $8, so…) at Sixth & I in DC. I thought I wasn’t going to like her, and that the session would be light on helpful content.

Opposite happened. She’s surprisingly likable, even though she’s clearly super rich and went to Harvard and seems like one of those girls who has a TV show on Bravo–someone I definitely wouldn’t feel that I could relate to. She used the word “bananas” a bunch of times, and she shared anecdotes with the crowd of about 200 that made her seem like an older, wiser sister, rather than a fancy-pants CEO with millions of dollars.

You could tell how much she really cared about helping people get their money situation sorted out, and for an affordable price. Certified financial planners generally cost at least $3000, which is pretty prohibitive for most people I know–that’s what I make in a month. Learnvest offers three plans that vary in price. The Budget Starter costs $89 initially, then $19 per month. The others have higher start-up fees ($299 for the Five-Year Planner, $399 for the Portfolio Builder), but they’re all $19 per month after that. For all of the plans, you work with the same CFP every time, and you can email them as often as you want.

But there are a bunch of free features, and their 50/20/30 rule has been helpful. You allocate 50 percent of your monthly take-home pay to essentials–rent, utilities, groceries, and transportation to and from work. Twenty percent goes toward your future–debt, savings, retirement, investments. Thirty percent is for lifestyle, which is everything else, like restaurants, bars, the gym, etc. They’ve got one of those account managers like Mint, but I like Learnvest’s better. You’re able to group transactions by 50/20/30 category, so you don’t have to take the extra step of calculating the percentages yourself.

At the talk, she gave a bunch of helpful tips that I didn’t know. Did you know you CAN close credit cards? One per year, and only if you won’t be applying to grad school or for any kind of loan or mortgage, because your credit score will take a dip for a short period. I knew you could call your credit card companies and ask them for a credit line increase or a lowering of your APR, but I didn’t know that you should only use 30% of your card’s value–more than that and you’re making credit score ratings think that you might have some trouble with money. You accrue credit card interest DAILY, not monthly. An emergency fund to cover six months’ expenses is important, but if the more degrees you have, the more months you need to have put away. Renters insurance is a no-brainer, and if your apartment burns down, or someone steals all of your valuables, you get money back to buy all new stuff. Amazing.

I’m actually kind of excited about saving money now. Next thing on the list is paying off my credit cards so I can build an emergency fund.

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