Cash Confessional: 22-year-old grad student living at home wants to pay off $42,000 in loans, invest in rental properties

Our Cash Confessional series, in partnership with Bank of America, takes a personal and anonymous look into how people of all ages and incomes spend their money. Answers have been lightly edited for clarity. 

PARTICIPATE: Want to be featured? Go take this new 28 question, anonymous survey. We’ve recently redone the survey to give participants more freedom to showcase their financial decisions and personality — without having to track weekly expenses. To see the other installments of Cash Confessional, click here. 

Tell us about yourself.

I’m a 22-year-old higher education grad student in a relationship, but living at home with my family. Post-grad, I’m hoping to move in with my boyfriend. We’ve been long distance and are ready to take the next step.

Income?

$20,000 annual stipend, $300 per month doing social media side work.

Fairly compensated?

Underpaid and overworked. I think I should be making $25,000 given the time I’ve put in, the hours I work, what I do, and how long I’ve done it for.

Putting anything into savings?

I put 20 percent of every paycheck into my savings account, 10 percent into an account dedicated to travel, and anywhere from 5 to 10 percent into another account for eventual student loan payment.

Saving for anything specific?

I take a trip every year for my birthday. I’m hoping to go to London and Paris next year.

Do your parents support you?

My mom buys my weekly groceries. That’s it.

Most stressful thing about your financial situation?

STUDENT LOANS.

How much debt do you have?

$42,000 – all student loans.

My credit score is 750.

Current monthly expenses?

CycleBar – $109/month

Apple Music (student discount) – $5/month

Because I’m in grad school, I’m able to defer my undergrad loans for another two years. But I try to put anywhere from $100-$500 aside for them each month.

Budgeting strategy?

My strategy is simple: don’t spend more than you make in a month. Don’t buy $5 lattes every day of the week just because you think it’ll make your day better. Don’t impulse buy. I use Natalie Barbu’s excel document. I also use apps like Get Upside and Drop for rewards when I spend.

Investing anything?

I invest my money in one medical company right now. However, I’ve been reading and listening to a lot of podcasts and am going to start investing more. My goal within the next 10 years would also be to invest in rental properties.

Credit card rewards strategy?

Discover student card. I get cash back on things like gas, which is big since I commute to school and my boyfriend lives more than two hours away. It also gives cash back for retail purchases.

Best and worst financial decisions?

Best: Going to college. While it carries a heavy debt, to me an education is extremely valuable and what I’ve taken from college has been so much more than sitting in a classroom. It’s where I found my passion, lifelong friends, relationships, and more.

Worst: Renting an apartment I couldn’t afford for a year simply because I thought living at home while in school was lame.

One thing you’d like to purchase but can’t afford?

The new iPhone 11 Pro Max.

Most expensive night out this month?

Purchasing all of my family and friends Christmas presents. Gift-giving is my love language. I love finding something unique and meaningful for each of the people I buy for.

This year I set a budget (and surprisingly I stuck to it). In total, for my family and friends, I spent $567.

Best purchase you’ve made this month?

I bought a Facial ice roller for $11. I do it every morning for 10 minutes and have noticed SUCH a difference.

What do you consider “rich” in Charlotte?

SouthPark area, South End, and Uptown. Rent is outrageous, everyone drives a luxury car, and everyone belongs to some $400/month gym.

Motivated by money?

I used to be highly motivated by money. I spent the majority of my high school and undergraduate years working 40-60 hours a week just because I loved making money and having more than anyone else my age.

Then I started to realize that what motivates me, as corny as it sounds, is joy. I want to be happy in what I’m doing, whether it’s at work, in the gym, or with my relationships. My motivation is getting to a place where I’m the best version of myself, because then everything else falls into place.

Sure, money still motivates me, but I think my relationship with it has moved from “I need it all right now” to “what are ways to be creative with making money and put it to good use?”

Where did you learn to manage money?

At one point in life, I saw how much my mom struggled with money, yet always managed to make it work.

From then on, I realized I needed to work, save, and spend my money on things that matter and don’t just spark instant happiness.

I also learned from one of the best teachers I’ve ever had in a high school personal finance class. More of those need to be offered, especially in today’s world of buy, buy, buy, whether you can afford it or not.

Ideal retirement age? Are you on track?

I think retirement is a social construct that people think is the ultimate goal.

I can’t put an age on when I want to retire, because I’m 22 and can’t even think about next week.

I think for where I’m at right now, I’m doing a great job at saving and learning to cut down on the things I don’t need.

Top three financial goals?

1. Pay off my student loans
2.  Move out of my family’s house after grad school
3. Create multiple streams of income for myself

No. 1 piece of financial advice?

Think critically before making a purchase, even it’s just a $5 coffee. Just because everyone else has it, an influencer recommends it, or it’s on sale, doesn’t mean you need to buy it.

Build your financial know-how with free tools and information to help you make more confident decisions. Visit the Bank of America Better Money Habits site today.

Need 1:1 guidance on getting your finances in order? Schedule an appointment with a Bank of America specialist today or stop in your local financial center.

PARTICIPATE: Want to be featured? Go take this new 28-question, anonymous survey. We’ve recently redone the survey to give participants more freedom to showcase their financial decisions and personality — without having to track weekly expenses. To see the other installments of Cash Confessional, click here.