Money, some of us are great at managing it and others not so much. Consumer debt surpassed $4 trillion in 2018. Some say a lack of personal finance education is to blame. People aren’t setting budgets, they’re taking out too much debt, or perhaps they’re living beyond their means. One thing is for sure, anyone who attended a high school or went to college knows that schools don’t teach their students one of the most important and practical life skills: personal finance. There are no classes on credit scores, banking, investing, refinancing a loan, or balancing a personal budget. Andrew, along with Gyutae Park, launched their website, Money Crashers, in the aftermath of the 2008 financial crisis with a mission to develop a community of people who try to make financially sound decisions. The website strives to educate individuals in making wise choices about credit and debt, investing, education, real estate, insurance, and spending.
I sat down with Andrew to learn more about his journey from hedge-fund executive to co-founder of one of the largest personal finance education sites on the web.
Q1: Tell us a little about your business. What makes it unique?
Money Crashers is one of the largest personal finance websites born after the great recession. What really differentiates us in our space is our nuanced approach to personal finance. We want our visitors to make sound financial decisions, but that’s ultimately so they can live more enriched lives. This means educating people on how to live below their means, but also reminding them that it’s ok to enjoy their money responsibly (buy a car, take a vacation, start a family, etc.). Money Crashers helps people make smart financial decisions so they can enjoy the money they make throughout their life, not just when it comes time for retirement. We take deep looks at data-driven topics like how to fix the United States’ debt problems but we also write about things like DIY wedding invitations and how to go on dates for less.
Q2: What attracted you to the line of work you’re in and how did you get started?
After earning my BA in economics from Brown University I started working at a Chicago-based hedge fund. It was a well-paid job, but helping wealthy individuals get richer didn’t give me enough purpose. I wanted to have a bigger impact on more people. The country was going through one of the worst economic disasters in its history and I felt compelled to do something. Money Crashers started out as a personal finance blog that we worked on during our off hours, but the void in reputable financial-related information helped us grow to where we are today. Our website receives over 2.5 million visitors a month and continues to grow.
Q3: What’s the worst piece of financial advice you’ve ever received?
The worst advice I received was during college. More than a few people suggested maxing out on student loans and worrying about paying them back later. The temptation to do that is pretty huge. You’re out of your parent’s house for the first time and some extra cash can make for a fun spring break trip. There’s also this expectation that things will sort themselves out once you enter the workforce, but that’s an unhealthy mindset. If you take the time to develop positive spending and saving habits early on, you’ll only be in a financially better place when the time comes to start paying back your student loans.
Q4: What is one step people can make today to become stronger, financially?
Start a personal budget and stick to it. Use your budget to trim your monthly expenditures and set that money aside to help build a rainy day fund, take a mini-vacation, or put a down payment on a house. It’s important to tie your personal budget to some larger financial goals to keep you motivated. It’ll make it easier to say no to spur of the moment purchases.
Q5: What’s the biggest money mistake you have made?
Looking back, my intuition told me that stocks were undervalued in the wake of the 2008 recession. It was a perfect “buy low, sell high” opportunity, but I decided to take a pass. There was a lot of uncertainty in the market. A lot of companies went out of business, small businesses couldn’t get loans, and there was a big risk that things would only get worse before getting better.
Q6: What’s the most satisfying part of your job?
It really means a lot to us when our readers share their personal finance successes. When we started Money Crashers, we set out to solve a very real problem and getting affirmations from our readers that we’re making a difference in their lives brings the very best out of our writing staff. We want people to have a resource they can go to if they have questions and need guidance.
Q7: If you had to give college students one piece of personal finance advice, what would it be?
Live as cheaply as you can while you’re in college. That might mean living at home for the first couple of years. Maybe you’ll need to live with a roommate for a while. If you do need to take out debt while in college, be smart about it. Do your homework and compare options for things like student credit cards. More often than not, the first offer you receive won’t be a good one. It’s only after you do your homework that you’ll uncover a good deal or useful credit building tools.
Q8: How has personal finance changed in the past decade?
The figures are staggering when you look at them. According to research by Bankrate.com, 29% of Americans have more credit card debt than emergency savings, outstanding U.S. consumer debt climbed to $3.9 trillion in 2019, and Americans now owe $1.6 trillion in student loan debt. America’s relationship with money was unhealthy a decade ago and I’m sad to say that it’s unhealthy today as well. What’s changed is perhaps people’s spending habits and the composition of debt. Student loan debt is a bigger burden today than it was a decade ago and it probably won’t surprise you to know that homeownership rates haven’t recovered to pre-recession levels.
Q9: If you had to sum up your work philosophy in one sentence, what would it be?
Incremental changes build to a competitive advantage.
Having a vision for the future or seeing a problem that needs to be solved is easy, but taking the daily steps to get there is the tough part.
Q10: What’s one piece of advice you’d give to aspiring entrepreneurs?
Pace your growth. If you have an idea for a business but have a full-time job – don’t quit your full-time job. If you jump in head first you might run into problems you didn’t expect. Having that reliable income will take a lot of the stress out of your financial life and allow you to pursue your entrepreneurship on a better footing.