Wise beyond her years, Eva Baker has been running her own blog TeensGotCents.com, focused on frugal living and teen-centric finance tips, since she was 16 years old. What started as a project to satisfy her family’s policy has since developed into a go-to destination for young adults and their parents with all sorts of money-related questions. When she’s not making readers smarter shoppers or preparing for the massive costs of college, she’s rock climbing, cat-cuddling, or hanging with her mom. We had the great privilege to interview with the savings phenom Eva. Take a look.
Great to have you with us, Eva. You founded your site when your were just 16, citing a listen to Dave Ramsey’s The Total Money Makeover as what motivated you to start Teens Got Cents. What was Dave’s book about, and what specifically got that penny to drop and made you start thinking financially?
Dave outlines his seven ‘baby steps’ in The Total Money Makeover. These steps will help anyone manage their money well and get on the right financial track. The first step is the one that caught my attention. He talks about having an emergency fund. Isn’t it funny how we all seem surprised when something bad happens? But it shouldn’t surprise us that the dryer breaks or that we need new tires on the car. By saving up an emergency fund, you can be prepared to pay for life’s little ‘surprises’ and not be wiped out financially when they happen. This made so much sense to me and I immediately started saving up for my emergency fund. It took me almost a year, but I did it!
Obviously, I don’t have those types of emergencies to deal with at 17 years old. However, I will probably have emergency costs when I get a car and I want to be prepared. The next step talks about paying off debt. My thought? What if I never took on any debt to begin with? That means that I can skip over those steps and get right to saving for retirement. Realizing this is what led to Teens Got Cents. My goal is to learn to manage my money wisely and help other teens do the same thing.
Admittedly, you don’t have a whole lot of financial burdens like a mortgage or dependents. So what costs do you take care of, and what kind of financial planning and budgeting do you do on a daily basis that young adults your age could learn from?
I am responsible for purchasing all of my clothing. I get a small monthly allowance that helps me cover those costs. Having this responsibility is a daily reminder of how to handle my money well. I only have so much to spend, so finding great sales and shopping the clearance section means that I get a lot more for my money.
For budgeting overall, I use something called “the envelope system.” I have six envelopes labeled with different categories. I separate my cash into these envelopes, which helps me to see exactly where my money is going. Three of the envelopes are for long term savings (car, college, retirement), and the other three are how I control my spending (clothing, spending, and charitable giving).
In your family, it is a rite of passage to pick up a vocation at the age of 16. What do you think is your family’s reasoning behind this? If other families were to adopt this custom, how would you suggest their 16-year-olds choose their “line of work?”
Participating in some sort of a meaningful project means that teens can learn valuable life skills while doing something that they believe in or are passionate about. So often, teens are not valued in our culture today, but they are capable of great and meaningful things in life. Give your teen something valuable to do with their life, other than making good grades and keeping their room clean. We are capable of so much more.
A project for a teen could be starting their own business, participating in some sort of non-profit or mission work, volunteering in the community, or anything else that the teen is interested in. Allow them to do the real work associated with the project. My mom wanted my communication skills to improve and starting Teens Got Cents has already helped in that area.
In early October, you used your emergency fund of $1,000 to start yourself off as an independent consultant for an accessories company called “Paparazzi.” You’ve already recouped half your initial investment. How is the business going so far? How did you come to the decision to take such a big financial risk?
It’s so great, super fun, and I am doing really well!!! I have been looking for a way to make extra money, but my school schedule really doesn’t allow for a part-time job at this point in my life since I’m not driving yet. A friend in town started doing this and so I went and checked out the website. I loved everything I saw!
When I realized that everything sells for only $5, I was ready to sign up on the spot. I did take another week or two to get all the details and make a final decision. It was a risk, but with the price of the accessories being so low, I thought that almost anyone could afford (and would want) such cute jewelry, especially friends my age that don’t have a lot of money. I also realize that even if I lost my entire investment, I have plenty of time to save that emergency fund back.
Do you find that your parents are open to and accepting of your financial recommendations, or do you get pushback?
My parents have been very supportive of me. It was a surprise to my mom that I decided that my project would be a website about personal finance for teens, but once I decided this is what I wanted to do, she has been behind me 100%.
You’re a renowned bargain hunter. What are your most common purchases, and how do you go about finding deals for them?
To be honest, I really don’t spend that much money, except when it comes to clothes. When I go shopping for things, I go through my closet first and see what I really need. Then I make a list so that I buy what I need rather than just the cute things that I like. I have had a lot of success finding basic items like jeans, shorts, and black pants at Goodwill or other second hand stores. For cuter and more trendy clothing, I look out for coupons and sales. I always go straight to the clearance section of a store first to see what I can find, and it’s always a good idea to see what coupons you can find online before you go to specific stores.
On your site there’s an entire section dedicated to college tuition and finances. What do you think are the most important things for college students and about-to-be college students to keep in mind about saving and spending during those expensive and study-filled years?
Student loan debt is a terrible gift that keeps on giving right after you get out of college. You probably won’t be earning that much in your first job, but you will be making those monthly payments from the beginning. Do you really want to do that to yourself? At the very least, try and keep any loans as small as possible. I am going to do this by attending a local school while living at home. You can also work while you are in college to pay your everyday expenses and such rather than borrowing money to pay for gas and food. Applying for scholarships and participating in contests can also make a big difference as you approach these years.
You wrote a guest article for Bryan Maltier’s site about dual enrollment. As a student who is dually enrolled, can you tell us what it is, what the benefits are, how much you’re saving? And how can others take advantage of the same system?
Dual enrollment allows a high school student to take classes at their local community college. The tuition is free and you earn high school AND college credit for the class. You just can’t beat that deal! I have saved over $700 in tuition costs this first semester in the two classes that I am taking. Dual enrollment is available in almost every state, as far as I know. Just contact your local community college to see if you qualify. Where I live you, have to be a junior or senior in high school in order to participate.
Thanks so much for taking the time with us. Is there anything you’d like to tell our readers before we let you go?
I would love for people to check out my eBook, Seven Days to Centsible Savings. It’s filled with ideas on how young teens can earn extra money and work toward saving that money for short and long term goals. All you have to do is sign up for email updates from me and you get the book for free! Thanks so much!
Like this interview? Check out the rest of our Interview with a Savings Expert series. Have a question for an expert or someone you want to see interviewed? Tweet your suggestions with #SavingsExperts to @CouponPal!