Have a tendency to overspend? Have money that you could be investing but don’t know how? Jon Dulin and his blog, Money Smart Guides, help people with these same types of questions to figure out how to get their finances under control. Read on for his advice on paying off debt, getting into the stock market, and creating an effective budget!
Your site, Money Smart Guides, helps to demystify many different financial issues (everything from budgeting to investing). What was the inspiration behind starting the site?
I actually started the site as a place to sell guides teaching people about money. I was going to sell a guide on investing and saving money in newspaper classifieds. I then changed course and decided to try to sell my guides online, so I started my website in 2010. I really wasn’t “blogging” until 2011 when I started writing posts on a regular basis.
The original inspiration was just to help people be smarter with their money. We work hard for it, but seem to spend it very easily. I wanted to help people keep more of their money and use it to grow into larger amounts.
In the About section of your site, you mention that you first became interested in finance in high school. You followed up by getting a bachelor’s degree and a certificate in financial planning. You also received your master’s degree from Saint Joseph’s University in Philadelphia. What was the most influential thing you learned?
The power of compound interest. No matter how small the amount of money is, when you tie an interest rate to it, it will grow. As it grows into larger amounts, the compounding rate accelerates and grows quicker.
You also talk about struggling with debt when you were first becoming financially independent. Can you tell us what led to your accumulation of debt, and how you reached the decision to change? Also, what was the number one step you took towards paying off your debt?
My debt started off because I had low self-esteem. I had a girlfriend in college, and I thought I had to buy her things to show her that I loved her. My debt slowly increased until I graduated from college. At that time, 2001, the economy was bad, and I couldn’t find a job. I became depressed and buying things made me feel better.
As I bought more and more, the “high” that I got from spending wore off faster and faster, causing me to buy more. I finally kicked the habit once I got real with myself. I tried and failed to get out of debt a few times, but I failed because I didn’t address the real issue - my depression and low self-esteem. It wasn’t easy to admit I was flawed, but it had to be done to finally kick the habit.
You touch upon the obsession you had with buying things you didn’t need. What helped you get over the habit, and how would you suggest others move away from a materialistic lifestyle?
I had an “ah-ha” moment when shopping for a jacket. I realized I had a couple back home already, some of which I never even wore. I did a lot of thinking on the drive home. When I got home, I took all of the stuff I bought and piled them on my bed and took a picture. I carried that picture with me in my wallet to remind me whenever I had the urge to buy again. I would ask myself if the item would just end up on the pile like everything else. This helped me to get my spending in check.
What’s the biggest misconception that people have about money management?
I think most people don’t understand how their circumstances shape how they see and use money. I overspent because it helped me to feel better about my situation. My wife has the need for a large emergency fund because growing up, her mom didn’t have a lot of money and having cash on hand gives her security.
If you want to manage your money wisely, you have to get to the heart of who you are to understand why you do what you do. Most people don’t have a spending problem, it’s something deeper, and until they look within, they will always overspend.
You’re a huge proponent of investing your money wisely. What’s the first step someone should take if they’re just starting off in the investing game?
Start today. I don’t care if the stock market is at an all-time high or is in the middle of a crash. The only way you are going to make any money investing is to start today. Remember, today’s all-time high could easily be the low a few years from now. We never know what the market will do on a day-to-day basis, but over the long-term, the trend is up.
Also, by starting today, you harness the power of compound interest. Time is your best friend when it comes to investing. The sooner you start, the better, regardless if you have $10 or $100,000 to invest. Just start now.
You have more than 10,000 (!) followers on Twitter. What’s the most memorable or useful tip you’ve ever received from your readers?
It was a note about a post I recently wrote on how long to keep financial documents. I recommended putting important documents into a fire-proof safe. A reader noted that if you don’t have a safe, you can put the documents in a ziplock baggie and store them in your freezer. I thought it was a very ingenious idea.
Publications like Kiplingers, Mint, and Yahoo have all featured your advice. Are there specific financial writers that you turn to in order to stay up-to-date on money trends?
There isn’t one person or source I always turn to. I am always reading other personal finance blogs, The Wall Street Journal, Money and Kiplinger magazines, and various financial forums. I also watch finance shows on TV, like the finance block Saturday mornings on Fox News and Clark Howard.
Your site also includes some really helpful budget templates. Why do you think budgeting is such an essential tool for money management?
Budgeting is your key to financial freedom. Many people look at budgets in a negative light. They see a budget as something that restricts their spending. In reality, a budget is a device that will help you reach your financial dreams. If you set it up correctly and follow it, you will be well-off financially in the future.
You’re definitely pretty open about sharing information about your own finances. Most people are reluctant to talk about money. Has it been difficult to be so honest? And has this openness impacted the way you deal with your money?
I was much less open when I first started writing. But over time, I have opened up more because there are others that are in the same place I was. By telling my stories, I hope I can show them that they can get out of debt, and they don’t just have to accept how things are.
It was so awesome of you to take the time to answer our questions! Anything else you think our CouponPal readers should know?
Thanks for interviewing me!
Just know that advertisers spend millions trying to trick us into spending our money. Educate yourself as much as you can so that you make smart spending decisions. The more you understand about personal finance, the better off you will be in the long run.
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