Case Study: Helping a Friend

I recently had a friend reach out to me to ask for help figuring out her financial situation. I am not one to let an opportunity slide so I took the liberty (with her permission, of course) to write up her situation and the advice I gave her.

Mary graduated a year ago and has been living at home to save costs while working her first job. This has been great but now her circumstances have changed and she need to plan for the next few years.

She has been accepted to a graduate program that starts in two months and she has to move as well. It’s a lot! She is hoping to find a new job in her new city but is worried she won’t find one right away. What should she do?

Well, luckily, Mary has been very frugal since she started working and hasn’t spent much of her paycheck. The bad news is that it is all sitting in a checking account, doing nothing for her.

Here are the numbers:

Amount in her checking account: $24,856.00

Amount in a low-interest savings account: $4,366.00

Cost of Graduate School Tuition over the next 2 years: $16,099.00 (not including books)


We are hoping that her new job will cover her living expenses (rent, food, bills (not including tuition) but we want her to have a very full emergency fund just in case.


As per the savings ladder I would suggest:


  1. Emergency Fund- She already has over a thousand dollar in a savings account. Keep it. Don’t move it. This will be the basis of her emergency fund.

  2. Retirement Fund- Why should she start an retirement fund now? Because there is no better time as the present! As nervous about money as she is now- for the purposes of financial planning we will assume that it will be harder for her to save in the future. As life moves on, she may want to get married or have a family or do something else and the expenses can keep rising. So put the $6,500 in a targeted retirement account now and forget about it. She will hopefully keep on contributing to this but at least a large chunk will start earning interest now. Compound interest is our friend!

  3. 3-6 month savings- Usually I would suggest putting away 2-6 months of living expenses away for emergencies but because she is nervous about her job prospects and paying for school I am going to recommend that she takes the whole tuition amount and put it in a savings account. She can also utilize a 6 or 9 month CD (as she needs the money liquid to pay tuition every 4 months) but the rate that they are offering is so close to a savings account- I wouldn’t want to lock myself in to such a low rate. Of course, CDs and MMA accounts are still an option for her if she chooses. So $16,099.00 into a decent savings account such as Barclays Bank. This way she has the money for tuition put away, earning her a small amount, but this can also double as an emergency fund if she needs.

  4. Moving costs money! So before she invests in long term savings- I would put some money away for expense that may crop up. $5,000 is a nice round number that gives us plenty of cushion. I would top-off her savings account to reach $6,000. (5,000+1,000 emergency fund). So she would place $1,634 into her existing savings account.

  5. That leaves us with $3,989.00 in her checking account. I wouldn’t leave her with no money in her checking account! So I would take $3,000 and open a long term savings account. This amount gives her many options but the Vanguard STAR fund is a safe choice. This can be her savings for a down-payment for a house, a car in a few years or any other huge expenses. Don’t forget she will be graduating with no student debt so she will be able to throw money at this account after she graduates!

The next 2 months: Mary still has two months of minimal expenses and a decent paycheck and it is up to her as to how she wants to use this money. Of course 10% will go to charity and a minimum of 10% will go to savings. I would suggest that she up that and take as much as 50-60% and put it towards one of her savings accounts. How she does this is up to her. She can open a CD and us it for books. She can put it in her long-term savings account. If she is very nervous about her income the next few years she can place that in her Barclays savings and have that there just in case.

This is a very conservative, risk-free way of using her money. There are other ways to play out this scenario with more gain (higher interest etc) but with higher risk as well. Since Mary wants the most conservative approach possible this is what I suggest.


You Should Talk About Money

Taking the “taboo” out of Money

Growing up, talking about money was taboo. No one discussed how much they made, how much big things cost, or whether or not you could afford something. Not being able to afford something was a given, but was embarrassing to admit. This was something that was passed on to my friends and I. I remember whispering amongst ourselves when an expensive extracurricular trip was offered in school. One girl turned red as she whispered, “My parent’s probably can’t pay for that”. We all stared at her awkwardly. We had nothing to say. We had no clue what to respond to that terrible admission. Never mind that my parents couldn’t afford something like that either. Never mind that, in retrospect, it would have been a struggle for many of my friend’s parents to pay for that type of trip either. It was considered “socially-off” to actually ADMIT something like that. The words “I can’t afford it” were one of the most embarrassing things to say. Why? My guess is that my parents and their friends very much considered “struggling” to be shameful. A personal failure. Something that reflected badly on them as individuals. Not having enough money or even choosing to be frugal as looked down upon.


Fast forward and I am an adult and I am newly unemployed. Money is tight and my husband and I are desperately trying to stay within our means and not go into debt.

My friend and I were brainstorming something to do on the endless Sundays with our kids. Her ideas all had some dollar price attached. Even her “cheap” ideas cost some money. I was about to agree to her plan when I realized how idiotic that would be. Was I agreeging to do something that I couldn’t afford just because I was too embarrassed to say that? Why was I so scared to say that money was tight and I didn’t want to spend money? Why should I spend money that I don’t have just because I was too embarrassed to admit that money was tight? Was I so scared of her reaction that I couldn’t share with a close friend that I didn’t have extra money to spend?

I took a deep breath.

“I would like to do something free” I said.

“No problem” she responded, “Should we check out this new playground I heard about?”

That was it. It was not as embarrassing as I thought it would be. I was so used to conflating my money or lack thereof with my own self-worth- as if it was my fault that I was unemployed (newsflash: it wasn’t). I was projecting my own securities onto my friends and imagining what their reactions would be. Luckily, most of my friends had grown up and had come to the same realization that I did. Lack of money or frugality does not need to be a topic that can’t be discussed. Once it was “out in the open” the conversations started. I realized that there were so many people who were in the same situation that I was in. So many of us were struggling. So many of us were doing our best to lead budgeted lives. So many of us were nervous about money. So many of us were anxious about our financial security. Once we realized that we were in the same boat, we were able to support each other. Share tips, recipes, and encouragement.

When we are raised that money shouldn’t be discussed, that not having money is some sort of personal failure, a moral failing or stain on our character , then we are depriving ourselves of an environment where we can share and be supported in our struggles or our goals.

How should I approach the topic of money

with my friends?

There is no need to bring up the topic unless you want to or need to. Don’t force people to share things with you that they would rather not share. Not everyone wants to be open or forthcoming about their finances, and that is their right.

Do make sure to create an open and non-judgmental atmosphere when it comes to money.

Don’t mock or pressure others into spending money that they don’t want to.

Take the words “cheap” and “mean” out of your vocabulary.

Respect others spending limits.

Don’t commit someone to an amount of money before speaking to them.

Looking for A Job?

Being unemployed can be an extremely stressful and difficult situation. I’ve been there and to put it mildly, it’s not fun. Searching for a job can oftentimes be frustrating, upsetting and even demeaning.

The job search can seem endless and pointless.

Looking for a Job

Once I was offered a job interview. I rearranged my schedule, got a babysitter, got dressed, took public transportation to meet with two people about the job. I talked, brought my resume and (hopefully) presented myself well. I emailed them the next day thanking them for their time and got back… Nothing. They totally ghosted me and I never heard from them again.

Another time, I emailed back and forth with someone about a Social Media position. We ended up on a phone call where he illustrated the job, what it entails etc. When I finally asked about compensation, he told me that it was “more of a learning opportunity for me, because I would learn from his experience, and so he wasn’t paying for the position”. It was a colossal waste of time as I needed a JOB to pay the bills not some half-baked non-paying internship program.

Continue reading “Looking for A Job?”