This is the latest in a series of interviews with fellow personal finance bloggers. Today’s guest is Michael from Stretch A Dime.
Who is Michael?
Michael: Hello Everyone, I ‘m Michael, owner of the personal finance blog Stretch A Dime. I am happily married to my beloved wife Sarah, and blessed with two beautiful daughters. Recently, two young doves, Ben and Jewel, became part of our family.
I graduated with a M.S in Electrical Engineering in the summer of 2000. When I was a master’s student, I received a research assistant position. What that meant was, my tuition was paid for, and I would receive a $700 monthly allowance as long as I got good grades and fulfilled the job responsibilities of a research assistant.
It was a great deal!
What did I do? Screw up!
In spite of this sweet deal, I had accumulated $27K in credit card debt as a student. I was living a lifestyle I couldn’t afford – buying branded everything at retail, expensive vacations, partying and foolish spending. Honestly, I did not even know how much I owed and was too afraid to face the total balance until my last credit card was maxed out. There comes a moment in everyone’s life when you just have to FACE your problem and address it than sweeping it under the rug.
This was my “Aha” moment. I realized I needed to live within my means and address the debt. I graduated with a good GPA and landed a job that paid well. That was the saving grace and only thing going well for me from a financial perspective. When I started working, I led a student lifestyle and started paying off my debt aggressively. Long story short, I paid off the 27K in credit card within three years. I have been debt free since then.
Why did you start your blog?
Michael: When I became debt free, I had mastered living within my means. That is a good place to be, but not a great place. Within a few months of being debt free, I didn’t have any savings to show for it. I was like, what the heck? Where is the money going? This is when I automated my savings right out of my paycheck. I didn’t see this money on my checking account anymore.
As time went by, I had built up my emergency funds and had a little bit of money to invest. This is when I got introduced to a financial advisor. He was a nice guy. After a year, I felt that he didn’t seem to have my best interests in mind. Let us just say that we went our ways with a friendly handshake.
This is when I chose to become a DIY dude. I read a lot of books on investing, personal finance, took courses, read PF blogs, and through trial and error found my WAY, and become good at personal finance.
What started out as a necessity turned into a passionate hobby. Soon, I had a lot of family and friends asking me personal finance questions and valued my opinion. This is when I thought, may be, I should start a PF blog. I could be of help to a wider audience. It was time to give back! My passion for personal finance and my love to write met on the street called Stretch A Dime – the blog was born!
What are your favorite Blogs?
Michael: This is a tough question, there are so many. I love reading personal finance blogs – they are informative, enriching, filled with success stories, clever ideas, lessons learned from mistakes, and the list goes on. The first blog I started reading was the My Money Blog. The blogs I read most these days are Get Rich Slowly, Retire by 40, and Making Sense of Cents.
When did you first become financially literate?
Michael: The great awakening happens when you go from “You don’t know that you have a problem” to “You Know that you have a problem”. This occurred to me when my last credit card was maxed out. It finally dawned on me that “I needed to live within my means”. That was life teaching me the very first money lesson the hard away. Since then, it has been a constant journey of learning. I don’t claim to know it all. Am I better off than yesterday? Of course, yes. I read and try to learn something new every day.
What was the last item you regretted purchasing?
Michael: I sometimes feel that I may have gone from one extreme to the other. It is a good problem though. If I feel like I need to buy something, I don’t go and buy it right away – especially high dollars items. It goes through a self-imposed 21 day rule or waiting period. I use this time to evaluate if I really need the item, research product reviews, warranty, customer service, return policy etc.
The impulse dies and objective reason and a strong conviction remains at the end of this period.If I still feel the need for the item at the end of the three week period, I look for a good deal and go ahead with the purchase. This strategy has helped me avoid costly mistakes.
Often times, I lose interest on the item within the three weeks, and I just thank myself that I didn’t waste money. We don’t have cable at home – we cut the cord long time ago. I recently bought a TV antenna online for ~$15 to get local broadcast channels. It had passed all my litmus tests. The darn thing didn’t work – looks like my home is too far away from broadcast stations. The reception was poor. I am going to be returning it. That is the most recent one that comes to mind.
If you died today, would your family be okay from a financial stand point?
Michael: We are debt free and live well within our means. The only debt that we have is our home mortgage. My life insurance would pay off the home. My retirement savings and money set aside for education would grow to be adequate to cover my children’s college education when the time comes. With the home paid off and money planning in place for children’s college education, Sarah would be able to live comfortably and raise the kids with her paycheck.
What are you teaching (or will you teach) your kids about money?
Michael: Throughout my school and college education years, I received “zero” formal education on personal finance. I didn’t get any money lessons at home growing up. I love my parents. I ‘m fortunate and thankful to have good parents but money wasn’t their forte. So, I learned money lessons the hard way. I don’t want my kiddos to repeat my mistakes. We owe it to our children. So I am very proactive and intentional in teaching my children about money. As they say, children don’t do what parents say, children do what parents do.
Anytime my older daughter gets money for chores, or a gift, she puts it away in her piggy bank. She has a saving mindset already! Teaching money lessons to my first born has been pretty easy thus far. The younger one is a toddler and has a few more years to go before she is indoctrinated. I take the time to teach the importance of saving money and in general how we must go about evaluating every single spending decision.
What’s your dream job?
Michael: My goal is to establish a solid passive income stream through dividend income from stocks and cash flow through real estate. Once this is established, my dream job is to be a full time blogger.
Summing up, I would like to encourage you all to DREAM BIG, SET LOFTY GOALS, and PURSUE them. I would like to conclude with a quote by T.E. Lawrence – “All men dream, but not equally. Those who dream by night in the dusty recesses of their minds, wake in the day to find that it was vanity: but the dreamers of the day are dangerous men, for they may act on their dreams with open eyes, to make them possible.”
K. Michael Srinivasan, is the author of personal finance blog Stretch A Dime, where he writes about Personal Finance, Investing, and Frugal Living. He is the author of the book “High School Money Hacks”.