budgets – The Modern Piggy Bank

Starting The Dreaded Student Loan Journey

Paying down your student loans? Yeah, us too.

College? Awesome. Student loans? Absolutely not.

I have student loans. And I hate student loans. I hate paying them every month and only watching the principal balance drop minutely. It’s a problem a lot of people have and one that is not going to be fixed anytime soon. What we’re here to discuss is how you, as a Modern Piggy Bank reader, can pay them down as quickly and as painlessly as possible. But to really understand student debt and paying them back, we’re first going to dive into some facts about it.

If you read my article on budgets, you’ll notice that I consider student loans a major category and a main part of my overall budget. And yet that’s really not enough. Sure, I make the minimum payment every month but do I really want to be in a mountain of debt forever? Of course not! I, like you, want to be debt free. Did you know according to Forbes and Credit Suisse if you have $10 in your pocket and zero debt you are richer than 15%-25% of Americans respectively.

“If you’ve no debts and have $10 in your pocket you have more wealth than 25% of Americans. More than 25% of Americans have collectively that is.”

That’s actually astonishing. So if I go up to my 18 year old cousin and hand him a $20 bill he is now in the top 75% of American households. Wake up people! Credit is great, debt can be great. Bad debt is not great. Use it wisely.

And education debt is the United States is massive and current trends only show it increasing. According to Forbes which cites MakeLemonade student loan debt in the US has reached $1.5 trillion. If you get a free minute and want to blow your mind look at these pictures to see what $1trillion would look like in cash. Crazy stuff. And we have that and more just in student debt. Forget mortgages, credit cards, car loans, and anything else you can possibly purchase on credit, student loans dwarfs them all.

Don’t go into $100,000 of debt for a $40,000 job. -Some Random NYC subway advertisement

For example purposes, Jeff Bezos (CEO and Founder of Amazon and recently anointed richest man alive) has approximately $150billion. THAT WOULD NOT EVEN MAKE A DENT IN TOTAL US STUDENT LOAN DEBT. Nor would I want Mr. Bezos to waste his money on attempting to eradicate student debt. That would just be stupid.

But let’s face it, student loan debt is a huge issue. And I’m not talking about the overall student loan debt now, I’m talking about your personal student loans that you took out to go to college.

I’ll be honest, I never really thought about my loans until senior year. I would go to school, have a great year, and then just sign whatever the school sent me for my loans and whatever my parents put in front of me. I thought they knew what they were doing. And then senior year I logged onto my account and saw the debt I was truly in.

Sure, I had known about it in the back of my mind that this debt was piling up but it wasn’t real. It was an idea floating on the outskirts of my thoughts. Let me be the first to tell you that it becomes real, real fast.

So now I’m here, staring into what seems like an insurmountable abyss of debt and just trying to figure out how to climb out of the whole that so many Americans find ourselves in. But I have a plan.

I mentioned before that I had a goal to live off one paycheck a month and save/invest the other one entirely. Unfortunately besides building a cash reserve for emergency purposes I don’t plan on saving or investing much beyond some meager contributions to a Roth IRA. And that’s because most of my excess money will be going towards student loans. I want that debt out of my life forever. I want no debt, no credit card debt, no car payments, yes a mortgage but really nothing else besides that. Don’t buy something unless you can afford it is something I truly want to live by.

So how am I getting there? I’m allocating as much as I possibly can a month towards my loans without sacrificing my health, both mental and physical. I’m riding my bike to work so I can save money on gas and put that towards student loans (I highly recommend biking or walking to work if it’s feasible for you since it not only saves money but is healthier as well).

I’m making sure I’m only eating out when it’s truly a special occasion or a time to hang out with friends. Any money left over from my social life budget goes right into loans at the end of the month.

I’m also making payments more frequently than just the once a month timeline that everyone is on. If you get a gift or a bonus in the middle of the month, use it right then to pay down your debt. I know how tempting it is to go out and get the newest and coolest thing or that item you’ve been eyeing for a while but take the temptation away. Get your money and pay your loans right there and then. You can still make your normal payment but you’ll feel so much better about paying twice or more in a month.

Something that never made sense to me was buying name brand food. Now I completely understand buying a brand for certain items, they simply taste 100x better and I won’t blame anyone for choosing the name brand, but if it’s something simple go for the generic brand. This has led me to have excess money in my grocery budget every month and the extra, you guessed it, goes right into student loans.

There are so many plans you can utilize to pay off your student loans. I’ve already started looking at refinancing my loans and consolidating them to simplify my payments. I highly advise you all to do the same. If you need some guidance, feel free to reach out to us in the Contact Us page and we will personally get back to you and help you navigate. Also make sure to share this article so your friends know they aren’t alone and there are strategies to dealing with your student loans.

Remember, student loans isn’t a debt that will disappear for you tomorrow, but follow us and you may just pay them down quicker and be debt free sooner than you ever thought possible.

Welcome To The Modern Piggy Bank

Welcome to The Modern Piggy Bank. Most likely you stumbled across us on your search to save more or make your money work for you. Either way, we’re happy you’re here.

The Modern Piggy Bank is a brand new website with the goal of cutting through all the nonsense that litters the internet of how to utilize your money to minimize your expenses and optimize your savings. You aren’t going to find where to get the best deals on $10 wine here or how to eat Bougie on a budget, what you’re going to find is solid research, tried and true techniques, and our own personal stories.

Most likely, we are just like you. We’re two really good friends that just graduated from Penn State and secured our full time jobs. Mike works in aerospace while I work at a startup. We live in two separate areas of the country now but during our four years in college we worked hard to put our dreams for a successful business into life.

We tried a lot of different ideas in college, a lot that never panned out but what mattered to us was that we were trying. We tried everything from delivering home cooked meals made by neighborhood “moms” to committing arbitrage on Amazon. What really drew us in was investing and that is where our passion lies. I did my internships at an asset management firm with $1.5 billion under management while Mike spent his time building planes and focusing on engineering. Yet we both knew we wanted to focus on investing. Fast forward a couple of years later and we secured our jobs and starting making real money.

We realized pretty quickly that with real money comes real expenses. And so The Modern Piggy Bank was born. The goal of this website is not to sell you some product that an advertiser wants to push. But to actually inform you of your choices as a retail banking client, a retail investor, and an average American who wants to make the most out of their money or as Mike and I constantly remind each other, the goal is to minimize expenses while optimizing savings.

“With real money comes real expenses”- Will Hershon

We love the challenge of investing and the rewards you can get from it and one day hope to have our own fund. But for now, we are working every day to save more, learn more, and invest wisely. I have goals to own real estate, mostly rental properties, and I’m going to document my experiences with that here. Mike wants to figure out better ETF and fund strategies that out perform the current indexes for lower costs.

We both really believe in the firm foundation theory of investing while Mike sometimes branches out in the more technical branches of algorithmic trading, considering his background in engineering, this isn’t surprising.

For now we’re both focusing on filling this website with the best information possible. I’ll be the first to admit we are going to make some mistakes, but we will also be the first people to fix them. We’re learning, just like you are. But we’re willing to share our successes and our mistakes. If we blow our budget on a night out we’re gonna write about how we fixed this in the future. When we buy our first rental property we’re going to write the process and what we looked for. Eventually we’re gonna have our portfolios up for you to see. Our views on investing, and the markets will be here as well.

The Modern Piggy Bank is going to focus on four major categories. Investing, Saving, Passive Income, and Education. Investing as you might have guessed is going to be focused on the markets and real estate. Saving is going to focus on the best ways to save money and the most efficient vehicles for doing so. Passive Income will take a little longer to build out as we believe that’s going to be focused more on maintaining the real estate portion of your portfolio, but I promise you, we will get there. And finally, Education. Education is where we will review and talk about the books we’re reading and the ideas we’re learning about, anything and everything helps when it comes to making smarter decisions with your money.

At The Modern Piggy Bank, we’re not going to give you some advice on how to save more from someone who heard it from someone’s brothers friends old roommate and how they managed to move out of their 500 square foot apartment and upgrade to a luxurious 700 square feet. We are going to give you our actual experiences right from our own lives of how we handle money, grow it, invest it, and save it. You’ll grow with us. No doubt, we will make mistakes at times. But we aren’t claiming to be perfect. We claim to be on a path few choose to actually follow yet all talk about.

Knowing what to do with your money is hard. I get it, and all of us at the Modern Piggy Bank struggle to some degree to save our money and make it go further. That’s why we set this website up. But when you get down to the bottom line, saving money isn’t rocket science (although Mike actually does rocket science).

If you’re looking for ways to shop the best deals on luxury items or make a quick buck by taking surveys online, this isn’t the website for you. There are plenty of great websites out there that will tell you how to do this. We are focused on other things, real ideas, true techniques, anything and everything that will help you grow your wealth and yourself.

Actual experiences right from our own lives

And with all that, welcome to The Modern Piggy Bank.

-Will Hershon

-Mike Andriopoulos

“Budget” Isn’t A Bad Word

“Spend your money wisely.”. I undoubtably heard this phrase upwards of a thousand times. Since my first job at 15 to every job I’ve held since, this phrase became a constant thought in my mind. But I’ll be the first to admit I haven’t always lived by it and that’s part of the reason I’m here today. Writing about my experiences and bringing you along on my journey and hopefully one of your own. I’ve wasted money on everything from designer shoes and wallets to Harley Davidson Motorcycles. Looking back now, each and every time I bought something I didn’t need, I learned a lesson.

Now, I’m fresh out of college and I have a goal of where in life I want to go and where I want to be. I’ll share that goal with you sometime in the future but in essence it comes down to freedom. And that’s why I have a budget. A budget sounds like the exact opposite of freedom, you have to stick to it, live by it, and adjust it constantly. Not exactly what any of us want to be doing in our free time.

First things first, don’t make it a shoestring budget. Don’t think you can survive on $30 a week on groceries. Make it realistic. I over budget for my necessary expenses such as food so when I don’t meet that I put the rest away into a Roth IRA. Don’t think you need to cut your friends out of your life because you won’t be able to go out with them. Make room for your social life, it’s important for your health and you’ll be happier for doing it.

My main categories that I budget for on a monthly basis are:

Rent
Utilities
Groceries
Student Loans
Gas
Apollo (my dog)
Social life

These major categories allow me to budget for what I consider important while also allocating a certain amount a month towards my savings account and my retirement accounts.

In a perfect world, I’d meet all of my budget requirements with my first paycheck of the month and commit the entirety of the second towards savings, real estate, investing, and retirement. But I’m not there yet, I will be someday and you all will follow me as I work towards that. For now I make do with sticking to my budget and growing my savings and my Roth IRA.

For the first couple of months it was really tough, the biggest thing I noticed was that I was going out to eat with coworkers for lunch or drinks after work and that was killing my budget. It’s hard to say no to a drink after a long day and I’m not saying you should but just be aware of where your money is going. If you want to make another category on your budget for work related social life separate from your social life, feel free. Just don’t add too many categories that you’re left with nothing.

“Do not save what is left after spending, but spend what is left after saving.” -Warren Buffet

I can’t stress this enough. I’m an economics student and I understand about the life cycle of a consumer but it’s so important to start saving early and often. Don’t listen to the guys in your fraternity or sorority say that you should get as many credit cards as you qualify for and max them all out so you can enjoy college to the max.

I had an amazing college experience and came out with minimal debt (excluding student loans, which I’ll cover my experiences with at another time). But that small credit card debt didn’t become minimal until I neared graduation. That’s because like all 21 year olds fresh from their internships in NYC I was flushed with money and had a huge ego. Playing credit card roulette with my friends at the bar didn’t seem like a big deal. (For those of you that don’t know what this is, it’s when you and everyone you’re with puts their credit cards in a pile at the end of a night out and lets the waitress decide which card to put the entire tab on). I highly advise you not to do this. We rationalized it all works out in the end, let me assure you, it does not. So I didn’t budget well through college and it cost me heading in to the real world. Now I’m cognizant about what I spend my money on (and how tabs are separated) and where it goes. I know around how much I can spend on a night out and still be happy about it the next day. I know how often I should say yes to my coworkers and go grab that drink and still have money left over to put away in savings.

Seriously, don’t be afraid to budget. You can be as tough and strict on your budget as you want to be but my just putting the numbers down somewhere you will start making progress towards your goal. Small steps now mean huge returns in the future.

I’d like to put an excel sheet in here that you all can download and use to create your own budgets but we’re still fine tuning the website to be optimized for that sort of thing. For now, if you’re interested in putting together a better budget, or start one altogether, reach out in the contact me section. It’ll go straight to my email and we can set up a time to talk and I’ll be able to send you the tools needed from there.