Amanda Wolfe, 35, said that her earliest childhood memories were about her family’s lack of money and financial security.
“I grew up very, very poor,” Wolfe said. “Both of my parents were addicted to crack-cocaine and used other hard drugs, and so I often went without a lot of basic necessities and was moved around a lot.”
As a form of escape, Wolfe read voraciously and focused very hard on how she could get herself out of the situation she was born into. She took on three jobs while in high school in order to save up enough to be able to go to college.
“Eventually, I got accepted into the University of Illinois,” Wolfe said, adding that she settled in Chicago after graduation, where she still currently lives. “I got some grants, but also took out some student loans.”
When she was done with school, Wolfe owed about $37,000. Her first job out of college was a sales job where she was making $40,000 a base, but nearly doubled her salary due to commissions. This was a lot of money for her at the time, but due to her lack of financial literacy, she wasn’t able to do much with it.
“I did not know I made $77,000 until I got my tax return,” Wolfe said. “And then I looked at it and was like, ‘Wait, what the hell? I’m still living paycheck to paycheck and have no savings.’ I’ve been paying on these student loans and I still owe the same amount and I don’t get why.”
It was then that Wolfe learned about the nature of interest, and quickly began reading more and more about personal finance at the age of 22.
“Originally, I just assumed everybody else was learning all of this stuff from their parents,” she said. “But then over the years, I started helping other friends and realized nobody else learned this stuff either.”
That eventually inspired Wolfe to create her personal finance influencer persona: SheWolfe of Wall Street. One of her most popular platforms is Instagram, where she currently has almost 160,000 followers. She currently uses her platform to educate people and tries to help others who struggle with things like debt and not knowing how to invest.
“It started as a little side hustle, but has definitely grown into a second full-time job,” she said, adding that her primary job is a 9-to-5 in cybersecurity. She hopes that by doing this, she can help people develop the sense of peace that she developed as an adult after she became financially literate.
“There’s no peace like financial peace,” Wolfe said. “You need money for literally every single thing in your life.”
Debt is something that affects nearly every American household. According to the Federal Reserve, the total amount of consumer debt at the end of 2021 — including mortgages, student loans, auto loans, and credit card debt — was $15.6 trillion.
Wolfe gave Insider three tips for getting and staying out of debt — and shared one thing she wishes she did differently when she was paying off her student loans.
Wolfe said that the first step to getting out of debt is by thinking about why you’re in debt in the first place, and discussed credit cards as an example.
“Was it some emergency situation that you weren’t prepared for, or has it been a slow bleed of shopping, dining out, and vacationing?” Wolfe said, adding that the next step is to “work our way backwards to what got us here. Then, let’s come up with a plan.”
The purpose for this first step, according to Wolfe, is to prevent the person who is in debt from keeping bad habits that will continue to get them into debt once they start paying it off.
After that, Wolfe said she’ll ask the client what their actual goals for their money are, adding that sometimes people who come to her are so singularly focused on their problems that they lack a greater vision of what it is that they do want to do.
“Let’s take a step back — what did you wanna do when you were 10?” Wolfe said. Often, she finds that this thought exercise works and that the client will have their own unique interests that they wish they could build upon.
This part of the process is important according to Wolfe, because it gives the client a chance to “strive for some fun things.”
She will then quantify the person’s debt against the cost of their interests, and then work with them on creating a sustainable plan that will measurably reduce their debt while also creating room in their budget for things that bring them joy.
“You’re allowed to spend your money — you don’t have to save and invest every single dollar,” Wolfe said. “But what you don’t want is to look at your bank account at the end of the month and wonder what the hell you spent all your money on.”
After you figure out your overall plan, then it’s time to focus on what you’re tactically going to do in order to pay it down.
“First we look through their expenses — we need to understand what’s coming in and what’s going out,” Wolfe said. Then she works with the client on figuring out how much of their paycheck goes to fixed expenses like rent, utilities, and recurring bills. This amount will usually be static from month to month.
“But then we start averaging out over the last three to six months, depending on the person,” Wolfe said, adding that this is where she’ll often find the “culprit” of what’s bleeding them dry all the time.
According to Wolfe, shopping is a really big one for a lot of the people she works with, and said that it’s not uncommon for her to have clients that spend over a thousand dollars a month on retail therapy alone, sometimes an entire fifth or quarter of their total income.
“What if we cut that in half? It doesn’t have to be drastic,” Wolfe said, adding that she’ll then help the client calculate how much they’d be able to put toward their debt if they put that savings difference toward it, often focusing on the debts with highest interest rates or small ones that would be easy to knock out immediately.
By doing this, Wolfe is often able to help her client establish a timeline of when they’ll be out of debt. She said that this can be very encouraging, and often motivates the client to save even more and tackle their debts even more quickly.
The other part of this process that Wolfe coaches people through is learning how to raise their incomes in addition to reducing their costs. The biggest thing that Wolfe suggests you could do to raise your income is by leaving your job and going to another with a higher salary.
There is data to back this up. Especially during the pandemic, workers who quit their jobs and left for new companies that were willing to pay more led to pay raises of 8.5%, on average. Meanwhile, those who stayed in their roles only saw pay jumps of 5.9%.
“The biggest financial mistake I ever made in my life was staying at the same company for too long,” Wolfe said, adding that she doubled her pay after leaving a role that she stayed in for 12 years.
Wolfe said that the best way to combat this is by learning what industry averages are and figuring out how much your talents would be worth at other firms. This knowledge can also arm those who want to stay at their job but fight for a raise. That said, she added that it’s not always feasible for everyone to leave their job or elbow their way into a bigger paycheck — but there are other things you can do.
“Even if getting another job or a raise feels out of reach at this time, just picking up some type of a side hustle can completely catapult your wealth,” Wolfe said.
Side hustles have become extremely popular in recent years, especially after the pandemic. For some people, they stumble upon something so lucrative that it ends up becoming a new full-time job.
When it comes to student loans, Wolfe said that not getting into more debt than you need to in the first place is a surprisingly important thing to keep in mind, illustrating this with a personal anecdote.
Wolfe said that when she was a freshman in college and received her loan offer in the mail, she realized that she had been given multiple loans for both unsubsidized and subsidized loans.
An unsubsidized student loan means that your interest begins accruing and compounding from the day you take it out, while a subsidized loan means that interest doesn’t accrue until you graduate — which was something that 18-year-old Wolfe didn’t know.
She asked one of her classmates about these offers, and what she should do with them. Her classmate decided to call her father, who was a wealth management advisor.
“He broke down the interest rates for me and told me not to take the unsubsidized loans unless I really needed them,” Wolfe said, adding that he told her that if she could just take out the subsidized loans and supplement with a part-time job, she’d save herself a lot of money.
“Because I only ever took the subsidized loans, I had half the loans that most of my peers had,” Wolfe said. “It probably would’ve been double if I had accepted all of that extra money.”
This practice, which she believes to be a predatory tactic to use on teenagers getting ready for college who are largely not financially literate, angers her especially.
“You do not have to accept all of the college loans that are offered to you,” Wolfe said. “And I would not have known that if I hadn’t asked.”
Certain programs, however, require people to take out a lot of money. Wolfe acknowledged that for jobs that have demonstrably high salaries, it’s worth it. However, there are some really expensive programs that have shockingly low median salaries for post-grads.
“Veterinarian and scientist are careers that stand out to me,” Wolfe said. “I have met so many people with hundreds of thousands in student loan debt that make like $70,000 per year.”
For this reason, Wolfe stresses that you should “know what you’re signing up for,” when it comes to these careers.
“It could potentially mean a lifetime of debt,” Wolfe said. “You might not ever be able to retire.”
One thing that Wolfe said that she wishes she did differently was focused more on building up her investment portfolio while she was paying off her student loan debt, which she said took her about five years.
Her reasoning for this was that her interest rates on those loans were between 3% and 4%, and that she missed out on earning the compound interest in the stock market during those five years.
“Mathematically speaking, if the interest rate on your debt is under 6% it makes more sense to invest more of your money in the market which returns 7% to 8% on average after inflation,” Wolfe said.
However, she also acknowledges that for some people, having debt comes with a lot of psychological baggage and compels them to pay it off as fast as possible in order to ease that anxiety — even if it’s not totally logical.
“Debt gets a negative connotation,” Wolfe said. “Poor and middle class people call it debt, but rich people call it leverage.”
She added that she currently owes about $2,000 on her car, which she’s not worried about, because the monthly payment is low. She added that she doesn’t like when personal finance gurus treat all debt as bad.
“I’ve heard some people say you shouldn’t finance a car. What a privileged thing to say,” Wolfe said, adding that most Americans have very meager savings and live from paycheck to paycheck.
“If you think someone should be able to just come up with $18,000 for a car or just go without one, you’ve obviously never not had money,” she concluded.
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