Jeremy Quittner: Welcome to Teach Me How to Money. I’m your host, Jeremy. On this week’s episode, we’ll be talking with personal finance, blogger and YouTube personality, Gaby Dunn. But before we get going, our term of the week is: net worth. People can have them, so can companies and institutions. So what is net worth, exactly? In simplest terms, net worth is the value of your assets minus your liabilities. So it’s anything you own minus anything you owe. If you have $1,000 in the bank and your total debt is $500 then your net worth is $500 and if you have $1,000 in the bank and you owe $1,000 well, guess what? Your net worth is zero. So why is net worth important? It’s a quick way to understand your financial situation and to see if you’re meeting your financial goals. You should aim to increase your net worth over time. So that’s our jargon hack for the week. Now let’s get to the interview.
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Today we’ll be speaking with Gabby Dunn, a financial blogger, host of the podcast, Bad With Money and the star of the YouTube show, Just Between Us. Gabby has also recently written a book called, you guessed it, “Bad With Money.” We’ll be talking with Gabby about what it actually means to be bad with money and why millennials and Gen Z have unique challenges with their finances. Welcome, Gabby!
Gabby Dunn: Thank you so much for having me.
Jeremy: It’s our pleasure. So the title of your new book is, “Bad With Money”, but what does it really mean to be bad with money?
Gabby: Well to me it was just uninformed. It just meant someone who wasn’t looking into it, wasn’t looking at their bank account, wasn’t reading about what they should be doing, who just existed in a world where, like I did where I just figured, “It’ll all work out. Oh there’s nothing to worry about.” Somehow this just works itself out and other people are just doing what they’re doing and you know, it seems to work for everyone else. So I don’t ever need to ask about it. I don’t ever need to look into it. I don’t ever need to ask what other people are doing.
Jeremy: Was it your experience that things did not work out somehow? I wonder if you could just tell us a little bit about that.
Gabby: Yeah. No, I mean, I had a credit card. I had never used it. I had no idea what building a credit score was. I had no idea that I had cash rewards waiting for me, I just had it. I never looked into whether the companies I was working for, whether I had a 401(k) there or not. I never looked into how my taxes were being taken out. So, I would just fill out the paperwork and turn it in at the job and I would have no concept of if I was going to be paying taxes later or they were taking them out week to week. I just didn’t have any idea what people were doing to make money or if I was making the right amount of money, I never negotiated my salary. There was just all kinds of stuff that I buried my head in the sand about. And so I think you can be wealthy or be well-off and still be bad with money. It’s not necessarily a poor thing.
Jeremy: That’s interesting. We were just talking earlier today about why when we talk about money, people are so disinterested. What’s causing that do you suppose?
Gabby: Fear. I mean, it’s terrifying. No one wants to feel stupid. No one wants to feel like they are not good at things. Everyone likes to do stuff that they’re good at. So why wouldn’t you avoid something that you feel like, well, I don’t know anything about this. I’m not good at this. And it’s purposeful. I mean, it’s all jargon. It’s purposefully set up to make sure that you’re not easily able to just jump in and learn everything right away. And I think that that comes from, you know, a lot of classism and racism.
Jeremy: Can you say a little bit more about that? Like, why is there this intentional confusion around money, from companies that say may offer your credit card or a bank account or an investment vehicle? Why is that? I mean a dumb uninformed population is just going to make mistakes that will result in fees for these companies or you know, what’s going on with that?
Gabby: Yeah, absolutely. They want your money. They make more money the less, you know. That’s why the payday loan industry is so big and also, that’s why credit card companies stand outside of colleges and wait to give you a t-shirt to sign up for a credit card. My big conspiracy theory is that rich people don’t want us to talk to each other. People that aren’t in the 1%, they don’t want us to talk to each other because they’re worried that if we do, we will find out that it’s not an individual problem. They like to keep it isolated. They like to keep it where you are the problem, you are stupid. The reason you’re not doing well is because you’re not working hard enough. Because I think if we all figured out that it was actually like something larger where there might need to be political action or there might need to be changes to how banks are set up or there might need to be changes to how healthcare is set up or anything like that, or to work hours, we might actually work together to get that done. And God forbid we do that.
Jeremy: Right, so, there’s a kind of intentional isolation at play here. So how do we become more conscious about money? What are your thoughts about that and how can we start communicating with one another more or better about money or you know, money problems that we might be experiencing or just kind of dilemmas or questions we have about finances. How can we become smarter about this?
Gabby: Talking to each other has been huge. Since I started the podcast, the amount of people that come up, friends of mine that just come up and want to talk to me about things in this very normalized way has been so wonderful. There was a guy that produces one of my other podcasts and we didn’t know each other that well and he was like, “Hey, what’s up?” And I could have just been like “nothing”, but I was like, “Oh, I’ve actually been looking into loan consolidation all morning. So I’m just thinking about that. That’s on my mind.” And he was like, “Oh, I actually did that.” And I was like, “you did?”, And he was like, “yeah, here’s what I did. Here’s what I use, blah, blah, blah.” And that’s like, maybe it would have been a taboo topic at a certain point and we don’t know each other that well. But to me, that was so indicative of what needs to change. Like that needs to be as normal as anything else you might talk about. So that was huge. I think, friends of mine have talked about sitting down and having salary conversations with their friends. Like “how much do you make, how much do you make?” People have talked about posting on Facebook being like, “who loves their accountant, what accountants should I use?” Just the more that we are talking to each other about this stuff without feeling like everyone already knows this and if I’m asking questions it means that I’m less than and I’m stupid, the better. Because I think we all think that there was like one day in elementary school or college or whenever, that everyone else learned this and we just weren’t there on that day and now it’s too late for us to ask any questions. And if we try to ask anything now, everyone’s going to judge us and not want to be our friend anymore and think that we are lazy or less intelligent. And that’s just not true because everybody feels that way. If everyone is sitting around isolated feeling that way, then the only reason to keep us from talking to each other so that we keep feeling isolated. And also people will push back, it’s not like people won’t say, “I don’t want to share my salary.” Someone just recently told me an interesting thing where they were at work and the person didn’t want to share their salary but they said that they were willing to share a percentage increase of their promotion every year so they were uncomfortable giving an exact number but they did want to be helpful. So they were like, I’ll tell you how much percentage-wise I am given as a bonus.
Jeremy: That is helpful information. I mean if you’re not going to get the exact number just to know like how does my raise or bonus increase stack up to someone else in the company? And pretty soon, I guess you’d realize that there are big differences. You’ve also talked about how your family set up contributed to your issues or your psychology around money. I’m wondering, can you talk a little bit about that?
Gabby: My parents are spenders, whether they can afford it or not. I talk about in the book that they took out a $20,000 loan for my Bat Mitzvah, which was wholly unnecessary. They were just spenders. I mean, my dad was an addict and an alcoholic when I was growing up. So money sort of disappeared where it went and my mom was the breadwinner and she never really understood how she was working so hard and yet all the money was disappearing. And of course, later it turned out to be drugs and gambling and that kind of thing.
Jeremy: Not her drugs and gambling?
Gabby: No, no, no my father. Yeah, my dad. And so I think I had this idea one, that you just buy stuff, you just buy stuff and worry about it later. But then also once you did worry about it, it was full panic. My parents would do whiplash where they’d be like “spend, spend, spend.” And then two seconds later they’d be like, “oh my God, why did we do that? This is a disaster.” So, I was constantly on the edge of my seat. Like, what’s this day going to be like? And so I operated that way too where I was just like, “I don’t know, spend the money and figure it out later.” So, I did a lot of that. They don’t really like to plan for the future. They’re very in the moment, very hippy-dippy. And so I also was just like, “Hey man, you can’t take it with you, man.” You can’t see me, but I’m doing a peace sign. So I mean it was just a lot of sort of like, I think I had this idea that money was evil in some way. That good people didn’t worry about money. People who cared about their spirits and their souls and whatever didn’t care about money.
Jeremy: And of course you’re an artist as well. So artists don’t always think about money.
Gabby: I’m an artist, yeah, exactly. I mean I saw the musical Rent and was like that’s it. That’s the thing.
Jeremy: So what changed? Did you have some sort of enlightenment where, you know, the hand of God reached down to you and said, “Gabby, be smart about money,” or like what happened?
Gabby: Well, being poor is very hard. It is very stressful. I would always have huge panic attacks about money and then I would somehow figure out how to get 50 bucks. The problem is if someone was like, “well isn’t it great that you are so like crafty?” And I was like, “Yeah. But it also kept me from fully getting my shit together,” cause I would always somehow come through with like 50 bucks in the nick of time basically. I was working at Buzzfeed and I had a co-worker sitting next to me and he had his laptop open and on the computer, it said his bank account and it said a number. And I leaned over and was like, “Oh yeah, I have that too.” And he was like, “you have what?” And I was like, “yeah, that’s my credit card debt too, it’s pretty annoying.” And he was like, “that’s my savings account.” And I was like, “ah, yeah, what you said.” And he was like, “wait, what?” And my best friend at the time was sitting behind me and even my best friend didn’t know my best friend went, “I’m sorry you what?” And I was like, “I didn’t say anything.” And I left the building because I was so upset. When I came back, the two of them were like, “wait, sorry, start over. What’s going on?” And so I ended up telling them and that was the first people I told and to be fair, the two of them absolutely come from very privileged, very rich backgrounds. So there was a little bit of a lack of understanding where they were like, “how did this happen?” And I was like, “oh, very easily. I have no parental support and I have no intergenerational wealth and I’ve been on my own since I was 18. Like very easily this is how this happened”. But I did know that from their reaction that it wasn’t good. And that was the first time that I was like, okay, not everyone is living this way.
Jeremy: Right. So what kinds of changes did you make? And I think plenty of people probably relate more to your story than the story of privilege. They can relate to having lots of debt or not having intergenerational wealth, et Cetera, et cetera. So, you know, what are steps that you took, that our listeners could say, “oh, I can do that too.” If you’re working for a salary and you’re trying to get out of debt, what did you do?
Gabby: Well, to be fair, I have a lot of privileges going for me in that I am able-bodied and cis and white. But I also, I’m not like out of the woods. I mean I have $12,000 in student loans still. It’s not like I wrote this book and was like, I’m writing from the perspective of a cured person. I still have student loans that I’m working on. I mean I’m down from a huge number to $12,000 which doesn’t seem that bad compared to a lot of people. I just started paying attention to it and a big thing was I checked the interest rates on my credit cards. I checked the interest rates on my student loans and noticed that one of them was way higher than the others. So I focused on paying that one off. I just started paying attention to things like I just started being like, is this the best credit card for me? No, let’s shop around. Do I like going to H&R Block or should I find an accountant who like gets me? Rather than just passively letting money-things happen to me, I started going forward with it. A big thing that I did was I printed out my bank statements and I went through them with a highlighter.
Jeremy: You know, I wanted to chat with you a little bit. You’ve talked a lot about this and thought a lot about, intergenerational differences between the generations and their attitudes towards money. What do you think the challenges are for millennials with money and how are those challenges different from other generations like Gen Z? And do you think Gen Z is smarter about money than Millennial Generation?
Gabby: I hate to talk about any generation as a monolith because I think a lot of times when we talk about millennials, what we really mean are like rich white, upper-class millennials who are living in urban areas. I don’t think we take into account lower-income or rural millennials really at all when we talk about them as a generation. I do know that, I think in general, we accepted a lot of terrible job conditions out of the gate. So, those of us that graduated from college, we graduated from college and then we took a job because we were terrified and then we just let ourselves be treated like shit basically. We just did an episode of my podcast, Bad With Money with Joy Shan who wrote an article for California Sunday magazine about Gen Z in the workplace. And Gen Z is a lot more social justice-oriented. So they are the ones who are kind of realizing, “Hey, this job listing is unrealistic.” Or “hey, this job listing is for something that’s gonna not guarantee me a job. They’re labeling it a fellowship, but it’s, you know, it’s actually a full-time job.” I think they don’t put up with unpaid internships the way that millennials did. Like I think they’re just a bit more aware. They talk to each other more about their situations, and they’re a little bit more practical. There was a thing of millennials trying to go for the dream job over security. And then Gen Z is, I think coming back a little bit from the research that I’ve read, coming back a little bit more towards like I want to take the secure route, which is similar to Gen X, I think it just switches.
Jeremy: Yes, from generation to generation. You sort of have these sort of through lines that go from one to the other. You also identify as LGBTQ. And I’m wondering if you can talk a little bit about how finances are different, for LGBTQ people. That’s sort of an important topic I think, you know, with regard to, is there a lavender ceiling, for example, as there might be with a glass ceiling for women. So can you talk a little bit about that?
Gabby: Sure. I mean, in tons of states, you can still be fired for being queer. There are no federal protections and they’re trying to take away even the ones we do have for queer people in the workplace. You know, I think in a lot of places if you want to transition or if you are trans, it’s going to be difficult for you to do at your job. You’re allowed to get married, but putting a picture of your partner on your desk might cause problems for you at your job. So I think there is a lot of stuff that isn’t really considered even like, you know, I talk about in my book, like I’m a cisgender woman. I had a girlfriend who was also cisgender and if we wanted to have a baby, that was a huge conversation. How are we going to pay for that? Where’s the baby gonna come from? You know, I think, there’s a lot to do with health care for queer people that just isn’t talked about, the specific sort of things that may or may not be covered by your company’s healthcare.
Jeremy: So how can people be smarter about money? We’ve been talking a lot about the mistakes that people can make, sort of the shame issues around money or on consciousness around money. So just what are, you know, you’ve talked about going through your bank statements and highlighting suspect things and just sort of coming up with these patterns in your own life financially to just be smarter about things. Do you have any advice for people? You know what they could do?
Gabby: I think you have to just be aware, and I know it sucks. You have to pull your head out of the sand. I cried, let me tell you something, I cried the whole time. I cried for three days while making a budget. I laid on the floor and cried. I cried while going through my bank statements. I cried when I talked to my therapist about going through my bank statements. I cried at Bank of America asking about my credit cards. I cried the whole time. It’s not like you’re going to start doing this and feel great. It’s very emotional. It’s very upsetting. So just don’t feel like you’re alone and don’t feel like you have to keep it to yourself and don’t feel like, oh, I’m a bad person because I’m crying while I’m doing this. Like sit down, look at the reality of your situation, try to figure out what the deal is. Write things down, make lists, Google stuff. There were a lot of things that I didn’t understand. I didn’t understand the word, so I had to slowly read the paragraph and then Google the word. I mean, it’s stuff that’s really designed to make you feel like you are deficient. I would go talk to my accountant and I would, I asked his permission, but I would voice record him so that I wouldn’t feel tempted to go. “Okay. Yeah, yeah, yeah. Okay. Yeah, yeah, yeah.” And then get home and not remember a single thing he said. I would listen.
Jeremy: So you actually listened to the recording later and what did you learn? Did you hear something else in the second hearing then the first one?
Gabby: I Googled words that he had said. And I read more about them slower at my own pace.
Jeremy: Were there any books that you read that were particularly helpful or anybody who you found particularly inspiring?
Gabby: I really liked “Your Money or Your Life” by Vicki Robin. I thought that was a really good one. I like, “Broke Millennial”. I get handed kind of every book that exists. I like Erin Lowry’s book (“Broke Millennial”) and I really, really enjoyed Vicki Robin’s book.
Jeremy: Terrific. Listen, Gabby, I’m wondering if you could help us with a listener question? This person wrote in to say, “how do you budget for multiple streams of income?” So I’m sort of interbulating from that this person works in the gig economy, like 60 million other people. They’re probably doing part-time work, maybe side hustles for Uber, Etsy, Airbnb. And one of the things I read in, just kind of researching this question is that, set the floor at your lowest month, whatever your lowest month was for the year. That should be how you budget. But that seems kind of draconian. Do you have any thoughts or can you offer any advice to that person who’s wondering how to budget for multiple streams of income?
Gabby: Ugh it sucks. I budget for multiple streams of income and I still don’t have a great handle on it. I don’t think, put it at your lowest month, but I think maybe a middle ground, like a median, I don’t know because it also comes down to, if you’re a company that has freelancers, pay them on time. I would budget for things and then not see that check for months. Pay your people on time. It’s unbelievable. And it’s so cruel that you don’t.
Jeremy: I agree. I think there should be legislation around that actually.
Gabby: It’s horrible. It’s so, so, so terrible. I’ve had multiple companies not cut me checks for full calendar years. It is so cruel.
Jeremy: So you need to factor that in so that you know you may not get paid on time if you have multiple streams of income. Well, Gabby, thank you so much for talking with us at Teach Me How To Money. This has been really fun and good luck with you.
Gabby: Oh, thank you so much for having me!
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