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Wealth Club: Financial Advice for the Centsless

GOOD's new financial adviser will help you stop screwing around and get your life together.

Welcome to GOOD’s new personal finance advice column. I’m Mike Fleck, and I’m here to help. My credentials include a bachelor's in economics, the master's in Applied Economics I’m currently pursuing, and three and a half years working in the financial services industry in a totally non-evil, rather boring way. Growing up, my father would talk constantly about this kind of crap—and, well, I always loved to listen, even if I didn’t heed his advice the way you should mine.

Personal finance starts with your job—you’ve managed to get what 9.1 percent of Americans want but don’t have, so put that six-figure education to work (you finished your degree, right?) to earn half your tuition in yearly salary. The important thing is that you now have a stream of income. If you haven’t had an appreciable one in a while, tread lightly before you start spending like crazy.

After decisions on taxes, health insurance, retirement and other pre-tax mumbo-jumbo, you’ll be left with that oh-so-magical number: your net or take-home pay. Now comes the fun part: Your role is to maximize your utility (a nebulous microeconomic term that can loosely be interpreted as ‘quality of life’) while staying within your budget constraint function (not spending more than you make). My goal is to arm you with the tools you need to do just that. Here are some first steps on your way to smart money management.

It starts at work. Whether you’re starting a new job entirely, or already have a few years under your belt at one organization, make sure you’re aware of internal effects on your net pay. Choose the appropriate number of exceptions on your W-4. For a single person, choose “0” if you prefer to have the federal government withhold more income taxes in advance, or choose “1” if you prefer higher paychecks and a total withholding that will match more closely with your actual tax liability—fair warning, that could mean no tax refund, or even a bill, come April! Opt into, or don’t opt out of, your company’s defined contribution retirement plan, 401(k), 403(b), etc. We’ll get into retirement, the true funemployment, later on—just open the damn plan. It may be the only time in your life that you’re offered legit free money. Take advantage of any pretax commuter or Flexible Spending Account programs. Yes, these reduce your monthly paycheck, but as long as you continue to pay for your commute, and have at least some medical expenses, doing this can amount to more than a 20 percent discount in the long run.

Figure out what you own (and what you owe). As Jack Donaghy reminds us, “You’re a lion. Take what’s yours.” Make sure you have at least a vague idea of where all your assets (and liabilities) are. Maybe it’s the savings bonds that Grandma Esther has been giving you forever, a yet-to-be-rolled over 401(k) from a previous job, or $5,000 in student loans and credit card balances you sort of forgot about. There are even convenient websites, such as, that can tell you what, if anything, is waiting for you out there. It couldn’t hurt to try. I know it’s comfortable to have your parents still in charge of some of your assets, and convenient to forget about some of your liabilities, but it’s not smart. If you don’t have a proper accounting of your entire financial situation, it’s going to be difficult to make optimal choices.

Connect Yourself. Once you’ve got your head around the big picture,it’s probably spinning with the number of financial institutions you now have to deal with. The vast majority of these institutions give you the ability to create online accounts—do so. A website like Manilla or can help you put all of your paperwork in one place. Take it a step further and link as much as you can to your bank: Connect your checking account to your credit card and your student loan administrator for easy payment. Connect any stock/mutual fund/bond account (remember Grandma Esther) to your checking account for access should the need arise. Automatically debit from your checking those monthly bills that are unchanging, like car payments and utilities, but not the minimum payment on your credit cardpay what you can there. This will reduce the risk of payment delinquency and late fees, and, should something disastrous occur, you don’t want to spend hours figuring out how to access your money.

Save some money. Yes, now the shittiest one. Find one thing in your life you know you spend way too much money on. Cut it out. Maybe it’s making your own coffee versus Starbucks, maybe it’s taxis versus public transportation, maybe it’s DVR, maybe it’s the horses. I don’t really care. Deep down, you know there’s something eating up an inordinate percentage of your disposable income. For me, it’s dry cleaning. From this moment forth, I’m going to make a deal with the devil and commit myself to learning how to iron. This should easily save me close to $15 a week, $780 a year. Do yourself a favor: Make sure it’s something you like, not love. At the end of the day, this is all about your own personal utility and happiness. Denying yourself the things you love the most isn’t going to help anyone.

Ask Questions. As a budding economist, I’ve learned that information is the scarcest resource. Ask your HR department about all the options and benefits available to you; check your credit report once a year; ask your parents if there are any accounts out there with your name on them; call up your financial institutions if you don’t understand your credit card terms or how to change investments in your 401(k)—customer service reps are generally more helpful than they get credit for; and most importantly, ask yourself what you can do on a day-to-day basis to cut out frivolous expenses.

Personal financial decision-making does not have to be painful, boring, futile, or difficult. It probably won’t be too fun much either, but get over it. You’re a quasi-adult now, so stop pouting and make it work. In the end, you’re the owner, employer and sole employee, of You, Inc.; the one who gets effed if things go south, and the person who benefits most from smart money management. If you have questions—the weirder the better—put them in the comments or e-mail I’ll do my best to help you make smart choices.

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