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Eat, Spend, Save

Photo: Erica Newport

Erica Newport, SOC/MA '04 (Photo: Carissa Warfield)

Of all the transitions endured by college students leaving campus for the real world — think 6 a.m. alarms instead of bedtimes — none is more jarring than personal finance. While checkbooks are now “balanced” primarily online, young graduates must adjust to the pressures and stresses of paying rent, bills, servicing debts, and if they’re smart (and lucky), saving for the future.

We were curious about how young AU graduates manage their money in today’s tough economy, so we asked a handful of them from cities east of the Mississippi. While the cost-of-living varies from region to region and people spend and save in ways suited to their personality, we found that their financial principles are surprisingly similar, no matter how much is in their wallet or purse.

We ended each interview by asking, “What’s the first thing you would do if you won the lottery?” The initial words out of everyone’s mouth — “Pay off all my debts” — has us hoping that if our numbers don’t come up, theirs will.

Erica Newport
35, SOC/MA ’04
Sarasota, Florida
Reporter for the Sarasota Herald-Tribune daily newspaper, PhD candidate at the University of Florida

Do you save money every month? If so, how much?
We choose to pay down debt. Education, car, business (art), taxes, a few small credit cards from earlier years. We probably pay down about $800 per month — sometimes more, sometimes less.

What about retirement? Do you have a 401(k) or something similar?
We [contribute to] something similar through my husband’s work as a professor.

What do you splurge on?
Starbucks and the New Yorker.

Where do you try and skimp or save on everyday purchases?
We get fresh organic produce from a local farm in our neighborhood; most of the produce is free with exchange of help on the farm. We also grow a lot of our own food, make our own bread, and we do not eat out. There’s a local movement here to choose production over consumption and we participate. We also barter art or fresh produce for classes we take, goods and services we need, etc. We are conscious spenders.

How would you characterize your relationship with money: love, hate, or something in between?
Practical, but I’m not attached to the idea of accumulation of money.

What would you do if you won the lottery?
I’d launch a news think tank focused on reporting news, studying news, falling under the umbrella of social responsibility. Then I’d go to Starbucks and splurge on a larger sized bold blend.

Michael Stubel
23, SPA/BA ’10
Washington, D.C.
Web producer at the Bipartisan Policy Center

Do you save money every month?
I do, mostly because I came out of AU with the habit of keeping a budget.

What about retirement? Do you have a 401(k) or something similar?

I have a 403(b) account and I just started a Roth IRA to force myself to save. I try to put away at least $200 a month in total.

What do you splurge on?
I subscribe to MLB.TV. I’m a crazy fanatic Phillies fan. It costs $120 for the year, about $20 a month, to watch every game.

Where do you try and skimp or save on everyday purchases?
I don’t have cable, but I don’t miss it — there’s not enough time to watch TV. I think one thing that everyone should do is to plan ahead meals-wise: I try to do as much cooking in the house instead of going out. If you go to the store with a plan in mind, you can save a lot of money on food.

I’ll make a meal and have in mind what I can bring for lunch. If you can get around without a car, I’d recommend it — especially if you’re in the city, you can find a way.

How would you characterize your relationship with money: love, hate, or something in between?

I’m thinking about it more because I think any way you can plan for the future, it’s very important. Especially if you can put away money and forget about it. I’m very skeptical of what the American dream is: buying a house, buying a car, moving to the suburbs. I’ve been reading more and more about how people my age are buying fewer homes. I’m very happy renting; it allows you to be more mobile, you’re not putting too much of your assets in one basket.

What would you do if you won the lottery?
I would probably travel. Maybe give some money back to my parents, pay off their mortgage, and then travel. One of my goals in life is to see every ballpark.

Christina Wright
26, SOC/BA ’07
Indianapolis, Indiana
Assistant director of educational programs for the NCAA, PhD student at Indiana University

Do you save money every month?
It depends on what’s going on. Anywhere from 5 to 10 percent [of my salary] on the lower end.

What about retirement? Do you have a 401(k) or something similar?
I do. The NCAA has a really great plan. After six years of employment, you’re fully vested.

What do you splurge on?
Lately it’s been cruises. People have this misconception that cruises are super expensive. Between all the normal travel I do for work, between car points and hotel points, I can get a great deal. I don’t travel in peak seasons. Cruises end up being my getaway because there’s no access to email or phones.

Where do you try and skimp or save on everyday purchases?
I don’t think I have to sacrifice too much. Indianapolis’s cost of living is pretty low. Little things that I do for instance, I try to carpool often so I’m not spending as much on gas. I cook a lot, I don’t eat out a lot. I love cooking, it’s a hobby. I’m a name-brand person, but there are basic, food staple pantry items for which generic is greater value than name brand. Generic brand flour works just as well. It’s great to have Ziploc bags, but the generic brand works just the same.

How would you characterize your relationship with money: love, hate, or something in between?
When I think about money, I think mostly about my debt. It only stresses me out when I start really thinking about things like unemployment rates. More experienced people are applying for entry level jobs.

What would you do if you won the lottery?
I’d do something for each institution I’ve been to. I’d do something for the athletic program at American University. I really believe in Coach Centrowitz and what they do on the track team. I would give to Ohio University, where I was in the sports administration program. I feel I should give back to the places that helped me get to where I’m going.

I will admit that most people would buy some sort of splurge item, and probably for me it would be some sort of house on the beach or the lake. Maybe I would go on a trans-Atlantic cruise. I would also pay for my younger sisters’ educational debt.

Nicholas Terzulli
29, SPA/BA ’05
Westbury, New York
Director of business development at Nassau County Industrial Development Agency.

Do you save money every month?
My wife and I have been dating since college. We got married in December 2011. Saving has always been a priority to us because we’ve had goals in mind: to have a nice wedding, to buy a house, now to furnish the house. Both she and I aggressively save. We [try] to save $1,000 a month. We also have a rainy day account that we don’t ever want to have to touch.

What about retirement? Do you have a 401(k) or something similar?
I have a relatively new job, with a pension. I have a 401(k), but I don’t contribute to it actively.

What do you splurge on?
Going out to dinner. We usually go out in the city to nice restaurants. (Italian, sushi, steak houses, and French restaurants are our favorites.) We do a lot of traveling in the Caribbean. We’d like to do a big European trip before we have kids. But now our money is going into the house. We bought some nice furniture. I bought a huge flat-screen television. Hopefully we’ll have it completely furnished soon.

Where do you try and skimp or save on everyday purchases?
I wish there were more areas, to be honest. We take lunch every day. Before we got married, our priorities were different, we’d go out more. My wife also doesn’t buy clothes with the same frequency.
How would you characterize your relationship with money: love, hate, or something in between?

Not that I’m worried about it, but it’s always something you think about, especially now that we have the bills that we do. We try not to obsess over it.

What would you do if you won the lottery?
Buy my wife whatever she wants.

Amber Vayo
29, SPA/BS ’11
Worcester, Massachusetts
Adjunct English professor at Worcester State University

Do you save money every month?
Not really as much as I’d like. We’re trying to save up to buy a house but it’s proving difficult. Neither of us has any credit card debt. It’s a matter of student loans.

What about retirement? Do you have a 401(k) or something similar?
We do, but we’re planning on pulling out the money from it for the down payment for the house.

What do you splurge on?
Mostly going out to eat. I buy a lot of books, he buys guitars — he has 12 guitars.

Where do you try and skimp or save on everyday purchases?
Mostly we try not to buy a whole lot of things we don’t need. He cuts my hair. Women’s haircuts are way too expensive and he can draw a straight line. His family are farmers so we get a lot of produce from them.

How would you characterize your relationship with money: love, hate, or something in between?
It’s always better to have some, but I grew up really poor, so I’m used to not having any. It does stress me out a little bit. It used to keep me up at night, but at some point you just have to let it go. At least I have a place to live and food on the table, so it could be a lot worse.

What would you do if you won the lottery?
I would buy an Aston Martin DB-9. I would also set up a scholarship fund for poor kids to compensate for buying such an expensive car.

Justin Bibb
25, SPA/BA ’09
Cleveland, Ohio
Special assistant to the county executive of Cuyahoga County

Do you save money every month?
I try to save between $400 and $500 if I can, but all of my money goes toward student loans. I moved back to Cleveland from D.C. to help take care of my family. The cost of living in Cleveland is great. It’s allowed me to pay down some debts.

What about retirement? Do you have a 401(k) or something similar?
I have roughly $10,000 in it now. I had to draw that down a little bit in order to move from D.C. to Cleveland. I was making a lot of money in D.C., but I couldn’t save in D.C. The cost of living plus my student loans, it was like living paycheck to paycheck.

What do you splurge on?
Suits. Having a professional wardrobe is a costly endeavor. Traveling when I can, visiting friends. Last year we went to Vegas, year before we were in Miami. Going to bars or restaurants with friends. But I don’t splurge that much.

Where do you try and skimp or save on everyday purchases?
Not buying lunch out, limiting my Starbucks. I go to the grocery store and buy 10 for 10 microwave dinners.

How would you characterize your relationship with money: love, hate, or something in between?
I think about it all the time. I have a dream of being independently wealthy one day. I want to make sure that I leave my children with some kind of tangible assets. When I grew up, I saw my mom struggling to make ends meet. Being able to provide for my parents when they grow old also is important for me.

The idea of legacy wealth creation is critical. It drives why I work so hard. Not that I obsess about it, but it does keep me up at night.

What would you do if you won the lottery?
I would probably buy a condo somewhere either in Cleveland or  on the East Coast. I’ve always had a dream of having my own place for my own family one day.