Debt Educated

    Recent grad and personal finance blogger Bridget Casey proves you don’t need a finance degree to know how to make smart financial decisions

    By Christie Moncrief on February 1, 2012

    Bridget Casey

    Recent grad and personal finance blogger Bridget Casey proves you don’t need a finance degree to know how to make smart financial decisions

    Bridget Casey, ’10 BSc, has an infectious, albeit rather unexpected, enthusiasm. The fashionable, bubbly, bio-chem grad is all about personal finance—budgets, loan payments, RRSPs and even stocks. In fact, she’s so passionate she started a blog called Money After Graduation (formerly hithatsmybike.com), where she shares her personal finance adventures in paying off her student debt while navigating the profusion of spending temptations in her path.

    “Not everyone is going to be a business major or an investment banker. Some are going to be like me, where they got their science degree, but they still have to face all these financial concerns like student loans and saving for retirement,” says Casey. “Money is a universal issue, whereas the career in money is only for some people.”

    Although Casey’s financial wisdom is self-taught, Money Sense magazine recently acknowledged her as an up-and-comer cutting her teeth in personal finance. “Being recognized by a national magazine was reassuring,” Casey says. “It made me feel a lot more confident about the way I handle my money.”

    Now a recruitment and student liaison specialist in the U of A’s Faculty of Engineering, Casey explains she wasn’t always so wise with her finances. “I didn’t care at all about money until my second year of University,” she says. “I had none and all my credit cards were maxed out. Once I realized that you don’t have to live maxed out, I started to take the actions to keep money in the bank and make smarter financial decisions.”

    Thanks to a side-job as a chemistry tutor, a little willpower and some personal finance research she was able to pay off $10,000 in consumer debt while still in school. Although many of her 20-something counterparts continue to max out credit cards on designer handbags and expensive cars, Casey now regularly contributes to a tax-free savings account, invests in stocks, and has already put nearly $1,300 against her student loan before the beginning of her official repayment—all just two years after graduation.

    Casey hopes to inspire readers of her blog—especially fellow young graduates—learn to be more money-savvy. “I hope it will motivate others. If people see me saving for retirement now, maybe they’ll start thinking about that, too. If they see that I’ve built up and used an emergency fund to cover my butt when I’m in trouble, they’ll say ‘hey, that’s a really good idea.’”

    Here, Casey shares more about what she’s learned about money after graduation.

    What’s the most shocking financial reality for a young grad?

    What their student loan debt really is. When you’re borrowing it you don’t think about it as your money; you just think, “Oh, this pays my tuition” and you’re done and you go out for some beers. But then you graduate and it is your money, and suddenly it’s a lot of money. Pay as much as you can to your student loans. If you have the money, just start paying.

    How do you strategize student loan repayment so it’s not so daunting?

    Look at it in monthly increments and focus on meeting that goal every month. You can also get creative with your debt repayment. For example, I can take $1,000 of my [income] tax refund and use that to knock down my debt; maybe start tutoring again for extra money; or use some birthday money to fill in the gaps. Once you realize how much “found” money there is in your life, it helps to make that loan repayment a little less daunting.

    calculate your spending

    What’s the biggest financial mistake people make after they graduate from university and get their first full-time job?

    I think when you go from a student income of $600 to $800 per month working part-time to a full time salary, you feel rich instantly. You think you can go shopping and you get credit cards with higher limits, and it’s really easy to dig yourself into a deeper hole. There’s no rush; you don’t have to have it all on the first paycheque.

    You’re a big advocate for saving in a tax-free savings account [TFSA]—what are the benefits?

    The tax-free savings account is the best thing; any [interest] it earns, you’re not taxed on. You can contribute up to $5,000 a year, and it carries forward each year; if you have zero in there now, you could contribute up to $20,000 this year [because it started four years ago]. You can buy income-generating assets within the TFSA—mutual funds and stocks—and you won’t be taxed on any of the money you make on those investments. You can withdraw money from a TFSA at any time without penalty, unlike an RRSP where you have to withdraw for a home purchase or retirement and you’re taxed for it.

    What are some simple ways to start investing?

    I was really nervous when I first started investing because it can seem very intimidating. I started with a simple savings account, and it was exciting to see, you know, four dollars interest accumulate after a while. Then I started to buy GICs, then invested in mutual funds, and now I’ve started investing in stocks online with Questrade, which is really easy to set up and really straightforward. It’s only $4.95 per trade as opposed to about $30 at the major banks. I buy stocks in companies that I know and understand—big name companies that have been around for ages, like Johnson & Johnson, Apple, Procter & Gamble. I know what those companies are and I know what they do, so I feel safe buying their shares.

    save your pennies

    How can people become motivated to save for retirement when they’re years away from it?

    An easy way to understand the importance of why you should save early is just to find an online retirement calculator and you can put in your age and how much money you’re starting with, your expected age of retirement, and it will tell you how much money you’ll have at that time. And for comparison, if you input an older age you’ll be able to see how much further ahead you’d be financially by starting retirement savings early. It could be the difference between having $300,000 at retirement to having $1 million. That was my motivation.

    What other resources should people seek out for financial advice?

    The personal finance blogging community offers a lot of different strategies, and I also follow some experts like Dave Ramsey [author of Total Money Makeover] or Gail Vaz-Oxlade [of the TV series Til Debt Do Us Part] and see what they have to say as well. Gail advocates a totally debt-free lifestyle—no credit cards, no loans, and paying off your mortgage as fast as possible. Another hero of mine is Lesley Scorgie, [’05 BCom] who wrote those wonderful books Rich by Thirty and Rich by Forty, which really helped me implement a wealth-building strategy. [Editor’s Note: watch for Bridget’s interview with Lesley in the Spring edition of New Trail magazine, coming to your mailbox this May.]

    What do you hope people learn from reading your blog?

    Being wealthy isn’t about securing a super high-paying job; you can build wealth at almost any income level as long as you’re spending less than you’re making. If everyone lived within their means and saved for long-term goals, they would live a really happy, really wealthy life. I think people should get excited about getting rich, because I’m excited.