A beginner’s guide to personal finance with Common’s VP of Finance
When it comes to managing money, all of us need a little help. Especially as rents and cost of living continue to rise in major cities, we could all be smarter with our personal finances. Common’s VP of Finance Jess Kaplan is here to share her tips on getting started.
Meet Common’s VP of Finance Jess Kaplan:
Hi, I’m Jess, and I am the VP of Finance at Common. I graduated from Lehigh University with a BS in Accounting and am a certified public accountant. After graduating, I started out at Deloitte & Touche, auditing both public and private companies, before moving into in-house finance roles at Tory Burch, Rent the Runway, Baked by Melissa, Intermix (Gap Inc. Company), and now, Common. I’ve mainly been responsible for building out the finance function of these businesses, such as implementing an annual budget process.
How do you get started with budgeting and personal finance?
The best place to start is to put together a list of your income and estimated monthly expenses (rent, commuting, groceries, etc.), so you have a good idea of what you are netting every month and have the opportunity to start setting savings goals. There are a lot of great apps and tools to help you manage a personal budget, like Mint.com. You can even connect all of your bank and credit card accounts, as well as all monthly bills, so your finances are conveniently stored in one central location.
What’s the smartest thing to do when you’re just starting out on building your financial freedom?
Don’t outlive your means. While it’s important to have a good time, go out, and enjoy life, there’s definitely a balance to maintain. At this point in your life, you should be attempting to lower your debt by paying off student loans, not incurring more debt by racking up credit card bills.
Best practices to avoid credit card debt?
Easy: don’t spend money that you don’t have. You should be able to pay off your credit card bill, in full, every month. The interest that credit card companies will charge on outstanding balances is outrageous and a complete waste of money. My advice would be to avoid credit card debt at all costs!
When should you start considering retirement funds, and what is a 401(k)?
As soon as possible if this is offered by your employer! A 401(k) is an employer-sponsored retirement savings plan that allows you to invest a portion of your paycheck (up to $19,000) before taxes are taken out. Taxes aren’t paid on these funds until the money is ultimately withdrawn, at which point, you will likely be retired and in a much lower tax bracket. Investing in a 401(k) is the smartest way to put away pre-tax dollars for your future, especially if your employer offers a matching program.
What’s one financial tip that has helped you the most personally?
What type of long-term financial goals should you set, and how?
The best way to set financial goals is to work backward. Think about when you want to retire and what kind of lifestyle you want to maintain in order to determine how much you will need to have saved at the time of retirement. You can then work toward this goal by putting aside money every year and assuming some rate of return on your annual investment.
Any last tips, tricks, or comments on personal finance?
1. If you receive an annual bonus or other lump sum payment, be sure to put away at least half in savings. Don’t go out and blow through everything at once.
2. When you set up direct deposit for payroll, have a portion of your paycheck go directly into savings so you won’t be tempted to spend. Most payroll systems will allow you to direct funds into multiple accounts, so reach out to your HR department if you’re having trouble.
3. Lastly, save by coliving! Living at Common can save you hundreds of dollars per month, since furniture, WiFi, laundry, household essentials, professional cleanings, and utilities are all included in your rent. Plus, we don’t require broker fees, you can pay your security deposit in increments, and there’s only one collective application fee. Our fully furnished homes are located in all major US cities, so you can start saving on housing and living costs today, wherever you are. Take a free tour today.
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