Next, in our 41st Best of the Best Blogger series edition, we had the distinct pleasure of sitting down with David Weliver from Money Under 30.
David’s story begins with that ever familiar refrain of under-earning and overspending. Less than 5 years ago, he was renting a room in a house that he shared with 3 roommates. At 26 years old, he was making $32K a year and was $80,000 in debt. To top it all off, David was flat broke with no available credit and, worst yet, he didn’t have a financial plan. The stress of it all really started to take its toll on him.
But then, it happened …. His life and his financial situation pushed him to a turning point. The bottom line is that things got so bad, got so uncomfortable and were so dire for him financially that he finally mustered the courage to make a decision. That’s all it really takes when faced with a daunting challenge in life, feeling enough pain or discomfort to make a decision.
While sharing a house with your college roommates in your mid-twenties with no money and massive debt might provide ample motivation for just about anyone, let me be clear about one thing: courage is not a state of mind, it’s a decision. Being afraid of something and making a decision to do it anyway – that’s courage. Anybody (including myself) who’s stared into that deep, dark abyss of massive, overwhelming debt knows about that fear. It’s an incredibly scary place to live.
Adding an ironic, humorous twist to David’s story is the fact that, in his day job, he worked for SmartMoney Magazine, where he doled out “snarky snippets” and advice on financial management and investing. Meanwhile, back at the ranch, he was so broke and in debt that his idea of a 7 course meal was taking a deep breath outside a restaurant.
At his inflection point, he was inspired by a simple thought: Just do whatever it takes.
David’s story though doesn’t involve any sort of surreptitious money-making or get-rich quick scheme. David’s story is about doing the work, putting in the time, and doing whatever it takes to reverse a financial path that’s led you astray.
So, David did just that … he got a second part-time job at Starbucks, worked his way into several successive pay raises at his day job(s) and worked tirelessly building out MoneyUnder30.com. He paid off his $80K debt, built out a substantial “rainy day” fund, maxed out his Roth-IRA and built Money Under 30 to a readership of over 100,000 unique visitors a month. His road back has been long and hard, but when all is said and done, he’s made it back and rebuilt a foundation for an incredibly bright financial future. And he did all of that in just under 5 years.
We sat down with David recently to talk about hitting rock bottom, losing money at the blackjack tables and the effect of parenthood on your financial decisions.
Tell me about your specific inspiration in launching Money Under 30.
When I started Money Under 30, I was nearing “the bottom” of my own financial situation. I was absolutely swimming in student loan and credit card debt.
I knew exactly why I was so broke…I just behaved really stupidly for 4-5 years and spent money I didn’t have. For part of that time I had even been working at SmartMoney magazine. So I knew better, but that didn’t seem to matter.
As I resolved to change my behavior and dig out of debt, I stumbled across a few blogs, some of which were written by people working to pay off debt, too.
I also noticed that out of all the hundreds of financial websites and blogs out there, less than five of them were written specifically for my situation: 25 and ambitious, but flat broke at the moment. So I had the idea to start a blog about money for twenty-somethings…specifically graduates who want to be prosperous but need help navigating those years after college with too much debt and too little pay.
You’ve established yourself as a fairly prodigious content producer, publishing over 800+ articles of very high quality content on the site. What’s the key to producing such a steady stream of good content?
Persistence. When I launched Money Under 30, I wrote a half dozen (pretty awful) articles, got a couple links to the site, and checked my traffic every 15 minutes only to find I was getting like five readers a day. I think six months went by before I started working on the site again.
But down the road as I began to have some success growing traffic and later, revenue, I began to dream bigger and bigger. Money Under 30 is my baby, and I deeply believe in its mission: helping people get a better financial start in the life. So that mission has kept me going. Lastly, I’m a writer. I love to write and it comes easily, so that has always helped.
You’ve talked about hitting rock bottom financially and all of the things that you had to do to dig yourself out. Looking back, are there any financial decision(s) you’ve made that you particularly regret?
Hell yes! There are many. Off the top of my head, I would not have:
- Gotten more than one credit card while still in college. (My first card had a $1,500 credit limit, the two subsequent cards I got had $10,000 limits each. That’s where all the trouble started.)
- Rushed to get an apartment with my girlfriend before we could truly afford it.
- Financed a new car.
- Developed a taste for blackjack.
There are more, believe me.
What I know now is that I’m an impulsive person, and that can get me into trouble, especially with money. Even now, I sometimes pull the trigger on purchases I later regret. (Today, at least I’m not spending money I don’t have.) Some people are naturally frugal and I’m not, so I have to be careful and set up systems that protect me from myself.
You dug yourself out of a fairly deep financial hole in a relatively short amount of time. Which financial decision had the greatest impact in helping you get back to even and beyond?
To go after new sources of income.
I tried to work on my debt for years by budgeting and spending less, but it never worked. I would make progress for a couple months and then blow it just like a dieter on a binge.
I hadn’t chosen a high-paying profession, so even though I was hustling for promotions and better paying jobs, that was only going to get me so far. So I did two things: I went out and got a second job at Starbucks. And I worked harder on Money Under 30 so it started generating income. For over a year, I worked from eight until two in the morning six days a week. It absolutely sucked, but it enabled me to finally get out of debt and it laid the groundwork for my successful business.
In what ways has becoming a father transformed your financial decision-making?
I think becoming a father has lead to a number of subtle shifts in my decision making. For one, it makes me more conservative. I might have begun to work for myself sooner, but now taking into account providing for somebody else, I made sure I was extra prepared before doing so.
Being a dad also helps me picture the long term better. When we talk about investing, we talk about long time periods: 20, 30, 40 years. That’s a long time. It’s often hard to picture what life will look like that far down the road. But being a dad, now I know one thing that will be constant—my daughter. I can see how fast her first 18 months have gone, and suddenly the 17 years until she goes to college doesn’t seem as long as it once did.
Lastly, what’s your stance on the use of credit cards? Are they useful or are we just kidding ourselves when we use them?
I think credit cards are a great tool if you pay them in full every month. Anything else is a slippery slope at best.
Today, my wife and I use a cash rewards card for literally everything we buy. We pay it off every month, and it pays us back over $500 a year. You get one statement with all of your purchases, and you get extra protection from fraud that debit cards don’t offer.
That said, when I was getting out of debt, I had to get rid of my cards. I was so strapped—and impulsive—that if I had $200 of available credit on a card, I’d spend it. If you’re in debt and can’t put the cards away, then you shouldn’t have them. It took me years and more than $15,000 in finance charges to learn that.
I’d like to extend my sincere gratitude to David for sharing his story with us. Thanks so much David, it’s an incredibly inspiring story for all of us.
Now, don’t forget all us little people on your way to the top!