bSmart Guide

Become Financially Fearless with LearnVest Founder Alexa Von Tobel

Founder and CEO of LearnVest.com and New York Times bestselling author of Financially Fearless, Alexa von Tobel wants to make your financial planning affordable, accessible, and even delightful. With a background in trading at Morgan Stanley and Head of Business Development for Drop.io, Alexa enrolled and then took a formal leave from Harvard Business School in 2008 to use her financial expertise to launch LearnVest after the financial crash.  Changing the way people feel about money, she has been honored as one of Fortune's Most Powerful Women Entrepreneurs in 2012, selected as a 2011 Young Global Leader by the World Economic Forum, included in Vanity Fair’s 2011 New Establishment, as well as Fortune’s 40 Under 40, Inc. Magazine’s 30 Under 30, and Business Insider’s Silicon Alley 100.  Find out how you can (finally) stick to your budget, pay off your student loan debt, start investing in your future, and be smart creating your financial plan with LearnVest.

Click here to get started and connect with a LearnVest Financial Planner.

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I founded LearnVest as a way for people to have access to unbiased financial advice.

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The F Word

Why is money management important for millennial women?

A recent study showed that 41% of millennials feel chronically stressed about their finances.  But, financial planning is an issue that impacts the entire country – not just millennial women.  64% of people say that money is a significant source of stress, which can impact our health, our families, and our overall wellbeing.

On top of that, we're facing greater financial issues than ever before – student loan debt in this country is over $1 trillion, and almost 29% of Americans over age 55 do not have any retirement savings, just to name a few challenges.

It’s critical that nearly everyone, including millennial women, take the time to put together a financial plan and work towards building a solid financial foundation.

What is the biggest challenge to creating and sticking to a budget?

As founder and CEO of LearnVest, I’ve come to learn that just because people know they need to use a budget and spend within their means, it doesn’t mean they will actually stick to it.  That’s why we worked hard to incorporate behavior change fundamentals into our financial planning software and service.  One trick we came up with to help people stick to their budget is the one-number strategy.  This budgeting framework accounts for fixed costs, financial goals, non-monthly expenses (which easily throws off typical budgets!) and a flexible spending amount.  This ‘safe to spend’ number is the only thing you need to remember on a day-to-day basis, which makes it easy to incorporate.

41% of millennials feel chronically stressed about their finances.

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How and when should millennials pay off their student loan debt?

When it comes to paying off student loans, the first step is to get organized.  Make sure you know exactly how many loans you have and what their total is (you can look them up at nslds.ed.gov).  We recommend paying off your private loans first (if you have them), and then sorting your federal loans from highest interest rate to lowest, to prioritize paying off the ones with higher rates first.

As far as consolidating your loans, there could be benefits and drawbacks to doing so, so you need to consider your individual situation to determine if it makes sense.

How does our credit card debt affect our credit score and why is this important?

Your credit score is a number between 300 and 850 that helps lenders determine how likely you will be to pay back a loan or credit card balance.  A number of different factors go into determining your score (like, your credit card utilization, percent of on-time payments, total number of account, etc.) but having a ‘good’ or ‘excellent’ score can save you thousands over your lifetime since it helps lenders set your interest rate.

If you’re making late payments on your credit card (or failing to make payments) this can directly impact your credit score and could cause it to drop.  On top of this possibly making it harder or more costly to borrow in the future, credit card debt typically comes with a high interest rate.

What are the biggest mistakes women make regarding their salary?

As much progress as women continue to make in the workplace, we still earn 78 cents for every dollar men earn.  Of course, there are a ton of theories about why this exists – everything from gender bias in the workplace to women lacking proper negotiation confidence.  But the truth is that salary negotiation skills are something that almost everyone, not just women, should focus on.  A recent study found that workers who negotiated even small salary bumps every few years earned an extra $1 million over the course of their careers.

Having a ‘good’ or ‘excellent’ credit score can save you thousands over your lifetime.

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When and how much should millennial women be saving each year?

Most people know that saving is a critical component of any solid financial plan, but what they might not be certain about is how much to save each month in order to be on track.  Of course, this amount varies from person to person, but ideally, you would be able to contribute the maximum amount to your retirement account each year (for 2016, that’s $18,000 in a 401(k)).  In addition to putting funds away towards a retirement account, you may also want to make sure you have emergency savings on hand (ideally at least six month’s worth of take-home pay) and you might be trying to save for various goals, like a future home or a vacation.

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LearnVest Planners help clients map out their entire financial lives.

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Financially Fearless

How can LearnVest change our attitude and mindset toward money management?

I founded LearnVest as a way for people around the country to have access to unbiased financial advice, which is also affordable and consumable.  We are dedicated to making it delightful to engage with your money and change your financial behavior.  The idea of dealing with your financial life should not induce stress and nightmares – it should be something that everyone feels equipped to handle easily since, at the end of the day, a strong financial plan is just math; it’s solvable.  At LearnVest, we’ve developed a program that pairs up individuals and households with a dedicated Planner to put together a plan and enact change together.

Can you explain the LearnVest 50/20/30 Program?

The LearnVest 50/20/30 principle of budgeting is a helpful way to think about how to portion off your expenses, and it’s one of our favorite financial planning tools.  According to this philosophy, 50% of your monthly budget should be portioned off for essentials like your home and groceries, 30% should be used for all lifestyle expenses, and 20% should go towards your future.

20% of your monthly budget should go towards your future.

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What are three questions we should ask our financial planner?

If you’ve never spoken to someone about your financial life before, you might be uncertain about where or how to start.  That’s why at LearnVest, we make it easy and convenient for you to talk about your money.  Our Planners are all working to help individuals and households get organized and tackle their individual goals.  We collect all of the necessary information through our unique software, and you also work with your Planner on the phone and via email to ensure that we are covering everything we need to.

At LearnVest, your Planner will know exactly how to get you started, but if you’re looking for three basic questions to ask, I recommend asking what the goals are, what the timeline is for reaching these goals, and how your planner will help you stay on track.

How can bSmart members be smart when investing?

Investing is one of the most reliable ways to grow your money over time, as the markets have tended to grow over the long term (though, throughout that period there will be highs and lows).  Conversely, if you keep your extra cash in a savings account, it may not have access to the same amount of growth (if there is growth at all), and you may not be able to counter the impact of inflation.

Once you have a solid financial foundation (which in our mind includes having an emergency fund and zero credit card debt), investing is something that we believe everyone should consider.  That said, I recommend investing within your retirement account (and maxing it out) before investing elsewhere.

LearnVest Planners help clients map out their entire financial lives, including how much to invest in the market and how to determine the strategy.  We also provide a ton of reading and resources online for you to accomplish your financial goals. 

If you’ve never spoken to someone about your financial life before, you might be uncertain about where to start.

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LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney, or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed, linked to, or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services, or policies. LearnVest, Inc. is wholly owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company.

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Investing is one of the most reliable ways to grow your money over time.

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Spotlight on Alexa Von Tobel

Neighborhood: Greenwich Village, NYC

Occupation: Founder + CEO of LearnVest

Cocktail of Choice: Margaritas!

Travel Destination: South of France

De-Stress Technique: Hanging out with my husband and daughter, Toby

Latest Gadget: Apple Watch

 

Photos of Alexa von Tobel by Claire Esparros of Homepolish

 

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