Interview with Amanda Steinberg from DailyWorth

Published September 9, 2010

Amanda Steinberg created DailyWorth.com in 2009 as a way to give women key insights into building real net worth. In her own financial journey, she noticed that her struggles happened to be particular to women. DailyWorth strives to make complex financial concepts simple, and it stands out as the go-to source about personal finance for smart, ambitious, working women.

In addition to her involvement with DailyWorth, Amanda also runs a web consultancy called Soapbxx and contributes to ForbesWomen.com. Amanda currently lives in Philadelphia with her husband, two children, and her iPhone.

Interview Transcript

BeFrugal:Tell us what DailyWorth is all about. What motivated you to start your email newsletter?

Amanda Steinberg: So, DailyWorth is about giving women key insights into building net worth. I had started DailyWorth because money has always been important to me, earning money, saving money, having money, building my own wealth.

What really motivated me was about two or three years ago, my husband and I bought a house. And, after living in this house for about six months and seeing how the bills were piling up, I realized we bought a house that was far larger than what we could really afford. I realized that I was struggling in my life despite being a very high earner. I had been earning more than $100,000 a year since I was twenty-five, and I earned far more than that.

Despite being a high earner, I was having trouble building net worth. And so, it really set me on this journey.  There really are so many practical aspects to personal finance that no one ever taught me. So, I, in particular, became passionate about women and finance because I noticed in my own research that a lot of things that I struggled with were consistent with certain things that happened to be particular to women.

I started DailyWorth not just as my own self-help project, but also as a way to help women everywhere understand the basics of personal finance and to build net worth.

BeFrugal: Are you a one-woman show or do you have help?

Steinberg: No, I have help, fortunately.  I have amazing help. We are actually edited by MP Dunleavey. She is also a contributing editor at Money Magazine and spent six years at The New York Times writing about personal finance; she is a real pearl.

And, I also have a team on the marketing and production side of the business.

BeFrugal: On an average day, how do you mix your personal life, your own business, and your email newsletter?

Steinberg: Well, I am a mom of two, so I wake up around 6:30 every morning with my one-year-old and my four-year-old. And, I get them off to daycare. I am always at my desk at 9:00 a.m., and I actually run two businesses.

DailyWorth is the business I started a year and a half ago, and it’s growing, but doesn’t have a lot of revenue yet. I have a web agency I’ve been running for five years called Soapbxx, and that has a staff of six people, so I split my time between the two.

And then I always stop work at about 3:50 in the afternoon so that I can go get my kids, and then I spend between 4:00 p.m. and 9:00 p.m. as a mom again. Then, I generally, much to my husband’s dismay, return to work around 9 o’clock at night if I can keep my eyes open. I am in a growth phase of both of my businesses, so it’s what it has to be.

BeFrugal: Being frugal is becoming more popular with more and more people. Do you think that this new mindset is here to stay?

Steinberg: I think it’s definitely here to stay. I think people are really skeptical about the returns of the stock market given what we’ve seen in the last ten years, and just looking at the state of deflation that we are in. I think even though we’ve seen certain patterns in history in terms of returns of the market, I think people are really skeptical as to what they have in store for their future.

So, I think that we all realize that we have to be especially careful about how we are saving our money and how we are growing our money. It’s not going to be as easy to passively invest as we have before.

BeFrugal: DailyWorth.com focuses on all things such as budgeting, earning, saving, investing, and spending. What is the one area in which people can easily save more money?

Steinberg: Well I particularly focus on women, and one area where I know I’ve saved an enormous amount of money is on manicures, haircuts, hair coloring. I used to spend thousands of dollars on those types of services. And I’ve become almost entirely DIY with the exception of haircuts probably every six months.

There is a lot you can do on your own, and I look at the amount I used to spend on manicures and pedicures and I cringe. I’ve kind of set up this whole system in my home, and I am now saving thousands of dollars. Now, not everyone had that luxury at a point in their life, so that may not, you know, apply to them.

One other thing that I always encourage from a saving standpoint is to setup something called a curveball account; it’s something that I really preach that has been life-changing for me. A curveball account is a short-term spending account.

I chose ING because of the lack of fees, and what I really love is that my curveball account is really for savings at the end of the month after I’ve paid all my bills, but I still have a little bit hopefully left over in my checking account. I just kind of sweep it into my curveball account. In that way, I get it out of my checking account.

I don’t think that I have it to spend, so I am less likely to spend it. And then, it’s there when I suddenly break my iPhone or something like that.

So, that’s another savings tip that I love. Get it out of your checking account and into another savings account. Even if you intend to spend it, it’s just less likely to get spent.

BeFrugal: What is the best budgeting concept out there?

Steinberg: I am using myself as an example, but I really don’t want to be considered an expert.  For me, I think the best budgeting system out there is mint.com. I just think that the problem with budgeting and why it’s so hard for some people is because it’s really complicated and takes  so much time.

I’ve spent many years using Quicken, and you know, it’s just because the amount of categorization that a lot of us, especially those of us who have kids, just don’t have enough hours in a day to go through it all. Mint does an extraordinary job of automating it and telling you where you are going over, where you are going under, so we can focus on that.

I then also like to put things into three buckets, which we actually wrote about on DailyWorth yesterday: wants, needs, and savings. Try to get fifty percent of the things you have to spend money on into the needs category. That’s hard for a lot of people. Some people have needs up in the seventy-five percent, eighty percent category. But, I like to think of this as a NorthStar, something to aim towards.

I really think the key to budgeting is keeping this needs section down to around fifty percent. The second category is savings, try to get twenty percent of your money, of your income into retirement savings, debt repayment, short-term savings, anything that you are not going to spend, and then the other thirty percent on wants. That’s everything from cable TV, to eating out, to the clothes that you need, etcetera.

BeFrugal: Do you have any other tips to help someone start improving their financial and self-worth?

Steinberg: Yes, it’s the save one percent more per year to your retirement. The rule of thumb is save five percent towards long-term savings and five percent towards short-term savings. For a lot of people even getting up to five percent of their retirement is a big stretch, say two percent of their income can go towards retirement.

One tip that I looked at that we wrote about on DailyWorth was this incredible calculator that we found on the New York Times. Everyone gets really excited about their 401K Matching. 401K Matching actually just kind of gives you a little jump.

The thing that’s going to give you a big jump is if you, over fifteen years, increase your retirement savings by one percent every year. That way it doesn’t feel like a huge change, but it can result, if you have a twenty-year horizon before you retire, it can quadruple the amount of money you have saved by the time that you retire.

I know that if I keep doing that every year that it’s going to have a huge impact on my retirement savings.

BeFrugal: Do you have any inspiring stories of someone that really turned things around?

Steinberg: Yeah, sure. Let me think about this for a second. You know I think what’s most inspiring about me is that I am a work-in-progress, and that I’ve taken my head out of the sand. And, I think I wrote a confessional on DailyWorth.

I am actually going to start writing more confessionals; I find people appreciate that far more than me pretending like I am an expert, which I am not even though we’ve had enormous success.

I wrote a confessional, you’ll see it if you see greatest hits on the side of our website. Last November my husband and I just got slammed with unexpected bills, and things breaking, and we owed ten thousand more dollars than we had coming in. And, for a two week period, rather than deal with it, I think I went into a money coma. That had been very typical behavior for me. I always use justification: oh I am such a high earner, I’ll just go and make more money.

But, I think what’s really inspiring about me, and what’s really what DailyWorth has been for me, is taking my head out of the sand, snapping myself out of that coma, and facing reality. I think that’s where so many people fall short. You can make extraordinary change in your life and actually reach financial peace of mind simply by dealing head-on with issues. I was actually able to deal with all that ten thousand dollars and paid it off over two months with some creative accounting.

And, it really wasn’t nearly as bad as I thought it had been. If I didn’t have DailyWorth and if I hadn’t written that confessional, I mean God knows, it could have compounded.  So, I am not sure that’s the turnaround story you are looking for, but I would just like to not have my head down.

****End of Interview****

For more financial tips and advice, be sure to check out Amanda’s email newsletter DailyWorth.com.

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