If You're Confused About Money, Pattie Ehsaei Has THE Best Financial Advice
If you're on TikTok, you might have come across Pattie Ehsaei, aka, The Duchess of Decorum, on your For You page.
With over 460k followers and counting, she doles out some great financial advice in a fun and compelling manner, and we can't get enough! We were lucky enough to chat with Pattie herself all about money and finances, and the importance of saving from a young age. So whether you're a teenager, in college or a post-grad, we think you'll definitely benefit from what she has to say. Keep scrolling for our full interview with The Duchess of Decorum, Pattie Ehsaei!
Sweety High: Tell us a bit about yourself and your background!
Pattie Ehsaei: Hi, I'm Pattie Ehsaei! I am a content creator and SVP of mergers and acquisitions financing. I am an immigrant who migrated from Iran during the Iranian revolution at the age of 7. I come from an underserved background and had to overcome not speaking English, dyslexia and ADHD. Despite these obstacles, I went on to graduate from law school, passed the bar in two states (Illinois and California), became a criminal prosecutor and eventually transitioned to financial services. I worked my butt off to achieve financial independence and made every possible mistake along the way. I always tell my audience, "I made the mistakes so you don't have to."
SH: Is it true you won't understand the value of money until you make it on your own?
PE: Absolutely. Unfortunately, this is human nature. We don't appreciate the value of things we receive easily, and when you don't have to work for something, you have no concept of what it takes to obtain it. It's only when we actually have to put in the hard work it takes to make money that we understand what our parents always told us—"money doesn't grow on trees."
SH: What financial advice would you give to young men and women?
PE: Start being financially responsible as early as possible. This means putting together a budget, saving money and having financial goals to work toward. It's the best thing you can do for your future self.
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SH: What should we know about saving money? Any advice?
PE: Saving money is the most important factor in being financially responsible and reaching your financial goals. You should put 20% of your income toward your savings. You want to save money not only to reach your consumer goals, like owning a home, but saving is also very important because you should have money for unexpected occurrences or emergencies. At a minimum, you should have three to six months of living expenses saved for a rainy day.
SH: What is "credit"? How do we build good credit?
PE: Credit is just a fancy way of saying how much money financial institutions are willing to lend to you, most commonly in the form of a credit card. A financial institution, based on your income, ability to pay, and past credit history will determine how much they are willing to lend you. This loan is not free however, and they will charge you a fee, typically a percentage on the unpaid balance called "interest rate." That institution then sets a limit on how much you can spend with the credit card or loan, sets the minimum dollars you have to pay on what you owe, and when it has to be paid. When you're extended "credit," you will be given a credit score, which ranges anywhere from 300 to 850. This score tells creditors how likely you are to pay their loan back. Where you fall on that scale is determined by a variety of factors; most importantly how much balances you carry on your credit cards (the higher the balances, the lower your score), and if you make the monthly payments on time. If you don't pay the minimum payments on time or don't pay at all, the financial institution reports you to the credit agencies and those reports substantially decrease your credit score. The benefit of having a high credit score is that it provides you with buying power because financial institutions are willing to lend you more money for the items you want to purchase. It also provides you with better terms on the credit extended, so you pay lower interest rates and thus, keep money in your pocket.
@duchessofdecorumIf you want to be a #richbitch, stop spending money on frivolous items! #financetok #moneytok #personalfinance♬ original sound – Pattie Ehsaei
SH: What's the difference between cash, a debit card and a credit card?
PE: Cash is simple, it's dollars in your pocket. The benefit of cash is that you can only spend as much as you have and cannot get into debt. A debit card is a card provided by your bank which directly deducts money from your checking account when you use it for purchases. You may also use this card to receive cash from ATM machines. The benefit of debit cards is essentially the same as cash, as you can only spend what you have and will not get into debt. A credit card is a card issued by a financial institution that provides you with a loan, or credit amount, to spend on purchases. They charge a fee, called "interest rate," for the amount you don't pay back at the end of the month or end of the billing cycle. If not used responsibly, you can get into a lot of trouble with credit cards because you can spend beyond your means and accumulate debt that you may not be able to pay back.
SH: What is budgeting? How do we do it?
PE: Budgeting is determining how much you can spend based on your income to meet your financial goals. You should follow the 50/30/20 rule. 50% of your income (after taxes) should go toward your "needs" or essential living expenses like rent, car payments, insurance, groceries and household bills. 30% of your income (after taxes) should go toward your "wants" or what I call, your "play money." 20% should go toward your savings. I always recommend utilizing the budgeting tools available online, such as YNAB (You Need A Budget) or www.personalcapital.com to learn how to budget money, track your spending and reach your financial goals. If you do nothing else, keeping track of your spending is the first step to budgeting. I recommend starting by writing down and keeping track of every penny you spend on a daily basis. Then, review these items every week to see where you're throwing your money away and stop buying those items. When you have to write things down, you think twice about spending your money because you become conscious of your spending. You'd be surprised how much this will help you in saving money.
@duchessofdecorumWhen is the right time to move out of your parents house? Short answer: when you're financially ready! ##moneytok ##jobtok ##finances ##movingout♬ Neon Bass – Tangelene Bolton
SH: Is there an age where we should start worrying about money and finances?
PE: Yes, as soon as you start earning an income, which is typically in your early 20s. People think you don't have to worry about being financially responsible until later in life, but that is a huge mistake. By your mid 30s, you have already lost about 15 years of potential savings and investing, and those dollars you could have saved or invested would have compounded to a large sum of money that cannot be replaced. However, it's never too late to start on a financial plan and if you start later in life, you can be more aggressive in your saving and still meet your financial goals.
SH: Is there anything else young people should know about money and finances?
PE: I can't stress this enough: it's never too early to start. The earlier you start to budget and save, the faster you will reach your financial goals. Also, do not fall into the "credit card trap" and accumulate debt. When you're young, you're not as savvy around money because you don't have the experience or know-how to be financially responsible, and credit card companies know this. They will extend credit to you, even though you haven't demonstrated the ability to pay it back, because they know you will most likely spend beyond your means. When you spend beyond your means, you carry a balance and they make money on those balances. They're getting rich because you weren't experienced enough to budget properly. If you're under the age of 30, carry only one credit card and only use it for purchases that you are able to pay back at the end of the month. If you cannot pay it back at the end of the month, do not buy it, unless it's a true emergency.
@duchessofdecorumVisit the link in my bio for 1-on-1 mentoring! ##mentorcam ##duchessofdecorum ##pattieehsaei ##mentoring ##careeradvice ##jobadvice♬ Blue Blood – Heinz Kiessling & Various Artists
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