We get it—managing your finances isn’t exactly a cake walk. Building a budget, learning about all the options for your money, and thinking about retirement can be difficult, complex, and frankly, not all that fun.
And that’s exactly what Alexa von Tobel wanted to change. After realizing that her Harvard education and trading experience at Morgan Stanley hadn’t taught her a lot about her own finances, she started looking for money resources and financial advice that spoke her own language.
But she couldn’t find much. So in 2009, she founded LearnVest, a platform of tools, support, and expert advice to help women gain control of their finances. Whether you’re about to graduate from college or you’re making six figures, there’s something for you—from bootcamps to help you save and custom budget-planning software to articles on the money issues you’re facing and easy access to financial experts.
The core idea of the site is that you should have a plan for how you save, spend, and earn money. Read on for an inspiring interview with Alexa on how to take control of your finances, today.
What’s the mission of LearnVest?
Basically, financially planning should not be a luxury, because money affects every day of our lives. I just finally said, it’s absolutely just vital for people to get access to financial experts to be able to help make better decisions for their lives.
We really believe that there should be a company out there that’s on your side when it comes to making financial decisions—that’s not attached to a bank of any kind. Plain and simple, it’s the best advice for you. You pay a flat fee for a financial plan, and we’re going to give you the absolute best things you should do for you.
LearnVest is relatively new—why didn’t anyone do this before?
I just honestly couldn’t believe that this was such an underserved market. I just gave a TED talk on how this is such a huge problem in America. We make 6-10 money decisions each day, but personal finance isn’t taught in high schools, colleges, or grad schools across the United States. For better or for worse, money affects us every day for the rest of our lives, and it’s just really, really critical that there’s something out there.
In your TED talk, you talked about “Jessica,” a new college grad making a small salary in an expensive city, and the money mistakes she makes. Any advice for the Jessicas out there?
The whole point was, these aren’t mistakes that are really obvious—it’s really these tiny mistakes that add up, that catch you off guard, that make you think, “Wow, I didn’t realize that that would have such big ramifications on my future.” That was my point with the Jessica example—she made five seemingly small mistakes, and just kept making them.
For people in Jessica’s position who don’t know how to get out of it, I promise you that, with a five-year financial plan, you can. Let me give you an example. We had a customer who was in more than $12,000 of credit card debt, which is not that uncommon here in America. One of the things we told her is, while it’s not going to happen overnight, what we’re going to do is come up with a really detailed plan, and that plan is going to give you the control you need.
We helped her figure out how she was going to pay down her debt in the next 18 months, and after that, were going to help her build an emergency savings account. She’s not out of debt yet, but she’s says, “I can finally sleep better because I know what I’m doing, I know which way I’m swimming.”
I think there’s always something you can do, you just need a game plan to get there. It’s just like managing your career—if you're a teacher, you’re not going to be a principal tomorrow. You need a plan.
What are the biggest money challenges facing young women?
One of the things that’s really hard with money is that you really do have five or six priorities pulling you in different directions. You have your emergency savings account that you need to fill to nine months of your life. You then have paying down your credit card debt. You have paying down your student loans. And you also have to contribute to your retirement. And you also have short-term investment goals—like having a kid or buying a house.
Those are five things that are pulling you in all very specific directions. At the same time, every day you’re being pulled into: I want to buy a dress! I want to go to dinner! I want to go on a trip! And really quickly, it becomes really unclear what to do with your dollars. That’s actually the most common question we get: Where does my next $X go? All those priorities provide a lot of anxiety for a lot of us, because we’re not quite sure if we’re allocating dollars to the right place at the right time.
So, what’s the answer?
So that’s what a financial plan does, and that’s why it’s so powerful. It can actually really lower your anxiety, because we can give you a game plan to get everything organized and straightened out. We can still help you live your dreams, but maybe that means, instead of buying a home that’s a million dollars, it’s going to be $600,000. There are a lot of these trade-offs, but ultimately we can give you the freedom that you want to have and give you a plan to get there.
What’s the best money advice you’ve ever received?
I think the biggest thing that has empowered me and changed my life is to not be afraid of my money. To know that you can learn the basics and you can really feel in control. I’ve learned so much about money—I literally know everything I need to know to build my own financial plan and really be in charge of my life. And the empowerment that that brings me, from being comfortable with knowing that I’m equipped to make these decisions, is the biggest relief I’ve ever had.
You talk a lot about spending and saving, but you also talk about earning what you’re worth. Any negotiation tips for our readers?
When you negotiate your salary, it’s important to bring everything that you’ve done and accomplished to the table—to say, “these are all the things I’ve accomplished this year, and therefore I’m going to ask for X, Y, and Z.” What that does is really bring your best food forward, and it also shows your value.
I think some of the worst advice is to ask for a raise without being able to prove your value to the company. Asking for a raise just because a year has passed—that doesn’t work. It’s really important to try to think like an owner, try to put yourself in your boss’ shoes, try to think about the things he or she is trying to achieve and how you can add more value.
What’s next for LearnVest?
I want LearnVest to be the Weight Watchers for personal finance—to be as large and as accessible as possible to help millions of women across the country get a financial plan and get in control. It’s not that different from losing weight—they always say the two hardest things to lose are extra weight and credit card debt. It’s just the same thing. There’s no quick fixes to your money, and it’s about commitment.
We want to build a business that really makes financial planning not a luxury, and I really want to impact as many people positively here in America as I possible can. And I’m not going to stop until we do.
For more in this series, check out: Personal Finance Week