From $20,000 In Debt To A Net Worth Of $100,000

This woman went from deep debt to retirement riches in a few years by teaching herself financial literacy

By Alessandra Malito

Published: Oct 5, 2019 12:21 p.m. ET

 The Brooklyn native grew up in a low-income neighborhood with a family working hard to make a living.

Within five years, Yanely Espinal has gone from $20,000 in debt to a net worth of $100,000.

Yanely Espinal knows what the power of a financial education — she came from a low-income home with two parents and nine children, and ended up with credit card and student loan debt even after receiving a full scholarship to college.

The Brooklyn native said she often saw a difference between herself and some of the wealthier students around her. She attended high school near Lincoln Center in Manhattan, where many students wore brand-name clothes and returned from holiday break with the latest gadgets.

When she went to Brown University, her friends were often going bowling or eating at Chipotle, CMG, +1.06%  activities she couldn’t afford on a regular basis.

So she opened her first credit card at 18 years old, with a $1,500 limit. “I never had that much money before,” she said. She used that credit card — and three others she opened during her college years — for textbooks and a laptop, as well as trips to the movies and restaurants.

By the time she graduated, she had nearly $20,000 in debt — $15,000 in credit card debt and $5,000 from a student loan. Her credit card interest rates were around 21%.

A $9 book called “Women and Money” by Suze Orman caught her eye one day while she was buying shampoo at Duane Reade. “That book taught me everything I wish I knew before I was 18,” she said. She spent the next few years reading up on saving and investing, and listening to podcasts and TED talks about financial topics.

 “I became obsessed with knowledge I felt I was deprived from,” she said. “It was social justice and financial empowerment, and that combination helped fuel my curiosity to learn as much as I could.” She started her own YouTube channel, MissBeHelpful, to share some of her own lessons about money as well.

After the YouTuber paid off her debts, in less than two years, she opened her first Roth IRA and then allocated whatever debt payments she used to make into savings and investing.

Three years after that, in March 2018, she had amassed just shy of $50,000. In the last 18 months, she’s doubled her net worth. Part of her inspiration was the goal to eventually have a comfortable retirement.

Espinal, now 30, is the director of educational outreach at Next Gen Personal Finance, a nonprofit organization that offers free resources and tools to educators interested in teaching personal finance.

Less than half of U.S. states have a financial literacy requirement for high-school students. Financial illiteracy is a growing problem in the U.S., especially for young adults. Less than one-third of college students (28%) could correctly answer three multiple-choice questions about interest, inflation and risk diversification, according to a 2015-2016 FINRA study, and slightly more than half (53%) could do the same.

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