Money coach has a few thoughts about living in expensive Seattle

Seattle is expensive. That's no secret. But to many people, the concept of money and how to manage it feels like a big secret. That's a perception that Suzanne Klenk aims to change.

“I’m an impulse spender, which is rough for a financial coach, but I’m in therapy, so it’s OK," Klenk told Seattle Now.

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Klenk is a financial coach and educator* who works at the Washington State Employees Credit Union, a nonprofit open to anyone living or working in the state. She offered Seattle Now a few money management pointers, drawn from common conversations she has with people (read more about that below).

“I think the number one misconception about money is that everybody else has it and you don’t, or that people around you are handling their money differently than you are and are therefore more successful," she said. "I think that comes from social media [and] the way we are raised. We are not raised to talk about money. We know more about Snooki’s boyfriend from the East Coast than we do about our own finances.”

Still, it's difficult to live in a region like the Seattle area and not have money on the mind, from housing costs, to food prices, and other aspects of affordability. The region has recently grappled with high inflation that exceeds the national average. In fact, over the past four years, average Seattle-area inflation has only dipped below the national average twice and the gap has widened in the past two years.

Affordability and housing now rank among the top concerns for Seattle residents, according to a recent poll from the Seattle Metro Chamber of Commerce. A total of 63% of people in the poll said they are concerned about their personal financial situation, and a quarter were concerned about affordability in general.

“If you’re in the lower middle class, which is right around $100,000 to $110,000 a year ... in Seattle, those folks are spending maybe 30-40% [on housing costs]," Klenk said. "But if you’re the guy working at Starbucks or you’re a student and working part time, you’re spending 50%, sometimes 60%, of your income on housing. That’s where you have to make other choices for your food, and transportation, clothing.”

Money management pointers for expensive Seattle (and everywhere else)

Klenk says folks have to get creative and "get out of the box that society has put housing into," when it comes to money and living in the expensive Seattle area. Klenk has a few guidelines she always recommends to her clients.

• Name every dollar
• Make a spending plan every month
• Get out of debt first
• Then think about savings

Name every dollar

One of the first things Klenk tells people is that, despite talking heads throwing around concepts (like saving a certain amount of money, or paying a percentage of income on housing), you need to start with your personal situation and understand your own emotions around money.

“I believe that you look at yourself as an individual just like you do with anything else," Klenk said. "Not everybody looks good in those tiny little straight jeans and some of us had to do something else. Who you are and your finances are the same way."

What are your priorities? This is relative to each individual. One person may value living in a certain neighborhood. Another person is a foodie and wants to eat out often. And another person just wants to go hiking every weekend. It all comes down to priorities, and naming your money based on those priorities.

"And you can find out what your priorities are very easily by just tracking your spending for two weeks," Klenk said. "If you’re spending a lot of money going out with your friends, that social aspect is incredibly important to you for one reason or another. That’s not bad, that’s just your personality. If you want to change that, the only way you can do that is recognize it … you have to tell your money what to do and you have to name it."

If you have "extra" left over in your spending plan, Klenk encourages clients to name that money each month and put it toward specific expenses, like an upcoming trip or a retirement account.

“If you’re just starting a job, if you’re a young professional, if you don’t have a Roth IRA, I just gave you the ticket to paradise. If you have other money, name it Roth for a little while. Put that money in there," she said. "You can change its name anytime and it does something different for you."

After you "name it," then you can "get creative."

Spending plan should be done every month

Spend your money on paper prior to it coming into your possession. Then plan around that to meet the goals you've set based on your priorities.

This could mean getting creative with reducing other expenses. Klenk cites living with roommates, eating cheaper food, using public transportation or walking more. Instead of going out, have friends over for pizza and then eat leftovers for breakfast, for example.

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"They aren’t sacrifices, because you are making the choice to be here, and you want to live here, and you want to create a life here. What that is going to take is for you to be creative to get to the place where you are able to afford different things," Klenk said. "It’s about choosing the life you want to have and sometimes living a little bit differently now so that you can get to the life you want to have.”

Debt is your ball and chain

Klenk said it's a good idea to pay of debt first, then focus on savings.

"If you’ve got debt, I tell people don’t worry about savings, because every time you pay off debt, it's a tax-free raise," she said. "Debt is your ball and chain."

What about savings?

You ever hear someone say that a person should have six months of a salary saved up in an account? Klenk has heard that, too.

“I think that’s a fantastic goal and if you can get there, right on," she said. "I’m telling you that most Americans don’t have that."

Klenk says, for starters, try to have about $500 or $1,000 in a savings account. So when you suddenly need new car tires or to pay an unexpectedly high bill, you're covered.

"If you don’t have that right now, the average person can get that within two months. You can sell a few things, not go out for coffee," she said. "That’s an attainable goal for most people, even on a part time job somewhere."

“Once your debt is paid off, I tell people, whatever you can put away every single month, and not take out at the end of the month, that is a good savings goal to start with. For some people, that’s five bucks a pay period, and some people it’s $100 a pay period. You get to choose because it’s your life."

Personally, Klenk does her banking at WSECU, where she works. But she also has a savings account with a different credit union. She has set up automatic withdrawals to that account so it's like she never had the money in the first place — out of sight, out of mind.

Listen to Seattle Now's full conversation with financial coach and educator Suzanne Klenk here.

* A financial coach and educator is different than a financial advisor, who focuses on investments. Suzanne Klenk encourages people to speak with advisors at their financial institution for that service.

KUOW's Dyer Oxley contributed to this report.