This story is part of CNBC Make It's Millennial Money series, which profiles people across the U.S. and details how they earn, spend and give away their money.
Fallon Schwurack tried to quit dancing. She went to college and earned a degree in biology. She worked in a lab for a few years and had plans to go back to school to become a medical examiner. But then a friend asked her to dance in a show as a favor.
She accepted — and fell back in love with with dancing.
Schwurack first learned to dance when she was just three years old and, after graduating from high school in Salt Lake City, she spent a year dancing professionally for a local ballet company. After getting pulled back onstage, she started going to auditions and landing parts in local performances around Salt Lake. Realizing she wanted to pursue dance full-time, she abandoned her plan to go back to school.
So, in 2016, one day before her 30th birthday, Schwurack moved to New York City to try and dance professionally. She works as a restaurant server to make ends meet.
Now 32, she's still building her career but, she says, she's able to live "very, very comfortably" on what she makes, and "getting to be able to dance every day is one of the best feelings I've ever had."
Although dance is Schwurack's passion, she acknowledges that "it's really hard, actually being a dancer in New York City."
For one thing, the competition is fierce: "When I go to an audition, open calls usually have around 300 girls there at least."
And when Schwurack does land a job, it's both short-term and means taking a pay cut. "You live the poor actor life unless you have certain side jobs that make the money because a lot of the contracts aren't very lasting," she says.
"Even if you get on Broadway they can last for a month or two, maybe up to six months. There's a few shows that are running for years, but things change and you might leave a show even if it doesn't close."
Most of Schwurack's contracts have lasted around two months and paid between $350 and $500 per week. Because she's a non-equity dancer, her rates are lower. Equity dancers earn closer to $900 per week or more, she says.
When she's not dancing, Schwurack works at the restaurant Tony's Di Napoli, where she earns around $60,000 a year.
In a typical week, she takes home about $1,100 between her wages and tips, though that number can fluctuate. "It's really a gamble when you're a server on how much you'll make," she says.
Although she normally brings in between $250 and $300 a night, she has earned up to $800 on particularly busy days. The holiday season is especially lucrative: Schwurack can make anywhere from $10,000 to $12,000 in December alone, she says.
Schwurack doesn't want to work at a restaurant forever, but for now she's grateful for the position. "Dance is my true passion in life, but serving pays the bills and it gets me to where I need to be," she says.
And, despite the competition and low pay, she says moving to the city to try to be a dancer was the right choice. "New York City is a great place to be," she says. "It has many more opportunities. If I can be on Broadway, it would be fantastic. But if not, I am very happy working with the regional theaters and being able to get out there and just act, sing and dance."
Here's a breakdown of everything Schwurack spends in a typical month.
Click to enlarge
Schwurack splits a three-bedroom apartment in upper Manhattan with two roommates.
"One of our roommates pays more because she has a master bedroom and bath included, and then me and my other roommate pay the same amount because we [each] have one bedroom and we share our bathroom," she explains.
Schwurack's serving job allows her to keep her grocery bill low because she gets to eat for free during her shifts. "I think one of the biggest savings for me is working at the restaurant," she says. "I probably save about $300 a month on food."
Schwurack purchases an unlimited monthly Metrocard for $121, which grants her limitless access to New York's subway and bus systems. She tries to take the subway as much as possible to get around and only splurges on cabs a few times a month.
Two of Schwurack's biggest monthly expenses are her dancing and singing lessons, on which she spends around $250 and $220 a month, respectively.
Although the classes can be costly, for Schwurack, they're a worthwhile investment in her career. However, it took time for her to feel OK about putting so much money toward them.
"Now that I'm completely debt-free and really trying to build up my savings account, I am trying to allow myself to spend more money on dance classes," she says.
Food, litter and treats for her 12-year-old cat, Cece, cost Schwurack around $30 a month. But Cece is worth the expense. "I've had her since she was a kitten so we've gone through a lot of life together," Schwurack says.
Schwurack's biggest regular splurge is her Starbucks habit, which costs her around $100 a month.
She also spends around $30 on crafts, including cross stitch kits and painting supplies, and she budgets $300 for miscellaneous entertainment, such as meals or drinks out with friends.
Schwurack attended a state college in Utah that only cost around $8,000, total, for all four years. She held jobs throughout school and was able to pay her tuition off as she went. Currently, she doesn't have any credit card debt, either.
But she wasn't always in the black. "I moved to New York with debt," she says. But "then I was able to make enough money to completely pay off all of my debt."
While she was still living in Utah, an unexpected illness saddled Schwurack with about $6,000 in medical debt. So during her first busy holiday season at the restaurant, she put all of her extra tips toward paying that down.
After ringing in the new year, "I said I didn't want any more debt, so I just paid it all off," she explains. "Then I only had maybe $1,000 in my checking account, but at least I had no more debt."
Now, she keeps $5,000 in checking and another $10,000 in savings. To prevent herself from racking up debt again, she says, she barely uses credit cards.
Schwurack doesn't put a set amount into savings each month. Instead, she transfers whatever is left over at the end of the month, typically between $150 and $200.
She also tries to put away a portion of every paycheck to cover taxes. "My mom does hair, so she works for herself. She knows paying taxes can be hard," she explains. "She always taught me and my sister to try to put away money for taxes, especially if our job isn't paying our taxes for us."
The restaurant does take taxes out of Schwurack's hourly wage. Still, she usually ends up owing even more at the end of the year because she brings in so much in tips. "My checks are mostly zero because my hourly wage goes toward my taxes," she says. "But I end up owing on my taxes because my hourly wage doesn't cover enough."
Schwurack says that she wants to get better at managing her money and start saving for retirement. In order to know where she can afford to make changes to her budget, Capalad says, Schwurack first needs to figure out exactly what she spends money on each month.
She should not only keep track of where each dollar goes but how she feels about each expense, Capalad adds: "See if there's anything that she spent money on where she's like, 'Whoa, how did that happen?' and see if that's happening regularly, because that's what you can cut."
If Schwurack decides that wants to save more, she should determine which of her expenses make her happiest and which she can live without. She might find that she could spend less on entertainment each month or that she gets the same pleasure from her daily coffee even if she makes it at home.
Once Schwurack figures out how much she's able to save each month, she can go ahead and automate that payment so she doesn't even have to think about it. Not only will it ensure that she regularly puts money away, but it could help relieve some stress.
"That's something that I think might bring her some peace of mind, just to know, 'Okay, cool, I'm actively putting away $200 or $150,'" Capalad says.
Capalad shrugs off Schwurack's caffeine habit. "I don't think that it's a problem at all," Capalad says. "If it makes her day to go to Starbucks on a regular basis and she spends $100 on coffee every month, I wouldn't tell her to stop doing it."
Since Schwurack is able to buy coffee while also putting money into savings and staying debt-free, there's no immediate reason she needs to cut that expense.
"If it's something that brings her joy, it's something that's part of what she wants to have in her life and part of her lifestyle, it's not a huge amount, it's not breaking the bank and it's not preventing her saving without causing her to go into debt, I say do it," Capalad says.
Schwurack wants to begin saving for the future but isn't sure where to start. That's OK. Capalad recommends setting up an IRA, either a traditional or a Roth.
For millennials earning less than $100,000, Capalad typically recommends a Roth because, with a Roth, you're paying taxes on the money now. "It usually makes sense if you're younger to consider doing a Roth IRA, because of the tax-free growth," she says. "So by the time you're 60 or 65, you'll have had 30-plus years for the money to grow and it's all tax-free."
Here's how she explains the difference: With a traditional IRA, you get the tax deduction when you put the money in. Say you contribute $1,000: "All the money grows in the account and when you take the money out, you have to pay taxes on it. So if that $1,000 grows to $10,000, you have to pay taxes on the $10,000."
Roth IRAs work in the opposite way. If you put $1,000 in, you'll pay taxes on that money now, but not later. "So if that $1,000 grows to $10,000, when you're ready to take it out, you can take out that $10,000, tax-free," Capalad says.
However, Schwurack should still do her own research and decide which option makes the most sense for her situation.
As far as where to find cash to contribute, Capalad says Schwurack is in a good place with her liquid savings and could probably use some of that money to start a retirement account. Based on Schwurack's current expenses, she has a little over three months' worth of living expenses put away, which is right in line with the three-to-six months savings cushion recommended by many experts.
"She may want to take $1,000 from her savings account or her checking account and seed her retirement account with it," Capalad says, adding, "She's at the point where she can divert her savings into a retirement account."
That means that, unless Schwurack wants to have closer to six months' worth of expenses in savings or has other financial goals she'll need cash for in the next few years, she can safely start putting the $150 or so she saves each month into an IRA instead. As Capalad puts it, that's "an exciting place to be."
Additionally, once Schwurack sets up an IRA, she should make sure she actually allocates funds to invest her money in and lists a beneficiary for the account.
While it's great that Schwurack already has so much in liquid savings, she can take it a step further by moving the money into a high-yield savings account, such as the ones offered by online banks like Ally.
"It's a great way to earn money on your money without having to take the risk [on the stock market]," Capalad says. "It's a regular savings account, it's been insured by the FDIC — but they're able to to pay more interest because it's all online so they don't have to maintain a bank. They're able to pass on those savings in the form of interest rates."
Many high-yield savings accounts are currently offering rates of 2 percent or more. In 2018, these accounts even outperformed the stock market.
When Schwurack was 18 and got her first credit card, she racked up a balance and had to have her mom bail her out, she says. Since then, Schwurack has chosen to be more careful about how she uses credit and only puts major purchases on her card.
Capalad applauds her for figuring out a system that works for her.
"I think it's great that she pays off her credit cards every month and in general tries not to use them," she says. "It sounds like she learned her lesson the hard way when she first got one. The fact that she's been able to pay down her debt and maintain not having credit card debt is great."
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