For today’s Money Snapshot, we’re talking salary, net worth, debt, and more with reader Midwest Solo, who works as an attorney in solo practice in Michigan. She noted, “Our financial goal is to be as free as possible, so we are rapidly paying down debt and building up our retirements. We want to live simply and non-traditionally. “
We got a few requests from readers to launch our own “money diary” series, so we’ve asked willing readers to fill out a form with lots of details about debt, spending, saving, and more! If you’d like to fill out the form and be considered for a future personal money snapshot, please click here to submit your response! You can see a PDF of the questions if you want to review them ahead of time. See others in the Personal Money Snapshot series here.
Please remember that this is is a real person who has feelings and isn’t gaining anything from this, unlike your usual friendly (soul-deadened, thick-skinned, cold-hearted, money-grubbing) blogger — so please be kind with any comments. Thank you! — Kat
Name: Midwest Solo
Location: Grand Rapids, MI
Occupation: Attorney — solo practice
Household income: $210,000
Family members: Husband, 35; three kids (8, 6, 4)
Net worth when started working: At age 28 (after working before law school and taking time off after with my young children), negative net worth due to student loans
Living situation: Own home
Childcare costs: Three children — $950/month for preschool/daycare for youngest only
What does your debt picture look like?
We currently owe on our mortgage only ($210,000). We hope to be debt-free within three years. We use credit cards but pay them off every month.
How much money are you spending each month to pay down debt?
How did you pay for school?
I received a 50% scholarship to a lower-ranked law school. I was married so I didn’t take out cost-of-living expenses. I knew I didn’t want to practice in Biglaw, so I went to a regional school with the scholarship even though I was accepted into more elite schools.
Home debt: Share your theories and strategies with us.
We took advantage of the extremely low rates in 2020 and refinanced our mortgage to a 15-year at 3.5%. Our mortgage payment is only $1,900/month (gotta love the Midwest LCOL!), but we hope to pay off our house before then. We’ve always made at least one additional payment a year. We rented when we lived in the D.C. area for years, so we did not buy a home until we were 30, and had no equity to show for our many years of renting.
Have you paid off any major debt?
Paid all $130,000 of my student loans (all while having three children!) in 3.5 years.
We asked Midwest Solo about how she paid off those student loans, and she shared this:
The first few years I was working were difficult. My children were 3, 2, and 0. I wasn’t making a large salary here in the Midwest, and we employed a nanny for our three young children. We would have months where we didn’t curb our spending (because let’s face it, with children that young you are just surviving, so you do things out of convenience), but both my partner and I wanted to be financially free as possible, and we knew with debt we couldn’t be. So we kept at it, even when we deviated from the plan the next month we’d try again.
Savings, Investments & Retirement
How much do you save for retirement?
We try to max out our Roth IRAs and in general put 15% of our pay toward retirement. After we pay off our mortgage, the goal is to catch up and increase my retirement. I am way behind my husband since I did not contribute to my retirement when I went to law school, and then stayed home with my kiddos.
How much money do you allocate to other tax-savvy investments/accounts?
Max out FSAs ($5,000/year) and HSA ($3,000/year). Starting this year we will be putting $10,000/year into each of our children’s 529s.
How much do you save outside of retirement accounts?
We have six months of living expenses in immediately accessible savings accounts ($40,000 in savings) and for now are paying off debt rather than increasing savings. Future savings will probably be in investment accounts.
Talk to us about investments.
Investment baby over here! We use a financial advisor who manages ours in mutual funds and we try to not really touch it. Our retirement assets are divided half into tax-deferred accounts and the other half in Roth accounts.
Do you have an end goal for saving or are you just saving for a rainy day?
We had a goal for six months of living expenses in case either of us lost our jobs.
When did you start saving seriously? How has your savings strategy changed over the years?
Probably not until 2019. I had a (surprise!) baby as a third-year law student and that changed our entire plan. For several years thereafter, we always had an emergency savings of a few thousand, but nothing more.
What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
We live way under our means by aggressively trimming our monthly expenses. We could easily afford to live in much nicer neighborhood or send our kids to private school. I primarily grocery shop at Aldi (thank you, Instacart)! We put off major purchases until we had reached our savings goal, despite the fact that I loathed how ugly our home was. We don’t have nice furniture and didn’t go on any fancy vacations.
We asked Midwest Solo if she had any advice for living more frugally, and she shared this:
Ruthlessly cut out money expenses. Y’all, we cut out Amazon Prime because it was too easy to just order whatever we needed without being more thoughtful about it.
Your partner HAS to be on board. If you are single, find someone who can hold you accountable. Schedule monthly check-ins. I only did this because my husband was committed to it. My advice is when you “mess up” by not following the budget, start anew the following month.
Do you have an estate plan in place? A trust? What lesson did you learn going through the process?
Absolutely! We have a joint revocable trust that provides for our children and protects them from liquidating the accounts until they reach 25. The money from life insurance ($2,000,000 if we both pass) will pay for our children’s college.
How much do you have in cash that’s available today?
How much do you have in cash that’s available in a week?
How much is in your “emergency fund,” and did you include it in the previous question?
$40,000, included in the previous question. Checking, savings, and money market accounts — two different institutions.
How much do you have in retirement savings?
$30,000 (shockingly low!!); husband has $175,000
If property values (home, car) are included in your net worth, how much are those worth?
Two cars, $45,000; home, $105,000 in equity
How much do you spend on the following categories on a monthly basis?
Restaurants, bars, takeout, and delivery: Pre-COVID, $500; COVID, $250
Clothing and accessories: $250 (much less during COVID)
Rent/living expenses: $2,100
Kid-related expenses: $1,200 (includes $900/mo. for childcare)
Other major expenses: Tithing/giving, $1,000
Health care – premiums and other costs: $500 monthly premiums (paid for through husband’s work); probably spend $3,000 yearly and use HSA funds. We’ve been blessed without a lot of health issues.
What’s your spending range for these things? What’s your average?
Vacations – Range: $2,000–$6,000
Vacations – Average: $4,000
Charity – Range of donations: $100–$1,000
Charity – Average donation or giving amount: $500
Individual items of clothing – Range: $30–$250
Individual items of clothing – Average: $75
Apartment or house – Range: $1,800–$2,500
Apartment or house – Current main residence: $1,900 mortgage only
Car or other other vehicle – Range: $200–$750
Car or other vehicle – Current main vehicle: $250/month (insurance, maintenance, and gas) — purchase $30,000 certified used SUV
How much did your home cost?
When was your wedding, how much did it cost (total), and how much did YOU pay?
We had a low-key wedding that cost maybe $15,000. We paid for it entirely ourselves, as young professionals only 22 and 23 (!). We both come from poverty, and we were young, so there wasn’t a lot of expectation for an impressive wedding.
Tell us about your wedding!
August outdoor backyard wedding. I am so glad I was married before Pinterest was a thing. We’re laid-back people and just wanted out guests to have a fun time. They did!
Are there any large expenses in your life?
Other than our mortgage, no! Twice a year, a vacation. The large discretionary expense is giving to our local church or causes we support, such as nonprofits.
At any point in your life to date, has inheritance played a role in your money situation?
No, and we don’t expect to really get anything from our parents or relatives.
How has your family provided financial support in your adult life, if any? (Or, do you provide support to them?)
As stated above, neither of our families are really in a position to help us out. Much of my husband’s family live in cyclical poverty, so we have to toe the line between bailing them out (especially for the sake of their children) and encouraging independence and wise choices. We occasionally help them out as needed.
Does your family provide any non-financial support?
It was humbling, but after law school I lived with my parents while my husband worked overseas with the federal government (a place family members could not join). A few years later, my parents lived with us while they were in between houses.
Do you have a general money strategy?
Pay off debt, invest in retirement, and give generously with our time and money!
Time vs. money — do you spend money to save time (e.g., cleaning service)? Do you donate your time instead of money? What else does this phrase mean to you?
Even as a business owner, I only work about 25 hours a week (yes, you read that right) so that I can have time to be more engaged with my kids. I’m purposely foregoing making more money so that I can be a present mother, wife, friend, sister, and daughter. When I was an associate at a law firm with three young children, I had no time for any relationships. I was miserable. I’d much rather live simply and forego the luxuries like nicer clothing or a housecleaning service.
We asked Midwest Solo for her tips for readers interested in solo practice:
Oh man, this answer could be an entire post. As a mother, I can’t praise the flexible schedule enough, particularly after we had lockdowns due to the pandemic and I found myself homeschooling my children.
The running a business aspect is more difficult than the practice of law because there are so many decisions. My main advice is you learn what works for you based on trial and error. Five attorneys will answer five. The flexibility is amazing, but also, all of the deadlines and work fall on your shoulders.
What advice would you give your younger self about personal finance?
The hard work to become financially free from the burden of debt is worth it!
Midwest Solo’s final thoughts:
My goal with sharing my finances is to provide a radical alternative to the high-paying jobs that are usually posted here. I think there are a lot of professionals with a similar financial picture to me and my husband. We are very middle class. We are trying to have reasonable monthly expenses and have a very simple financial plan. More money, more problems, as they say.
Both my husband and I could make more money, but for us more income does not contribute to a better quality of life. We rarely work evenings or weekends, and we are so much happier! Our kids are happier!
I left my firm job to hang out my own shingle last year when my middle child started kindergarten. I do not pay for after-school care, so I am home every day by 3:45 to get the kids off the bus. I can never get these years with my kids back, but when they are older I can always work more. Work will always be there.
It’s a privilege to make what we do ($200,000 in the Midwest) and have the time and flexibility we do. We want to be giving people and would rather give to people who need it through charitable giving and volunteering our time than provide our children with a more upper middle class lifestyle (e.g., private school, lake house, etc.).
My husband is actively involved in two nonprofits and I am actively involved with our children ages 4, 6, and 8.
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