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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
Age: 34
Occupation: Attorney — solo practice
Income: $100,000
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
Debt
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?
$4,000
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?
$40,000
How much do you have in cash that’s available in a week?
$80,000
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
Spending
How much do you spend on the following categories on a monthly basis?
Groceries: $850
Restaurants, bars, takeout, and delivery: Pre-COVID, $500; COVID, $250
Clothing and accessories: $250 (much less during COVID)
Transportation: $1,200
Rent/living expenses: $2,100
Entertainment: $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?
$239,000
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.
Money Strategy
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 are your favorite resources for personal finance?
I like Dave Ramsey and Rachel Cruze, although part of me hates admitting that.
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.
Icons via Stencil.
Anon
Tell us more about hanging out your own shingle. What type of law do you practice? What do you do to get/keep clients? How much overhead do you have for business expenses? Do you have any staff members or do you do all of your own admin/billing?
OP
I practice primarily in probate work (estate planning, estate and trust administration, some estate litigation). I share office space with 6 other attorneys and we share a receptionist. I am looking to hire an assistant as my practice grows, but I currently handle admin and billing. My overhead in the first 2 years has been fairly high due to start-up expenses, and its about 20% of my income.
Anon in Dallas
I wish you were in Texas. My mom ran my father’s 5-7 attorney office before their divorce and she moved on into other accounting jobs. She is retiring from her Director position in April and she is looking for a part-time role and her ideal would be the AP, AR and operations of a small law firm.
OP
She sounds like a dream to hire, too – experienced! I hope she finds just the right fit!
Anon
Sounds like a job that could be done remotely!
Anon
I do the accounting for a solo lawyer in the same bailiwick as you. She has a couple of office rooms at an executive suite building and does her own billing. She sometimes has an assistant, sometimes not. I do her payroll and business taxes as well as special projects, like annual accountings and estates. The biggest thing to worry about is staying on top of reconciling your IOLTA. She and I are in two different states, and it works out okay. Remote log-in, PDF back and forth, etc.
OP
Love this. You’re totally right about the IOLTA. I use quickbooks and a CPA, and definitely need to consider hiring someone for large accountings (bless you for undertaking them).
JB
I’m very impressed with your financial goals. I would strongly encourage you to take advantage of the low interest rate on your mortgage and just keep paying the standard monthly payments rather than accelerating being debt free. Instead use that extra monthly cash to invest in the stock market and think about more of your overall net worth. You are in effect debt free because you could pay off your mortgage, but have put that money to better use. Compounding gains are real, so the earlier you start, the more time you have for your investments to grow. Plus over time the monthly mortgage payments will “feel like” less as inflation increases salaries.
OP
JB – I appreciate this advice. I’d rather do this but I have to persuade my other half. I am thinking we will do some sort of hybrid (pay more than minimum payments but not be in a rush to pay it off), because I do know we have more to gain from the market.
Cat
This diarist felt a little… proactively defensive to me? Lots of women decide to step back and work part-time (essentially what the OP is doing by limiting her workload to 25 hours per week) when they have young kids, and cut family expenses accordingly! That’s not the self-stated reader base for the blog but pretty sure all of us know “overachieving chicks” that have either gone full-on SAHM or part time. And the self-proclaimed “middle class” description seems a little odd given the HHI of over $200K?
I’d be curious to see how the husband’s job affects OP’s ability to do this (like I presume his employer offers reasonable health insurance). I’m also interested at the family dynamics behind the last line – husband is “actively involved” with nonprofits while wife is “actively involved” with the children?
Anon for this
Yeah, it’s a little odd to call her situation “middle class” and then say that the “upper middle class” is sending their kids off to private school and have lake houses. Not to bring up this discussion of terminology again, but I think most “upper middle class” people in MCOL/HCOL areas are also doing 1 mortgage+public schools.
Anonymous
I wouldn’t say it read as defensive so much as deeply insecure.
Anonish
Y’all seem like you are being unnecessarily mean. I don’t really see my lifestyle reflected in OP’s, just as she doesn’t see hers reflected in some of the other conversations around here. But I didn’t feel the need to dunk on her. A lot of the comments around here…. SMH.
Friday
+1. Money is deeply emotional. I really don’t like all the hate around here for those of us who have made it out of poverty to the middle class or upper middle class or whatever you want to call it. You will never understand what I have been through and why I make the decisions I do. Please don’t throw shade. You have no idea what I’ve seen.
Anon
What is middle class or not is something that is determined by objective facts, so I do think the people who roll in here with multi-six figure salaries and claim to be just middle class deserve some side eye.
Sara
+100!
OP
OP here. Yes – my husband’s job is a huge reason why the transition was easier because it does offer reasonable health insurance benefits for our family of 5. The last line was an attempt to explain that this lifestyle allows us more spare time to invest in people. When I worked at a firm as an associate, I was less involved with the children. Because I am home more, I am more involved in my husband in that I spend more time with them and handle all of the school communications, medical/dental appointments, etc.
I did mention that we are “privileged,” even though I also mentioned we both come from poverty (neither of our parents have a nest egg for retirement or any sort of financial independence). It sure doesn’t feel like our financial situation is “upper-middle class” which is why I identified as “middle class,” but I suppose it is semantics.
Anonish
no need to explain yourself, OP–Anon For This and Cat were being hateful. Congrats on your accomplishments–they aren’t anything to sneeze at!
quail
No, those of us who are working moms appreciate this explanation as to how the OP has decided to allocate her time. I applaud OP’s decision – it seems like she’s doing very well financially with only working 25/hrs per week, and understands that her family is probably in the top 1% or at least 5% of income earners in Grand Rapids (I have family in a similar Michigan city). OP’s family has far lower childcare expenses than she did when she worked for the firm, likely at the expense of her earning potential (but maybe not, depending on how her solo practice grows). Work may always be there, but if I cut back to part time now as a litigator, I would be cutting off my earning potential in the future. Maybe I will make that choice some day.
But it does rub me the wrong way when fellow moms say “my kids are only young once” and “I can never get these years with my kids back” as a justification for stepping back. My kids are also only young once – what does that say about me, who works twice as many hours and loves it (for the most part)? Am I also not actively involved with my children? There’s a value judgment there, and it isn’t necessary to the financial part of the picture which is the point of this series. And it doesn’t seem her husband has made the same choice – his investment in people is outside the home while hers is inside, along traditional gender norms. That works for some people, but it makes me itchy, especially when it’s described in a way that makes it seem like it’s not replicating traditional gender norms when it really is.
But overall, OP, your story is amazing and I hope your law practice and home life flourish.
OP
Thank you for this comment! I appreciate your perspective, and you’re right that it IS a value judgment–but only reflects my values– zero assumptions about others. I loved my children just as much when I worked full-time. For me, it was too much on my plate and I was a cranky, anxious, insomniac mom. My mental health was declining. If working traditional hours gives you life, I fully support that! We need more women in C-Suites.
My husband’s current job offers him little flexibility. If he gets a different gig with more flexibility, we’ve discussed him working less in the future and me working more because we’d be completely comfortable if the roles were reversed.
Anon
You must live a very sheltered life if you think those comments were hateful.
Anon
calling someone defensive or deeply insecure IS hateful. Sorry not sorry.
Anon
You are earning $200k in the Midwest in your 30s. Give it ten years and you will understand why you are upper middle class.
Anon
https://www.pewresearch.org/fact-tank/2020/07/23/are-you-in-the-american-middle-class/
“Based on your household income and the number of people in your household, YOU are in the UPPER income tier”
T
As someone who also paid off six figures of student loans with a nonstop diet of Dave Ramsey, I recognized this mentality instantly. She’s on Babystep 4/5/6 – pay off mortgage early, then max out investments. It’s very cult-like. Nothing will change her mind re: interest rates. (I have thankfully diverged in my personal finance consumption over the years.)
OP
Hi T – OP here. I wouldn’t say “nothing will change my mind” regarding the order of Ramsey’s steps 4-6. We primarily follow the advice of our financial advisor. We try to pivot when life calls for it, and no one knows what the future holds. I’m very familiar with Dave Ramsey, but definitely not a die-hard fan.
T
Ok! That’s nice to hear:)
Anon
Do you have any recommendations for personal finance reading/consumption? Ramsey is not my cup of tea…
Anon
Blogs: frugalwoods, mrmoneymustache, ESI, White Coat Investor are great places to start
OP
If you don’t like Ramsey’s personality, you could also try his daughter, Rachel Cruze. I wish I had better recommendations but I don’t reach much about finance. Definitely going to check out this other commenter’s suggestions.
Anonymous
paula pant! her podcast is “afford anything” and she has a blog. i also like jill schlesinger, and joe saul-sehy who are both former CFPs with podcasts.
Anon
Thank you for sharing! I always enjoy reading these money posts. As a mom of 2 young kids, I definitely understand where you are coming from with respect to wanting to be active with your children’s lives!
OP
Thank you! And hats off to you with the two littles, it can be quite a challenging season!
Anon
People who are going to submit money diaries should have to use one of those online calculators from the NYT or Pew before they claim to be middle class. Really anybody commenting here claiming that should do that first.
Booties
Well done.
I also see your Ramsey influence and am really impressed with your dedication and life goals. While it may be true that slowing down paying off your house and investing instead might be a good idea, just running the numbers, but honestly…. past performance doesn’t predict future returns, especially in the midst of this crazy poor economy/COVID/out of step market, and the peace of mind from paying off your house can’t be beat. You are on the right road, so don’t stress the small stuff. You have already maximized your savings in so many other ways.
Again – well done. Don’t forget to enjoy your life with your family, and hope that you and your husband will eventually be able to pull back a little and have a few more adventures. I learned the hard way that sometimes you never get that early retirement of travel and luxury you worked so hard for (my parents died/disabled young), so don’t forget to live for today too.
I hope you plan a wonderful family trip etc… to celebrate when your house is paid off!!!
OP
Thank you for your kind words :D you’re completely right that with finances, its wise to
balance between short and long-term. I love that fancy vacation idea – will for sure have to do that!
JW500
More details please on how you are able to net $100,000 in a legal practice working only 25/hours week in the Midwest? What kind of legal work do you do and how are you paid (by clients, contingency out of settlement, etc.)
OP
I practice in trusts and estates. After years of working in a firm, I built up a solid referral network with financial advisors I know and former clients will refer me their friends and family, so I’ve been very fortunate to have a steady stream of clients without a lot of extra leg work.
Maria
I fully understand the tendency to place herself as middle class. I too came from a poverty level background. After years of work, saving and (some smart, some lucky) my spouse and I approach retirement with a $3m net worth. I feel middle class, fly coach, and shop off-brands. The calculators might say wealthy but if that’s not how you grew up, it’s hard to see yourself that way.