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For today’s Personal Money Snapshot, we’re talking salary, net worth, debt, and more with reader N, who lives in a HCOL area and works as an analyst for the federal government. She noted, “My #1 goal right now is to have a fully-funded six-month emergency fund, and I am very close to reaching it..”
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
Location: HCOL area
Occupation: Analyst with the federal government
Net worth: With student loans, -$42,000
Net worth when started working: I technically started working when I was 16, but when I started working in my post-grad career, I was 26. My net worth then was -$70,000.
Living situation: Renting studio apartment; living separately from partner
What does your debt picture look like?
$81,000 in student loans, no credit card debt
I have student loans from going to a private school for graduate school. I am enrolled in the PSLF, as I work for the government, so my strategy is to pay as little as possible monthly, save the rest, and make it to forgiveness.
How much money are you spending each month to pay down debt?
I am not spending anything to pay down my debt right now, thanks to the COVID pause on student loan payments, as I am enrolled in PSLF. I will start paying $500 when payments start up again.
How did you pay for school?
My parents generously paid for my undergraduate degree at a state school. I paid for my graduate degree and living expenses through a combination of savings, student loans, work-study, and a combination of paid internships and part-time jobs while in school. At one point I was working over 40 hours a week while going to school full time, which put me in the hospital from stress. I quit one of my jobs and lived off my savings a bit more.
Do you own or rent? How much do you pay monthly?
I rent a studio and pay $1,350.
Have you paid off any major debt?
I paid off $6,000 of credit card debt incurred while I was in graduate school and when I was looking for a job post-graduation! That was my priority as it had the highest interest rate and I was still in my grace period for student loans.
Savings, Investments & Retirement
How much do you save each month or year in retirement vehicles like 401Ks, Roth IRAs, and others?
I save $315 per month for retirement: $270 in my 403b and $45 in my Roth IRA. My employer matches $270 in my 403b. I really want to increase my contributions to my Roth and plan to when I hit a financial goal this year.
How much money do you allocate to other tax-savvy investments/accounts like HSAs, 529s, FSAs, and others?
$75 a month goes into an HSA through work.
How much do you save outside of retirement accounts?
I save $1,065 a month, including the payment I would normally make to student loans that I am not now because of the COVID pause. These are split up into several categories: emergency fund, long-term savings, short-term savings, and a sinking fund. I do it manually whenever I get my paycheck, mostly because I get my paychecks on a different day of the month each month, so automatic transfers wouldn’t really work for me, but I never skip them.
Talk to us about investments. Do you have a financial adviser or planner?
I would like to go to a financial advisor one day! I have a diversified 403b that I decided on through discussing with a relative who works in investments whose advice I trust. I also invest $25/month through Betterment to get a sense of how it works. My Roth is in a life cycle fund.
Do you have an end goal for saving or are you just saving for a rainy day?
My #1 goal right now is to have a fully-funded six-month emergency fund, and I am very close to reaching it. After that I plan to up my retirement contributions a bit and direct more of my savings to the general short-term/long-term accounts. My short-term savings goals are for travel, a car, a dog, and a wedding. My long-term goals are for a house down payment and a baby. While my partner and I don’t live together, we have similar goals.
When did you start saving seriously? How has your savings strategy changed over the years?
I started savings seriously when I started my first post-grad job, which I started three months before COVID hit. While I was lucky to keep my job and work remotely throughout, I realized how precarious my living circumstances were and wanted a six-month emergency fund straightaway, as that’s how long it took me to land my job after graduating. My strategy has remained pretty stable throughout the years, although I’ve been able to save a lot more without monthly student loan payments, of course.
What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
I keep a very close eye on my spending and always look for a free thing to do for entertainment. If I’m going to spend money it’s going to be for something worth it, like a girls’ trip for a milestone birthday or a much-needed new laptop. I don’t have a TV/cable, don’t own a car, walk most places if safety permits, and cook at home 95% of the time.
How much do you have in cash that’s available today?
$500 in actual cash, and $1,400 available immediately online
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?
$15,000. I keep most of it in an online bank account I can access almost immediately, with $500–$1000 of it available immediately online. It is included in the previous question.
How much do you have in retirement savings?
How much do you have in long-term investments and savings (CDs, index funds, stocks) that are not behind a retirement wall?
$5,000 ($3,000 is from an inheritance)
How much do you spend on the following categories on a monthly basis?
Restaurants, bars, takeout, and delivery: $50–$75
Clothing and accessories: I don’t buy clothes every month, but possibly $150 a season or when needed.
Transportation: Work pays for my metro commute and I put away $40/month for transportation that I don’t always spend, for my personal metro and Ubers.
Rent/living expenses: $1,350 rent
Entertainment: I don’t buy books; I go to the library constantly. I have a fun budget of $110/month that includes entertainment, dining out, etc.
Other major expenses: All my friends are getting married and my partner and I are saving up for a wedding! I’ve been a bridesmaid three times in the past year, and going to be a bridesmaid again this year and have two other weddings on the calendar. I put aside $50 a month for “wedding season” expenses for weddings I’m invited to/in, but it is so expensive! I use my office gym for free but occasionally spend $20 on a ballet class as I love the workout.
Health care – premiums and other costs: I have a HDHP so pay $83/month in premiums, plus a few dollars for dental and vision. (I have glasses and poor eyesight!) I am lucky to be pretty healthy and wanted to take advantage of having an HSA.
What’s your spending range for these things? What’s your average?
Vacations – Range: I’ve only taken one self-financed vacation since I started working, and it cost $1,500 total for a week in Europe at peak season. I don’t go on a vacation like that often! I often go to the beach for a long weekend with my girlfriends or partner and spend maybe $500.
Charity – Average donation or giving amount: $25/month to the local food bank
Individual items of clothing – Average: I try not to buy anything full price, but I had to buy some suits for a new job that cost $200 total (top and bottom!). I try not to spend more than $30 for a shirt or $50 for a pair of pants, although I can be persuaded if its good quality and an item I really need.
Apartment or house – Current main residence: $1,350, utilities included
Fill in the blank on this question: I could save _____ if I stopped ______, but I don’t because _______.
I could save $25 a month if I stopped streaming subscriptions, but I don’t because I don’t have any other method of entertainment without a TV! I could save $100/month if I didn’t go to my friends’ weddings, but I don’t because my friends are reasonable in their wedding expectations and I love them.
At any point in your life to date, has inheritance played a role in your money situation?
My godfather died suddenly when I was an infant and left me investments that came up to $25,000 by the time I was in college. My grandfather handled them and let me use $5,000 of it when I studied abroad so I could travel like my godfather enjoyed doing, which I will never forget. I used $15,000 of that inheritance to supplement my part-time jobs when I was in grad school to pay for my living expenses, and the rest is still sitting in my investment account.
How has your family provided financial support in your adult life, if any? (Or, do you provide support to them?)
My parents generously paid for my undergraduate education and living expenses. I lived at home for a year while working full time before grad school to save up to my move to a HCOL city. When I was looking for work, I knew I always had a place to go back to, and they would sneak me money when they visited, but I didn’t like asking them for anything as I wanted to make it on my own.
I’m on the family phone plan and just recently started paying my part of the plan, even though mostly that is because we all forgot about it once I graduated.
Do you have a general money strategy?
My money strategy is to separate my savings goals in buckets/different accounts and be as disciplined as I can while still enjoying the life I live right now. I could probably save more money if I never went out, never saw my long-distance friends, or [never] bought new clothes, but I believe life is for living, and as long as I am hitting my savings goals I intend to give myself some breathing room in my budget so I don’t go crazy.
What advice would you give your younger self about personal finance?
To think of saving money as giving your future self the gift of options.
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