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For today’s Money Snapshot, we’re talking salary, net worth, debt, and more with reader V in the Washington, D.C., suburbs, who works as a lawyer at a publicly traded company. She noted, “My husband worked in Biglaw for six years; that allowed us to pay off our school debt and save a down payment. We didn’t buy our first house until we were 32.”
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: V
Location: MCOL; D.C./DMV suburbs
Age: 37
Occupation: Lawyer at a publicly traded company
Income: $167,000 + 15% bonus + $66,000 in rental income
Family: Husband, 36, government lawyer (former Biglaw attorney) and two kids
Household income: $409,000
Household worth: $1.5 million
Net worth when started working: Age 25, negative $300,000 in student loans for husband and I
Living situation: Own home; $3,000/month mortgage
Debt
What does your debt picture look like?
Just mortgages. I pay $3,000/month for the mortgage on my primary residence. I have a second mortgage on a rental property [$4,500, including taxes] — the renters cover it.
How much money are you spending each month to pay down debt?
The interest on our mortgages is low, so I pay the minimum.
How did you pay for school?
That sweet Biglaw $$$ and scholarships — I worked through college and law school and so did my husband. I went to a public school with a full scholarship and graduated early.
Home debt: Share your theories and strategies with us (including any that lead you to rent rather than own).
We have a 30-year 2.75% mortgage on our primary residence. When we moved to the D.C. area from San Francisco, everything felt so much more affordable. I was very focused in spending less than $700,000. We prioritized living in a downtown area and that means our home is small and old. I love it so much — but I wish we would have splurged to fit our life 10 years out (and more kids!).
Have you paid off any major debt?
Yes! We paid off about $300,000 in law school debt (+ husband's private college). We lived on my smaller salary and threw my husbands entire Biglaw salary plus bonuses towards our debt. I snowballed the smaller loans for some feel-good wins.
Have you ever done anything noteworthy to avoid or lessen debt?
Just living very frugally when we made a lot of money in the first five years we worked and were DINKs.
Savings, Investments & Retirement
How much do you save each month or year in retirement vehicles like 401Ks, Roth IRAs, and others?
We max out our 401ks; with employer matches this is $4,000–5,000k/month.
How much money do you allocate to other tax-savvy investments/accounts like HSAs, 529s, FSAs, and others?
$400/month to 529, we do a dependent care account, and maybe $1,000/year to a FSA.
How much do you save outside of retirement accounts?
Automatic transfers — $1,000/month to a Vanguard brokerage for me, $200 for each kid.
Talk to us about investments: Do you have/use a financial adviser or planner?
I don’t believe in financial advisors typically. I use the Bogleheads method! More recently, I did opt into Vanguard's advisors (they have a fiduciary duty and are pretty low cost).
Do you have an end goal for saving or are you just saving for a rainy day?
I want to have a comfortable retirement where I’m free to splurge and be generous to my family members (vacations on me!).
When did you start saving seriously? How has your savings strategy changed over the years?
I have always been a saver. When I graduated law school I committed to paying off our debt and setting up a system that would get us ahead. I read Ramit Sethi’s book I Will Teach You to Be Rich [affiliate link] in 2010, and his system of automating finances and prioritizing spending what was important to to me as an individual resonated with me. Twelve years later my approach isn’t that different and I’m amazed how much consistency and time can accomplish.
What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
I’m naturally a frugal person (and so is my husband), but I’m more interested in increasing my earning potential vs. cutting back.
Have you ever made a big money move or investment with savings in mind, such as rolling over an older IRA into a Roth IRA or superfunding a 529?
No, I wish I understood this stuff better, but my 80% approach has gotten me so far I’m not that worried about getting in that extra mile.
Do you have an estate plan in place? A trust?
Not yet, it’s on the to-do list. I know, I know….
How much do you have in cash that’s available today?
$100 if that
How much do you have in cash that’s available in a week?
$150,000
How much is in your “emergency fund,” and did you include it in the previous question?
Yes, I included it in the number above. I have about $70,000 in savings and $80,000 in index funds.
How much do you have in retirement savings?
$750,000 for both of us; we have maxed this out every year we’ve worked (so 12 years).
How much do you have in long-term investments and savings (CDs, index funds, stocks) that are not behind a retirement wall?
$80,000
If property values (home, car) are included in your net worth, how much are those worth?
Just my houses: $2 million (I have about $600,000–700,000 equity.)
Spending
How much do you spend on the following categories on a monthly basis?
Groceries: $1,000
Restaurants, bars, takeout, and delivery: $500
Clothing and accessories: $100
Transportation: $80 for gas [note: in May 2022]
Kid-related expenses: $1,800/month (1 kid in daycare, 1 kid in public school + aftercare)
Rent/living expenses: $200
Entertainment: $50
Other major expenses: Nothing consistent
Health care – premiums and other costs: $100/month through work for family coverage
What’s your spending range for these things? What’s your average?
Vacations – Range: I haven’t been on a real vacation in years. I usually combine work travel to visit family and also travel back for points.
Vacations – Average: $500
Charity – Range of donations: $1,000
Charity – Average donation or giving amount: I don’t have a strategy; I just donate to whatever I want.
Individual items of clothing – Range: $50–$100
Individual items of clothing – Average: I am not into clothes; I’ll buy a few new shirts at Loft or Old Navy a couple times a year. I not above splurging on Vuori sweatpants!
Apartment or house – Current main residence: House is worth $850,000; we bought it for $635,000 and spent about $100,000 on renovations.
Car or other vehicle – Current main vehicle: $15,000 Corolla — one-car fam. I’d probably upgrade a little on our next Toyota. 😂
Any other large personal expenses?
I bought a rental property. I spent all my money on that.
Fill in the blank on this question: I could save _____ if I stopped ______, but I don’t because _______.
I wouldn’t change how I currently spend money. I can afford to spend what I spend, and what I choose to spend it on brings me happiness. Viva a Starbucks or bagel a few times a week!
If you're married: When was your wedding, how much did it cost (total), and how much did YOU pay?
My wedding cost $20,000, inclusive of EVERYTHING, in a HCOLA. My parents paid for most of it (my in-laws kicked in a couple thousand); I was very conscious about not overspending.
Wedding: Tell us about it!
It was at a historic house owned by the public park district. I had snow cones and pizza! It was so hot, but lovely! And best of all, I married a wonderful partner.
Have any large medical expenses (including nursing homes) for yourself or others played a role in your financial picture?
Not yet, they're the big unknown future $ suck.
If you own, how much did your car cost?
$15,000, 12 years ago
If you own, how much did your home (permanent residence) cost?
$650,000
If you have vacation homes, timeshares, or income properties, how much did those cost?
I have a rental property I paid $900,000 for. The mortgage is $4,500 (including tax) and the rental income is $5,500. The rental problem will tell you this was not a good investment, but for me it is.
Have any large medical expenses (including nursing homes) for yourself or others played a role in your financial picture?
Not yet; they're the big unknown future $ suck.
At any point in your life to date, has inheritance played a role in your money situation?
No, my parents are still alive.
Are there any other large expenses in your life, now or previously?
Kids
How has your family provided financial support in your adult life, if any? (Or, do you provide support to them?)
My parents are generous and will help us here and there (like they’ll cover our cost to visit for Christmas), but it’s not consistent or reliable.
Does your family provide any non-financial support (such as regular childcare)?
No, I wish!
Money Strategy
Do you have a general money strategy?
Yes automatically invest each month in low-cost index funds.
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?
Right now, I have more money than time, so I pay a cleaning person, gardener, babysitter. I will usually donate money if given the option for time vs. money.
What are your favorite resources for personal finance?
Ramit Sethi and Bogleheads
What advice would you give your younger self about personal finance?
Open a Roth IRA while you still can! Buy a house, it doesn’t have to be your forever home!
Icons via Stencil.
Minnie Beebe
You seem like you’re very smart with money, so I say this from a caring place: Take. A. Vacation! With the kids! They will enjoy it, and so will you and your husband! A large amount of money in the bank is great, but the memories of your vacations with your kids are priceless! I know COVID and your husband’s big law job make things a little difficult, but plan something and go. (And I’m of the opinion that traveling to see family is not vacation
Anon
Second this. You won’t regret it. Take the vacation – you’ve earned it!
Cat
Thirded. (Husband is now a gov’t attorney, you’re in-house, you don’t have to worry about making up hours anymore. GO. Visiting family is not a vacation!)
Anon
+1
My parents make less than 100k HHI but we took a vacation every year during spring break. Usually to Florida, nothing fancy but the memories we all have from those trips are lasting a lifetime
typo
Have any large medical expenses (including nursing homes) for yourself or others played a role in your financial picture?
I don’t own a car in NYC. If I lived elsewhere, I would!
?? Is this a typo?
Kate
Oh, my. I swear the correct answer was there in the draft! Fixed now — thanks for pointing it out, and thanks for reading!
Anon
Are your kids young enough that you don’t have any activity expenses for them? Thinking swim lessons, rec soccer, camp in the DC area? Kid activities are a cost, even if you just choose one per kid per season.
Op
Younger kid is a baby and in a year round program and we haven’t signed him up for anything yet. I forgot to add in camp for my older kid- we kind of splurged on 1 camp for a few weeks and offset it with a less expensive camp and some time off the rest of the summer. It’s probably about 5k, so not insubstantial.
We don’t do a lot of activities for the older kid either- she’s early elementary. 1 activity at a time and it’s been county soccer and swim so probably spent less than $500 on it this year.