For today’s Money Snapshot, we’re talking salary, net worth, debt, and more with reader Pizza Queen in Cincinnati, OH, who works as a sales manager. She noted, “We are aiming for FIRE (Financial Independence, Retire Early), more specifically fatFIRE ($2.5MM investments) in our late 40s, so we are trying to squirrel away 25x our annual expenses. In the short term, we are saving for upgrades to our backyard ($30,000). I don’t want to take out a HELOC since it’s a purely cosmetic project.”
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.
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: Pizza Queen (“I like to make homemade pizza, ha.”)
Location: Cincinnati, OH
Occupation: Sales manager
Income: $140,000 salary, $8,400 car allowance, $10,000 profit sharing, annual bonus target $0–$42,000
Household income: $240,000 assuming no bonus; average bonus has been $10,000 or so.
Net worth: $610,000
Net worth when started working: Age 21, -$100,000 due to student loans
Living situation: Own home. Spouse, 33; 0 kids, 1 dog. Want kids soon though. COVID didn’t feel like the right time to try.
We asked PQ about the financial steps she and her spouse might take when they get closer to adding a baby to their family, and she shared this:
If we are fortunate enough to add to our family, the wine budget will be repurposed for sure. We have a cushy emergency fund but we will be looking to stack additional cash for health emergencies and daycare. I will get three months of paid maternity leave and up to three months of unpaid leave; I’d love to be able to use those three months of unpaid leave. We will also update our estate plan, possibly setting up a trust. I am more confident in the financial part of having children than the “keeping tiny human alive” part, but I’m told those instincts will kick in. :)
What does your debt picture look like?
$250,000 mortgage, $29,000 car loan.
How much money are you spending each month to pay down debt?
$650, covered by car allowance from work.
Have you paid off any major debt?
Just finished paying back $140,000 in student loans over eight years; I consolidated and refinanced five years in and it made a huge difference on my repayment timeline.
If you have any other large expenses each month, please list them here.
$300 a month roughly for wine clubs in Sonoma and Napa. Worth every penny.
How did you pay for school?
Lots of private student loans co-signed by my grandma. I didn’t think I had any other option to go to my “dream school.” Scholarships filled some of the gap but I filled out my own FAFSA and did not know the rules of the game.
Home debt: Share your theories and strategies with us.
Our mortgage with escrow is 20% of take-home pay, and it feels right. We had started with a 30-year but refinanced last year to a 20-year. For us it was a good balance between the kickass progress of a 15-year and the cash flow advantage of a 30-year. We toss $100/mo. extra at it each month but paying it off super early is not a priority.
Savings, Investments & Retirement
How much money do you allocate to other tax-savvy investments/accounts?
I max pre-tax 401k at $19,500 and am so grateful to get a $14,000 match from my employer, my spouse contributes $8,200 to his crappy fee-laden 403b, and we now max backdoor Roth contributions at combined $12,000 a year, since I just learned how to do it. Overall $53,700.
How much do you save outside of retirement accounts?
$100/mo. auto-deducted to a taxable brokerage account, $175/mo to a Fundrise REIT account, $120/mo. plus round-ups to an Acorns account, and $100-$200 in crypto per month through EToro, mostly BTC and ADA. We have a lot going on… It does prevent me from buying stupid crap with my spare time, though.
We asked PQ to share her thoughts on getting into cryptocurrency:
Crypto advice: I’m a lifelong learner and crypto has really piqued my interest. I’m dabbling in it with small dollar amounts. I started by Googling and YouTubing “Crypto 101” to understand blockchain and have since added podcasts like Unchained to my rotation. Start by learning about Bitcoin and Ethereum, then you can branch out into learning about altcoin projects. The adage of “Don’t invest in something you don’t understand” is important with crypto. It is highly volatile; you need to be able to ride out the dips. I am also working to invest on Coinbase Pro so I can move my crypto to a wallet (eToro isn’t great for that).
How much money do you allocate to other tax-savvy investments/accounts like HSAs, 529s, FSAs, and others?
I max a single HSA at $3,600 and am treating it like a retirement account. My spouse has a great healthcare plan but adding me is stupid expensive.
Talk to us about investments.
We check in with an advisor once a year as a gut check. However, I have learned so much through books and podcasts on my own. VTSAX is great, although I don’t want to sound like a FI dudebro for saying that.
Do you have an end goal for saving or are you just saving for a rainy day?
We are aiming for FIRE (Financial Independence, Retire Early), more specifically fatFIRE ($2.5MM investments) in our late 40s, so we are trying to squirrel away 25x our annual expenses. In the short term, we are saving for upgrades to our backyard ($30,000). I don’t want to take out a HELOC since it’s a purely cosmetic project
We asked PQ to share her advice for readers curious about FIRE, and she had this to say:
Identify your “why,” or what success will look like, before you begin your journey. Illustrating our financial goals with pictures has helped us to stay focused — I have links and photos in a shared note with my spouse about what FI and RE life could look like; we add to it when we feel inspired.
When did you start saving seriously? How has your savings strategy changed over the years?
Ugh, it took a while. I had a boss who retired at 50 who taught me to shovel some money into my 401k at 21, but we found the FIRE movement three years ago. We got more serious about saving then, and plowed into my student loans at the same time. We cut out a bunch of spending that didn’t line up with our values to attack both sides of our balance sheet, and were fortunate to find housing during a non-peak time in the market in 2016.
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?
Not yet, but I’m learning about Roth conversion ladders and plan to do a Roth conversion if I take an extended maternity leave (taxable income would be lower that year).
What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
Earning more income — you can only cut so much, but expanding your income gives you more options.
Do you have an estate plan in place? A trust? What lessons did you learn going through the process?
Yes, we have POAs and wills and included hypothetical kids in there. It was really good to get that done in 2019; it was a delightfully awkward but important conversation. We plan to set up a trust once we are closer to FI.
How much do you have in cash that’s available today?
$43,000… it’s a cash drag for sure, but it helps us sleep at night.
How much do you have in cash that’s available in a week?
$43,000. I am too lazy to open an online HYSA, and rates today aren’t inspiring.
How much is in your “emergency fund,” and did you include it in the previous question?
$43,000, it’s in regular dinky savings accounts earning $4.
How much do you have in retirement savings?
Me: $340,000. Spouse: $80,000. When we met, he had $2,000, so I’m very proud of how far he has come. His job also has an old-school pension, but he is two years away from vesting.
How much do you have in long-term investments and savings that are not behind a retirement wall?
$15,000; we are working to grow our taxable account balances.
If property values (home, car) are included in your net worth, how much are those worth?
We have about $120,000 in home equity and one paid-off hybrid sedan, about $12,000. Our car loan is for a new hybrid RAV4; I wanted bells and whistles… I know that cars depreciate, but I also can’t parallel park without beeps and cameras.
How much do you spend on the following categories on a monthly basis?
Restaurants, bars, takeout, and delivery: $200
Clothing and accessories: $100
Transportation: $850 ($650 for car payment, $100 gas, $100 insurance)
Rent/living expenses: $2,900
Entertainment: These days, $20 for SiriusXM and some iCloud storage. We can’t wait to get back to concerts; we had budgeted $100/mo. in the past.
Other major expenses: $1,400: charitable giving and gifts/holidays is $750/mo., wine is $300/mo. (see above), travel fund is $300/mo., and our dog is $50/mo.
Health care – premiums and other costs:
My spouse gets free “Cadillac” health care through work; my premiums are through payroll at $1,650 per year for medical. I qualify for $1,000 in dollars to offset it by completing online assessments and providing health metrics. Blessed to say we haven’t had significant out-of-pocket costs in a few years…
What’s your spending range for these things? What’s your average?
Vacations – Range: $1,000 long weekend, driving distance; $15,000 10-day Europe trip. Haven’t gone anywhere in over a year though.
Vacations – Average: $5,000
Charity – Range of donations: $10/mo. to $5,000 capital campaign commitment. My spouse is in nonprofit development, so oftentimes the fundraising lead needs to show support for their initiatives.
Charity – Average donation or giving amount: $500/mo. to various charities. Church, schools, I have a sweet spot for friends’ GoFundMe pages.
Individual items of clothing – Range: $20–$200, although not buying too many clothing items these days
Individual items of clothing – Average: $40
Apartment or house – Range: We rented for $750; mortgage is $2,100
Apartment or house – Current main residence: $2,100
Car or other vehicle – Range: $0 (used to have a company car) to $36,000
Car or other vehicle – Current main vehicle: Bought my former company car, a 2019 Ford Fusion Hybrid cash for $15,000 this past August, then a 2020 Toyota RAV4 Hybrid that September, which we financed at 1.9% APR. Those were back-to-back expensive months… praying the car gods leave us alone for a while
Any other large personal expenses?
Wine, baby! I love supporting female-owned small wineries in California.
Fill in the blank on this question: I could save _____ if I stopped ______, but I don’t because _______.
$150, at a stop sign, I was impatient. Yes, I got a ticket…
If you’re married: When was your wedding, how much did it cost (total), and how much did YOU pay?
$45,000 — we paid for $35,000 of it. We wanted a huge church wedding, we had a huge church wedding, I regret nothing.
Wedding: Tell us about it!
We had over 225 people, and it was the last time my entire family has been together in one place at one time. I’d do it all over again, except for the part where my dog ran away (we found him!).
If you own, how much did your home (permanent residence) cost?
We bought for $295,000 in 2016. The value has shot up to $360,000.
If you have vacation homes, timeshares, or income properties, how much did those cost?
None; real estate isn’t for us.
Have any large medical expenses for yourself or others played a role in your financial picture?
We both have LTC insurance policies as a hedge; they’re cheap. We know we are young to have this in place already.
How has your family provided financial support in your adult life, if any? (Or, do you provide support to them?)
My grandma co-signed my student loans, and I don’t know if I would have gotten them without her. We send gifts to her and our parents every so often, and try to treat our parents to meals. My parents insured me through college but once I was 21 I took over all of my financial needs.
Does your family provide any non-financial support?
My father-in-law is the best when it comes to our homeownership questions like when to fertilize the yard, if an appliance is making a funny sound… That stuff is so valuable
Do you have a general money strategy?
Pay yourself first, give freely, spend on what matters most.
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, we are rich in both time and money. We don’t pay for convenience, since we spend large chunks of time at home, but expect that to change as our family hopefully grows.
What advice would you give your younger self about personal finance?
I’m proud of my younger self for starting to save for retirement at 21. No regrets.
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