This post may contain affiliate links and Corporette® may earn commissions for purchases made through links in this post. As an Amazon Associate, I earn from qualifying purchases.

The text

For today’s Money Snapshot, we’re talking salary, net worth, debt, and more with reader L, who lives in an MCOL city in the Southeast and works as a corporate strategy manager. L, who is currently renting, noted, “I am saving for a down payment, but even starter homes in my area feel out of reach so I think it’s going to be a long journey to home ownership for me.”

After getting a few requests from readers to launch our own “money diary” series, 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.

house ad for Corporette; the text reads "How to Look Polished When It's Hot Outside," and pictures a young professional woman pulling her hair back while sitting outside with sunglasses

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: L
Location: Southeast U.S., MCOL city on the verge of being HCOL
Age: 30
Occupation: Corporate strategy manager
Income: $140,000
Net worth: $225,000
Net worth when started working:
I did work in my parents’ business growing up, but it was different from formal employment in that I didn’t get paid (but my dad would sometimes give me $10-$20 after closing). I had no net worth as a teenager.
When I started my first full-time job post-college at age 22, I had a net worth of $3,000 saved from part-time work during college. I had no student loans due to that part-time work and choosing my second cheapest college option. (My cheapest option was a full ride to the college 20 minutes from home, but I chose the Ivy with the logic of wanting it to open more doors for me and [because] I qualified for significant financial aid there due to my parents’ income level. My parents agreed with this decision.)
Living situation: Single; renting apartment for $1,700/mo.

Debt

How much debt do you have currently?
None

How did you pay for school?
I chose which college I attended to avoid debt. I also chose my MBA program based on where I had the most merit grants. I was able to fund the portion of my tuition that wasn’t covered by those grants with my savings from working between college and grad school. My mentor at the time and others at my company made it clear they thought I was being shortsighted to give up more prestigious options for a lower ranked program, but I was afraid of having that much student debt. I had part-time jobs throughout both college and graduate school.

Do you own or rent? How much do you pay monthly?
Rent — $1,700 for a 1 BR apartment (My lease is up for renewal soon and I expect it to go up a decent bit.)

Home debt: Share your theories and strategies with us (including any that lead you to rent rather than own). 
I do not own currently. I am saving for a down payment, but even starter homes in my area feel out of reach so I think it’s going to be a long journey to home ownership for me.

Have you paid off any major debt? 
No. I am blessed to have been able to avoid taking on major debt in the first place.

Have you ever done anything noteworthy to avoid or lessen debt?
I cannot think of anything beyond the choices around my education.

Savings, Investments & Retirement 

How much do you save each month or year in retirement vehicles like 401Ks, Roth IRAs, and others?
I contribute the allowed max to my 401(k) through work and to my Roth IRA

See also  I'm a Fashion Editor in My Mid-20s—These 10 Brands Guarantee Compliments

How much money do you allocate to other tax-savvy investments/accounts like HSAs, 529s, FSAs, and others?
I currently have an HSA because my health insurance is an HDHP, but I was recently diagnosed with a chronic condition that may affect my future fertility so I may change that for 2025 and beyond.

How much do you save outside of retirement accounts?
I currently save $1,000 per month and invest it (have auto-transfers set up each month) and save $1,000 per month towards a down payment. I also contribute to sinking funds each month, so I have auto-transfers for 1) fun travel – $150, 2) friends’ weddings – $100, 3) things my parents need – $150.

When my checking accounts gets a higher balance than usual, I split that “excess” between those three sinking funds. That may sound complicated, but this enables me to both save consistently and take advantage of a month or two of low spending in a row.

Talk to us about investments. Do you use a financial adviser/planner?
No financial planner currently. I think I should probably talk to one soon. My 401(k) and Roth IRA are in target date funds and my non-retirement investment is in index funds (?) of the S&P 500. My savings are all in an HYSA account and my bank has a buckets system so can I clearly label the sinking funds, down payment, etc.

Do you have an end goal for saving or are you just saving for a rainy day?
My company/industry has been doing lots of layoffs in the past two years and offshoring to India. Combined with those trends and the excitement around AI, I’m trying to think of what I can do to protect my career opportunities and trajectory. I also do not like or enjoy the business field at all.

In college, I wanted to go into a more public service oriented career, which I did pursue after college. I worked alongside several colleagues who had family money to fall back on (not necessarily trust fund level, but they could afford that career path in a way I couldn’t). That led to a wake-up call for me about how I needed a better-paying career. At that point, it felt too late to learn skills like coding or go back to school for the sort of courses that my pre-med/pre-dentistry/pre-law classmates had taken in college, so I pursued an MBA because it felt the most doable.

I have vague goals of living below my means so I can retire early or transition to a more fulfilling job that pays less, but I haven’t gotten into the details for now so that I can focus on performing well in my chosen career and establish myself as a high performer.

When did you start saving seriously? How has your savings strategy changed over the years?
I have always tried to save as much as I could afford to, but my savings significantly shot up after starting my job post-MBA. Before grad school, I made less than half of what I make now. My biggest life upgrades have been to no longer live with roommates and spend more money on traveling and time with friends.

What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
I live further from the city center to save on rent (I save $200-$700 per month compared to my friends who live in better neighborhoods), and I plan to drive my car until the wheels fall off to avoid having a monthly car payment. These are both intentional choices as I have a decent bit of anxiety around money so I feel better knowing that these two major costs are lower than they could be.

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?
I had two full-time jobs before my current one, and I made sure to roll over those 401(k) accounts into a rollover IRA if that counts.

See also  Lala Kent Shares an Update on Vanderpump Rules Cast & Tom

Do you have an estate plan in place? A trust? 
Not at this time. My parents are my next of kin, so I assume they would get everything if something happened to me. I would work with a lawyer to have a will if I were to get married or have a child.

How much do you have in cash that’s available today?
$6,000

How much do you have in cash that’s available in a week? 
$80,000 (includes emergency fund and down payment fund)

How much is in your “emergency fund,” and did you include it in the previous question?
$35,000 emergency fund, kept in an HYSA and included in the $80,000 figure above

How much do you have in retirement savings?
$130,000

How much do you have in long-term investments and savings (CDs, index funds, stocks) that are not behind a retirement wall?
$25,000 invested outside retirement

If property values (home, car) are included in your net worth, how much are those worth?
No property to include. Did not include car, but it’s definitely worth less than $9,000.

Spending 

How much do you spend on the following categories on a monthly basis?

Groceries: $450
Restaurants, bars, takeout, and delivery: $200 (likely an overestimate; I group eating out into a general “fun” category)
Clothing and accessories: $2,500 (annual)
Transportation: $250 gas; I expect this to increase due to in-office requirements from my employer.
Rent/living expenses: $1,700
Entertainment: $350
Other major expenses: N/A, but I should note that outside of necessities, I’ve been considering changing to an annual budget for things like eating out, travel, and fun with friends. I find that I can go four to six weeks not spending much and then all the fun expenses happen in a span of three weeks. Being under budget one month and over budget the next gets complicated for monthly budgeting.
Health care – premiums and other costs: $115 per paycheck (every two weeks) for an HDHP, dental, and vision coverage. I used to allocate $1,000 annually for co-pays, etc. but I will need to increase that given my recently diagnosed chronic condition.

What’s your spending range for these things? What’s your average?

Vacations – Range: $300-$5,000. High range to include expenses for my parents — I don’t always take them, but I try to when I can afford it; cheaper is a road trip to visit a friend or go hiking and stay in a hotel after.
Vacations – Average: $1,300

Charity – Range of donations: I explain my donation approach below.
Charity – Average donation or giving amount: $20-$100

Individual items of clothing – Range: $1-$150 (low end: thrifting, $150 for something like sturdy boots or a winter coat)
Individual items of clothing – Average: $35ish, more for the right pair of jeans or bra (curvy girl here)

Apartment or house – Current main residence: $1,700 is my current base rent before facility fees/utilities

Car or other vehicle – Current main vehicle: No car payments currently; purchased my current car for $8,800 years ago

Any other large personal expenses?
I aim to donate 10% of my income (motivated by my faith, but my donations include several charitable organizations and are not limited to a single religious organization).

Fill in the blank on this question: I could save _____ if I stopped ______, but I don’t because _______.
I could save more than $1,500 each year if I stopped getting takeout when I’m tired and shopped for less clothing, but I don’t because I’m not disciplined enough.

If you’re married: When was your wedding, how much did it cost (total), and how much did YOU pay?
n/a

Wedding: Tell us about it!
I’m from a community where big weddings are the norm. My parents buy into that, but I know they can’t afford a big wedding for me. I expect future family drama about how they will expect me as the “successful, six-figure earning daughter” to pay for a bigger wedding than I want in order to live up to community expectations.

See also  Tony Bennett’s wife Susan Benedetto shares his final words before he died

Have any large medical expenses (including nursing homes) for yourself or others played a role in your financial picture?
N/A so far, thankfully

How has your family provided financial support in your adult life, if any? (Or, do you provide support to them?)
They paid for flights home for breaks during college when I couldn’t afford them. No formal arrangement currently. I pay for what I can when I visit them or I give them money and frame it as a birthday gift or holiday gift. I don’t know if they spend or save that money. They have also helped me move before, which saved me a lot of money at a time when I wasn’t making a lot.

I may end up needing to provide financial and caregiving support for my parents. Thankfully, they are both currently in good health, but the costs of long-term care if needed, for example, are far out of their reach or mine. I need to formulate a better plan for this. As a single woman, I don’t have a spouse who could support me if I needed to take time off work to care for them, and as an only child, I don’t have a sibling with whom I could share this responsibility.

I have considered repurposing part of my donations into a savings account for this purpose but haven’t done that because 1) this realization of just where my parents’ finances are is relatively recent, and 2) I haven’t yet completely worked through my feelings about them about projecting an image towards me and the outside world of being more financially stable when the reality was different.

Does your family provide any non-financial support? 
We are a religious family, and I know that my mom prays for my health and happiness on a daily basis. It may sound insignificant to others, but she also did not shame me when she found out I was going to therapy even though I can tell my parents don’t get it.

Money Strategy 

Do you have a general money strategy?
I try to save money on the big things (rent, car) so that I don’t have to make the frugal choice every single day. I try to live below my means and avoid lifestyle creep so that one unexpected expense doesn’t derail me.

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?
A bit of both, I guess. I get takeout to save time more often than I should, but I am also a coupon queen for things like groceries or household necessities, even though stores have made it more complicated than it used to be. I used to donate more time when I made less, but now I donate more money because I work more hours. No cleaning service, but I would love to eventually.

What are your favorite resources for personal finance?
Google and this blog

What advice would you give your younger self about personal finance?
1) Don’t compare yourself to others who have parents who can pay for things even if they don’t admit it. The choices available to them are not available to you if you want financial stability and a higher quality of life, but no one wants to hear you complain. Become the one who creates that generational wealth for your family.
2) Don’t let #1 cause you to burn out. Take care of yourself, spend the money on self-care because life is a marathon, not a sprint (lesson learned the hard way).

Icons via Stencil.

Want more posts like this? These are some of the latest Money Snapshots…



Source link