The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.
If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going.
Also, please leave constructive comments, questions, and so forth. Simply telling someone what a mess they have, how they have made poor decisions, and so forth is not helpful. There is a way to say, "That was a mistake, but here's what you can do to correct it" that both acknowledges the problem and offers a solution. It's this sort of feedback that this series is intended to solicit.
Next in the series is FMF reader DL. He answered my questions (in red below) as follows:
Please tell us a bit about yourself.
I am 37 years old. I have been married for 13 years. I have 6 children (and one on the way) ranging from 12 to 1. At the moment, three boys and three girls. We are the Brady Bunch minus the quirky maid named Alice (if we had the resources we would have her hired in an instant though :) )! I am an associate pastor of a medium sized church in Indiana. My wife stays home with the kids. We both have Bachelor’s degrees.
Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.)
My wife stays at home with the kiddos. My monthly income is $4,200 / month. We have no personal debt other than our mortgage. I have quite a bit of carpentry experience, and our past two homes have been fixer-uppers and we have been fairly successful doing that. Our current home is a very modest mortgage, and with our current budget will be paid for in 14 years. Our monthly expenses at the moment are:
Monthly Income - $4200
- Housing (mortgage, extra payment, T&I, Maintenance, etc): $1126
- Transportation (maintenance, fuel, registration): $421
- Insurance (home, partial life, auto): $200
- Household (food, clothes, household supplies): $1200
- Entertainment (vacations, eating out, sports, etc): $200
- Savings (general savings, next vehicle): $450
- Charitable Giving (Tithes, gifts, missions): $660
That’s roughly our cash budget from month to month. Things that are not included in that which are big components are healthcare (we have zero cost with my salary package). Also, life insurance. We both have good term life insurance. I pay personally for my wife’s and a small policy of my own. The majority of my term policies are paid through my salary package as well. Additionally, I receive ½ of my social security reimbursement from our church, and I have a modest expense account)
Retirement accounts total approx. $15,000. I may be leaving some big pieces out, but that about sums it up.
What are the current financial issues you're facing (saving, paying off debt, etc.)?
We have a large family. Things are tight for us but I believe we live fairly frugally on a single income. We have a fully funded emergency fund plus around $30,000 in savings. The bulk of that extra savings is from the sale of our last home. I feel truly blessed that we are out of debt (we had college and vehicle debt until about 4 years ago). Obviously, us paying for our kids college is not a real possibility at the moment, which is not a huge concern to me. I think working through college and community or state colleges are not out of the question.
What are your plans for the future (retire early, build your career, etc.)?
Some of my uncertainties revolve around what to do with our extra cash at the moment. With my skill set, I’ve thought a lot about investing in some rental properties around me. Real estate scares me a little bit in our current economy, but I hate all that cash sitting in a savings account.
A huge goal of mine would be to have some supplemental income in the near future to give my wife and I more options when the kids are a little older and we may want to travel more, or serve somewhere internationally someday.
What's your best piece(s) of financial advice and/or your general philosophy on personal finances?
Proverbs 13:7 – “One man pretends to be rich, yet has nothing: another pretends to be poor, yet has great wealth.”
This has been a guiding principle for us in our last ten years of marriage. We don’t live in a cardboard box or feed our kids tree bark. But, we don’t buy a lot of extra stuff that I know we could afford either, including a nicer and bigger house. We also try to be very generous in our giving as well.