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 BY. She answered my questions (in red below) as follows:
Please tell us a bit about yourself.
I’m 28 years old, single, female and live in Phoenix, Arizona. I work in audit/compliance for a large corporation with a good sense of job security at this point. I work from home and travel in the Southwest region 4-5 days a month, so I’m able to save a lot on food and gas (on the company’s dime while I travel and easy access to make quick meals at home during the work day).
Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).
Income: Base Salary $72,000/yr + ~$8-10k bonus (pretty well guaranteed), Side hustle brings in between $6,000-$9,000/yr (adjunct faculty for a local university)
Monthly Income: $4200 from base salary plus anywhere from $200-$660/month from side hustle (varies greatly)
AVERAGE MONTHLY INCOME: ~$4500 (conservative side hustle income amount included)
- $1800 mortgage
- $370 utilities (electric, water/trash, home security system, cable/internet/phone)
- $261 student loans (minimum payment)
- $90 food/treats for dog (have to special order hypoallergenic food due to allergies)
- $80 gas (work from home so save a lot on gas)
- $150 food
- $300 miscellaneous/fun
- $30 gym membership
- $3,081 total monthly expenses
Discretionary: ~ $1,400 per month
- 2009 Toyota Camry - paid for
- IRA - $15,100
- Investments (TD Ameritrade account) - $8,300
- Cash Savings - $7,000
- $260,000 mortgage @ 4.62%
- $20,700 student loans (@7.75%)
- No other debt
What are the current financial issues you're facing (saving, paying off debt, etc.)?
The current financial issues I am facing are whether or not I should pay off my student loans ASAP, put more into my investment account, or contribute more to retirement. I would love to hear different thoughts on what I should do in regards to this!
I am currently paying the minimum on my student loans while throwing an extra $500-$1000 at it when I feel like it. I recently moved into a new-build home and had been saving, saving, saving for house related items (a few new pieces of furniture, décor, landscaping, etc), but now that that is over, I need to decide whether or not I want to attack my student loans and get these paid off within the next year or keep saving money. I am sick of paying interest on my student loans, but at the same time, I am single and want to make sure I have plenty of savings should something unexpected happen. I have a decent amount of cash savings and investments (that can be made liquid very easily) but think I should have at least $30k there. Any thoughts?
I currently work for a large corporation (since February of this year) and do not anticipate any problems with job security in the foreseeable future, although nothing is guaranteed.
I am very cautious and constantly stressed over money because I have seen my parents have very little (we were on subsidized lunches in elementary school off and on with 5 kids in our family and my parents not planning accordingly), to then having a lot of money when my dad got into a very lucrative field (when I was in middle school & high school) and saw them spend frivolously and overextend themselves beyond words, to now having very little again due to the downturn in the economy back in 2008/2009 and having given or let them borrow thousands of dollars over the past several years. I have seen it all with my parents and although I am doing fine financially, I live in fear knowing that you never know what life will throw your way and don’t want to make any of the same mistakes they have made. I have never taken financial advice from my parents and have more or less learned everything on my own by reading blogs like Free Money Finance and doing my own research on goal-setting for financial freedom.
What are your plans for the future?
I would love to have children at some point. My boyfriend (see marrying him at some point) and I have discussed this, and I am perfectly fine having children in my thirties (I don’t want an entire basketball team like my family – maybe 2 or 3). I want to have all of my student loans paid off, plenty of money in the bank, etc. before taking on that responsibility. The house I recently purchased is one I see staying in for the next 10+ years – it is much larger than I need right now, but has room to grow and is not a stretch for me to cover financially. I plan to continue working once I have children as well, although probably not necessarily full time.
What is your best piece of financial advice?
Set goals – both short term and long-term. For me, I need to see the big picture, but what keeps me motivated is hitting those goals that are more near-term and tangible. Keeps me going and committed to financial freedom. I set up little challenges for myself related to my financial goals – I like to feel the sense of accomplishment and this keeps me going. Also, I try to let myself splurge every once in a while and buy a nice pair of jeans, go out to a nice restaurant, etc. – this keeps me sane. :)