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 GL. She answered my questions (in bold italics below) as follows:
Tell us a bit about yourself.
I am a 20-something personal finance enthusiast, who makes no secret of her love for food, reading, and Pinterest. I work as an accountant at a hotel and live in St. Louis, MO. I am married to an awesome guy, who happens to stay home with out 5 month old, and we have a three-legged dog named Max! My blog, Retired by 40!, tracks my progress towards retiring by 40.
Describe your financial situation.
I work as an accountant, my husband stays home with our daughter, but he attends school and drills with the Illinois National Guard, so he bring in money for going to school and drills. I am not shy about sharing everything on my blog, so I'll do the same here! Our after-tax income is $3,800 per month, and we break down our budget this way:
- Mortgage - $635
- Utilities (including phone & internet) - $300
- Vehicle Payments - $920
- Gas - $300 Insurance - $80
- Health/Life Insurance/Doc Bills - $313.33
- Anything bought at Walmart - $300
- Haircut - $20
- Entertainment - $8
- Savings - $150
- Student/Personal Loans - $620
- Total = $3,646.33
This leaves a bit of wiggle room for a meal out every other month or so, as well as small home maintenance issues and other things that inevitably pop up.
What are the current financial issues you face?
We have a personal loan that we are paying $500 per month on right now. The balance is sitting right around $9,000, but because it is from family, we would like to get it paid off sooner rather than later. Next on the list will be the huge car payment. $670 of it is for our SUV (bought after the baby was born....) and $250 is for my husband's ATV. Don't just me too bad on these! They were impulse purchases that I made while swimming in hormones, and now we're paying the price :-)
Right now - even with our debt, our Net Worth is sitting at $51,025, give or take depending on the day, so when you consider that we're only 23, I feel that we're doing pretty well. We bought a HUD home valued at 3x what we paid for it, so I feel that we did pretty well there!
Phase 1 is paying off debt and we're plowing through that as much as possible right now.
Phase 2 is moving out of our current home and turning it into rental property - yay passive income!
Phase 3 is saving and retirement - Hopefully by 40! Right now we're on track, but who knows what the future holds!
What financial advice do you have for FMF readers?
Use the future value of money method to help stop spending money. For example, $20.00 at McDonald's on a quick meal is the same as $300 in retirement! Makes you want to go eat at home, right?
Also, it is never too late to start! Just because you partied away your college years that doesn't mean that you have no chance of retiring early. All it takes is some creativity and hard work!
Finally, be aware of your impact on future generations. Are we setting a good example for our children and grandchildren?