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 JS. She answered my questions (in red below) as follows:
Please tell us a bit about yourself.
I'm a 35 y.o. Single female living with my three cats, yeah I'm a crazy cat lady, in the "bad" part of the same state as FMF, near Detroit. I work downtown and live in one of the inner suburbs. I've lived here for a whole 5 months. I have a new 3 bedroom 2.5 bath "city house" on a 40x110 lot which means I can mow my lawn in 20 minutes. My neighborhood is a mix of old tiny bungalows and houses like mine where 900 sq ft bungalows were torn down and replaced new space efficient slightly larger houses (1500-2000 sq ft.).
Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).
I prefer not to say what I do only that I've worked for the same employer for 13 years now and Detroit is my 3rd office, I was in New York City and Middle of Nowhere GA prior to this my employer paid for both of my moves. I'm in a pretty specialized field one that I get to retire early from and am pretty much at the top of it without going into management. My current base salary is $130,000, I am sometimes required to work weekends and holidays and am compensated for that as well. My employer also provides me with a car for work, but only for work I am allowed to drive it to my home but cannot use it to drive someone like a family member around in it or even to stop the the store for milk on my way home from work. My employer also still offers a pension, I expect to receive 35-40% of my salary depending on when I retire.
I'm an accidental landlord, and rent my old co-op apartment in Bayside Queens out to a long term, they are renewing for a 5th year, tenant for $1,500 a month. My parents and I also co-own a vacation place that we rent out when we aren't there to subsidize it's cost, we don't make money on it and never really intended too.
Assets:
The Pet emergency fund started as one of those automatic transfers so that if a larger bill came up I wouldn't have to make a financial decision instead of an emotional one. I don't know if I'll every used the whole thing or if I'll use it and more.
What are the current financial issues you're facing (saving, paying off debt, etc.)?
It's just in the past 6 months to a year the I finally feel back on track to where I wanted to be finically 5 years ago when I became an accidental New York landlord. I bought my NY co-op thinking that I knew all the important things about the complex. For those of you who've never heard of a co-op basically it is similar to a condo except instead of owning a specific unit, I won 330 shares in the complex which entitles me to a permanent "lease" of my unit. What it means in reality, there is a 3rd party in all sales, buyer, seller and the co-op board. What I didn't know when I bought was the complex has a floor price for sales (which may be illegal court rulings have gone both ways) and I was trying to sell it in 2008 when prices were falling. I had 2 sales that fell through in the year I had my place on the market before it went to either for sale of for rent and I got a renter before I got a sale. At first I was losing about $100 a month, then my adjustable rate mortgage adjusted down and I made a bit, Last fall I paid off the mortgage for personal not fully financial ones. Basically cash flow, I wanted more money available monthly that I could apply to other things.
What are your plans for the future (retire early, build your career, etc.)?
I'm currently beefing up my short term savings, I want to get that up to about $50,000 so that I can buy my next vehicle, I drive a 2000 Jetta, in cash. I'm also planning on taking my first major vacation ever next year, I'm looking at 2 weeks in Europe. After I get my short term savings where I want it I will be turning my focus to really funding my non-retirement investments which I think are low for my income level. I do still add money to my investments each month but not as much as I want.
What's your best piece(s) of financial advice and/or your general philosophy on personal finances?
My #1 personal philosophy when it comes to finance: I have all of my needs covered and most but not all of my wants; therefore, my financial decisions are all about evaluating my wants. I make a great salary but I also can see myself spending it all on stuff that really isn't all that important as well. When I decide that I "can't afford" something it's not about what I didn't buy but instead it's about what I now can buy that I want more instead.
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 JS. She answered my questions (in red below) as follows:
Please tell us a bit about yourself.
I'm a 35 y.o. Single female living with my three cats, yeah I'm a crazy cat lady, in the "bad" part of the same state as FMF, near Detroit. I work downtown and live in one of the inner suburbs. I've lived here for a whole 5 months. I have a new 3 bedroom 2.5 bath "city house" on a 40x110 lot which means I can mow my lawn in 20 minutes. My neighborhood is a mix of old tiny bungalows and houses like mine where 900 sq ft bungalows were torn down and replaced new space efficient slightly larger houses (1500-2000 sq ft.).
Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).
I prefer not to say what I do only that I've worked for the same employer for 13 years now and Detroit is my 3rd office, I was in New York City and Middle of Nowhere GA prior to this my employer paid for both of my moves. I'm in a pretty specialized field one that I get to retire early from and am pretty much at the top of it without going into management. My current base salary is $130,000, I am sometimes required to work weekends and holidays and am compensated for that as well. My employer also provides me with a car for work, but only for work I am allowed to drive it to my home but cannot use it to drive someone like a family member around in it or even to stop the the store for milk on my way home from work. My employer also still offers a pension, I expect to receive 35-40% of my salary depending on when I retire.
I'm an accidental landlord, and rent my old co-op apartment in Bayside Queens out to a long term, they are renewing for a 5th year, tenant for $1,500 a month. My parents and I also co-own a vacation place that we rent out when we aren't there to subsidize it's cost, we don't make money on it and never really intended too.
Assets:
- Primary residence $291,000
- NYC Co-Op $210,000
- Vacation place (1/2 value) $125,000
- 401k: $287,000
- IRA: $62,000
- Emergency Fund $24,000
- Short term savings Fund: $18,000
- Non-retirement investments: $21,000
- Available for whatever: $2000-5000 depending on the time of the month
- Pet Emergency Fund: $9,000
- Primary Home Mortgage $2,200 a month and I owe approximately $223,000 on a 15 year mortgage at 2.375% I'm accelerating slightly my payoff actual due is approximately $1,600 with escrow.
- Condo Mortgage: $645 (again half of the amount we owe $54,000 total) NYC Co-op Maintenice: $850 Utilities (gas/water/cable/power estimated.) $250 Cell Phone: $65 Retirement $1916 (Maxed out 401k and Traditional IRA which is converted to a ROTH IRA yearly)
- Food: I'm not really sure up to maybe $500 and that includes eating out and pet food.
- Fuel: $100
The Pet emergency fund started as one of those automatic transfers so that if a larger bill came up I wouldn't have to make a financial decision instead of an emotional one. I don't know if I'll every used the whole thing or if I'll use it and more.
What are the current financial issues you're facing (saving, paying off debt, etc.)?
It's just in the past 6 months to a year the I finally feel back on track to where I wanted to be finically 5 years ago when I became an accidental New York landlord. I bought my NY co-op thinking that I knew all the important things about the complex. For those of you who've never heard of a co-op basically it is similar to a condo except instead of owning a specific unit, I won 330 shares in the complex which entitles me to a permanent "lease" of my unit. What it means in reality, there is a 3rd party in all sales, buyer, seller and the co-op board. What I didn't know when I bought was the complex has a floor price for sales (which may be illegal court rulings have gone both ways) and I was trying to sell it in 2008 when prices were falling. I had 2 sales that fell through in the year I had my place on the market before it went to either for sale of for rent and I got a renter before I got a sale. At first I was losing about $100 a month, then my adjustable rate mortgage adjusted down and I made a bit, Last fall I paid off the mortgage for personal not fully financial ones. Basically cash flow, I wanted more money available monthly that I could apply to other things.
What are your plans for the future (retire early, build your career, etc.)?
I'm currently beefing up my short term savings, I want to get that up to about $50,000 so that I can buy my next vehicle, I drive a 2000 Jetta, in cash. I'm also planning on taking my first major vacation ever next year, I'm looking at 2 weeks in Europe. After I get my short term savings where I want it I will be turning my focus to really funding my non-retirement investments which I think are low for my income level. I do still add money to my investments each month but not as much as I want.
What's your best piece(s) of financial advice and/or your general philosophy on personal finances?
My #1 personal philosophy when it comes to finance: I have all of my needs covered and most but not all of my wants; therefore, my financial decisions are all about evaluating my wants. I make a great salary but I also can see myself spending it all on stuff that really isn't all that important as well. When I decide that I "can't afford" something it's not about what I didn't buy but instead it's about what I now can buy that I want more instead.
Really enjoy reading these reader profiles FMF! Everything seems in place especially with the mortgage paid off from that co-op. Don't think that would work for me though with the 9k savings for the cats. I don't have cats but just seems a bit high. I like that you paid cash for the car. Is something wrong with the Jetta or are you just wanting an upgrade? I like your thinking though about getting your needs met and taking care of some of the wants as well. Balance is key.
Posted by: Thomas | Your Daily Finance | August 11, 2013 at 06:09 AM
I'm in a love/hate relationship with my car. It works, It has low mileage, I want something else. I'm going to keep the Jetta at least for another year by then I may feel justified in getting a new one, I keep hoping it gets hit and totaled in a parking lot or something.
As for the cat fund. It's more so if it comes to and illness that could be solved at the vet and still give them a good quality of life I don't want it to be a financial decision. I also if I needed it use that money for another kind of emergency as well if I every went through my real emergency fund. So I guess in a way it is a part of my emergency fun just earmarked for the cat first.
Posted by: JS | August 11, 2013 at 08:05 AM
Still has a pension? Wow, didn't know that was still a thing. Lucky, lucky. Looks like your other retirement accounts for well-funded for your age, so if the pension isn't everything that's promised, you'll be fine.
You're in great shape. Nothing to add really. Keep it up! I would like to know what you do though :)
Posted by: Paul | August 13, 2013 at 03:05 PM