Free Money Finance

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Need More Reader Profiles Posted: 06 Dec 2012 12:28 PM PST The Reader Profiles series has been pretty popular around here. So far we've done over 110 posts and, while I still have a few in the hopper, I wanted to let you all know that I NEED MORE of them to keep the series going. So if you're willing all you have to do is email me the answers to the following questions (it's all anonymous -- don't worry about your name getting out, I use initials to hide real personalities): Please tell us a bit about yourself. Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.). What are the current financial issues you're facing (saving, paying off debt, etc.)? What are your plans for the future (retire early, build your career, etc.)? What's your best piece(s) of financial advice and/or your general philosophy on personal finances? Take as much time/space as you like answering them, but don't be too short or people won't get the "meat" of your situation. If you want to see what others have done, all the posts can be found here. Thanks!

Reader Profile: EA Posted: 04 Apr 2013 10:22 AM PDT 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 EA. She answered my questions (in red below) as follows: Please tell us a bit about yourself. I am 31 year-old single woman living in a Western U.S. city - large metropolitan area with a comparatively low cost of living (particularly housing).  I just bought my first home last year (townhome with a small patio – perfect size for me) and I also took a new job (home purchase and job move occurred almost simultaneously - about 9 months ago).  I work for a large real estate investment trust (REIT) and work on the transactional/financial side.  Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.). I work full-time.  I started my first job exactly one week after I graduated from college (2003) and have worked in the same field for my whole career (with the exception of one year spent in DC working for a US Senator).  I was with the same company for my entire career until my move 9 months ago (former company let me do the 1 year stint in DC and come back). I worked hard and got several promotions and opportunities.  The main reason I took the new job was that it was a pretty substantial title and salary increase (about 25% increase – all-in (salary + bonus)). Income My income: $130K gross annually, plus a 40% annual bonus.  So, all-in – my 2013 income will be $182K.  When I get my bonus, I put it all into savings. My monthly take home (just salary) is about $6,600 (after 401K contribution, healthcare and taxes) Expenses Mortgage: $1200 (this includes an extra $100 per month towards principal) HOA: $247 Food/Wine: $500 (I am a foodie and entertain a lot – I recognize this may be extravagant to some, but I enjoy this part of my life and feel like I have some room to spend here) House Cleaners: $160 (they come twice a month @ $80 per visit) Utilities: $200 (this is electricity, cable and internet) Going Out: $300 (same philosophy as my food budget).  I am out most week nights after work and at least one weekend night.  A big part of my job is relationship based and I am often out on weekdays with clients, etc.  This number would be much higher, but most of my really expensive/fun week day stuff goes on the company expense account. Clothing/Make-up/Skincare: $250 Target/Household Stuff: $100 Services: $200 (Hair, blowouts, nails, eyebrows) Car insurance, gas and car wash: $200 (I own my car – 2008AudiA4 – only 35K miles – I will keep for a least a couple more years) Charity/Donations: $250 Savings: I have an auto deduct to this account for $2,500 monthly.  I generally have extra on top of that (although sometimes Clothing is higher).  Whenever my checking account gets too high (about $7K or higher), I transfer a lump sum into savings.  The account is a Capital 360 Account (formerly ING) and I am happy with it. Assets: $230,000 (Townhome value) $72,000 (401K – rolled my old one into current.  Company matches up to 3% - I contribute 10% for now – I will make sure it is fully funded) $13,115 Fidelity Roth IRA (I can no longer contribute based on current income, so it's just invested and growing) $30,000 (Current Savings balance – I use this as my "everything" savings.  Travel and any other extras come out of this.  I also consider it my Emergency Fund.   The balance is normally about $50K or higher.  I used about $45K about 10 months ago for down payment and renovation on my house.  I expect it to increase again going forward.  The last couple years I have had large expenses (house down payment, house renovation, paid off my car) and I don't anticipate any other large investments for a couple years.) $10,500 Fidelity Investment Account (I have this split between various dividend stocks) Debt: Townhome Mortgage ($189,000) No other debt.  I have never had credit card debit.  I went to a very good public university in California (I grew up there, so I was a resident).  My parents paid for my education and I am SO thankful they did it.  It was a gift I can't place a value on.  That being said, it was "public university or the highway" in my family (my parents started telling us this in about 7th grade, so we were very clear on their expectations).  The parents paid tuition and housing.  They expected us to get a part-time job to pay for all other living expenses, and they also required that we graduate in 4 years and maintain a 3.5 GPA or higher.  Looking at the above couple sentences, it makes my parents seem really strict, but I never felt that way.  They were always super supportive.  They just acted like we were worthy of high expectations and, thus, always held us to them. What are the current financial issues you're facing (saving, paying off debt, etc.)? I'm happy with my home and my savings plan.  I do wonder if I could be doing more to avoid taxes.  I really get screwed because I make a high income and am single.  I have a mortgage now and can write-off interest payments, but aside from that and fully funding my 401K, I don't see much else I can do.  Any input here would be helpful. What are your plans for the future (retire early, build your career, etc.)? I don't think I will retire early.  I definitely would like to get married and maybe have 1 or 2 kids, but I would probably still work.  Obviously, that could change – I have no idea what it would be like to have kids at this point, but, that's the plan for now.  I am good at my job and I generally like it, so I can't imagine being at home full-time.  My current position is very demanding and, at some point, I would like to make a move to something that allows for a little more free time.  I may take a bit of a pay cut if I do that, but it wouldn't be substantial.  For the time being, I have a lot of fun and I can't see doing anything different.  I have always been super focused on building my career and I feel like I am finally reaping the benefits of all my hard work (I get to go to the dinners at high-end restaurants, attend the ski trips to Aspen and go to the NFL games now, instead of staying behind to build financial models!). What's your best piece(s) of financial advice and/or your general philosophy on personal finances? I am so thankful that I worked hard and long hours when I was young.  It isn't for everyone, but it's how I got to where I am today.  I was also very lucky to graduate in 2003 (still good economic times – many jobs available.  If I were a couple years younger, things would have been very different for me).  The biggest thing I learned about succeeding in the business world is this:  Be the most likable person in the room.  If you are marginally smart, that's a plus.  People want to spend time with people they like: people who are fun to be around, have a good attitude and want to help get a job done.  I have used this to my advantage my whole career.  Also, they may say it's a "man's world", but, for me, being one of the few women in my industry has ALWAYS felt like a positive.  No one ever forgets who I am – it's pretty easy to remember the only girl in a meeting with 20 men – plus, I am not shy about speaking up and bringing my opinion to the table.  Even as a child, my Dad made sure I knew that my opinion counted (if it was well thought out) and I should share it.  Also – I spent a year in DC working for a Senator as noted above.  It was a much lower income job, in a pretty expensive city, and I never felt like I was struggling financially.  It taught me that I could live on a lot less and be happy – a great perspective to have.  I got a great "education" working on Capitol Hill, and, while the salary wasn't stellar, I did get paid as a staffer.  As far as "resume builders" go, the job on Capitol Hill has gotten me more street cred than any MBA could have.  And I didn't go into debt for it. I am sure many people may not agree with some of my spending habits, but, the fact is that I take home $6,600, which is a lot of money (at least to me).  Also, I benefit greatly from making a relatively high income and living in a place where housing is not very expensive.  I grew up in Southern California and also lived in DC, so I know what expensive housing can do to you financially.  I knew I wanted to have some lifestyle extras and I was willing to live in a cheaper housing market to allow for that (plus, I happen to love my home and my friends, so I got lucky there).

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