Reader Case Study: Having A Quarter-Life Crisis in Nashville, TN!
Welcome to this month’s Reader Case Study in which we’ll address Steph’s questions on how to plan for her future in light of her recent quarter-life crisis. Case Studies are financial (and life!) dilemmas that a reader of Frugalwoods sends to me requesting that Frugalwoods nation weigh in. Then, Frugalwoods nation (that’s you!), reads through their situation and provides advice, encouragement, insight, and feedback in the comments section. For an example, check out last month’s case study.
I also provide updates from our Case Study subjects at the bottom of each Case Study several weeks/months after their story is featured. To see what past Case Study participants have decided to do, check out the Case Study section and scroll to the bottom of the individual posts.
P.S. Another way to get support on your financial journey is to participate in my free Uber Frugal Month Challenge! You can sign-up at any time to join the over 20,500 fellow frugal sojourners who’ve taken the Challenge and saved thousands of dollars.
I probably don’t need to say the following because you all are the kindest, most polite commenters on the internet, but, please note that Frugalwoods is a judgement-free zone where we endeavor to help one another, not to condemn.
With that I’ll let Steph, this month’s case study subject, take it from here!
Hello, fellow Frugalwoodsians! My name is Steph, I’m 25 and I live in Nashville, TN with my wonderful husband, Zach, who is 26, and our Boston Terrier and kitten. There is not a frugal bone in my body, and everyone says I have a champagne taste on a beer salary, which is the most accurate way to describe me.
I grew up in Nashville and went to college in a tiny west Tennessee town where I majored in business. While there, I met Zach, a management information resources major, who is from a town with a population of less than 100 people. He moved out to the big city with me after we graduated from college in 2014. We got married in November 2016 after dating for five years. Our hobbies include going to concerts, music festivals, sushi dinners, shopping, and frequenting all the local coffee shops. We do not like going out in nature, saving money, or dealing with finances, so I’m the opposite of the Frugalwoods and probably every other reader 😊.
Steph and Zach’s Jobs
Zach works in IT in a job that he’s pretty content with. He’s a hard worker, often receives yearly raises, monthly bonuses, and plans to climb the corporate ladder at his company. I work in the public sector, where the pay is low and there’s little room for advancement, rare raises, and the work is menial. I’m currently searching for a new position and my dream job would be as a Human Resources generalist, benefits analyst, or really anything Human Resources-related, except for recruiting. I definitely want to stay working within the state/federal government. I love working for the government and don’t want a private sector job. I’m job searching now, but being picky and only applying for HR jobs within government agencies. Finding a new position is proving to be difficult.
Steph’s Debt and Housing Story
I graduated from college with $38,000 in debt. Zach and I both expected to make $40K-$60K right out of school, so money was no object to me while I charged up my credit card account. Let me tell you, we most certainly did not make anywhere near our expected salaries in our first jobs. We both landed jobs three days after graduation and made $12 an hour each before taxes, insurance, etc.
Despite our low salaries, we followed Dave Ramsey and paid off all of my student loans in January 2017! Zach and I both worked side jobs, got raises, threw all our windfalls at the loans, and kept our savings at $1,000 a month. On top of that, we saved 10% for a down payment to buy the condo we were renting. Since we knew the owner, she gave us $20K off the purchase price! We bought our condo in 2016 for $140K with $11,000 down.
At that point, we felt very accomplished. After my loans were gone and a home base was secured, we started to “deserve” nice things such as: dinners out, sushi lunches EVERYDAY with my co-workers, $200 bar tabs every weekend, and fancy coffee drinks three to four times a week. And then… my brand-new car. I had a 2007 Mazda CX-9, Maizy, for four years. She had served me well, and was NEVER sick.
But of course, life happens, and the same week I paid off my loans, Maizy died on me. With over 220k miles, she found life not worth living. With only $1,000 in savings, I was determined to find a car with no payments. This did not happen at all, and I ended up buying a brand-new car fresh off the lot for $20,000 with 0% in interest.
Steph and Zach’s Frugal Journey
We were socking away a fair amount into savings (or so we thought until we found this blog!), paid our bills on time, and had increased our retirement contributions, so we really didn’t see any problem with our newfound splurging, ‘treat yourself’ lifestyle. However, when I turned 25 in July 2017, a quarter-life crisis set in. I examined our lifestyle, our low retirement contributions, a job I felt “stuck” in, and realized that I’m not happy. Based on this feeling, Zach and I decided to make this our year to get our careers, finances, and lives in tip-top shape! We are now on a clothes-buying ban and are working on lowering our fun/entertainment budgets.
I discovered the concept of financial independence a few months ago via Frugalwoods. I didn’t know it was possible to leave a cubicle prior to age 55 or 65! It’s something Zach and I would love to pursue. However, to make it a reality, we have cut back and plan to give up eating out, my daily Starbucks addiction, and we are never buying a car on finance again!! I’ve also given up spending $100+ a month on make-up, hair products, and other beauty products. We’ve stopped traveling while we try to save and get our finances in better shape and haven’t taken a trip in over a year. Zach and I don’t buy gifts for each other and, in lieu of buying holiday gifts for family and friends, we dog sit, house sit, or babysit for them. We are trying hard, but it feels like our incomes are too low to make real headway towards a financial independence goal.
Where Steph Wants To Be In 10 Years
What does our ten year plan look like? Great question! We didn’t even have one until a few weeks ago!
- Finances: We’d like to be making maximum yearly contributions to our 401ks, Roth IRAs, and also into some other investment accounts. We plan to rent our condo out for a passive income stream at that time. We want to have no consumer debt and no other debt besides mortgages. We’d also like to have a year or two of expenses saved up in an easily accessible emergency fund. However, financial independence/early retirement doesn’t seem like an attainable goal for us in 10, or even 20, years due to our low income.
- Lifestyle: Two kids, a single-family home in the ‘burbs, and money set aside to take our kids on some vacations once or twice a year. We aren’t into traveling much now, so I don’t see us getting the travel bug in a decade. A typical, boring adult lifestyle is what we aim for and we plan to stay in the Nashville area. We are open to relocating anywhere for jobs, but for now, our plans are to rent out our condo and move to a Nashville suburb.
- Career: I want to stay in the public sector, but not at my current position. I hope to find a job in human resources, or some type of analyst work that utilizes my degree better. Zach wants to advance and continue to be promoted at his current company. I’ve contemplated going back to school for my MBA, and my current employer pays for three classes a year; however, it would still cost me $10K-$12K for the degree. It’s unclear to me whether or not an MBA would open up more doors. I know so many people in debt with an MBA; however, I do think an MBA would open up more human resource opportunities, and hopefully give me an advantage in my career. That being said, I don’t have a clear-cut, defined plan post-MBA.
Steph and Zach’s Finances
|Monthly Net Income||Amount||Notes|
|Steph||$2,172||After taxes and 401k contributions.|
|Zach||$2,400||After taxes, health, dental and vision insurance, 401k contributions, and mandatory pension contributions. This does not include OT pay or any bonuses Zach receives, since those aren’t consistent and go straight into savings.|
|Mortgage||$896||30 yr loan, 4.5% interest rate, includes insurance and taxes. We pay an extra $60/month for a full year’s principal pmt. We have a high interest rate in order to avoid PMI!|
|Car Payment||$350||2016 Mazda CX-3. 0% interest, 4 year loan|
|Groceries||$320||We were spending over $400/month! Still trying to get this lower.|
|Food out||$250||We are used to spending $400/month on lunches out, dinners, happy hours, and meals to go. YIKES! We are still trying to get this down.|
|Car Insurance||$175||For two cars. It is high, but we have all the extras added and my husband has a “sports” car.|
|Fuel||$160||I have a long commute with a lot of stop/go traffic.|
|Utilities||$120||Average water + electricity per month.|
|Cell phones||$80||Verizon plan, 2 phones and an iPad. We get steep discounts through work.|
|Coffee consumption||$80||We were spending over $130/month for us both! Our jobs have coffee shops in them and Starbucks is all around us. We’re working to cut this out completely!|
|Internet||$67||There are NO cheap options here. We’ve submitted our bills to those “bill cutter things,” we have shopped around, no luck. Womp womp.|
|Sundry items||$60||Pet expenses, cars, yearly dues (Amazon, registrations, etc).|
|Household/beauty||$55||Includes home supplies, make-up, shampoo, hair cuts, etc.|
|HOA||$45||Pretty self explanatory!|
|American Home Shield||$40||This is a warranty on home appliances, but we’re not renewing our contract when it’s up in December. With this and cutting the gym, we’ll save $60/month! It’s crazy how these things add up.|
|Home alarm system||$32||A worthy expense for peace of mind! Cheapest plan we could find with no landline.|
|Concerts||$30||We try to limit ourselves to 5 concerts a year. This year our big ones are The Shins, Father John Misty, and The Decemerbists! We plan to cut this after this year. .. Unless Wilco comes. We have our limits.|
|Gym memberships||$20||Planet Fitness. Our contracts are up in December and we will not renew!|
|Spotify||$16||We don’t have wifi at work, so this saves us from going over our data every month.|
|HBO||$14||A worthy expense for Zach who is obsessed with Silicon Valley.|
|Netflix||$8||A worthy expense to us.|
|401k (combined)||$13,100||I just got a 401k last year when I switched jobs. We were both contributing just 3% of our incomes to get the company match up until August 2017.|
|Savings||$12,000||We started really saving in February 2017 after we paid off my student loans. Our goal is to save up 6 months’ of expenses.|
|Roth IRA||$525||I did roughly 0 research, threw money into a USAA Roth IRA, and it has a whooping 3% return. Bleh!|
$19k owed on car
|2016 Mazda CX-3||$19K||0% interest loan; pay-off date of 2022|
|2010 Mitsubishi Eclipse||$0||Valued at around $5,000|
Steph’s Questions For You
- Is it possible for us to reach financial independence at our current income level? Obviously, there’s a lot of fat we could trim in our budget, but it’s hard to stay motivated when we feel like little bits saved here and there aren’t adding up to much.
- Would it be worth it for me to pursue my MBA? As mentioned above, it would be a major out of pocket expense!
- Should I pay off my $19K car loan ahead of schedule (it’ll be paid off in 2022)? It’s at 0% interest, so we feel ok with paying the minimum while increasing our savings and retirement accounts, but I wonder if that’s wise? In general, how should we balance savings, investing, and debt repayment? It seems like an impossible feat!
- Should I consider taking a pay cut in order to pursue my dream job? Did I just bemoan our low salaries all through this post and then ask if it’s ok to take an even lower salary?!? Yep! The HR jobs I qualify for pay $200-$300 less PER MONTH. Should I just accept my current job, even though I don’t enjoy it?
Mrs. Frugalwoods’ Recommendations
Ok, first off, I rarely flat-out disagree with Case Study subjects, but I am going to flat-out disagree with Steph. She claims that she doesn’t “have a frugal bone” in her body, but she is dead WRONG. Steph is pretty much a frugal warrior!!! Girl, if paying off THIRTY-EIGHT THOUSAND dollars in student loan debt in a mere three years isn’t frugal, then I’m retiring (oh wait, I already did… ). Oh and they bought a house too!!!! Sheesh.
Point being, Steph, you need to give yourself some major credit here!! I am deeply impressed with where Steph and Zach’s finances are at, especially given the fact that they’re about 12 years old. Ok they’re 25 and 26, but WOW. These are some organized finances for people barely out of undergrad! Many folks TWICE their age would kill to be in the financial position they’re in: minimal debt, home owners, retirement savings, two stable jobs, and an emergency fund. Wow. So, you know, just needed to get that out of my system before proceeding.
And now, I’ll take Steph’s questions in turn.
Question #1: Is financial independence possible?
The short answer is that yes, it is possible for Zach and Steph to reach financial independence. However, the larger question is if they want to. You don’t need to become financially independent or retire early in order to live a financially stable, happy life. It is but one option in the great panoply of choices out there and it’s a choice that involves embracing a lifetime of frugality. Mr. Frugalwoods and I enjoy our frugal lifestyle and we love the auxiliary benefits we reap from living a simpler, less consumeristic life. But it’s not for everyone and that is perfectly fine!
The question for Steph and Zach to wrestle with right now isn’t so much financial as it lifestyle. While Steph did outline their ten-year plan, I’d encourage these two kids to spend some time reflecting on what they want in their future. I’ll tell you right now that I had NO CLUE what I wanted to do when I was their age and Mr. FW and I had NO IDEA we’d be retiring early to a homestead in the woods. So I think allowing some time and space for their dreams to come into focus is a wonderful idea. What really stands out to me, however, is Steph’s mention that she hates her job. Age 25 is pretty young to already feel trapped and hemmed in by a job and so this is a wonderful opportunity to do some soul searching.
If Steph and Zach decide that financial independence (FI) is a definite goal for them, then they are on the right track already! There are essentially only three variables to achieving FI:
It’s all about how much you make, how much of it you can save, and the amount of time it’ll take you to save. Obviously, the greater your income, the more you can save the faster. To that end, if FI is their goal, then finding better-paying positions is a great idea for Steph and Zach. That being said, they’re making pretty darn good salaries for being 25 and 26! Focusing on advancing in their careers and increasing their earnings will allow them to put more distance between their income and their spending, which is crucial. Now is the time for them to both be aggressive in their careers: they don’t have kids, they don’t have too many other responsibilities, and so now’s the time to show up early, stay late, and gun for every promotion. This is what Mr. FW and I did at that age and it worked. As they get older, things like flexibility in work hours to allow for time to care for kiddos might take precedence, but for now? Focus on climbing that ladder.
Steph and Zach will also need to slash even more of their spending if FI is a goal, but man oh man are they already doing well! I am super impressed with everything they’ve cut out and their rapid re-payment of Steph’s student loans is a testament to their frugal ninja capabilities. If they want to achieve FI, they will.
To Steph’s point that saving little bits here and there doesn’t seem to add up, allow me to assure you that it does. My first job out of college paid a whopping $10,000 a year and I saved $2,000 of my salary. My next job paid a bit more and I saved much more and so on and so on. Steph and Zach also need to embrace the beauty and wonder that is compounding interest. Over time, drips and drabs of money become thousands and then hundreds of thousands of dollars if invested.
And now, in fine Frugalwoods Case Study tradition, let’s take a run through Steph and Zach’s expenses:
- Mortgage: My note here is that 4.5% is not a terrific interest rate–it’s ok, but not great. I’d advise Steph and Zach to investigate refinancing options in the future. Especially if they want to rent this condo out and generate a profit, getting that interest rate lower will help their margins.
- Groceries: $320/month for two people is actually quite good! But, it’s only good if this covers ALL the food and drinks you’re consuming. It’s a great expenses level if you don’t spend anything on…
- Eating out: Steph and Zach already know what I’m going to say here… this $250/month needs to go. In its entirety. I am excited for them that they’ve reduced this down from their previous staggering $400/month, but in order to reach financial independence, this line item needs to be eliminated. Here are a few posts for inspiration and ideas:
- Car insurance: $2,100 per year seems really high to me. I recommend they shop this around and see if there are any cheaper options to be had. I’ll also note that this is yet another reason not to buy new cars.
- Cell phones: $80/month for two phones isn’t terrible, but there are cheaper options. I pay $19.99/month through BOOM mobile. Other inexpensive providers include Ting and Republic Wireless. I recommend they price these out and see what they can find. I know folks on Ting, for example, who pay a mere $14 per month.
- Coffee consumption: This is another one that would need to be eliminated entirely if financial independence is a goal. $80 per month is $960 per year on coffee!! Now I myself am an avid coffee drinker, but I buy organic, fair trade whole beans in bulk for dirt cheap from BJ’s and make it myself at home. Back in my office days, I took a thermos of coffee with me every morning. Now, in my working-at-home days, I have a thermos of coffee at my side. As a person who used to buy very expensive coffee, I can appreciate how hard this is. However, it can be done. Here’s more on how we coffee for cheap: Is Costco Coffee Any Good? We Bravely Discover (newsflash: it totally is).
- American Home Shield: I am glad to hear they’ll be cancelling this–that’s another $40/month saved.
- Home alarm system: My question here is if this is truly necessary. Everyone has their own comfort level and you have to do what works for you. But, it is an expense every month. I encourage Steph and Zach to research crime stats (particularly break-ins) in their neighborhood to determine if this is truly necessary.
- Concerts: Same story as eating out and coffee. If financial independence is an earnest goal, then this needs to be eliminated.
- Gym memberships: I’m excited they’ll be cancelling this as it’s another $20/month they’ll save. There are a million ways to exercise without a gym membership.
- Spotify, HBO, and Netflix: These three all come down to how badly Steph and Zach want to achieve financial independence. If they REALLY want it, then these need to go. It boils down to: do you want to watch specific TV shows or do you want to retire early? Here’s how Mr. FW and I watch TV for free: How We Avoid Cable And Watch Free TV Online.
I know that Steph is having a hard time seeing how all these seemingly small expenses add up over time and so I want to do a little bit of fun (I promise!) math. If she and Zach were able to eliminate all of the above expenses I recommend, they’d be on track to save $490 more per month (and that’s without accounting for any reductions in their cell phone or car insurance bills). That’s $5,880 per year, which is no small change! Still not convinced? Allow me to unveil the wonder of compounding interest.
Let’s say that Steph and Zach invested this $5,880 in low-fee index funds and enjoyed a 7% annual return (which is considered an average annual market return over the longterm). Imagine that they kept this $5,880 invested for decades (which is the wisest way to invest) and added just $5,880 to their investments every year instead of paying for restaurants, coffee, TV, etc.
In 30 years, their $5,880 would grow to $600,189.48. Yeah, you read that right and it’s not a typo: $600,189.48. Now ask yourself: would you rather have $600K or watch television, buy coffee, and eat at restaurants? That is the power of lifelong frugality. Want to do this calculation with your own numbers? Check out this handy dandy online compound interest calculator! For more on how to get started with investing, read this post and, for a deeper dive, I HIGHLY recommend this book: The Simple Path to Wealth: Your Road Map to Financial Independence And a Rich, Free Life, by: JL Collins, which provides a basic, easy-to-understand overview of how to invest for people of all ages.
No matter what Steph and Zach want out of life, being financially stable will smooth the road and will enable them to pursue whatever dreams they want. There’s nothing like debt or a $0 savings account to stop any dreams you might have dead in their tracks. You want to be a position of having plenty of money and the ability to find out what it is that you want to do with your life. There’s nothing more liberating than realizing what your passion is and having the financial ability to pursue it. Trust me.
Question #2: Should Steph pursue her MBA?
This is one of those questions that only Steph can answer. What I encourage her to do is determine exactly how much her salary would increase if she had an MBA. As a government employee, there should be salary bands available for her to research with inputs such as an MBA. If there’s no clear return on the investment (of time and money) for an MBA, then there’s no reason to do it (unless she just really wants to go back to school).
I don’t recommend taking on the debt or the stress of an MBA if she doesn’t have a very clear, articulated career path post-MBA. She should research these questions (and more): How much would she make? What position would she have? How quickly would she pay back her student loan debt? How would she manage her time while working and in school? It’s not easy to work full-time and go to school full-time, which I know because I did it. Here’s how I got my MA for free in case it’s helpful: That Time I Went To Grad School For Free*. All that to say, I wouldn’t dive into an MBA without a clearly articulated plan and rationale for doing so. The time, expense, and stress of grad school is not to be taken lightly.
Question #3: Should Steph pay off her car loan ahead of time? And, how should she balance savings, investing, and debt repayment?
My answer might surprise you, but, I firmly believe that Steph should NOT pay off her car loan ahead of time. Why? Because it’s got a 0% interest rate!!! Debt on its own is not a bad thing. What’s so bad about debt are interest rates. But with 0% in interest, there’s absolutely NO financial reason on EARTH to pay this off early. Pay it off on schedule and then never, ever, ever buy a new car ever again. Here’s an in-depth treatment of the math and rationale behind why buying used cars for cash makes the most fiscal sense: Why We Buy Used Cars And You Should Too.
Steph’s second question–on how to balance debt repayment, savings, retirement accounts, and investments–is an interesting one and a query I receive from readers on an almost daily basis. Here’s my advice:
- Track your expenses religiously. Steph and Zach are already doing this, so kudos!! If you’re not, you can sign-up for the free service Personal Capital, which is what I use and recommend for expense tracking.
- Pay off any high interest debt. Steph’s already taken care of this by paying off her student loans, so she can move on to…
- Building an emergency fund. You MUST, must, must, must, MUST have an emergency fund saved up. An emergency fund is kept in an easily-accessible bank account, such as a checking or savings account, NOT in investments, retirement funds, or cars/houses/expensive china. An emergency fund is cash money you can access immediately in an emergency. I recommend saving three to six months’ worth of expenses, which Steph and Zach are well on their way to accomplishing. They currently have $12K saved up, which is awesome! In order to reach their stated goal of six months’ worth of expenses, they’ll need a total of $16,908. Now, the other consideration here is that if they lower their monthly expenses, they won’t need as much in their emergency fund. This is yet another example of how frugality is a compounding game: the less you spend, the less you need, the more you save, and the wealthier you are!
- Contribute to retirement accounts. Steph and Zach are already doing this! Hooray! Especially if your employer matches your contributions, putting money into a 401k or 403b is a no-brainer. Here’s more on why: 401ks Are Your Friend: Demystifying Personal Finance Part 3.
- Invest in low-fee index funds. Once you’ve accomplished steps 1-4, which Steph and Zach pretty much have (with the exception of beefing up their emergency fund a bit), it’s time to start investing! Investing in the stock market is how you grow your wealth. Without this crucial step, you won’t reap the advantages of compounding interest and you’ll never build your net worth in a meaningful way.
- Explore other options for investing in order to achieve diversification. After completing steps 1-5, you should continue investing in your low-fee index funds on a regular basis (I recommend automating this process) and you can also start to look around for diversification options. This might include, for example, real estate. Mr. FW and I rent out our home in Cambridge, MA for a profit and Steph and Zach mentioned that they might want to rent out their condo. Renting a property can be a fabulous financial decision and it can also be an absolutely abysmal one. It depends entirely on the rate of return you’d receive. For more on renting out properties, I recommend the site Bigger Pockets, which discusses real estate investing.
As you can see, Steph and Zach are doing FABULOUSLY well!!!!
Question #4: Should Steph take a pay cut in order to pursue the job she wants?
This is a tough one. It’s hard to advise Steph to reduce her income, but it’s also not worth it to work a job you hate. I strongly encourage Steph to look around, and to look outside of the government to see if there might be an HR position that’ll pay more. I worked in the non-profit sector for my entire career and loved it. The private sector is another option. I advise that she not hem herself into just one sector so early in her career–it’s not worth it! Unless she’s getting mad benefits from her government job (which she doesn’t appear to be), she needs to keep an open mind and do a broader search.
Steph said that she doesn’t want to work in the private sector, but has she tried it? And what about the non-profit space? Since Steph loves music so much, and lives in a vibrant music town, I wonder if there might be an HR position open at a music-related company? Just about everyone has an HR department and so she might be able to enjoy her hobby while finding the job of her dreams. Plus, I bet there’d be an opportunity to snag free concert tickets! I used to work for a cultural institution and got benefits such as free classical concert tickets, free museum admissions, and more. It’s good to think broadly.
Steph and Zach are doing great, especially given how young they are! I am thrilled that they’re taking this hard look at their lives and finances now because NOW is the time to do it. They have the time, the energy, and the ability to dramatically change and shape their future at this stage. In summary, here’s what I recommend they do:
- Do some serious soul-searching and decide what they want to do with their lives. It’s OK if this takes some time to evolve. They could take my free Uber Frugal Month Challenge together as there are a lot of prompts in this challenge to articulate and define your life goals.
- Decide if financial independence is an earnest goal. It it is, they can absolutely get there–it’ll just take some hard work and some time.
- Focus on increasing their incomes and decreasing their expenses. No one has EVER wished they had less money saved up for their future.
- Do more research on the value of getting an MBA.
- Job search more extensively and look beyond just government positions.
- Figure out what would make them happy. If Steph is unhappy now, at the tender age of 25, then it’s time to determine what would make her happy and what she wants to do with her life. Lucky for her, she’s in a wonderful financial position to make these decisions!
Ok Frugalwoods nation, what advice would you give to Steph? She and I will both reply to comments, so please feel free to ask any clarifying questions!
Would you like your own case study to appear here on Frugalwoods? Email me (email@example.com) your brief story and we’ll talk.
Updated January 10, 2018 with Steph’s decisions:
Happy 2018, Frugalwoods!!! Since my case study, I have applied to a ton of private and public HR careers. I decided I do not want to take any pay cut, and so, I have not found anything. My husband still works at his same job, and is now finally actively looking for a job he is passionate about! So excited for him! I have decided to put grad school thoughts and plans on hold. I honestly have no idea what I want still, so getting in more debt seems silly. We have decided that FIRE isn’t a path we want to embark on, not yet anyway! We do want to invest and save like crazy, but we really want to have good careers first.
We have over $17k in our emergency fund!!! We opened up IRAs ($1,500 in them, combined), upped our 401k contributions to $300/month each, and our next goal is up to open a Vanguard non-tax-deferred account. After taxes and insurance, we are able to save or invest anywhere between 42-48% of our income. That is A LOT to us! We now have over $20k in retirement accounts! Yay! We decided to put savings and investing as our main focus, and just keep my car loan. We also plan to shop around for home refinancing once our credit score is 800 (we are so close!).
We always thought we made too little to save, invest, and adopt a more frugal lifestyle. And I’ve always viewed myself as “stuck” in my job. Those mindsets made us miserable! We didn’t get new jobs that pay a lot, a huge raise, or any sort of money wind fall (darn!), but what we did do is shift our mindset to one of being grateful for our jobs, hopeful for the future, and we cut back on all the frivolous things that distracted us from our future goals, like eating out, Starbucks, and concerts.
I want to give a big thanks to everyone that commented, and to you for featuring my story! The feedback made me realize ANYONE can be frugal with what they have now, and on the salaries they make now.
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