Reader Case Study: Making It Work on a Small Salary in a High Cost of Living City
Zaria lives in Seattle, WA where she advises students and leads a graduate program at a local university. She’s done tremendous work over the years to pay off her debt, build up her savings and retirement investments, and create a frugal, sustainable, outdoorsy lifestyle. Now, at 52, she’s looking to the future and would like our help crafting long-term plans as well as assistance navigating our increasingly tech-dependent world (computer nerds, your help is needed today!).
What’s a Reader Case Study?
Case Studies address financial and life dilemmas that readers of Frugalwoods send to me requesting advice. Then, we (that’d be me and YOU, dear reader) read through their situation and provide advice, encouragement, insight, and feedback in the comments section. For an example, check out last month’s case study. Case Studies are updated by participants (at the end of the post) several months after the Case is featured. Visit this page for links to all updated Case Studies.
I probably don’t need to say the following because you folks 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 condemn.
And a disclaimer that I am not a trained financial professional and I encourage people not to make serious financial decisions based solely on what one person on the internet advises. I encourage everyone to do their own research to determine the best course of action for their finances. I am not a financial advisor and I am not your financial advisor.
With that I’ll let Zaria, this month’s Case Study subject, take it from here!
Hi, Frugalwoods Community! My name is Zaria, I’m 52 and I live in Seattle, WA where I advise and lead a graduate program at a local university with 100+ students across three degree programs. I grew up in the Midwest where I was unschooled and trained in ballet. I decided against a career in dance, attended college on the east coast, studied and worked abroad, and then moved to the Pacific Northwest where I’ve found home.
I love to hike, kayak, and dance, especially Cuban-style salsa and West African dance. Life has been a rich and rewarding journey, though not without pain. Buddhist meditation and mindfulness are core practices for me and key to staying healthy as a therapist and survivor of childhood abuse. I live with the invisible disabilities of chronic depression and PTSD. My journey with them revealed my calling as a therapist and necessitated me to live intentionally with as much gratitude and compassion as possible.
My parents instilled a passion for social justice, languages, art, and learning along with gifting me and my siblings with acceptance and love. They also struggled with, and feared, money. We were money poor, but we were rich in education, culture, and self-confidence. We volunteered everywhere, which allowed us access to otherwise unaffordable social and cultural events. Later, as a dancer and actor, I loved sharing complimentary tickets with my family.
In addition to the resources I mention above, I have the additional privilege of being a white, cisgender woman who passes as straight and middle class in spite of my “invisible” disabilities and lesbian sexual orientation. These privileges helped me develop a financially stable life as an adult. Also important has been releasing my fear of, and distaste for, money. A childhood spent in the shadow of relentless debt and frequent close brushes with bankruptcy lead me to think of money as a predatory mystery to which I was fated to be subservient. I thought people like me could never have enough for a financially stable life or comfortable retirement.
Zaria’s Money Awakening
I’ll never forget the day this narrative started to change. A regular customer came into a store where I worked. He was elated to have just paid off his student loan. What?! He was barely older than me and worked as a low-paid house painter. Was it possible for people like us to live debt free?
At his suggestion, I read Vicki Robin and Joe Dominguez’s Your Money or Your Life* cover-to-cover, adjusted my mindset, and overhauled my budget (and life). But once that was done, I ground to a halt. What were my next steps? This was early days of the Internet, so that resource wasn’t available. Also, employers weren’t helping employees become more financially literate the way many of them do now. And it never occurred to me that my credit union could help me learn more and review options.
*Mrs. FW side note: I love, and highly recommend, this book! Also, this is an affiliate link.
For years I muddled along as best I could: paying off my student loans and purchasing Treasury Bonds. I simply had no idea how (and how much) to save for retirement. For years I focused on living frugally and saving as much as I could from my low-paid community-service jobs. Those savings were needed to pay medical bills for medically-necessary therapy, tuition for a MS degree in mental health counseling, and life expenses when I lost my job due to the Great Recession. In 2010, I got a stable, full-time position with decent pay, health insurance, and some retirement resources. In 2016, I discovered the FIRE/frugal online community (especially Frugalwoods!) and never looked back.
I’m currently on my third career. 1) Trilingual instructor, translator, and dramaturge, 2) Bilingual mental health therapist working with young immigrants and refugees, and currently 3) Academic advisor at a large state university.
When I “retire,” I’ll return to offering mental health support to child/youth refugees and immigrants (I have an MS in mental health counseling and am fluent in Spanish and French).
I look forward to incorporating more physical movement and interaction with nature into what I offer as a therapist.
Zaria’s Hobbies and The Best Parts of Her Life:
- Immersion in breathtaking nature, in and outside of the city
- Hiking, especially in WA and southern Utah
- Time with water – kayak, SUP, wade (I don’t love swimming)
- Buddhist practice and community
- Dancing, playing with kids and animals, laughing, learning, speaking my other languages
- Sharing meaningful connections and helping those around me
- Exchanging thoughtful weekly letters with my father
- Caring for shelter dogs
- Living in a quiet home with a patio and garden
The Most Challenging Parts of Zaria’s Life:
Isolation: Managing my disabilities combined with needing solitude to recharge from the job of therapist or advisor (meaningful work that I love and do well) results in reduced energy to socialize and meet new people.
- Loneliness: I’ve had wonderful friends, but now all but one live far away and don’t have bandwidth/desire to maintain our friendship. Also, for various reasons, Seattle isn’t always an easy place to make friends. Note: I love animals, but can’t have them in my rental.
- Connection: In September 2019, I started to intentionally seek new friends. I joined a local hiking group, took yoga classes, attended a few social gatherings, and reached out to some interesting people. But the pandemic ended those activities. As of March, I’ve been reaching out online (via affinity groups and free dating sites). No strong connections yet.
- Doubt: Will I even be able to find and keep friends and community? Is it too late to make connections? So many people, especially around my age, seem to have found the friends they want and not be open to adding more.
Where Zaria Wants To Be in 10 Years:
- Secure comfortable retirement (food, housing, healthcare), supplies for already-existing hobbies, dance/yoga classes, attend occasional theater performances/lectures, winter travel to a warm sunny place.
- What else: Be able to make some modest donations, explore US National Parks, and take a special trip once or twice a year.
- Have a few loving, interesting, dependable, long-term friends.
- Be part of a healthy, diverse, art/nature-oriented community.
- I welcome an intimate relationship, but cultivating friends and community is my priority.
- I could continue to live in Seattle or move to a progressive town (e.g., college town, etc.).
- I prefer temperate weather and need access to beautiful natural places, preferably mountains and water.
- I love the Pacific NW and could be happy in progressive communities in the mountain west, NH, VT, MA, Europe and Latin America.
- Daily: meditation, yoga, and outdoor activity.
- Regular: dance, laugh, time with friends, read, play, garden, socialize, speak other languages, learn about plants/animals and geology/climate
- Starting summer 2021: volunteer in Mt. Rainier National Park, start drawing and begin a nature journal.
- Work part-time as a therapist for BIPOC children and youth.
- Connect my clients to physical movement, art, and nature.
- Foster shelter cats and dogs.
|Zaria’s net income||$2,682||Minus deductions for taxes, healthcare, and 403b contributions|
|Item||Amount||Notes||Interest/type of securities held||Name of bank/brokerage|
|403b||$137,800||VANG INST TR 2040 & VANG INST TR 2035||Vanguard funds managed by Fidelity|
|IRA-Traditional||$35,996||I was told I couldn’t contribute to a traditional IRA, but it seems I actually can. So, starting in 2020, I’ll be contributing the max to my traditional IRA.||Vanguard|
|Emergency||$5,466||Goal: $10,932 (Could you recommend a good high-interest saving account for this?)||My local credit union|
|Checking||$1,500||My local credit union|
|Savings||$500||My local credit union|
|Vehicle make, model, year||Valued at||Mileage||Paid off?|
|Honda Fit (2013)||$8,500||33,726||Yes|
|Rent||$1,350||furnished apartment with internet, laundry, utilities, garbage/recycle, vacuum, etc.|
|Food||$200||organic/local/unprocessed; free of a number of allergens; diet is similar to Whole 30|
|Non-food household||$25||cleaning supplies, toilet paper, first aid, body care, seeds, batteries, light bulbs|
|Medical care||$16||managing a chronic health condition|
|AAA road service||$8|
|Insurance – car & renter’s||$102||payment for having an accident-free record = $48.66/year|
|Shoes||$17||replace hiking/trail shoes|
|National Parks Pass||$7|
|Book purchases||$5||approx. three books/year by local authors (and then I use the books as gifts)|
|Card Name||Rewards Type||Bank/card company|
|Fidelity Rewards (primary)||Cash back||$129 cash earned so far; $20,200 line of credit|
|Capital One (back-up)||Travel (I have 140,405 miles)|
Zaria’s Questions for You:
- FIRE Calculations:
- Is there an easy-to-use online retirement calculator for non-techie/non-math people?
- I’m mystified about how to know future interest rates and other such details required by these calculators
- Recommendations for frugally enjoying music? iTunes, Apple Music, Spotify or something else?
- How do I retain access to my purchased music (e.g., purchased via CD, online, etc.)?
- Computer backing-up:
- How does a non-technical person like me securely back-up music, photos, and documents to my iCloud account?
- I’m drowning in passwords and can’t keep up with having to change them regularly.
- Thank you for your help with password strategies and/or recommendations of password managers.
2) Questions for renters living in HCOL areas they can’t afford:
- Do you plan to stay? If so, do you have any creative budget-friendly strategies for doing this?
- If you’ve moved to a more affordable location, are you glad you did? What should I consider/do before making the decision about moving?
3) Planning for the future:
- I hope to enjoy a long, joyful, active, healthy life for many years to come. I may or may not become partnered. No matter what, I welcome your advice on what I should be considering and planning, including how to deal with ageism and aging as a single woman.
- I’m open to leaving Seattle as long as it’s safe to be gay and I have friends and community. Any places I should consider?
- Currently, my focus is on saving for retirement, cultivating friends/community, developing technical literacy, and investing in my long-term health. Is there anything else I should be doing?
Many thanks to the entire Frugalwoods community for taking the time to read and comment. I know how lucky I am to be a part of this wonderful community that Liz created.
Mrs. Frugalwoods’ Recommendations
I begin with massive congratulations to Zaria for managing to live well in a high cost of living city on a relatively modest salary. I am impressed with her inexpensive rent, small grocery budget and super frugal entertainment. Zaria should be telling ME how to save money!!!!
It’s clear that over the years, Zaria has cultivated a naturally frugal lifestyle that allows her to spend time and money on the things that matter most to her–hiking, yoga, dance, community, animals–and eliminate all the expensive distractions that so many of us (me included) fall victim to. Zaria is the prime example of how to forge a meaningful, fulfilling life in an expensive city with limited resources.
Zaria’s Question #1: All Things Technology
I want to note here that sometimes people grouse about how every single Case Study doesn’t focus exclusively on money questions. Folks, I LIKE it when Case Studies don’t focus exclusively on money questions because if they did, I’d be writing THE SAME responses and advice every month. So, don’t bemoan that these questions aren’t alllllll about money.
Plus, I’d argue that most questions in life do have an undergirding of money–how we use it, how we earn it, how we feel about it, how it serves as a proxy for status–money is integral to most choices we’re able to make and ultimately, to the lives we’re able to live.
Zaria asks, “Is there an easy-to-use online retirement calculator for non-techie/non-math people?”
I respond, “Sort of.” This calculator from Engaging Data is pretty straightforward.
A few notes for Zaria on retirement:
- She’s not looking to retire tomorrow, so there’s no immediate concerns, and she’s doing all the right things: contributing to her employer-sponsored 403b (enough to receive the full employer match) AND she’s contributing to an IRA.
- Zaria should go ahead and figure out her anticipated social security payments, which she can do by following these instructions on how to retrieve their earnings tables from ssa.gov (the government Social Security website).
Since Zaria lives so incredibly frugally, it’s highly possible that her social security payments will cover (or nearly cover) her monthly living expenses in retirement.
- It’s a bit oversimplified, but I like Fidelity’s retirement planning rule of thumb, which stipulates: “Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.” Since Zaria is in her early fifties, she should have roughly $193,104 saved for retirement at this point (6 x $32,184). And she has, drumroll please…. $249,996 in her retirement accounts!!!!! Woohoo!
- Based on the 6x rule of thumb, the likely presence of social security, Zaria’s inherent frugality, and the fact that she doesn’t plan to retire ASAP, I’d say she’s in excellent shape for retirement.
Zaria asks, “Recommendations for frugally enjoying music? iTunes, Apple Music, Spotify or something else? How do I retain access to my purchased music (e.g., purchased via CD, online, etc.)?”
I listen to free music on Pandora and Spotify. When I need/want a specific song (like when I’m preparing a song to sing at church), I use free YouTube. If the free option isn’t working for Zaria, I turn this over to the readers in their infinite wisdom.
Zaria asks, “How does a non-technical person like me securely back-up music, photos, and documents to my iCloud account?”
I’m an obsessive backer-upper of data and I do it in two ways: with an external flash drive (kicking it old school) and via web-based services, some of which, yes, I actually pay for. The easiest way to think about this is that nothing actually lives on my computer. I could take my flash drive and my web-based log-ins and recreate “my” computer on any computer anywhere in the world. This way, if my computer spontaneously combusts or–more likely–a toddler dumps a cup of water on it, the only loss is the computer itself–all my data is stored elsewhere.
For photos: I pay for Google photos to back-up all of our photos (this means they’re web-based and can’t be lost if you lose your phone/computer/every photo print-out you’ve ever made). Plus, I can upload them directly from my phone into Google photos. Since I take all my photos with my iPhone, this is beyond convenient for me. Readers, I am but one voice here, so please chime in with your recommendations!
For documents: I primarily use Google docs and spreadsheets. These are free, you can access them anywhere, share them with anyone and, like the photos, the documents are web-based and so cannot be lost if your computer catches on fire.
Because I’m old school, I also shovel all my documents onto an external flash drive, ever-present on my laptop. But, the flash drive is a WAY less secure method of backing up because it could be lost or perish in flames if I accidentally leaned too close to the bonfire.
The cloud–which is really just the internet–is generally considered the best way to back stuff up because it means it’s not device dependent. You could lose your phone, your computer, etc and still have access to alllllllll your photos, documents, and spreadsheets (am I the only one attached to my spreadsheets? just me? Ok…. ). Having everything web-based is also super convenient if you’re toggling between a work and personal computer.
For music: I honestly don’t know. I listen to the free services I mentioned above and, when I’m out and about, I listen to free podcasts I’ve downloaded ahead of time. I am totally out of the loop on music back-up services. Readers–help out please!
Zaria asks, “I’m drowning in passwords and can’t keep up with having to change them regularly.Thank you for your help with password strategies and/or recommendations of password managers.”
Having secure, differentiated passwords is imperative, especially when you’re backing your stuff up online (aka in the cloud)! We use 1password, for which we pay an annual fee. For me, the cost is worth it because Mr. FW and I have a lot of shared passwords and we need a central repository for them all. I also like 1password because it auto-generates highly secure passwords and then remembers them for you.
However, if you want to go the free route, a lot of browsers now offer built-in password managers. My computer nerd husband reports that the password manager built into the Chrome browser is free and pretty straightforward to use. I think having a password manager–whether free or paid–is a fabulous idea in our increasingly-online world.
Zaria’s Questions On Planning For The Future
Zaria has created a nimble lifestyle and she’d be well-equipped to pack up and move anywhere she wants, if she wants! I think she’s got a uniquely excellent set-up there in Seattle with: dirt cheap rent (WOW), access to nature, a great job, and a queer-friendly community. There are certainly cheaper areas to live in, but I question if she’d be as happy?
For example, I went to the University of Kansas in Lawrence, KS, which is a wildly progressive, hip, artsy, cultural little university town. However, it doesn’t have access to mountains, the winters are harsh, and while Lawrence is ultra-progressive, the rest of Kansas is not. My current state of Vermont has everything Zaria wants, except for climate… “temperate” we are not.
Other towns that come to mind are Ann Arbor, MI and Asheville, NC, but with both of those places, I think Zaria would likely face some of the same challenges I noted with Lawrence (although Asheville is more temperate and has gorgeous mountains). Plus, I think Zaria would be hard-pressed to find rent so cheap anywhere else. If she WANTS to leave Seattle, I think there are plenty of university towns she could consider, but if she’d just be trying to replicate what she already has in Seattle, I’m not sure I see the point.
The wild card here is her rent. If her rent were to increase significantly, I wonder if she’s considered looking into subsidized housing? At her income level, I think she might qualify for some rent assistance and it might make staying in Seattle more tenable for the long-term.
Zaria’s a long way away from needing elder care, but it sounds like it’s something that’s on her mind. To that end, I wonder if she’s explored some of the options in the Seattle area? Perhaps knowing what’s available–and what assistance she might qualify for–would help frame this question better and give her some reference points for where she might live when she does need care.
Join The Peace Corps?
Given Zaria’s fluency in Spanish and French, I wonder if she’s ever considered doing something like elder Peace Corps or AmeriCorps? Zaria’s interest in social justice, in serving under-represented communities, her love of travel and the outdoors, as well as her training as a mental health counselor all make me wonder if she’d enjoy doing one of these programs in a few years as a sort of quasi-retirement? Just throwing it out there as an idea to consider. Plus, working through the Peace Corps might make the red tape of living abroad easier and might make it easier to receive/access her social security and Medicare benefits (this is me hypothesizing, do your research!!!).
Building Community and Making Friends
I hear from Zaria a desire for deeper friendships and community and I wish I had advice to offer her. It sounds like she’s already done all the right things: joining a faith community, joining a hiking group, attending yoga and dance classes, and using online dating sites. It really sounds like she’s putting forth the effort and, unfortunately, a pandemic has gotten in the way. I hope there are readers who can offer sage advice here!
Expenses: I have zero advice for Zaria on this front. She is a frugal maven and we should all learn from her! I will note it’s obvious Zaria carefully tracks her spending every single month. Looking at your expenses for just one month isn’t terribly illuminating–you need to know what you spend every month in order to have a clear picture of your spending. I use and recommend the free expense tracker from Personal Capital (affiliate link). You can read more about why I like Personal Capital here.
Retirement: As noted above, Zaria’s in rock star shape.
Emergency fund and cash: Between her emergency fund, checking and savings accounts, Zaria has $7,466 in readily-accessible cash. The standard rule of thumb is to have three to six months’ worth of your expenses in an emergency account. Zaria spends $1,822 per month, which means her savings would cover four months worth of her expenses. This is a perfectly adequate amount, but, she noted she’d like to have more saved and hey, more saved is never a bad idea (but it’s certainly not a hair-on-fire situation, not by a long shot). Zaria noted she’d like to move these accounts to a high-yield account, which is super smart. Unfortunately, most of those accounts aren’t very high-yield right now, but this is something for Zaria to keep an eye on when interest rates rebound.
Credit cards: Nicely done on using a cash-back card! I too am a cash-back card user because it’s the easiest way to earn rewards for buying stuff you were going to buy anyway (affiliate link). If you can pay off a credit card in full every month, and only use it to buy things you were going to buy anyway, a credit card is a fabulous way to: boost your credit score, track your spending, and earn cash back! You can read all about my credit card strategy and the cards I recommend.
Car: Major congrats on driving an older, paid-off car! I’m all about that used car life. Here’s why.
Debt: WOOHOO on being debt-free. Zaria has done the hard work to put herself in fabulous financial shape.
Income: Zaria’s income is modest, but she’s made it work. I don’t hear from her a desire to work more or take on a higher-paid job and, because of her frugality and wise choices, she doesn’t have to if she doesn’t want to.
- Retirement: Zaria should calculate her anticipated Social Security income to give her a fuller picture of what to expect in retirement. After gathering that data, she can plug all her variables into the calculator at Engaging Data.
- Technology: Look into free, web-based services for back-up (such as Google docs and the Chrome browser password manager) as well as paid options, such as Google photos and 1password. Consider if music needs can be met by free services.
- Long-term: Explore eligibility for subsidized housing/rent assistance. Research elder care options in the Seattle area to start gathering data. Consider joining elder Peace Corps or AmeriCorps as a quasi-retirement plan that would provide modest income, availability of US benefits, and the chance to live abroad and use her multiple languages.
- Every day: Feel really, really good about all the hard work she’s done to put herself in an excellent financial position despite having a modest salary in a high cost of living city!
Ok Frugalwoods nation, what advice would you give to Zaria? We’ll 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.
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