Jul 13, 2016 - Money

Cash Confessional: A week of spending in Charlotte on a combined $224,500 salary

km skyline romare bearden cash confessional

Our Cash Confessional series, in partnership with Bank of America, takes a personal and anonymous look into how people of all ages and incomes spend their money in the span of seven days. 

To see the other installments of Cash Confessional, click here. If you’re interested in keeping track of your own spending and having it featured, email Kylie at [email protected].

This week, I spoke with a married couple who makes a combined $224,500 a year. Here’s how they spend their money. -Kylie

The basics:

Industry:
Him – Finance
Her – Manufacturing
Position:
Him – IT Manager
Her – Marketing Manager
Yearly salary: $224,500
Him – $140,000
Her – $84,500
Extra income:
Her – Photography that brings in an extra $4,000-$5,000 a year.
Who do you bank with and why? For checking, we use PNC for the convenience and Capital One because she just hasn’t closed this since getting married. For savings, we keep 6+ months of expenses with a .8% interest rate at Capital One.

Savings: We both max out of 401(k)s and have matching programs with our employers (6 + 2% and 3%) that ends up being around $50,000 a year. We also max out our HSAs ($6,700. $1,500 of that is covered by our employers). We contribute $5,000 to a Vanguard brokerage account each month and do have Roth IRAs, but don’t contribute to them due to being over the salary limit.

We intentionally try to save 65-70% of our income each year in order to reach financial independence as early as possible. We are currently looking at reaching full financial independence in 6-7 years, which essentially means we would be able to quit the 40+ hour work week if we choose to.

Ages: 31 and 26

Monthly expenses:

Mortgage: $1,354 (it’s $950/month of a 15-year fixed plan, but we’d like to pay it off much earlier than 15 years)
Number of roommates: One. It’s a dog.
Neighborhood: East Charlotte
Utilities (electric, gas, water, internet, security system, etc.): Around $175, depending on the season.
Student loans: $0
Car payments: $0
Car insurance: $95
Transportation costs (gas): $145
Phone bill: $70
Insurance: $70 for life insurance (including disability).
Gym: $99
Netflix and HBO Now: $23
Travel: We set aside $600 each month that rolls over. Travel is incredibly important to us, which is why that’s our second biggest budget.
Pet needs: We put aside $45 per month. We spend $60 every 3 months on food, $185 every 6 months for flea/tick/heartworm medicine and yearly check-up costs.
Pest control: $28

Note: Our total monthly expenses are around $4,600 (including things that were not listed above such as: entertainment, shopping, personal care, gifts/donations, and additional miscellaneous expenses).

Everything, minus a couple of auto-drafts, is paid for on a credit card and paid back in full. Depending on what we are purchasing, we will use a different card. Ex: AMEX is for groceries (6% cash back) and gas (3% cash back). Discover has quarterly deals, and this month it is Amazon and restaurants (5% cash back). Everything else goes on our Citibank (2% cash back). We are going to be switching to a more travel-based credit card method in the near future, but we are still educating ourselves on all of our options.

Three financial goals:

Increase our net worth by $10,000 each month.

Gain complete financial independence by 2023.

Learn the ins and outs of travel hacking for cheaper travel.

Money Diary: How we spent our money last week

Day one: Sunday

Breakfast is bacon, eggs, veggies and coffee that are all made at home with ingredients we had. $0

Lunch is leftover veggies and chicken for her and a mini charcuterie board for him. $0

Snack time! Homemade banana ice cream made from frozen bananas. $0

We head to the USNWC, but since we have yearly passes, it’s free. She also goes to yoga (free) and we watch the new Game of Thrones and the Stanley Cup finals on free-to-air TV for free. $0

We picked up a few things at the store for this week (including some ground elk that was not on the list, but was $5 off – $3 a pound! Great steal! We threw it in the freezer to make some chili with on another day). $43.80

Dinner is grilled burgers with a side of homemade sweet potato fries for her and potato salad for him. $0

Total spent: $43.80

Day two: Monday

Breakfast was oatmeal for him and a free cappuccino at work while she had a green smoothie and coffee made at home. $0

Lunch for her was a salad she’d prepped at home (weekly meal prepping helps alleviate stress) and a vendor brought lunch to his work. $0

She had a meeting after work and bought a drink. $5.06 with a tip. She also filled up her tank for $32.15.

We both went to the gym and had homemade steak wedge salads afterward because he’s been craving one for a while. They were both massive and delicious. $0

Steak Salad

Total spent: $37.21

Day three: Tuesday

He ate oatmeal and drank a cappuccino at work for breakfast and ate blueberries and drank coffee. All free.

Both had salad for lunch. Also free.

She had a happy hour celebration for a co-worker and bought the co-worker’s wine and a beverage for herself. $14.87

We transferred $5,000 from our checking account into brokerage. We call this a wash, though Mint wants to think we are $5k in the hole, something we have to manually adjust every time. $0

Our weekly mortgage payment also auto-drafted today – $338.66 (we pay on a weekly basis to reduce interest rates as much as possible as we pay off our house).

Dinner is curried chicken sweet potatoes with green beans made at home. $0

Total spent: $353.53

Day four: Wednesday

He makes bacon, eggs and veggies for both of us because we’re working from home this morning. $0

We both meal prepped a salad and had them for lunch. $0

He grabs drinks with his co-workers ($22.29) and she heads home to do yoga ($0).

For dinner, he eats a pre-made meal from Trader Joe’s and she eats salmon with cauliflower rice and zucchini from the garden. $0

Speaking of the garden, the veggie plants in our garden blew over in the storm from the previous night, so she decided to head to Lowe’s to pick up some trellises to fix this problem. But this is the first year we are gardening and we did not think about having to squeeze the pretty large plants into the first tiny rung on the trellises. Sigh. Repurposed some stakes and tied the plants to those, hoping they will hold up for the next storm. At least we have trellises for next year now!

Side note: excited that we have a lot of tomatoes, peppers, and squash growing! We will not have to buy any of those for a while. The cucumbers are still being stubborn, but hopefully they will start producing fruit soon! $17.87

Total spent: $40.16

Day five: Thursday

She has berries, bone broth and coffee for breakfast while he eats oatmeal and gets another free cappuccino at work. $0

Both had salads for lunch. We both purchased our Father’s Day gifts – four tickets to a Panthers game. No big deal. $155.81

Date night! For dinner, we went to a restaurant we’d never been to, got an appetizer, two entrees and beer for $51.97.

Cash Confessional Burger

Total spent: $207.78

Day six: Friday

Breakfast and lunch are both the same as yesterday. $0

For dinner, we grilled out with a friend who provided the meat while we brought the beer and vegetables (from the garden). $26.48

We also had to pick up trash bags while we were on our beer run. $5.49

Total spent: $31.97

Day seven: Saturday

After our long run, we rewarded ourselves (and supported the local community) with a full dozen of Joe’s Doughs. $19.35

For lunch, we were both full from breakfast, so she skips and he eats a bagel. This was a very carb-heavy morning. $0

She went to the farmer’s market to pick up a few things (grass-fed butter, berries, eggs, grass-fed steak for Sunday’s dinner, a marrow bone for bone broth and an immunity booster for allergies) and spent $70.59.

Farmer's Market

We went to a local festival and after, she did free yoga and he got some beer and munchies with friends. $18.95

Dinner was pork chops and brussels sprouts with ingredients we already had. $0

Total spent: $108.89

Total spent: $823.34
The breakdown:

Food and drink – $273.36
Mortgage – $338.66
Transportation – $32.15
Miscellaneous – $179.17

What we learned: Nothing too surprising with how this week went from a budget standpoint. We generally look at our Mint account each day to see how we are doing for that day/week/month. We do spend a fair amount of money on high quality food, but that is a sacrifice we are willing to make, as it does impact our short and long-term health. On the other hand, most of our entertainment has something to do with alcohol… so we do need to have some sort of balance…

With the goal of becoming financially independent as early as possible, we don’t live a lavish lifestyle despite our income. We are completely happy with a smaller home, less stuff, and more experiences. We are very aware of our spending habits, and while we do splurge every now and then (example: tickets for Father’s Day), those purchases are generally thought-out and agreed upon before spending. Plus, we are very grateful for the people in our lives, and gifts are usually an exception when it comes to being frugal (though that doesn’t mean we didn’t do plenty of research before purchasing the tickets we did buy for Father’s Day).

___
Need personal finance education? Visit Better Money Habits. Build your financial know-how with free tools and information to help you make more confident decisions. It’s a simple way of getting real, practical knowledge, brought to you by Bank of America in partnership with Khan Academy.

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