Cash Confessional: What are they doing right – and wrong?

Our Cash Confessional series takes an anonymous look into how people of all ages and incomes spend their money in the span of seven days. If you’re interested in keeping track of your own spending and having it featured, email [email protected].

Katrina Pride is a Finance Business Support Manager at Bank of America, where she supports employee engagement, communications, learning and leadership development for the Chief Financial Officer Group. Her prior roles supported the Consumer Finance organization.

She’s also active in the community and co-leads the Neighborhood Preservation community volunteer team at Bank of America in Charlotte. Katrina mentors a ‘little sister’ with Big Brothers Big Sisters of Greater Charlotte and will be joining the Arts and Science Council Board as an apprentice this year.

Below, she’s weighing in on individual Cash Confessionals to give tips for smarter saving and spending.

Biggest financial mishap? I wish I would have sought financial planning services at the start of my career.

Financial advice for your peers? As your income increases it doesn’t mean my lifestyle has to change. That increase should go to savings.

#1 financial goal? At this point, my number one financial goal is saving for retirement.

Story: A week of spending in Charlotte on a $74,000 salary

I’m a spender. You can’t take it with you when you’re gone. I value using my money for the things/experiences I want now rather than waiting until I’m 65. I know saving is important, so it works best for me if the money is gone before I get it. The majority of my savings goes to my 401K. I contribute 7% of my salary to get the full 50% company match my employer offers. I’m thinking about increasing that to 10% in the very near future. I keep $1,000-$2,000 in a savings account for an emergency fund.

Katrina’s feedback: Say yes to leftovers!! I am a fan of leftovers. Sometimes they taste better the next day and they save you money. You managed to eat at home a few times as well which also helps. Overall, I think you did a great job managing your expenses for the week.

From a savings standpoint, you should consider increasing your emergency fund to at least 3 months of expenses for incidentals. In addition, it’s good that you’re contributing a percentage to your 401K plan that allows you to benefit from your company’s matching program; here are some Retirement challenges to consider when thinking about increasing your 401K contribution. Lastly, I think you should strongly consider being a customer of Bank of America!

Story: A week of spending in Charlotte on a $105,000 salary

Three financial goals:

• Establish a $2,000 emergency cash fund.
• Pay off my two credit cards. They’re both maxed out and I make minimum payments, so it’s an endless loop. I’m never really making any headway.
• Figure out what to do with my 401k from last employer – it’s losing money big time and I’m 100% invested in company stock.

Katrina’s feedback: Your standard monthly expenses appear to be reasonable and balanced, so that’s great. I’m sure this exercise was helpful in seeing where a majority of your money is going (i.e. to your college-aged daughter, food/drinks and miscellaneous items).

I think you should take it to the next level and create a monthly budget. The hard part is sticking to it, but you can do it! These Steps to Better Money Management will help get you started as well as providing guidance for establishing your savings goals and paying off your maxed out credit cards. Share these tools with your daughters too; it’s never too early for them to learn how to manage their money.

Story: A week of spending in Charlotte on a combined $123,000 salary

Total spent: $414.99
Breakdown:
Food and drink – $301.37
Entertainment – $21.22
Health/Personal Care – $69.41
Home – $17.71
Other – $5.28

Katrina’s feedback: It’s clear that budgeting expenses is not new for you two, considering both of you spent approximately $400 during the week including grocery shopping, entertainment and other expenses. Great job using coupons for food and entertainment as such benefits can add up over time. Moving forward you should continue to consider your Financial goals as a couple.

Story 4: A week of spending in Charlotte on an $82,000 salary

Monthly expenses:
Mortgage: $982
Housemates: 2. My husband and 4-year old daughter. We also have one on the way.
Neighborhood: Mountain Island Lake
Utilities (Electric, Internet, Water): $239
Home security system: $42.99
Home Insurance: $153.38
Car payment: None
Car insurance: $180
Student loans: $302.75
Credit card payment: $250. I’m aiming to eliminate this by December 2016.
Cell phone: $106
Netflix: $8.99
Satellite TV: $64.25
Lawn care: $50
After school care & Pre-K tuition: $600, but we’re anticipating this to go up to $1,000 per month with the baby coming and the 4-year old going to kindergarten.

Katrina’s feedback: Overall your weekly spending appeared reasonable based on your obligations. In terms of your monthly expenses, it’s a great goal to eliminate your credit card debt by the end of 2016. As you have student loans as well, you should consider which debt to pay first. Congratulations on the expected arrival of the new addition to your family! Managing your family’s finances are going to be important as your family grows, particularly related to your disposable income, increased child care expenses and planning for the future.

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(Note: This content was co-created with Bank of America.)