Jan 27, 2020 - Money

Cash Confessional: Parents of two making a combined $108,000 look to become debt-free in about two years

Lauren Corriher

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. Answers have been lightly edited for clarity.

PARTICIPATE: Want to be featured? Go take this new 28 question, anonymous survey. We’ve recently redone the survey to give participants more freedom to showcase their financial decisions and personality — without having to track weekly expenses. To see the other installments of Cash Confessional, click here.

Tell us about yourself.

I’m a married 23-year-old with a Bachelor’s degree, working in marketing. We have two wild children and one ambivalent cat.

Living situation?

We pay about $1,000 per month towards our mortgage and $170 in HOA fees. We definitely plan on moving in the next 1-2 years as our two-bed, two-bath townhome is a madhouse with two little ones running around!

Income?

About $36,000 with bonuses. My husband makes about $72,000 after all is said and done.

Are you fairly compensated?

My work is amazing! I work for a locally-owned company and my boss is the most amazing boss you could ever ask for. I’ve never felt more fairly compensated or appreciated in my whole life. I only work about 35 hours a week, so the work/life balance is insane. I really lucked out!

Are you putting anything into savings?

We set some savings aside every month for different goals (car maintenance, home repairs, health expenses) and once our debts are paid off we plan to build a six-month emergency fund. Soon we’re going to have to start saving for a family beach trip next June.

Do your parents support you in any way?

Nope.

How much debt do you have? Credit score?

My husband and I are currently at about $180,000 in debt between health bills (having a baby is expensive, y’all), car payments, student loans, and our mortgage. My credit score is around 670, my husband is around 720.

At what age do you hope to retire? Are you on track?

I’m aiming for 60, but as long as my hubby retires at 60 I’m happy pushing it a little later. I think if we keep up our dedication we definitely will be on track.

Most stressful thing about your financial situation?

Honestly, just trying to be patient! My husband and I are actively working on becoming debt-free, and we should be in about 2 years. It sucks having to wait on paychecks to pay off our debts!

One thing you’d like to be able to purchase but can’t yet afford?

I’d like a new-to-me car, maybe a Honda HR-V.

I bought the car I have now after the other one got totaled (not my fault) because it had more space, and I have two car seats to fit in there. Turns out, the trunk space is lacking, and it’s had a lot of small but annoying problems. So yeah, I’d like a slightly bigger, more functional car.

Best purchase you made this month?

I got myself some new shirts. They’re pretty soft, and my closet is silently screaming for some TLC.

Most expensive night out this month?

My husband went out for drinks with some friends for his bud’s birthday. Somehow my husband got stuck with a bunch of people’s drinks on his tab and ended up paying $100 for a simple, mid-day jaunt to the bar.

Best and worst financial decision?

Best financial decision was buying our townhome.

We did get a little help from the parents in the form of a generous monetary gift. With the housing market being what it is in Charlotte, we knew rent would become unaffordable. It was such a great investment because now we’re building equity in a good part of Charlotte for less than what a rent payment would be!

Worst decision? Having a wedding.

If I knew then what I know now, I would’ve eloped for sure. I love my husband to death though! The marriage is certainly not the worst decision!

Current monthly expenses?

Mortgage: $1,000
HOA: $172
My car: $173
Husband’s car: $290
Insurance (car and home): $185
Childcare $400
Netflix: $18
Phone bill: $110
Electric: $120-$150
Internet: $30
Medical bills: $155
Student loans: $368
Planet Fitness: $20

Budgeting strategy?

My husband and I follow the cash-only (except paying bills) system and do budgets for each paycheck based on zero-sum budget. We plan where every single dollar goes. Gotta make your money work for you!

Investing?

We actually don’t do any investing at the moment.

How did you learn to manage your money?

I combined a couple of different techniques I researched online! Dave Ramsey, the Budget Mom, etc.

Top 3 financial goals?

Become debt-free in two years
Sell our home and maaaaaybe move somewhere on the West Coast for a couple of years
Start investing to become financially independent and retire at 60

Are you primarily motivated by money?

No! I’m motivated by so many things! The freedom to travel whenever and wherever I want, have fun times with my family, get the people I love beautiful things, and most of all to never, ever have to feel like I am struggling. It’s so much more about freedom than it is the actual money. Money means nothing.

What do you consider “rich” in Charlotte?

I think decent middle-class incomes can still be “rich” if they are money smart. I guess I wouldn’t really put a number on it since it really depends on your situation and priorities.

My parents raised four kids in Charlotte on around $50,000 total at a certain point. I could not really imagine doing that, and would probably struggle on less than $70,000 with just my two kids. So who really knows?

No. 1 piece of financial advice?

The only way to truly change your financial lifestyle is to change your mindset.

Don’t buy things you couldn’t afford twice, don’t fall for the social stigma that debt and credit are good, normal things.

Build your financial know-how with free tools and information to help you make more confident decisions. Visit the Bank of America Better Money Habits site today.

Need 1:1 guidance on getting your finances in order? Schedule an appointment with a Bank of America specialist today or stop in your local financial center.

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