Cash Confessional: 23-year-old with $63k salary rents bedrooms to college students for extra $18k
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 23 and in a relationship, but we live separately. I own a home and rent out three of the bedrooms to college students.
Industry and income?
I work in IT and make $63,000 annually. I also bring in $18,300 each year in rental income.
I believe I’m compensated fairly. This is my first job out of college, and I don’t have much experience in IT yet.
Putting anything into savings?
I try to put around $1,700 into savings each month.
Saving for anything specific?
I’m currently saving up to purchase another rental property.
Do your parents support you?
My parents helped me through college, and I’m still on their phone bill.
Most expensive night out this month?
My most expensive day this month was spent at the Renaissance Festival. The admission was $26, but you can’t just go to the Renaissance Festival and not have a $10 turkey leg…and a beer…and a mimosa…or three. After that, we got dinner at Jim & Nick’s and spent around $30. (Note: These responses were collected at an earlier date.)
Most stressful thing about your financial situation?
My roof is getting old and will need to be replaced in a couple of years.
Top 3 financial goals?
- Buy another rental property by this summer.
- Max out my 401(k).
- Earn enough income through real estate and other investments to be able to quit my office job.
My budgeting strategy is moving money into savings when I get a paycheck and putting the remainder into my checking account to spend on whatever I want.
Twenty percent of my paycheck goes into my company-provided 401(k) with Fidelity. I plan on opening a Roth IRA with Vanguard soon. Real estate is my other investment avenue.
Credit card strategy?
Citi Double Cash offers 2 percent cash back on everything so I don’t have to think about specific categories to use it on.
One thing you’d like to purchase that you can’t currently afford?
I would like a 2019 Toyota Tacoma, but I wouldn’t be able to stomach the payments and I currently have a working car.
Best purchase you made this month?
New shoes for $40 on eBay. It was worth it because they don’t make these shoes anymore and I got a good deal on them.
Best and worst financial decisions?
Best: Purchasing my house near University. I rent out three bedrooms and live in the master. The rent I receive from my tenants more than covers my monthly payment. It has essentially eliminated my cost of living.
Worst: Not saving any money throughout college. I landed a job in my major during my senior year. Unfortunately, the majority of what I made went to going out to bars and buying expensive drinks.
Where did you learn to manage your money?
Podcasts and YouTube videos.
What do you consider “rich” in Charlotte?
I consider someone to be “rich” in Charlotte if they have enough wealth to not be forced to work. A lot of people have high incomes but spend it all on fancy cars, clothes, and other unnecessary things. Someone who makes $500,000 a year isn’t rich if they spend it all.
Motivated by money?
I am motivated primarily by money. I don’t like the traditional 8 to 5 lifestyle I’m currently living. Saving, investing, and creating other forms of income that don’t involve sitting at a desk all day motivates me. To me, having more money means having more free time to be able to do the things I genuinely enjoy doing.
Ideal retirement age?
I hope to not “have” to work by my mid-30s. I think I’m off to a good start.
#1 piece of financial advice?
Do everything you can to eliminate costs and maximize saving and investing.
The number one thing that made me start focusing on my finances was watching $1,000 each month get flushed down the toilet for my half of a two-bedroom luxury apartment in Uptown. I didn’t think paying that much for rent was worth it and it drove me nuts to see $1,000 drained from my bank account each month. I knew there were better ways to use my money.
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.
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.
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