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For today’s Money Snapshot, we’re talking salary, net worth, debt, and more with reader Lisa in the Washington, D.C., area, who’s on a career break. She noted, “I paid off six figures of law school debt in my second year as a lawyer,” and explained, “I grew up thinking that if you didn’t pay your debt on time, you’d go to jail. Suffice to say, I don’t keep a lot of debt.”
We got a few requests from readers to launch our own “money diary” series, so we’ve asked willing readers to fill out a form with lots of details about debt, spending, saving, and more! If you’d like to fill out the form and be considered for a future personal money snapshot, please click here to submit your response! You can see a PDF of the questions if you want to review them ahead of time. See others in the Personal Money Snapshot series here.
Please remember that this is is a real person who has feelings and isn’t gaining anything from this, unlike your usual friendly (soul-deadened, thick-skinned, cold-hearted, money-grubbing) blogger — so please be kind with any comments. Thank you! — Kat
Name: Lisa
Location: Outside Washington, D.C.
Age: 37
Occupation: Former MediumLaw layer on a career break
Income: $20,000
Net worth: Rounds to a million but on the lower end
Net worth when started working: 22, a few thousand
Living situation: Single; renter ($2,000/month)
Note: Lisa submitted her Personal Money Snapshot back in 2021 (eek), and unfortunately it got lost in the shuffle! (Shall we blame the general craziness of the pandemic?) However, we had to share it because it’s quite different than our average Money Snapshot! Thanks so much to Lisa for her patience.
Debt
How much debt do you have currently?
$0
How much money are you spending each month to pay down debt?
$0
What does your debt picture look like?
I grew up thinking that if you didn’t pay your debt on time, you’d go to jail. Suffice to say, I don’t keep a lot of debt.
How did you pay for school?
My parents paid for college. I worked and saved up for four years before law school, using the money to keep my loan payments down. I also worked a few part-time jobs during law school.
Do you own or rent? How much do you pay monthly?
Rent, $2,000
Home debt: Share your theories and strategies with us (including any that lead you to rent rather than own).
I rent. I’ve always wanted to own my own place but I’m enjoying the freedom, the beautiful “what if” that I can leave town whenever I want.
Have you paid off any major debt?
After graduation, I had $112,000 in student loan and credit card debt (0% interest), which I finished paying off in my second year as an attorney in a medium-sized law firm.
Have you ever done anything noteworthy to avoid or lessen debt?
I took out $60,000 from my 401k to pay for law school. The jury’s still out on whether that was a good or bad idea. Granted, I went to school in 2009, when the stock market was hitting bottom, but I think I was invested poorly because the stock that was left didn’t seem to rise that much.
Savings, Investments & Retirement
How much do you save each month or year in retirement vehicles like 401Ks, Roth IRAs, and others?
I max out my Roth IRA every year and I contribute a few thousand to a simple IRA.
How much money do you allocate to other tax-savvy investments/accounts like HSAs, 529s, FSAs, and others?
I contribute a thousand to a 529 every year, because of wishful thinking. =D I max out my HSA every year.
How much do you save outside of retirement accounts?
I don’t do a lot of saving because my income is so low currently. I’m cashing out stock to support myself as needed.
Talk to us about investments. Do you have a financial advisor or planner?
I don’t have a financial advisor. My 401k and most of my brokerage account is in index funds. Then I have a bunch of stocks that I invest in for fun. I’m terrific at buying stocks but I sell a lot of winners too soon (see Apple, Tesla, Netflix, Amazon, Costco, Target, Disney — most of which I still own but I could have rode those puppies for longer).
Do you have an end goal for saving or are you just saving for a rainy day?
I’m 37, single, and childless. I might have a child but I’m ambivalent. If I do, I would like the option to stay at home. Most of my savings have been so that I could leave my law firm job (which I did in 2019) and take a lower-paying job. I’m still looking for the job! But the money cushion has been a huge help for my psyche.
When did you start saving seriously? How has your savings strategy changed over the years?
I’m a first generation immigrant, so saving and sacrifice is just built in. When I compare myself to my parents, my life will always look extravagant, no matter how much I save. Still, there was a time when I was paying down my debt when I rather aggressively planned to pay it all off in a year. I had moved into my apartment and I had no furniture. If I forgot my lunch, I would just skip lunch to avoid going out to eat.
It just seemed too extreme for me, and I gave myself a break from that deadline. I bought furniture for my apartment and I went out to eat sometimes. I realized it wasn’t the end of the world if I still had debt for another six months. And still, I paid off my debt faster than most.
What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
I’m doing what everyone is doing — staying in because of COVID.
Have you ever made a big money move or investment with savings in mind, such as rolling over an older IRA into a Roth IRA or superfunding a 529?
I took a COVID 401k rollover.
Do you have an estate plan in place? A trust? What lessons did you learn going through the process?
As an attorney, I think estate planning is really important (though this is not my area of law). I remember one time I was talking with an older friend about my estate planning and a young woman interrupted to ask why I would write a will when I wasn’t old yet. First, none of us know our last day, so today is just as good as any other day to get started. Updating doesn’t take nearly as much time as creating. Second, it’s not as if old people have a monopoly on accidents or health problems. A deer hit my car just the other day — if it had jumped a second faster it would have gone through my windshield.
Last year I finished working with my parents over their estate plans (I’m the executor). And I have a will, but most of my assets will transfer through the beneficiaries listed in my account. I wrote out a Big Book of Everything. My social media is set to destruct after a period of inactivity.
Planning for the worst is an act of love. I’m also very mindful of the Swedish act of death cleaning and I am trying to pare down my stuff for myself and in case it’s a burden for someone who has to sort it later (and I’m also cleaning out my parents’ house because they’re moving). This is all stuff that, should the worst happen, my family will thank me for. And it gives me peace of mind making it easier on them.
How much do you have in cash that’s available today?
$50 in wallet
How much do you have in cash that’s available in a week?
$40,000
How much is in your “emergency fund,” and did you include it in the previous question?
I consider my checking, savings, credit cards, and brokerage account to be my emergency fund (though I would only access the brokerage in the event of a huge crapstorm). This would be about $300,000 (including the $40k from earlier). I could max out all my credit cards and take the money out of my brokerage account to pay for it, if I needed to.
How much do you have in retirement savings?
~$300,000
How much do you have in long-term investments and savings (CDs, index funds, stocks) that are not behind a retirement wall?
~$300,000
If property values (home, car) are included in your net worth, how much are those worth?
My car is worth a few thousand dollars, generously. It’s 21 years old and has a deer indent on the side.
Spending
How much do you spend on the following categories on a monthly basis?
Groceries: $150
Restaurants, bars, takeout, and delivery: $100
Clothing and accessories: $60
Transportation: $30
Rent/living expenses: $2,000
Entertainment: $10
Other major expenses: Charity = $200/month now, used to be a lot more when I was working
Health care – premiums and other costs: $100/month, $500/year out of pocket last year but that was high
What’s your spending range for these things? What’s your average?
Vacations – Range: $100–$3000, I went to South Africa last year for a wedding
Vacations – Average: $300
Charity – Range of donations: $5–$100/month/charity
Charity – Average donation or giving amount: $50/month. Between $2,000 –$10,000/year.
Individual items of clothing – Range: Free to $150 (most expensive thing I ever bought is sneakers)
Individual items of clothing – Average: $20
Apartment or house – Range: $1,700–$2,000/month
Apartment or house – Current main residence: $2,000
Car or other vehicle – Range: $0–$5000
Car or other vehicle – Current main vehicle: I haven’t owned a vehicle younger than 15 years old in the past decade. My parents bought my car used in 2002. It was top of the line back then and even came with a car phone!
Any other large personal expenses?
I pay for a life coach. I’ve worked with her for years, and it’s part therapy for someone who doesn’t need to pay a psychiatrist, just to talk and part goal planning.
Fill in the blank on this question: I could save _____ if I stopped ______, but I don’t because _______.
I could save all my money by living with my parents, who live 20 miles away, especially while I’m not working. I had originally thought I would live with my parents after graduation and while paying off my debt, but on my first night I was already googling apartments.
It’s better for our relationship and my mental health for me to have another place to be. I could also move far away to a cheaper area, but I live where I do because I want to be close to my family. My sister and brother (and my nephews) also live in the area and it’s worth all the money that I get to see them grow up and that I can see my family during the pandemic.
How has your family provided financial support in your adult life, if any? (Or, do you provide support to them?)
My parents paid for my college and they gave me a few thousand dollars for law school so I wouldn’t have to take out another loan.
Does your family provide any non-financial support?
I stay with my parents for about a week out of every month. I eat my mom’s cooking and my dad checks my car. They’ll pay for little things like if we go to the grocery and I want something or, recently, I needed staples, and my dad gave me a box. They would be so upset if I went out and bought stuff that they had to give to me.
Money Strategy
Do you have a general money strategy?
I like not to worry about money. For me that means spending far less than I have the means to. This means I have plenty of money to not let the desire for money dictate my career goals or lifestyle.
Time vs. money — do you spend money to save time (e.g., cleaning service)? Do you donate your time instead of money? What else does this phrase mean to you?
I used to have a cleaning service but typically just a few times a year before parties. Now that I can’t have anyone over [COVID], and I’m in my apartment all the time, I’ve just tried to become neater.
What are your favorite resources for personal finance?
I’ve met so many wonderful people in the personal finance world like StoppedIroningShirts.com, PFGeeks.com, and ChampagneandCapitalGains.com. I read GetRichSlowly a lot and I was obsessed with The Billfold (RIP).
What advice would you give your younger self about personal finance?
You’re doing just fine, don’t stress so much about it. Maybe get married.
Icons via Stencil.
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