Home Economics No. 14: Married, 45, and Living Outside of Boston on a $151,000 joint income.

Spending more on daycare than the mortgage.

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I started writing about millennials and money nearly a decade ago because I didn’t like the avocado toast narrative that we were all bad with money. Somehow, even though millennials are all grown up, that storyline hangs around like a bad odor. Publications are always eager to talk about the many financial challenges we face—student loan debt, soaring housing prices, stagnant wages, rampant inflation, blah blah blah—and how we’ll essentially never amount to anything.

I’m not saying these challenges don’t exist—they do. My problem has always been with the idea that a generation is a monoculture—that because we were born between the early ’80s and the mid-’90s, we are somehow all latte-buying, job-hopping, overly sensitive, failure-to-launch snowflakes who expect to receive praise and a participation trophy for everything we do. (Side note, this Buzzfeed list made me laugh.)

The most recent article that annoyed me was a piece in The Wall Street Journal earlier this month about millennial HENRYs (High Earner Not Rich Yet) who are earning six figures but don’t feel rich. Look, the truth is $100,000 doesn’t go as far as it used to, and housing and childcare is very expensive. But the piece was still tone deaf and left millennials looking ridiculous. 

While I take issue here with the millennial stereotypes, the same can be said of what’s written about boomers, Gen X, Gen Z, and now Gen Alpha. I come from a traditional media background, and I’m not looking to put it on blast. These are just not the kinds of stories I see myself telling at The Purse.

I feature individual women in Home Economics because I want to tell unique stories. Each of us has a different path to financial success—and still, those journeys can be so relatable/inspirational/just plain fun to read. I am so lucky so many people are willing to share—it is a privilege to tell these stories and change the narrative one woman at a time.

And on that note, on to today’s Home Ec, which features a teacher earning six figures who owns her own home. She’d be a model millennial, except she and her husband are Gen Xers. Oops!

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Age: 45
Location: Massachusetts
Relationship status: Married
Age of partner: 49

About me: I’m a teacher and mother of a three-year-old. I live with my family in a Boston exurb. 

Income:

1. Your job title/salary: Teacher, $101,000

2. Partner’s job title/salary: Carpenter, $50,000

3. Your monthly take-home pay (paycheck amount after taxes and other deductions): $5,512

4. Partner’s monthly take-home pay (paycheck amount after taxes and other deductions): $2,881

5. Additional monthly income: $300 from my small therapy private practice

6. Total monthly income: $8,693

Account balances:

7. Checking account balance: $7,615

8. Savings account balance: $2,000

9. High-yield savings account balance: $47,000 at 4.7% APR

10. Monthly contribution to savings account: Somewhere between $0 and $1,000. Every month, I pay our credit cards and then calculate how much we saved or didn’t that month. From there, I decide how much to contribute to savings.

11. Retirement account(s) balance:

    • Target Date Retirement Fund: $57,000 

    • Roth IRA: $16,000

    • 403(b): $15,000 

12. Monthly contribution to retirement accounts:

    • I contribute 11% of my paycheck to the Mass Teacher Retirement System. If I retire after 30 years (which will be 62 for me), I will receive 80% of an average of my three highest-earning years. 

    • My husband also has a pension with his job, and he contributes around 9.5% of his paycheck. But he started contributing in his mid-40s, so he won't get to 30 years. Most likely, when it’s time for him to retire, he’ll receive something like 40% of his salary.

    • Roth IRA: $100 

    • 403(b): $200

    • The last few years I’ve been able to contribute $7,000 to my target date retirement fund after taxes.  

13. Investment account balances:

    • Husband’s ETF: $24,000 

    • Mutual fund: $43,000

14. Monthly contribution to investment accounts: We don’t contribute regularly to either the ETF or the mutual funds. I’ll sometimes make an annual contribution to the ETF, but I’ve pretty much left the mutual fund alone because it’s not our best performing investment account.

15. 529 account balance: $16,000

16. Monthly contribution to 529 account: $100

17. Emergency fund balance: N/A. Our high-yield savings account is our emergency fund.

Total in checking, savings, and investment accounts: $227,615

Housing:

18. Size of your home: We live in a three-bedroom house about an hour outside of Boston. We bought it from a family member a few years ago—a retired contractor, who built the home. Honestly, it’s a very nice home but not my first-choice town. We couldn’t pass on the price and the interest rate, though.

19. Mortgage: $1,027

20. Current home value: $520,000

21. Current mortgage balance: $214,000

22. Year you bought your home: 2020

23. Price you paid for your home: $325,000

24. How much down payment did you put down: 20% ($65,000)

25. How long did it take you to save the money? For six years, we lived in my husband's first house, which he built before we got together. The mortgage was super low—about $500 a month—so we were able to save a great deal of money. Over those six years, we stashed away over $100,000.

26. Did you receive any family support to make the down payment? We did not, but we got a reduced price on the house because we bought it from family. Also, a family friend is a real estate paralegal, so she advised us on the deal and did some of the paperwork for us for free, so we saved money on a real estate agent, too. 

27. Mortgage interest rate: 3%

28. Home taxes: $591

29. Homeowner’s insurance: $121

30. Electricity: $180

31. Water: $0 (well water)

32. Cell phone: $22 (Yay, Mint Mobile!)

33. Internet: $68

34. Housekeeper: $0

35. Gardener: $0

36. Natural gas: $229 

37. Other: We spend about $300 a year to cover the taxes for a vacation home that we share with our large extended family. So many people own a share of this house that we had a lawyer draw up an agreement, and technically I own just a small percentage. Still, we get access for about two to three weeks each summer and some offseason weekends because my parents own a much bigger percentage, and we go with them for most of our visits.

Transportation:

38. Monthly car payment: $0. We purchased both cars with cash.

39. Car insurance payment: $163 for both cars

40. Gas: $200

41. Car maintenance: $1,000 annually, which includes about $500 total to have snow tires mounted in fall and unmounted in spring.

Children:

42. Number of children and their ages: One toddler

43. School tuition: $1,200 for full-time preschool, five days a week for a 9-hour day 

44. Extracurricular activities: $58 for swim lessons

45. Babysitter: We have family nearby who pitch in to help with babysitting if we need it, so we haven’t had to hire anyone.

Debts:

46. Student loan total balance: $0. Both my husband and I paid off our loans years ago. I think I had about $18,000 total in student debt. Between loan forgiveness, a scholarship, Americorps funds, and some money from my mother, I was easily able to pay off the loans in less than 10 years. I went to state school for my undergrad—a few of my siblings went to private universities for college, and I knew that I didn’t want to take on that much debt. I have a master’s degree in social work from an expensive university, but after I graduated, I worked in a high-need neighborhood, so I qualified for some loan forgiveness—I think about $6,000. When I moved into working in schools, I didn’t qualify anymore. My mom was able to help me out with $5,000 that she received from my grandparents’ estate. And I paid off the rest myself.

47. Credit card balance (if you carry a balance month to month): $0. We pay off our credit cards in full every month.

Food:

48. Groceries: $900. I shop at a local “discount” grocery, but I don’t really skimp when it comes to groceries. This is one of the only areas of my life where that is the case. I’m kind of picky, so there are name brands that I like, so I buy them. 

49. Dining out: $50. I stopped eating out during the pandemic, and I’ve never really been interested in going back, especially because by the time everyone was going back to restaurants, we had a baby. I’m not a big meat eater, and there aren’t a lot of great vegetarian options near us. My husband and I split up the cooking, so it isn’t always on me. 

    All that said, I think as a rule that eating out isn’t great for our health or our finances.

Socializing and Entertainment:

50. Subscriptions (streaming services, magazines, etc.): $41 for Hulu, Netflix, and a New York Times digital subscription.

51. Movies, concerts, other events: $100 a year

52. Entertain and socializing other: Minimal! I prefer hiking with friends to eating out, going to bars, etc.

53. Travel: $1,000/year. We haven’t traveled far or extensively since our son was born, but we have nearly $3,000 in credit card points we’ll use for a major trip in the next year or two.

Miscellaneous:

54. Clothing: $300 a year. For financial and environmental reasons, I am trying to mostly buy secondhand clothes.

55. Home supplies: $50

56. Exercise: $20 for Alo Moves membership

57. Personal and self-care (haircuts, manicures, massages, etc.): $500/year covers haircuts and other miscellaneous self-care things.

58. Pet supplies: $130 every six weeks for prescription dog food

59. Pet insurance: $102 monthly, $500 annual deductible

60. Other pet expenses: $23 monthly for Pet Care Club with our vet, which covers routine visits. I haven't gone through our vet bills and calculated how much we paid after insurance. I don’t really want to know! 

61. Donations: $300/year. I used to contribute $10 monthly to several charities, but I stopped that when I had my son. I should resume that again, in some form. 

62. Events (birthday parties, etc.): $50 monthly for gifts for family members. 

Insurance:

63. Life insurance: $1,536/year for policies for both my husband and myself

64. Health insurance: $401 monthly (comes out of my paycheck)

65. FSA contribution: $208 twice a month for dependent care FSA (comes out of my paycheck)

66. Other insurance costs: $45 monthly for umbrella insurance policy

Total monthly spending (includes travel and annual expenses divided by 12): $6,522

Tell us more:

67. What are your top financial priorities?
    My top priorities are to save for retirement and generally spend much less than we take in monthly. While my husband and I both have good jobs with decent benefits (and pension plans), there’s also not a ton of room for upward mobility or salary increases.

    Despite having pensions, I feel a lot of pressure to make sure we’re still saving more for retirement. My husband earns less than me, and he hasn’t been at his job as long, so when he retires, he’s only on track to get something like 40% of his salary in retirement. Between that and my pension, I worry it won’t cover living expenses for both of us in retirement, so we need to save more.

    Plus, there’s a law in Massachusetts that prevents workers who receive a public pension from also taking full Social Security benefits. That may be changing, but we still need to keep it in mind when calculating what we need to retire. 
    

68. How do you feel about your current financial situation?
    Okay, though objectively we’re doing well. How I feel really varies month to month. We didn’t pay for childcare over the summer, and still we didn’t save anything. We bought an induction stove, went to a wedding, and celebrated my brother’s birthday. I felt stressed afterward that we spent so much. But then in September, we didn’t spend very much at all, and I was able to save more, and that made me feel better about things. 

69. What are your money stressors?
    I feel guilty nearly every time I spend money due to a scarcity mindset that started young. Money was definitely tight when I was a kid, and my father had a lot of job instability. I’ll always remember when he came home and announced that he’d been laid off again and said we’d have to tighten our belts. I came to the conclusion we might need to get rid of the dog, or even turn off the fan because it was too expensive. My three siblings didn’t take it as hard, and they definitely don’t have my scarcity mindset. We’re very lucky that my father came from a family with money, so inheritance helped pay for college. As a kid, I would ask my parents if we’d ever go to Disney World, and they’d say, “Do you want to go to Disney or go to college?” I’ve still never been to Disney. 

70. Do you expect to receive (or have you received) an inheritance from a family member?
    Yes, something, but I’m one of four children, and my parents’ house isn't particularly valuable, so I’m not expecting much.

71. Do you receive (or have you ever received) any financial support from your family?
    My parents paid for college with money from my grandparents’ estate, and my mom also gave me $5,000 to help cover grad school loans. But we don’t receive any financial support from them now.

72. Do you financially support any family members beyond yourself and your nuclear family?
    Not usually, but a few times I’ve sent my brother $1,000.

73. How do you and your partner split your finances? How did you decide to go that route?
    My husband and I pooled our finances when we got engaged. I manage everything and keep him updated about how we’re doing. He apparently has total confidence in me! Once in a while the disparity in our incomes comes up. If we make a large purchase, he might joke that it’s more mine than his because I make more money. A few of his large personal purchases ($800 for some musical equipment, for example) have irked me and resulted in some tension that’s accentuated by the fact that I make more money, but I think we’ve settled into more of a give and take. As long as it’s not frequent, I just go with it. The way I see it, because he built our former house and his family member sold us our current house at a good price, that has kept our housing costs low, and that’s a major contribution to our financial wellbeing. 

74. What is one financial goal(s) you still want to achieve?
    I want to save aggressively for retirement. I’m making large contributions to our retirement accounts once a year, after doing our taxes and getting our refund. 
    

75. Tell us about one financial accomplishment you’re proud of.
    We have no debt, besides our mortgage. It was never my explicit goal to avoid debt, but we’re lucky that we’ve been able to do that. We both aggressively paid down our student loan debt before we met. 

    When we had to buy our current cars, I was appalled at how high interest rates were, and we had the money in our savings, so it felt better to just buy our cars outright. (To be fair, my prior car had been totaled in a car accident, so the car insurance payout covered a good portion of the cost of my current car). I know that people who are smart with money would advise taking out the car loans at 8% and investing your savings instead. I knew our high yield savings account wasn't paying out anything close to 8%, but honestly it didn't occur to me until now that I likely could have gotten higher than an 8% return on investment by putting that money into something like an ETF considering how well the market has been doing.² 
    

76. What do you regret spending your money on the most?
    I feel like money spent on eating out and hotels is money wasted.
    

77. What is one thing you spend money on that makes your life better? ​​
    IVF made my life better. Luckily, here in Massachusetts, health insurance covers most of the cost of IVF. We still had to pay around $8,000 out-of-pocket to cover everything, but we saved up so we didn’t have to take out a loan or use credit cards to cover it.

    I shudder to think what we would have done if we lived in a state that doesn’t cover fertility treatment. I did two rounds of IVF, which (with meds) costs about $30,000. Would I have been willing to pay that amount of money for a treatment that had no guarantee of success? Possibly multiple times? Probably not. But my son is one of the best things that’s ever happened to me, so I’m incredibly grateful that we didn’t have to take such a big risk and financial hit. 
    

78. What is one thing you spend money on that drives you crazy?
    It pains me to spend so much money on our dog’s pet food, veterinary care, and pet insurance, but that’s what happens when your dog gets older (and has allergies that require special food).

79. Is there anything else you would like to add?
    I care a lot about the environment, and we’ve been making home improvements so our house is more efficient. That includes replacing our gas stove with an induction oven this summer. And we’re getting solar panels soon. They'll cost about $16,000 (which will just come out of our savings—we’ve already paid about $10,000 of the cost), but about a third of the expense we’ll get back as tax credits, thanks to the Inflation Reduction Act. After about a year and a half, we’ll have enough solar credits that we won’t have to pay electric bills anymore. So it’s both a financial and environmental win.

Please comment with kindness!

Random Extras:

• Just a reminder that paid subscribers get one extra Home Economics each month (and the one going out on Saturday is good featuring a couple in Brooklyn with a $3.2 million brownstone). They also get early access to our first Purse event, which we’re announcing this week! And they are automatically entered to win a monthly giveaway. This month’s prize is a copy of Bobbi Rebell’s book Launching Financial Grownups, plus an Owala water bottle³. Maybe it’s time to upgrade to paid?

• Figuring out the cost of childcare can be daunting. Luckily Winnie has this free calculator to remove the guesswork for you! #partner

• I’m launching a new social-first series on Instagram called “Saturday Spend.” I was inspired last weekend, when we were bopping around Manhattan like a family of tourists and paying tourist prices for afternoon snacks. (Gotta say, Little Island was a little meh, but the rooftop park at Pier 57 was stunning. Someone invite me and Ken to a cocktail party there!) Fill out this form if you want to participate! (It will be anonymous!)

• With the election nearing, I’m feeling stressed. I loved

  Laura Fenton
  ’s recent newsletter on things you can do to help fight your climate and election anxiety. I sent some postcards this weekend!

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2. I don’t usually pop in with financial tips, but I did want to say that the rule of thumb of whether to prioritize debt payoff or investing is 6%. So today’s teacher was smart to pay cash for the cars rather than take out a car loan with 8% APR.

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