Home Economics No. 38: Single, 34, and living in Columbia, Missouri, on $83,000 a year

And trying to decide whether to have a baby on her own after a breakup

I’m a bit of a broken record on the topic of personal finance being personal. How I manage my money and how you manage your money are going to be different. Our priorities are different. Our resources are different. Our expenses are different. And even though there are a handful of money tenets that are generally good to live by (have an emergency fund, save at least 10% for retirement, try to avoid high-interest debt, etc.), even those are a little squishy sometimes.

In my conversation with this week’s Home Economics writer, we started talking about stashing money in a high-yield savings account versus investing in the market. She has a fully funded emergency fund, so she’s been focused on saving more for retirement while also investing some in a brokerage account. But after reading two recent pieces Alicia and I wrote about Fed independence and the S&P 500 index, she asked me if she should be doing something different with her money.

I’m not a certified financial planner (yet¹), and I like to regularly remind readers that they should do their own independent research before making any financial decisions. And I generally shy away from offering advice to the women who share their stories in Home Economics, again, because I’m not a professional.

Our conversation made me pause, though, to think about how Alicia and I are approaching the topics we write about for our weekly links roundups. We both have backgrounds in service journalism, and I like there to be useful takeaways at the end of the news we cover—other than just, “Ugh, the world is on fire. What can we even do??” Yet, sometimes there isn’t a clear answer. And I don’t want someone to read one of our weekly roundups and make a big financial decision without first doing more research. So much of being good with money is about being patient and not having knee-jerk reactions to what’s going on in the world that’s beyond your control.

In an email exchange after our call, today’s Home Ec writer reassured me she’s learning a lot from the weekly news roundups. She told me that no one taught her the specifics of investing, even though it’s her main vehicle for saving for the future. I know a lot of women (and men) feel the same way. I feel that way! Selfishly, what I choose to write about usually coincides with topics I want to understand better.

As I alluded to in the September Receipts newsletter, Alicia and I will be rolling out more how-to type articles on The Purse website in the coming months. But if there’s a topic you’d like to know more about, please let us know! Same goes for the news in our weekly roundups. You can always send us an email at hello [at] thepurse [dot] co (not com!).

This is also a good place to add that we’re also looking for new Home Economics entries. It’s been a while since we got any new submissions! You can fill out the form here.

Okay, now on to today’s Home Economics! I hope you enjoy!

Age: 34
Location: Columbia, Missouri
Relationship status: Single

About me: I’m a single woman who lives in a college town in the Midwest. I work in communications. I prioritize retirement savings while still being mindful of the fact that many people don’t make it to retirement. We gotta be traveling now, while we can!

Income:

1. Your job title/salary: Associate director of communications, $83,000

2. Your monthly take-home pay (paycheck amount after taxes and other deductions): $4,264

3. Additional monthly income: I do take on some occasional freelance work. I’m not doing any at the moment, but I recently got around $10,000 in a lump sum from a project that took a few hours a week for a year and a half.

4. Total monthly income: $4,264

Account balances:

5. Checking account balance: $951.38. It’s almost payday!

6. High-yield savings account balance: $20,000 (4.2% APY)

7. Monthly contribution to savings account: I consider my HYSA to be my emergency fund, and it’s fully funded right now. So, none.

8. Retirement account balances:

   • 403(b), 457(b), and 401(a) (combined): $131,063

   • Roth IRA: $43,706

9. Monthly contribution to retirement accounts: I contribute $1,093 to my 457(b) each month, and my employer matches 5%. I contribute another $600 a month to my Roth IRA until I hit the max. I like to front-load my Roth IRA contributions so I have a bit of breathing room at Christmastime for other expenses.

10. Investment account balance: $6,166

11. Monthly contribution to investment accounts: $400. (Sometimes a little less to account for travel expenses.) When my emergency fund is fully funded (like it is now), I like to focus on investing more in my brokerage account.
    
    I struggle a bit to know which account to prioritize. I’m tempted to save more in my HYSA (for rainy days, a new car, and home renovations). But the interest rate on my savings account keeps going down, and the market keeps going up. So while it feels riskier, this year I’ve decided to prioritize saving more money in my investment account.

Total in checking, savings, and investment accounts: $201,886.38

Housing:

12. Size of your home: I live in a 950-square-foot two-bedroom, two-bath condo.

13. Mortgage: $500

14. Current home value: $152,400

15. Current mortgage balance: $67,620

16. Year you bought your home: 2020

17. Price you paid for your home: $96,000

18. Mortgage interest rate: 3.75%. Because my interest rate is so low, I’m not paying extra each month to pay off my mortgage faster. It would be great to get out of my house payment sooner, but I know that money is growing faster in the market (for now), so I’m prioritizing my investment accounts.

19. How much was your down payment? It was important to me to save up for a 20% down payment. All in with closing costs, I wrote a check for $28,000.

20. How long did it take you to save for the down payment? I saved up for the down payment over three and a half years. I share that story below! It’s one of my biggest financial accomplishments.

21. Did you have any family help buying your home? My parents paid for college, so I was able to graduate debt free, and I know that helped me be able to focus on saving for a home in my 20s. Also, when I first moved in, my parents came for a week and helped me install new light fixtures, faucets, etc. Their labor alone was worth a couple thousand, and I think they paid for at least $1,000 of our Home Depot trips that weekend. They’ve also provided a wedding’s worth of home goods (pots and pans, dishes, etc.) for Christmases over the years.

22. Home taxes: $93

23. HOA fees: $240

24. Home insurance: $98, which also includes my car insurance

25. Electricity and water: $150 on average—sometimes more, sometimes less

26. Natural Gas: I pay around $20 a month during the summer, and it peaks around $75 during the coldest months of the year.

27. Cell phone: N/A. My parents still pay my phone bill. They won’t let me pay them back.

28. Internet: $49

29. Housekeeper: N/A. But I am considering getting one.

Transportation:

30. Monthly car payment: $0. I drive a 2012 SUV. I bought it used in 2014, and I put down around $4,000 and took out a loan to cover the rest. I didn’t realize when I was negotiating a lower interest rate that I signed up for a loan where I wouldn’t pay less interest if I paid off the loan faster. I paid it off early, but I was still on the hook to pay all the interest! I had no idea that was even a thing, but I won’t let it happen again! I really hope the car will last for five more years, but that might be wishful thinking. It only has 140,000 miles on it, but it’s seen better days.

31. Car insurance payment: Included in my homeowner’s insurance

32. Gas: $100

33. Car maintenance: $700 to $1,000 a year. It used to be closer to $500 a year. My ex boyfriend was a big car guy, and now that we’re not together, I’m quickly realizing how nice it was to have him take care of everything for me. He changed my oil himself, and he never made me pay him back even when I offered. He always “knows a guy” who could get discounts on tires and rotate them for free. He would change my brakes himself. Just in the few months since we broke up, I’ve put at least $700 into my car.

34. Parking: $60 a month for a spot at my job. They just raised it from $46. It comes out of my paycheck.

Children:

35. Number of children and their ages: I don’t have kids. I’ve been thinking lately about what it would be like to have a kid on my own. There’s a woman on Instagram who I follow, and she’s made it her brand to talk about the perks of being a single parent. But there’s a lot of expenses and other considerations to keep in mind, so I’m not taking any serious steps into pursuing it yet.

Debts:

36. Student loan total balance: $0. My parents paid for college. It was very important to them that I not graduate with student debt, and so they prioritized putting money into my 529 each month. I ended up going to an out-of-state public college, but it had a very generous in-state policy—you just have to live in the state for a full calendar year. So I stayed in town the summer after my freshman year, and that was enough to qualify for the in-state rates.
    
    I worked at a fast-casual restaurant job for anywhere from 10 to 25 hours a week (15 during the semesters, 25 hours in the summers) for about $7.50 an hour. It didn’t buy much, basically just spending money for essentials like beer, gas, and dining out.

37. Credit card balance (if you carry a balance month to month): I have three credit cards right now to maximize points. I spend enough to get about a plane ticket covered each year with points (about $400 worth of points a year). I pay them off in full each month. I actually like to make payments on them once a week as I go, just so I can make sure I’m staying on budget.

Food:

38. Groceries: $250. Aldi forever, baby! I really like to cook, and I don’t mind eating leftovers. I also don’t buy a ton of beverages—usually like a 12-pack of Aldi-brand sparkling water every other month. And I don’t buy alcohol every grocery trip or a lot of snacks. They’re expensive and bad for me! I try to buy a lot of fruit, which you can get for pretty cheap at Aldi.
    
    I joke with my friends that Aldi has saved me thousands over the years, and that I’m an Aldi evangelist. I can get almost everything I need, and the limited options makes decision-making easier. I also do grocery pickup via Instacart. I only buy the ingredients for the meals I plan to make each week, with some extra fruit, yogurt, tortilla chips, and salsa thrown in for snacks.

39. Dining out: $323. I had been spending around $200 a month when I was still dating my ex, because he would pay for our meals out, and I bought a lot of our groceries and planned our meals. We cooked a lot during the week and had leftovers for lunch.

    
    Now that I’m single, I can tell that I’ve been letting myself have a lot of fun and be much more loosey-goosey in this category for the past few months with more happy hours, more little Starbucks treats, lavish girl dinners, more reading lunches out during the work day, etc. I’ve also been dating some, and sometimes the time spent getting to know someone new has come at the cost of meal prepping that I normally would do for the week. When I’m unprepared, I tend to spend. Your girl does not go without a full lunch and dinner every day. I just can’t concentrate when I’m hungry.

Socializing and Entertainment:

40. Subscriptions (streaming services, magazines, etc.):

    • Patreon: $37 for podcast bonus content

    • Spotify: $12

    • Apple TV: $10

    • I share Netflix with my parents and HBO, Prime, Hulu, and FuboTV with an ex boyfriend. And by share, I mean, my ex hasn’t kicked me off of them yet. I offered to Venmo him each month, but he’s gracious. I do feel like my days are numbered here, though.

41. Movies, concerts, other events: $100. This varies so much month to month. Sometimes, it’s more and it comes out of my miscellaneous shopping budget, which is kind of high. Generally I go to three to four concerts a year (which can actually be way more than $100), a few university basketball and football games, five to 10 movies a year, and I like to go to the True/False Film Festival. Sometimes, if I haven’t done a ticketed event all month, and my dining and drinks budget has gone a little crazy, I’ll move some happy hours over into this category.

42. Entertaining and socializing other: N/A. This is included in my grocery budget if I’m bringing a snack or a dish to a friend’s house. I don’t entertain much because my place is small, and my friends with kids prefer to host. I always offer to bring something, though!

43. Travel: I would really like to be traveling more, but this year was intense at work. Generally, I budget between $2,000 and $3,000 a year for travel. The months that I’m paying for flights and lodging, I don’t contribute (or I contribute less) to my investment accounts.These are the big trips I took in the last year:

    • Girls trip to New Mexico: $1,500

    • A trip to Paris with my mom in November after we found a super cheap flight: $1,700

    • Last year, my family took a trip to Glacier National Park. I used credit card points for the flight and chipped in about $300 for food.

Miscellaneous:

44. General shopping budget: $400. This includes everything from clothes to makeup to books to housewares.

45. Home supplies: $20

46. Exercise: $50 for gym membership, $55 for therapy

47. Personal and self-care (haircuts, manicures, massages, etc.): Usually $0. I have really fine hair, and I’ve trimmed it myself ever since the pandemic. I love having my nails done, but I pick at them way too soon to make it worth it. Other personal care expenses are lumped into my shopping budget. I’d say I spend around $500 a year on makeup, skincare, and hair products at drugstores and Ulta.

48. Gifts: $50. This is money I set aside for any GoFundMe’s I happen across and want to donate to, as well as gifts for friends for birthdays, baby or wedding showers, etc.

49. Tithing: $450 to my church

Insurance:

50. Health insurance: $116. This comes out of my paycheck. I chose the “middle of the road” insurance, which means no co-pay most of the time and a low-ish deductible, but I have to stay in-network.

Total monthly spending (includes her deposits in her investment accounts, plus annual expenses divided by 12): $4,434.66

Tell us more:

51. What are your top financial priorities?
    I’d like to retire a little early, if possible, but I don’t want that goal to get in the way of living a good life now or giving generously, where it makes sense. It’s a hard balance to find.
    

52. How do you feel about your current financial situation?
    For the most part, I feel really good. I’ve gotten promoted at work recently. In 2017, I was making $44,000, and I have slowly but surely increased that to $83,000. I’m proud of living below my means and having a really good number in my retirement accounts. My next steps are to figure out how to hold it all more loosely—give where I can, feel good about traveling a little more, or take the plunge on larger purchases, like renovating my kitchen.

    
    My 30-year-old cousin was recently between (not-super-high-paying) jobs and took a two-week road trip out West. I want to do that, but I worry if I did the whole time I would have a nagging voice in the back of my head saying, “You know, the $2,000 you spent on this vacation would have turned into a lot more thanks to compound interest if you had just invested it.”
    
    Right now, I have more than I need, so why is it so hard for me to channel some of that free-spirit energy and spend my money on travel? The same goes with giving generously. I just want to be known for throwing around a few hundred here and there to people who really need it in a pickle. I don’t want to think about it too much.
    
    This has really been put to the test lately, because I recently became the coordinator of a foster care ministry for my church. We became members of a platform called Care Portal, and it allows social service caseworkers to put out vetted needs for kids (kind of like GoFundMe), and then anyone in the community can fill that need. It’s a good bridge between government services and private help. There are opportunities every day for me to throw in $300 for a new bed for a child so they can stay with their biological parents, or $100 for a winter coat for a kid in foster care. So why don’t I do it a little more?
    

53. What are your money stressors?
    I am always convinced I’m one tragedy away from losing everything. I’ll need a new car in the next few years, and that feels huge. And I’ve been thinking about if it would be possible to have a baby on my own. Just freezing my eggs would be about $10k. That’s totally doable. But could I afford child care on my salary? Should I?

    
    Another thing I think about a lot is ethical investing. Are the companies in my index funds destroying the environment? Do they treat their employees well? Is constant market growth good for our world as a whole? Am I helping prop up a ton of really bad actors?

    
    Am I banking on a system that’s going to crash and burn in the next 20 years? Is any of it REAL?
    
    These are the things that keep me up at night.
    

54. Do you expect to receive (or have you received) an inheritance from a family member?
    I do not expect to receive anything for at least another 20 years or so. My parents are young and healthy and decidedly middle class.
    

55. Do you receive any financial support from your family?
    My dad told me to stop Venmo-ing him $40 for my cell phone every month. They paid for my college. I moved back in with them after graduation for about three months.
    

56. Do you financially support any family members beyond yourself and your nuclear family? No.
    

57. How does being single impact how you manage your money?
    Until recently, I had a boyfriend for seven years. It would’ve made more financial sense to live together, but I’m glad I held onto my condo. I am spending a little more on food and car maintenance than I did when we were together, but other than that, it’s been about the same.
    
    If I ever get married I might want a prenup, just because I do have quite a bit of a net worth at this point. Obviously, being married sounds great for all sorts of reasons, but having constant conversations about priorities around money sounds exhausting, and I’m glad it’s just me I have to worry about sometimes.
    
    My ex is six years older than me, and he only had $70,000 saved for retirement, and that concerned me. For most of our relationship, he was making between $80,000 and $100,000 a year, so he had the means to save. To this day, he’s paying for live TV on two different streaming services just because he doesn’t care to cancel one. I felt like if we stayed together long term, the mental load of managing our finances would fall on me, and I didn’t want to be the bad guy all the time. That’s not really why we broke up, but it was one of our big differences that weighed on me some.
    

58. What is one financial goal(s) you still want to achieve?
    Retire early! I’m saving what feels like an exorbitant amount each month toward this goal, knowing that time is on my side. It’s not that I don’t want to work, but I do want my time to be my own. If I could quit my corporate job in my mid-50s to work on creative projects, or freelance write while traveling, or volunteer or bartend or be a barista a few hours a week, or all of the above—that sounds like the joy I’m after.
    

59. Tell us about one financial accomplishment you’re proud of.
    I was so proud that I put 20% down on my condo when I bought it at 29 years old. Here’s how I did it: I had my normal communications job that was a nine-to-five during the day, and at night, I was the nighttime manager for a guest house on campus near the hospital. If you were coming from far away to receive cancer treatment and you qualified financially, you and your family could come stay in the guest house for free. I had a tiny little apartment off to the side of the guest house, and I had to be in my apartment by 9 p.m. on weeknights at the start of my shift. All it really entailed was I got a list of guests names and room numbers, and occasionally I had to help with letting someone in the building overnight.
    
    As part of my compensation, I got to live there for free, and I got a stipend of like $300 a month. During that time, I socked away as much money as I could with the goal of buying a home. I did that job for three and a half years! Three and half years of having a 9 p.m. “curfew” on weeknights!
    
    I’m also proud of saving so much for retirement even though my pay has always been fairly average or lower than a lot of my brilliant, career-oriented friends.
    

60. What do you regret spending your money on the most?
    Cheap clothes. There are so many clothes in my closet that I hate right now because of how low quality they are. I really need to level up my wardrobe with expensive basics that will last. So many of my clothes look shabby after one wash because I am tempted by a $30 Target sweater rather than investing in really good pieces.
    

61. What is one thing you spend money on that makes your life better?
    Nice dinners out with friends. I cook at home a lot so that I don’t bat an eye splurging on a dinner with two cocktails and savor every moment of the food itself and the time connecting with other people.

    
    I’d also say my church tithe. It feels like a lot each month, and obviously I could be a member of my church without tithing at all, but I do feel invested (literally) in making it a place where we are intentionally giving back to the community and fostering an environment for folks to grow spiritually. My closest friends in town are from church, and I know that if I ever got into a financial pickle, the community would rally around me in incredible ways. I try to be that for other people there, too.
    

62. What is one thing you spend money on that drives you crazy?
    My condo HOA feels ridiculous at $240 each month. The pool is small, needs shade, and is only open a few months of the year. There’s some landscaping, but not much. I just don’t know what all that money goes toward, and it’s higher than other similar communities in town. Also paying for parking at work feels wrong. Maybe one day I’ll move to a cute bungalow and bike to work. But until then!
    

63. Is there anything else you would like to add?
    I feel incredibly privileged to have been taught from a young age that “debt is bad.” My parents are Dave Ramsey devotees. I don’t ascribe too much to Ramsey’s financial principles anymore, but that message really stuck with me. But I also think it’s just the way I’m wired. Money is a form of security for me, and that comes out in both good and bad ways.
    
    After college, I moved back to Dallas, near where I grew up. I was making $36,000 a year, and even with a roommate and a cheap apartment, I never felt like I could get ahead. In 2017, at 26, I decided to move to Columbia, Missouri, and I’ve never regretted it. The cost of living is much more affordable, and I feel like I can live well on my $83,000 salary doing a fulfilling job that’s not super high stress.
    
    My college town is quaint. I miss all the amazing restaurants Dallas had to offer, but there is plenty of outdoorsy stuff to do here (float the river, bike the Katy trail, visit wineries), and the university brings in enough culture (film festivals, art events, book festivals, etc.) that I don’t miss much about city life.

Please comment with kindness!

1. I’m more than half way through the CFP program at NYU and hoping to take the big exam next summer!