The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.
If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going.
Next in the series is FMF reader Jetgirl. She answered my questions (in red below) as follows:
Please tell us a bit about yourself.
I am 32, married, and we have no children. My husband and I both work as engineers in the aerospace industry, and we are currently very happy to be living in central California. We went through several job changes and relocations to end up here, and we are very happy with our current employer. We also have a wonderful circle of friends and although desert life is not for everyone, we really love the area we live in.
Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).
Currently, we both work for the same employer. Because our areas of expertise are different, we have always been fortunate to be able to be employed together. At the moment we sit feet away from each other and work on the same project. For us this is an ideal situation, and it allows us to only own and maintain one vehicle.
Our only debt at this time is our mortgage (~$1,450/month with escrow), which we have been aggressively paying down. We expect to pay it off in the next 3-4 years. We use our credit card (Southwest VISA) heavily to accrue flights so that we can visit family (we are fortunate that we and our immediate families are all located near major Southwest hubs), and we pay off the credit card in full each month. We purchased our vehicle with cash in 2009.
Recently we took a hard look at whether or not I could afford to stop working, and although that is not currently something I plan on doing, it was a good exercise for us. If we really had to tighten our belts and cut back on all frivolous spending, we have enough savings for us to live off of for a 9 months to a year.
Our current net worth is ~$390k (excluding our home value – even though we are not underwater, housing prices have been fluctuating in our area so much that I've stopped including it in my net worth calculations). We both fully fund our 401(k)s to the maximum yearly limit and our employer matches with 6% of our salary (including bonuses).
What are the current financial issues you're facing (saving, paying off debt, etc.)?
Although I know that I am biased, my husband has developed his photography hobby and has become a wonderful nature, landscape, and wildlife photographer. We kept talking about taking vacations to locations that would be interesting to us personally and would help develop his skills as a photographer, but it was mentally difficult to take money out of our savings to fund these vacations. So two years ago, I started a separate savings account for us to use to fund travel. We just emptied the account to fund a trip to the Serengeti (Tanzania), and we are really excited about the upcoming trip. We have already started refunding this account so that in another 2-3 years we can go on another milestone trip.
Our yearly salary has fluctuated a lot in the past 3 years. While our base salary has continued to grow based on great performance reviews, profit sharing bonuses have been a large percentage of our income. This year we are going to recognize a 10% income decrease because of the drop in the profit sharing bonus for this year. However, I am happy to see the reduction in my income knowing that my company took money from profit sharing funds to alleviate the need for lay-offs during a lull in our business. Working for a company with ethics like that is really inspiring.
What are your plans for the future (retire early, build your career, etc.)?
As I mentioned earlier, my husband and I went through the exercise of looking at our finances in a single income situation earlier this year. We are still undecided about whether or not we will have children. We both feel strongly that one of us would stay home if we ever do. We both have really enjoyed developing our careers and although we are young, we are already starting to be recognized as experts in our specialties, so we have always considered starting a family to be something we would do in 5 years (we've been together for 10 years…). Being a bit more honest, I see my husband as being very happy and fulfilled in his career, and I still question what I want to be when I grow up.
What's your best piece(s) of financial advice and/or your general philosophy on personal finances?
Hard work pays off. My husband and I are in great financial shape because we both took our finances seriously from a very early age. I used scholarships and co-operative engineering money to get through college debt free. My experience as an engineering co-op also gave me invaluable experience and knowledge about what kind of engineering career I wanted to pursue.
Pay yourself first. Even though I set up automatic transfers each month, it really helped me mentally when I created separate buckets for different types of savings (i.e. we did not even consider planning vacations until I set up the vacation savings account).
Communication is king. I think that one of the cornerstones in any healthy relationship is communication, but I have found this to be especially true with regard to finances. I take care of our finances, and even though I was giving monthly updates on our financial situation, I found that we need to have frequent conversations about long term goals and spending patterns to alleviate a lot of worries.
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