let's talk about money
This post was first published in July 2011. It was last updated in October 2013 along with a downloadable Excel document of our budget: Download Budget_13October
It can be hard to talk about money matters, even with the people that you are closest to - money can be a sensitive topic! But Chris and I are an open book when it comes to our finances. We are very meticulous with budgeting and planning for our financial future. We even like to have "budget meetings" over scones at our favorite coffee shop and talk about long-term financial goals.
Of course there's no one right way to manage finances. Depending on your short-term and long-term goals and your income you have to make the best decisions for you. But I hope that by sharing a bit about how we manage our finances others might find some helpful strategies.
I talked about how we organize our bank accounts in this post. Now I'd like to share our financial numbers:
Salaries
Kelsey: $54,000 / year as a science writer for a large public university.
Chris: $76,377.60 / 9-month school year as an assistant professor.
Chris receives additional pay based on any contracted summer effort, such as teaching a summer class or conducting research related to a grant. Therefore, his summer pay varies year by year but it’s been an average of $12,000/summer.
In 2012 our combined income was $129,000.
Paychecks
Kelsey: $1,398.08 (after taxes and deductions)
Chris: $2,300 (after taxes and deductions) - note this is during his 9-month contract, during the summer it varies and depends on his effort (i.e. teaching, reasearch)
House
Purchased for $200,000 in July 2009.
We put $20,000 (10%) down and have a 5.25%, 30-year, fixed interest rate.
Our total monthly payment (principal + interest + taxes + insurance) is $1,243.
Loans
Chris and I each have student loans which together total approximately $100,000 (which gives me slight heart palpitations).
The total monthly payment is $670.
Credit Card Debt
None! If we use our credit cards we pay them off the same month (or even within days of making a purchase) and never carry a balance. Currently we each have a Chase Sapphire card, which we’re using to accrue points (and hopefully take an awesome vacation) and I have a Chase Southwest Visa that I use to earn travel on Southwest airlines.
Savings
Chris and I maintain a total of four savings accounts for personal, short-term, and long-term savings.
Currently we have $13,655 in our long-term/emergency savings.
We are currently working towards saving up at least six months of expenses in our long-term/emergency savings account.
Cars
I drive a 2008 Prius (that I wanted for a long time!) that I bought for $15,500; I put down $7,000 and borrowed $8,500. I owe $6,200 on my car and make a $300 / month payment.
Chris drives a 2004 Chevy Colorado that is paid off.
Retirement Accounts
Chris and I each have retirement accounts through work and separate Roth IRA accounts.
Through work, Chris contributes 11% of his paycheck to the state retirement system and receives a 9% match that will be fully vested after 10 years of service. After 10 years he will also be guaranteed a pension from the state when he retires.
I contribute 7% of each paycheck to a 401(a) account and receive a 7% match. It will be 100% vested after 5 years of service. I also contribute an additional 3% to a 403(b) but that one does not receive an employer match.
Across all of these accounts combined we currently have about $112,000 saved for retirement. (This includes vested amounts; Chris is currently 40% vested and I am 0% vested.)
So there you have it! I think we're doing a pretty good job managing our money but of course there's always room for improvement. I’m definitely looking forward to the comfort of having 6-8 months of living expenses saved up in our emergency savings account.
I'm happy to answer any questions about how we manage our finances. Please leave a comment or send me an email at hellorisingshining{at}gmail{dot}com