Today we continue the ESI Scale Interview series where people answer questions about their success at working the ESI Scale.
In short, the series focuses on what the interviewee is doing in the areas of earning, saving, and investing. They also get an opportunity to ask ESI Money readers for suggestions if they choose to do so.
This interview took place in May.
With that said, let’s get started.
My questions are in bold italics and their responses follow in black.
Please tell us a bit about yourself.
I’m 33 and my wife is 34. We have been together for 8 years and married for almost two of those years.
We are happy to say we have been prepping for a little boy due in early October of this year (2022). Additionally, we have the best dog and a crazy kitten.
We love living in Charlotte, NC. Lots to do in and around our city. We like having all four seasons and having the beach 4 hours away, the mountains 2 hours and a large airport.
What is your current net worth?
Our current net worth is as follows:
- $34,860 in cash (Distributed amongst different BOA “buckets” – emergency/savings account, new car account, checking account, travel account)
- $62,300 in 401k (100% match up to 4%)
- $15,450 in Traditional IRA (Vanguard/VTSAX)
- $21,257 in Roth IRA (Vanguard/VTSAX
- $6,420 in HSA
- $5,550 in Stocks (Charles Schwab)
Total = $145,837 – does not include two cars nor the mortgage.
We have no debt other than mortgage ($240,000) and we paid off both vehicles within 3 years of getting them and have enough saved in our car funds to purchase another vehicle in cash when the time comes. Our idea on this is with our specific car fund plus the trade in value we should be able to purchase a 3 year old (or so) used car for $20-25k cash and continue to ‘pay ourselves’ the equivalent of a car payment in order to save for the next.
How did you accumulate your net worth?
We both have earned and saved everything we have up to this point. Neither of us make what we would consider a ton of money (see below). In fact, we are one month in to only one income due to the pregnancy so it has been an interesting adjustment period thus far.
Investing mostly comes in the form of the tried and true boring index funds (VTSAX). I have had some wins with a few stocks and some losses with others. I turned about $1,500 into just over 8k with one stock in particular. The rest of my stocks have been gains or losses amounting to nothing incredible. I went through a phase where I’d find myself with $200 and I’d put it into a single stock and see what happened. Not wise but I’ve learned lessons and it wasn’t all bad news.
With my most recent company, I have contributed 10-12% in the company 401k plan with a 100% match up to 4% for the past 5 years. This is in addition to contributing to savings in all other areas. About 4 months ago I switched to contributing 7% as I plan to max out the IRA contributions this year while keep my savings contributions (car, travel, baby) the same. So, this has caused me to decrease the 401k contributions.
What is your job?
I am an Assistant Project Manager for a concrete subcontractor. I help manage projects in the multi-family, commercial, manufacturing, industrial, sporting, and education realms. I get a lot of enjoyment out of it between the people I work with and the fact that I’m helping contribute to something that makes a tangible impact on people.
Since graduating college, my wife has largely been a private nanny. She took a coding class four years ago and did that for a little while before returning to being a nanny but she would also freelance building websites and perform QA/QC and graphic design work. Currently she is a home maker in getting ready for the baby occasionally picking up babysitting and freelance projects which will net $100-$200 at a time.
What is your annual income?
Currently I earn $75,040 (that $40 is important!) and the bonuses I’ve received range from $1,500 – $3,500.
The past two years have been on the low end and I expect that to be the case again this year, although, this will be the first year I’m in the position I’m in and the bonus structure is different than what I am used to so we’ll see. It baffles me to read others that have $10,000 bonuses and the like. I don’t know anyone who ever comes close to that.
My wife was making around $58,000.
Tell us about your income performance over time. What was the starting salary of your first job, how did it grow from there (and what you did to make it grow), and where are you now?
My very first job was at a friend’s restaurant. I was 14 and I made $40 every Friday and Saturday night as a busboy. 10 hours for $80 cash was more than enough to pay for my own movie tickets and Pokémon cards. I did that until I graduated.
After two years in college I started to valet 30-40 hours a week. I kept up valet work until about 2 years after college and made $500-$800 a week depending on the shifts and seasons.
I graduated college in 2011 with a degree in civil engineering and my advisors told me I’d start out making $70,000. Well, I applied to several hundred places and didn’t land a position until a year later and only after I went out and got a certification on my own.
Finally, I landed my first “big-boy job” graduating college and made a whopping $12.25/hr as a 3rd party materials tester/inspector/consultant on job sites. I’d often work 60+ hours and travel all over NC, SC, and VA. All the overtime made me feel like a king but obviously this wasn’t the $70k I was told. I was making better money as a valet for less hours, less effort, less responsibility and I wasn’t out of town 4-6 days a week. I learned a lot and got a few more certs and after 2 years I asked for a raise and they boosted me to $12.50. A month later I left.
I worked as a Project Scheduler making $44,000 for a residential pool company which was fairly neat but I didn’t know I was walking into a dumpster fire. Corporate came in 10 months later, fired the GM, let everyone else go.
It took me about 2 months to find a job as a QA/QC representative with my current company where I made $45,000. I stayed in that role for about 3.5 years and increased my salary to $51k. Switching roles within the company to a Project Engineer netted me another $4k.
Three years later I was making $67k as a Project Engineer before getting promoted to my current APM role ($75,040) and finally exceed the aforementioned starting salary of $70,000. Thank you, professors.
When I met my wife, she was making mid 40’s and increased her earnings to about $58k.
What’s your work-life balance look like?
My work life balance is pretty good. There are times where I have to go out of town for a day or two.
The hardest thing is my commute is 40-50 minutes depending on traffic. I’d love to be able to get that down to 15-20 but we love where we live.
My wife and I split the chores but since she stopped working she has taken on 95% of those responsibilities which really helps me enjoy my evenings and weekends. Now, when I’m not working, we can focus on each other and the pets and friends and any other fun things we want to do. I really appreciate that.
Do you have any sources of income besides your career? If so, can you list them, give us a feel for how much you earn with each, and offer some insight into how you developed them?
No other sources of income.
I suppose my wife and her freelance graphic design/building websites would count as an additional source now given the circumstances which again range from $100-$200ish per project which come at no particular intervals.
If you were rating these results on a scale of 1 to 10 (with 10 being best), what rating would you give yourself and why?
I would say I’d rate the earning portion a 7.5.
Looking back is always easy to do but if I had been able to recognize the path I wanted to be on, especially in my current company, sooner than I did I could be making 20k more at least. But I believe the hindsight and lessons are huge factors that have made me more driven. The fact that we are now a one income family and have a baby on the way is also extra motivation.
What would you say is your best tip for earning more money?
My best tip for me personally is recognizing my career path and then getting after it. Know what it is that you want to do and figure out how to do that successfully and the money follow.
Although, I do know a number of people who job hop after two years or so and they’ve certainly increased their earnings. I just celebrated 7 years with my company. The company culture, my manager, co-workers, and work-life balance are all really great and I just don’t think I’d be able to mirror that anywhere else in the industry. Especially right now as I’m trying to advance myself and prove myself to my company.
What are your future plans regarding growing your income?
I plan to continue to pursue a Project Manager position. The department I am in is the most successful in the company and therefore I see a lot of quick growth potential. As long as I provide value and continue to do good work I can see myself being a leader as a Senior PM or Group Manager in 5-7 years which would net me +$120,000. The department is small so there are lots of opportunities to show my value and make really meaningful impacts.
My wife and I both agree on her staying home until at least pre-K. Then she might return to the work force full time or maybe just continue to freelance as it comes. We’ll also see if we want another kid or not which would also affect her time table of going back to work. I’ve been in the 1-2 kid camp and she’s been steady on 1 so we’ll see how this first one goes.
What is your annual spending?
Annually, for the past 4 years, we spend consistently in the mid 30’s regarding all things except for travel.
Some notes explaining the breakdown are below…
What are the main categories (expenses) this spending breaks into?
Here are our expenses by month/year:
- Groceries ($325/$3900): we meal prep to make two or three servings for each dish which helps with portion sizes as well as cutting down cook and clean-up time because we only do that twice a week.
- Cell phone ($50/$600): $25/month per line with Visible.
- Internet ($70/$840): 1000mbps. Higher than we like but we get tired of threatening to switch companies every year and then actually doing it every other year to save $15 a month.
- Car Insurance ($136/$1632): This dropped $20 in April 2022 because we were able to declare the cars as low mileage vehicles and only used for running errands and not commuting because she was no longer working and I received a company truck in January.
- Bills [Water/Gas/Electric] ($170/$2040): Average of the past 3 years
- Eating Out ($180/$2200): On average once a week and we try to split it into two meals.
- Entertainment/Wants ($300/$3600): Social activities, clothes, etc.
- Needs ($350/$4200): hair dryer replacement, pet items, home improvement, etc.
- Mortgage ($1360/$16,320):
- Vacation: Travel is our #1 priority! African safari, snorkeling in Bonaire, island hopping the Galapagos, backpacking the PNW, Northern Lights in Iceland! All priceless in our eyes! Before she stopped working, we were both putting about $500 a month into a Travel fund. Our trips that year determined how much we would spend (safari vs backpack camping = huge price difference). We always had the money to go where we wanted regardless of destination. Contributing $256 a month now but we expect our travels to be curbed for the next couple of years because of the baby. But hey, that gives us time to save up for Thailand. I guess you can say our saving every month counts towards spending so ($256/$3072).
Do you have a budget? If so, how do you implement it?
We did make a budget together and use Mint to loosely monitor it. We have a good feel with what we are spending our money on and how much so we do a good job staying on budget for the most part. Sometimes we’ll do something with friends and spend more on dinner and an activity than normal but we’ll recognize that without logging into Mint and just say “ok, that was fun but next time the two of us want to eat out we’ll either choose to stay at home or go somewhere cheap”.
We are starting to check in with Mint more often though as we adjust to the single income. We aren’t feeling strained by it, but rather, just want to make sure it’s working and is sustainable. We use Personal Capital for overall wealth figures but budgeting we keep in Mint.
What percentage of your gross income do you save and how has that changed over time?
Again, we were saving more when we had two steady incomes (obviously). But right now, with the one, we are saving right around 40%.
Contributions to the car fund (currently +$15k) and travel fund have been cut some and that money has gone straight into savings which is earmarked for baby items. Although, my wife used to be a nanny and a has a great network of friends and families some of which have little boys and which we’ve been the beneficiaries of things like an unlimited amount of clothes, a crib, diapers, baby carrier, etc.
She also knows from her experience with babies and little kids the things you really need and the things you thought you would have needed but actually don’t. This has and will continue to save us money and unnecessary purchases.
With two incomes, we were saving more from a dollar perspective but probably saving close to the same amount from a percentage standpoint.
How did you get to this level?
She has always been a saver. When we first met, before we were dating, I’d ask her to come do something with some friends and she would say she only has $33 left in her entertainment budget and that she couldn’t afford to do that.
I had no concept of budgets or money. I spent money freely. I had the stupid mindset of “ok I have $3000 in my checking so that means I have $3000 to go out that night to the bar with friends” or whatever the activity was. There were times where I would just pick up the tab for friends at the bar because I didn’t want to wait for the bartender to ring up 4 or 5 different checks – just put it on mine and let’s make this whole thing go faster. Boom. $180 right there. Just stupid things like that.
Being around her and seeing her relationship with money really taught me a lot and saved me from my horrible habits.
I wised up and clumsily made a budget with her help and struggled but now it’s second nature to save and make sound decisions. I check all our accounts once every two weeks.
If you were rating these results on a scale of 1 to 10 (with 10 being best), what rating would you give yourself and why?
I’d honestly say 10 because although I knew how much I was saving for this, that, and the other from a dollar standpoint I had no idea how much it was from a percentage standpoint.
I’ve read plenty of others saying they save 30%, 40%, 50% and I would just think ‘wow that’s amazing’. I thought I was less than 20%.
Also, just the growth of how my relationship with money was to what it is now is a complete 180.
What’s your best tip for saving (accumulating) money?
A broken record in the world of personal finance but definitely pay yourself first.
I look at my checking account and I see money just whisking away automatically to all the different buckets we have set up. If it wasn’t automatic, it’d never happen. Setting that up has been the number one way.
What’s your best tip for spending less money?
I’d say get into good habits. I was never much of a spender at any point in my life on things that weren’t food and drink. I was never tempted to buy a bunch of clothes, the latest phone, movies, concerts, etc. So, from that perspective I was safe.
Only when I was living on my own and out with friends on the weekends did I spend money with blatant disregard. Meeting my wife, learning from her and applying the control I had in other facets of my life to my bar adventures got me to develop good habits.
Also, surround yourself with people that you really enjoy being around. We found, at times we would go do something with some friends and we would get back home and just say ‘well, that wasn’t as fun as we had hoped’ or ‘the company wasn’t really that great’. We found ourselves repeating that time and time again with certain people and we started to reduce the amount of time we would hang out with them because of the lack of fulfillment we felt afterwards.
With other friends, we always have a great time whether we spent $5 or $100. Becoming more aware of the value of our time and money led us to being more intentional with who we spend our time with and it has saved us money because we aren’t agreeing to every single person that wants to go out and do something.
What are your future plans regarding saving your money?
Having a newborn will certainly keep us from eating out as often or doing social things with friends so we’ll save there but I suppose some of those savings will be put towards baby needs. We’ll see how that balances out.
We have zero intentions of putting our kid in daycare. We anticipate enrolling him in a pre-k program of sorts or maybe just wait until kindergarten.
My wife may return to full time or part time work when that time comes and at that point we’ll definitely have figured out how to thrive being on my one income so we would ideally be saving 100% of her take home pay. We may have a second kid depending on how this first one shakes out. If that happens that would delay her return to the workforce if that is ever an option.
Until then I would like to find other ways to save or increase savings. We often have conversations asking ourselves where we can cut spending but we can only come up with getting rid of Spotify ($12/month which I use every day for podcasts and music) and lower our internet which would save maybe $10-$15 a month. We don’t have any other subscriptions.
What are your main investments?
Our main investments are my 401k and our IRA accounts but in total they read as shown below:
- My 401k: $62,300 – 2022 has not been kind! Contribute 7% of weekly paycheck which shows on my paycheck as $101 = $404 a month (except on those months where it’s a 5 week pay frequency month)
- My Traditional Roth via Vanguard: $15,450 – Contribute $495 a month so that I can get the full contribution amount this year. VTSAX.
- My individual stocks via Charles Schwab: $3,913 – Contribute very infrequently to this
- Her Roth IRA via Vanguard: $21,257 – Also VTSAX but right now she is not contributing to this but will occasionally with any freelance money.
- Her HSA: $6,420 – Contribute $0. We’ll be using this (and deplete it) throughout the pregnancy and she is now on my health insurance plan.
What is your investment philosophy/plan?
Invest what we can into the 401k and Roth accounts.
She was maxing out her Roth for a few years in a row before she stopped. The plan is to just stay consistent as best we can and not panic during bad times (like now having lost about 17k in 5 months…).
If we have all of our bases covered and have some money left over somewhere we’ll put it into one of the accounts above.
What has been your best investment?
Our best investment, you could say, is our house. We bought in summer of 2019 for $265,000 and now it’s worth about $415,000.
We have absolutely zero plans to sell. We are in a great location and see ourselves staying for decades to come.
I also have to include my wife because she set me straight in more ways than one and I can’t thank her enough.
I did buy shares of a stock at $1.12 a piece and rode it up to about $4.70 before I sold. It continues to drop to this day so I got lucky on that.
What has been your worst investment?
Individual stocks. Overall I’m in the black but that’s because of the lucky windfall mentioned above that netted me about 8k.
There are a few individual stocks that I put $200-$300 in and some are down to $50-$70. So, big losses from a percentage standpoint but in total maybe $1,000-$1,500 worth of losses. I’d say the real loss is the opportunity that I could have put that money into VTSAX or something like that.
If you were rating these results on a scale of 1 to 10 (with 10 being best), what rating would you give yourself and why?
I’d say a 7.
I don’t feel like I am doing anything wrong but I also feel like I could be doing some things better but I don’t know what that could be.
I always read about 401k, Roth, HSAs being the main ones. I guess they just aren’t as high as I’d like which will come with time as I invest more and more as time goes on. It’d be nice to be able to max out the 401k and the Roth IRA but haven’t found a reasonable way to do that yet. Sometimes it feels like if I’m not doing something new or changing things up I’m missing out in some way.
What is your best tip for investing money?
I feel like I don’t have much investment experience so I can’t really speak on giving out tips that are going to be explosive and earth-shattering. Just focus on investing in the tried and true methods of 401k and IRAs and let compound interest and employee matching help you along the way.
I wish I could succeed in stocks or crypto and make a quick $20,000 in 3 months but until I have true disposable income and am in a much better place financially, I’ll be watching from the sidelines.
What are your future plans regarding investing?
We’ll stick to what we are doing currently.
A college fund of sorts – either 529 or other – will be in the workings but that is probably it.
We don’t have any interest in real estate or owning multiple properties but it’d be foolish to close ourselves off from all possibilities. Maybe something will pop up.
What are you currently doing to maintain/grow your net worth?
From an earning perspective: I plan to stay with my current company. I am in a great department and see huge growth for myself in about three years’ time. There are so many good things going for me right now that I am too averse to jumping to another company. I know that’s how many people get big pay increases quickly but I don’t think that’s for me.
From a saving perspective: Keep following our budget and adjusting to becoming new parents and the costs that come with it. Maintain the mindset we have currently with regards to how we spend our money and our time. Stay aware of where we can trim here and there.
From an investing perspective: Stay the course. Allow salary increases to go all into Saving and Investing vehicles. Keep our eyes open for anything new but don’t deviate from what is working.
Do you have a target net worth you are trying to attain?
I don’t have a target net worth and we haven’t talked about it at all. Our focus has been so much on saving at least 15%, saving for emergencies, vehicles, not spending irrationally, etc.
Some of our goals and what we practice are laying the groundwork for a comfortable future but what that final number is remains to be determined. Perhaps around $2M based on some of those calculators online but they don’t account for everything.
What would you say is your greatest strength in the ESI wealth-building model (Earn, Save or Invest) and why would you say it’s tops?
I would say saving is our biggest strength because she’s always been a saver and conscious of her spending and she’s gotten me into that mindset as well.
Our earnings haven’t been outrageously high nor have they been what they could have been. For example: Me not trying as hard or not jumping from company to company.
Investing has been very good with the 401k and IRAs, I would say, but that has largely been a byproduct of us having money saved that frees up money for investing.
What money mistakes have you made that others can learn from?
Biggest mistakes I’d say I’ve made was not taking my professional life as seriously as I could in the beginning.
At first, once I had a big-boy job, I just treated it as a paycheck that I was happy with. It was enough to pay rent and fund my social life. I didn’t treat the beginnings as building a foundation or a stepping stone to bigger and better things. I feel like I got a foot in the door and coasted when I should have been more balanced between grinding and working hard during business hours and having a responsible amount of fun after work.
We all mature differently…I just wish I had done so a few years sooner but not so much that I would have been a workaholic. I never want to be one of those people. Work to Live not Live to Work.
What are your plans for the future regarding lifestyle?
We want to have a lifestyle where we don’t have to worry about if we can afford to do this or that. We want to be able to provide our son with exciting experiences and not have to sacrifice in order to do so.
I feel like with just the two of us that is how we lived. It wasn’t ever anything over the top or lavish but it was what we wanted to do. We didn’t have millions in the bank but we did what we wanted and how we wanted to do it. If we can do that for ourselves and for our son going forward, I think we’d be very happy with that.
I suppose, too, that early retirement is something I’ve started eyeing. Maybe 55-ish and then go part time or something like that. Again, been very focused on lining things up so that those things can happen. Once our son is born we’ll reevaluate and see what it will take to retire at 55 or to retire comfortably or how to achieve our magic number.
Ever since middle school I’ve always fancied the idea of teaching in some capacity and being a school soccer coach. Either a high school history teacher and soccer coach or maybe some part time teaching position at the local university or community college.
What are your retirement plans?
Once we both are in full retirement, I can see us taking extended trips to places and be going for several weeks at a time so I’ll be looking forward to checking out any places we have yet to get to.
Are there any questions you have for ESI Money readers regarding any parts of your finances?
Sure, I have questions but would really like input or criticisms of anything that was read. Yes, it sounds like you’re doing great! Or…. No, you fool, stop doing that and focus more on this!
Reading other interviews (millionaire, six-figure, scale) all have me constantly reevaluating my actions and plans so I’m always second guessing myself.
Are there ways I can improve my investing?
Thank you so much for reading. I learned a lot doing this and I hope it helps others as well.
You are doing great. Keep maxing out the 401K if at all possible.
Solid start, good money habits esp w embracing a debt-free life. Consider inching up 401k contribution per year until it hurts. Also , throw a few bucks a months to the HSA. u don’t have to deplete it. use some keep some and keep your receipts. those are two vehicles that increases your overall savings, while reducing ur tax burden. One more, develop few more streams of income. More income diversity is money. Again, solid, slow and steady, good money habits.
Well done so far, young engineer.
One piece of career advice — if you don’t have it, get your PE license. It will open doors when you least expect it, and can be worth a lot of $$$ to the right employer. It may even lead your own engineering firm.
The voice of experience — I finally got mine ten years out of school, and it paid big dividends. Just do it! All the best with the soon to be expanded family.
Financial Fives says
You’re off to a really great start and have already established solid money habits, nice work! You’re ahead of many already. You might feel crunched at this time in life with a single income household currently and newborn on the way, so it’s important to practice self-compassion and things will get easier in the future. Don’t guilt yourself if you’re savings rate decreases, work towards increasing salary over the next few years.
And wow, a $265k house? That sounds like a dream. I live in suburban CA and even “lower-end” homes are $500k.. I miss living in the South!
ESI Scale 53 says
I see increasing the Earn facet of ESI is going to be the key successor at this point since my investments habits and saving habits are already automated/established. An increase in Earning will allow us to expand on the other two. Next few years will be crucial in gaining major increases without having to switch companies.
Great Job! Having done what you are doing (supporting a family on one income), you need life insurance and disability insurance on the sole income provider, you! Also get rid of one car (from what I understand you have three) that will be a big boost to savings. Get back to maxing out 401K, maybe with each new raise, you wont get that time in the market back. Shop around for the best car/homeowners insurance discount from the same company, bump up your deductibles as high as you can. Treat the HSA as another Roth IRA, invest it and forget it, can’t beat that tax free growth. Meanwhile, do a FSA each year for a portion of out of pocket medical expenses. Lastly, get a 2% cash back credit card on all purchases, run everything through that, pay off every month, nice little cash fund. Best wishes to your family!
ESI Scale 53 says
A few months after this was submitted I did take out policies on myself and my wife and feel good about doing that. We really want to get back to the 401k matching as well as starting the contributions to the HSA again since that hasn’t happened since she stopped working. She has also been finding deals and ways to save % here and there on top of our credit card that gives us great cash back on all purchases. Works out well because we earmark that free money for gifting. We talk about to getting rid of one vehicle but can’t bring ourselves to it. Maybe if we get rid of both and replace them with one that fits both our needs/wants.
ESI Scale 52 says
I think you guys are doing great. I enjoyed reading your story, and you guys have done a lot with a modest income. It was also nice to see where you guys put your priorities with family, travel, and savings. My advice is don’t worry about waiting too much with travel. We took our kids traveling with us at all ages. It gets a little more hectic and stressful, but we had so much fun traveling with them. My wife also stayed at home with the kids and we will never regret lost wages and savings, because that time is so precious.
As others have said, if possible work on increasing those Roths, HSA contributions, and increasing your 401k. We cash flow almost all of our medical expenses and keep investing our HSA. Your expenses are impressive, so keep up the good work.
One option for future income – while your wife is at home with your child, she could nanny another infant or toddler who is a similar age. The similar age part would help in terms of a similar nap schedule and the kids having a playmate.
You guys are doing great!
ESI Scale 53 says
That has been discussed and she may very well end up doing that once we get used to having the little one around.
Y’all are doing great, especially at that income range. Your discipline of automatically “paying yourself first” will pay large dividends as your income grows.
Also, congrats on the upcoming arrival. We are fellow Charlotteans and in nearly an identical life stage as y’all. Feel free to have ESI connect us if you ever want to grab a coffee. It’s always nice knowing like-minded folks.