The Money Diaries: The 37 year-old homeowner who makes 6 figures
Here’s another post in the Money Diaries series, which is based off New York Magazine’s Sex Diaries. We’ve collected stories from real people about their spending habits over seven days, anonymized them, and posted them here.
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DAY 1
8am: Grab some cereal and sit down to a quiet house and pay some bills. My bills are a combination of automated and hand entered electronic bill payments. The fixed monthly costs are automated, everything else is set up where I just have to fill in the amounts. The breakdown:
Income:
Paycheck direct deposit: $8000 plus $475 expense reimbursement. This is after maxed out 401(k), benefits, and a ridiculous amount of taxes are taken out.
Fixed Costs:
IRA Contribution: $400
Transfer to Property Tax savings account: $500
Truck payment: $600
Mortgage: $3,200 (My house and land isn’t as big as this payment suggests).
Variable Costs:
Property Taxes: : $1300
Quarterly water bill: $80
Quarterly sewer bill: $50
House phone/internet: $111
Wife cellphone: $54
My cellphone: $108
Annual homeowners insurance: $991
Pay the minimum on my credit card bill: $250. Total bill is $17,584 right now (This needs explanation, but I’ll get to it later. Wife and I pay for everything on the shared credit card. My card limit is something like $40k. This amount has been lingering for 5 months now).
DAY 2
8:30am: Rode the bike to work. Ponder new jerseys for the cool mornings. $60/jersey. Crazy, decide to look at the Bike Nashbar specials when they’re on clearance.
12pm: Starving by lunch time, but I have a lunch meeting.
1:30pm: Lunch meeting over, still hungry, buy a $2 chocolate pudding at the company cafe.
5:30pm: Ride home.
6:30pm: Wife went food shopping, $159 in food. And she got gas, $85.
8pm: Check the mail, see a $43,000 tax bill adjustment from last year via “automated review”. Wtf? Call my accountant.
DAY 3
9am: Drive to work because I’m late.
12pm: Buy $8 lunch at company cafe.
8pm: At night, shop online for $1000 in parts for my project car. Decide to wait till I have the time to install them.
The project car is a car someone gave me for free if I could tow it out of their backyard. So hey, “free car” but just needs some fixing. It really only needs $500 in parts to repair and be drive-able. But it would want $1500 in parts to be slightly upgraded and make for an enjoyable, performing ride.
DAY 4
9am: Drive to work.
12pm: Buy $8 lunch at company cafe.
6:30pm: Meet with a financial advisor trying to sell me on his services. He buys fancy dinner, $150. He says his fee is ‘only’ 1.5%. Tell him I’ll consider it, but I’m lying. My ETFs (Exchange Traded Funds) are doing fine in my IRA and 401k. 1.5%?! No wonder he drives a Maserati.
DAY 5
8:30am: Ride to work.
12pm: Buy $8 lunch at company cafe (feeling a trend?)
2pm: Later in the afternoon, still hungry. Buy a $2 chocolate pudding.
6:30pm: Family wants to go to Disneyland for vacation. Disneyland wants $4k for in-park hotel, park tickets, and flights. Jetblue wants $2100 for just-outside-park hotel, tickets, and flights. Make a note I should start a travel company that answers “When is the cheapest vacation possible for destination X?”
7:30pm: Spend an hour playing with dates and flight times to find a cheaper vacation on a bunch of websites. End up finding $2200 for in-park hotel, park tickets, and flights, but kid has standardized testing that week. Gah.
9pm: Accountant calls back. Says he sees IRS error and it should be at most under $5k in tax adjustments. I invested in a business a few years ago, which failed. I used some tax software to do the returns then, and now I’m continually harassed about what were legitimate business expenses, depreciation, etc. My accountant has saved my financial ass from the “tax software returns” a few times already. He’s worth his $250/hr rate.
DAY 6
5:30pm: Fill up truck with biodiesel. $100 for a full tank, which typically lasts 2 weeks if I ride the bike to work more than 2 days a week.
6:30pm: Wife doesn’t feel like cooking, suggests Japanese steak house. $70 dinner for the family.
10:30pm: Check the accounts after everyone else is in bed. As part of my 10b5-1 plan, I sell a fixed amount of options on the last Friday of the quarter. Look at the stock price, guesstimate the funds that should be wired to me Monday. Looks like $8500. Stupid markets (and me). Like everyone else, my company stock is down, way down. I was hoping to pay off mortgage with my options; now, maybe just the truck and put the rest in savings.
Last year, my options gave me $220k in extra income, so the credit card bill went up (clearly because you spend what you make). I figured the good markets would last for a bit longer, bought new toys, started a race car habit, paid off wife’s car, paid $20k/qtr in credit card bills, paid lots of taxes. Maybe the market will magically rebound and I’ll be a paper millionaire again.
What I should have done is stop racing cars last year and paid off my truck and mortgage by cashing my options out more aggressively. I have a fancy race car, trailer, and all the parts sitting in my garage, unused for all of 2008. Clearly my “faith in the markets” strategy didn’t work too well.
DAY 7
10am: Ponder buying a fancy Xbox Elite. Decide I lack the time to play games and the Gamecube is fine; besides, when was the last time I played it? Avoid spending $400+.
11am: Head to gun shop. Buy $300 in ammo. Ponder buying that target rifle I’ve been wanting. Store owner offers to knock it down to $700 from $800. Still too much for a toy; I tell him I’ll take it for $600 if no one else buys it in the next week.
2pm: After lunch, take kid to the saddlery to look at saddles, bridles, and clothing for riding lessons and competition. Mentally add up $3000 in stuff needed for first competition. Good thing it’s not until the spring.
4pm: Head to animal rescue league to look at horses and dogs. They have 2 real nice horses, which have to go together as a pair. Lots of dogs, none up for adoption yet. Need to find a stable to put the horses at, or need to move to a house with a barn and corrals.
7pm: Neither wife nor I feel like cooking, so we head out to eat at the Italian place we like, $110.
In sum: Monthly income received: $8,475, Expenses: $7,644 (including IRA and savings contributions), spending for the week: $552.
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