Welcome to Racket’s Money Journal series, where you can snoop on the finances of an anonymous Twin Cities neighbor. Interested in submitting your own? Email jay@racketmn.com for instructions on over-sharing the monetary details of your life! (And gang? Let's keep the very popular series going following a long period of dormancy.) H/T to Refinery29 for pioneering a tremendous concept that we’re excited to localize.

Personal Information

Job: Project manager
Age: 32
Neighborhood: South Minneapolis
Education: Master’s degree
Salary: $103,000
Partner’s salary: $101,000
Dependents: My cat (still waiting for him to earn his keep)
Estimated net worth: $214,000

Assets

Retirement accounts: Around $150,000. 

Cash on hand: $18,166 (usually higher, but I made a big payment on the loan because I’d rather get rid of that debt and interest than earn 3-4% on my savings). 

House: $42,500 in equity. 

Furnishings, tools, hobby gear, etc: Unsure of value, but it’s higher than what we spent to acquire everything, because we are second/Buy Nothing/DIY people so we’ve gotten a lot of great stuff for a bargain.

Partner’s savings: Separate.

Debt

Mortgage: Approx 99% of the starting balance and 6.5% interest, LOL. 

Credit cards: I use my credit card for everything and pay it off monthly (or more often).

Vehicle: $3,800.

Personal loan: $9,825 at 12.4% APR. 

Monthly Income

Paycheck amount: $7,966 pretax, $5,336 after tax

• Tax withholding: $1,932
• Health insurance: $101
• Healthcare savings plan: $20
• FSA: $115
• Retirement plan: $437
• Vision: $5

Monthly Expenses

Mortgage: $2,040 total; I pay just over half.

Loans: $494 personal + $140 car; I pay just over half.

Utilities:

• Gas/electric: $192 average (shared 50/50) 
• Water, trash/recycling, sewer: $117 average (shared 50/50)
• Internet: $75 (shared 50/50) 
• Phone: $46

Insurance:

• Health: $101 
• FSA: $115 
• Healthcare savings plan: $20
• Dental: $0, paid by employer
• Vision: $5 
• Disability/life: $0, paid by employer
• Homeowners: included with mortgage payment 
• Car: $72 (shared 50/50) 

Retirement: 5.5% of my pre-tax salary with 6.25% employer match.

Transportation: Varies; I haven’t figured out the exact budget needed. I have a free transit pass through work, we rarely drive, and my partner does most of our vehicle maintenance. I’ve set aside $500 for my half of upcoming maintenance that will require a mechanic. 

Groceries: $285.

Pet: $50.

Subscriptions: $65/mo: Spotify ($15), Netflix ($18), Dropout.tv ($6.53 - I’ve offered to password share but no one’s taken me up on it yet); annual subscriptions divided to monthly cost: Strava ($6.67), Racket ($4.17) (Editor’s note: hell yeah), 1Password ($2.99), Google One ($1.67), You Need a Budget ($9.08), NYT Games ($3.33). Mooch from friends/family: HBO, Hulu, NYT Cooking, WaPo. 

Gym: $30, plus $70/month training program paid quarterly.

Personal care: $80 for quarterly haircut savings + hair and skin products, etc.

Donations: $50, donated wherever it feels right and if there’s any left over, I roll it to the next month.

Money Talk Q&A

Did your family talk about money growing up?

Absolutely. My parents divorced when my siblings and I were in elementary school, and it took a few years of my mom working for $8/hour and taking night classes before she got a job that paid the bills without assistance beyond child support, although things were still tight. ($8/hr wasn’t enough to raise a family then and it certainly isn’t now; the federal minimum wage needs to match inflation and cost of living increases and it’s fine, actually, if teenagers flipping burgers at McDonald’s get a little more pocket money as a result.) 

My mom didn’t hide the challenges from us, but—largely because of support from my mom’s church and other members of our community—we never went hungry and the mortgage (my parents bought a house and my mom kept it in the divorce) was always paid. We were also fortunate to have access to healthcare at no cost via Tricare; shoutout to the U.S. military for doing one good thing for the country. 

As we got older, she was consistent in telling us that it would be better to attend community college for a year or two than take out student loans to attend a four-year university straight out of high school. I considered ROTC as a way to go directly to a four-year school without needing loans, but was fortunate to receive a full ride scholarship, and this wound up being the case for my siblings as well. 

Did you worry about money growing up?

Yes—see above. There were often times that we’d ask our mom for something and her response was that it would have to wait for the next paycheck. She refused to open a credit card because she didn’t want to spend on anything we couldn’t afford and get stuck in a cycle of debt, which was a good example for us. She managed to keep us in sports and other extracurriculars, and take us on a shopping spree with a $250 budget each to buy new clothes before the start of each school year. Despite how tight our budget was, we did receive a weekly allowance corresponding to what grade we were in—so $7/week when I was in seventh grade, and so on—not a lot, but enough that I could save up to buy something I really wanted. I assume that the same people who helped keep us fed and the bills paid also supported all of this. After I went to college, my mom remarried and my stepdad’s income dramatically improved the financial picture. 

At what age did you become financially independent?

I’d say it was at age 22. My parents didn’t (need to) assist much with college expenses, except for buying me a laptop and sending the occasional care package, so I was fairly independent as soon as I went to school. My summer job covered groceries and other purchases during the school year, but I did live at home without contributing to household expenses during school breaks, so it wasn’t until I moved out after college that I was fully on my own. 

How did you learn how to budget your life?

Because I grew up financially insecure, I’ve always lived below my means, but have also always felt guilty spending money. Last year I signed up for You Need a Budget (YNAB), which has been a huge help for seeing exactly where my money is going and feeling OK when I spend on clothing, dining out, and other non-essentials, because I know the money has been assigned and I’m not taking away from other expenses or savings. I’m still learning, though—I took out the personal loan in November to finance a home improvement project and didn’t register how high the interest was until last month. Fortunately we’re in a position to shift things around and pay it off within a couple months, but I wish I’d done the math to realize I could borrow less and pay more out of pocket from the start. 

Have you ever received inherited income, major financial gifts, or large insurance payouts?

Yes. Like I mentioned, I received a full ride for my college education, and it was a huge leg up to enter adulthood without student loan debt. My mom got me a $1,200 beater to drive in high school and college, then my stepdad bought me a new car as a college graduation present, which I sold last year for about $14K. I was always responsible for registration, insurance, and maintenance, but not having a car payment itself (or the higher maintenance costs that come with an older car) was a massive benefit. 

I was supremely fortunate to also receive merit-based aid for grad school, which meant I only had to borrow $35,000 to cover living expenses during school—substantially less than if I’d had to pay for tuition. After graduating and getting a salaried position, I kept my expenses and fun money at grad-school levels while putting all of my new excess income toward my loan. About a year after my graduation, my dad made a $7,000 payment on the loan, and I was able to finish paying it off within another year. I know he had/has a college fund for me and both of my siblings, but to this day I’m not sure if that $7,000 was the full savings for me or if there’s more he’s been holding onto until he feels like sending it, and I will not ask. 

Being free of student loan payments by my mid-20s has had a rippling positive effect for my finances since then. I worked hard in school and still I know that luck was a major factor for me to get where I am, but luck shouldn’t be required to get an education without taking on a lifetime of debt. I don’t think other people should have to pay off their full debt themselves just because I was able to. Cancel student loans! Make college free and accessible! If it’s not good enough for you that education is a basic right, just think how much more everyone could contribute to The Economy if they weren’t sending hundreds of dollars a month to the vortex of student loans and ever-increasing interest. 

Do you worry about money now?

Yes, mostly because of our money pit of a house. We keep our expenses low enough that we could pay for everything with only one person’s income, we can fulfill most of our wants with our monthly discretionary budget, and we have savings to cover a few months’ expenses; however, some major home maintenance is in the not-too-distant future and I’m not sure the best way to pay for it. 

One of my friends said that homeownership feels like a tool to keep people preoccupied and lonely because you wind up spending so much time and money just trying to keep your house standing up, especially if you’re in a bigger space/less walkable area and therefore have more to maintain between the house and car(s). This inspired me to start asking our friends for help on our house projects and offering to help with theirs as well, which: a) saves money and more importantly; b) builds community instead of fragmenting it. 

While I recognize that we’re lucky to be where we are financially (and socially!), it’s still hard to feel secure, especially in light of everything Trump and his cronies have done over the past seven months. I am always struggling to find the right balance of saving for retirement, (this shouldn’t even be a thing, we should just take care of old people! Also will IRAs and/or the world exist in 30 years?), preparing for house projects, donating to causes I care about (where is the line between “putting your own oxygen mask on first” and wealth hoarding when it comes to financial security?), and everything else we have to worry about in this capitalist hellscape.  

How much do you think a person or household needs to earn to live comfortably in the Twin Cities?

Comfortable is subjective! I was comfortable making $55,000 and sharing a $1,200/month apartment with a roommate in my 20s, but $55,000 doesn’t go as far as it used to and I would be less happy with that arrangement now even though—sorry for my privilege—renting was less stressful than homeownership. Something like $70K/person seems like enough to follow the basic 50/30/20 rule at least, though it leaves less available for big spends like a major home project or an international vacation if that’s your jam. 

Money Journal

Day 1

11:51 a.m.: $13.17 for an egg sandwich because I forgot my lunch at home, RIP. 

5:30 p.m.: $0 for a no-jito and shared apps at happy hour, paid for by the hosting org. 

Day 2

7:57 a.m.: $1,250 for extra payment on principal for the personal loan. The monthly payment was also processed, bringing the balance to $8,200. 

8:06 p.m.: $25 donation to a candidate for local office. 

Day 3

3:32 p.m.: $24.54 at the co-op for missing ingredients to host friends’ dinner. (My partner and I have separate finances and will settle up for household expenses at the end of the month.) 

Day 4

1:29 p.m.: $21.79 for Tetris Effect on sale. Do people actually have fun with this game? I am stressed. 

Day 5

10:02 a.m.: $14.34 for an iced oat milk latte for me and pain au chocolat to share with my friend C.

1:36 p.m.: $47.88 at Trader Joe’s for some necessities and a few items we definitely didn’t need. You know how it goes there.

4:50 p.m.: $47.98 for a haircare set (on sale!) including shampoo and conditioner, bought online.

Day 6

$0; all I did was work, go to the gym, and read with my cat in my lap (priceless). 

Day 7

5:23 p.m.: $55.97 at the co-op for ingredients for another friends’ dinner, a few impulse buys, and a restock of kosher salt. 

Total: $1,560.67 ($310.67 without the extra loan payment) 

We don’t usually host friends for dinner—or make $1,000+ loan payments—but this was otherwise a typical week. If we weren’t buying nicer/more food for those gatherings (my partner went to a separate store for ingredients as well) we likely would have gone out to eat and spent the same amount of money or more. I successfully avoided a couple of impulse buys, but I made a note of what those were so that if I’m still thinking about anything in a week or two, I can move fun money from something else and go ahead with the purchase.