How a Woman Who Prioritizes Savings Over Debt Repayment Does Money

Christy is a 26-year-old federal employee living near Washington, DC.

So, Christy, tell us a bit about your finances.

Okay! I looked all this up today so I’d have specifics. I’m a government employee who just got a promotion, so I make $76,378/year. My girlfriend and I live together, and she makes around $47,000/year. I have $21,189.34 in student loans and $2,184 left to pay on my car, and my girlfriend has no debt. We have a joint account for bills but everything else is separate.

Next year I should make $90,823 because I should be getting another promotion. It’s insane. It’s way more money than I ever expected to make.

Congratulations!

Thanks!

Okay, how much money did you expect to make?

Well, back in college I wanted to do technical theatre for a living. It took me a few years to realize that I couldn’t really afford to live like that — I really value having health and dental insurance, and I didn’t want to scrape by that much, and I wasn’t expecting any help from my parents. So when I stopped wanting to do that, I decided to go to library school (like my mother and grandmother before me), and I expected/hoped to make like $40,000/year.

Are you currently a librarian?

Hah! No. Thank goodness.

I’m not exactly sure what I am — the promotion was also a new government office — but I’m something like a SharePoint developer and something like a project management person.

So you went to library school, and then you started working for the government, and now you’re making more money than you could have ever imagined.

I started working for the government before library school, actually, back when I still wanted to do theatre. I needed to save money before studying abroad, so I got an internship and never really left.

But yes, I’m earning more than I ever thought I would. It’s funny because I have my dad’s career now, basically. He always made what felt like a ton of money, even though I, to this day, don’t know what he earns.

How did your approach to spending/saving change once you realized you were going to make more money than you had anticipated?

Did I ever have an approach to spending/saving money in the first place? Not really. I knew that I had to save for study abroad, and then after I depleted that money I knew I had to replenish it. Then I was just (JUST) working through grad school. I paid everything but the first semester out of pocket, and I was really just focusing on that rather than specific savings.

I learned how to budget growing up — my mom is very proud of that — and so I don’t have any consumer debt, and right now I’m just trying to avoid lifestyle creep and build up my savings.

I put away 7 percent (5 percent match) in a Roth TSP, which is like a government 401(k). I also try to save $300/pay period.

Okay, so we’ve got one more person who made it through college without consumer debt!

Yes, LOL.

Were you ever tempted to just use credit cards? Did you think about credit as an option at all?

I never really needed to? My mom always tried to make me get a job while I was in high school (like during the school year) and I always parried and said I would work summers and in college. And I did! I worked 10 hours/week all four years in college, first as a office assistant and then as a carpenter.

Plus like I always knew credit card debt was bad. My mom doesn’t even really carry her credit card and doesn’t have a debit card.

She’s an envelope budgeter.

With actual envelopes, I’m assuming?

Yes!

So cool.

Yes. I am not disciplined enough for that, plus I treat cash like Monopoly money.

On that topic: what do you feel like you do well, finance-wise, and what do you wish you did better?

What I do well: I will be debt-free by the time I’m 30 because I’ll snowball my car payment amount towards my debt (I’m using those words right, right?). I spend a relatively small amount of money on rent. I make a lot of money? Am I allowed to say that? Does that count?

What I wish I did better: I wish I saved more consistently. I wish I only spent $100/week on things like going out to eat, clothes, and books. That’s what the budget has for my ideal savings rate and I don’t stick under that. I wish I actually followed a budget. I wish I didn’t love my $450/month, not entirely necessary car so much. I wish I didn’t spend so much on my appearance. I’m happy with spending the money on my appearance, but it sure feels like a lot of money.

One thing I think I do really well: I am not overprioritizing paying off my debt. I’d rather have the flexibility of (not quite, but soon!) $10,000 in the bank rather than $10,000 in loans, for the relatively low cost of $2,000 in interest. I’m risk-adverse.

See, I think that whole “only spend $100 a week on restaurants OR clothes” is really hard. If you’re in DC, your professional wear is probably in the Ann Taylor/Banana Republic/J.Crew world, and that’s $100 per item on average. You can shop sales, but still.

And restaurant meals will probably be $40 per, including drinks. So… it is possible, but it’s hard.

It’s not, really? I haven’t gotten a lot of actually professional clothes. My work clothes are super cheap — they are literally all $25 dresses from Lands End, on sale.

Oh, that’s smart!

Ha ha, yeah, thanks! I’m weirdly cheap on clothes.

Restaurants, though… My girlfriend and I take turns paying, so like Tuesday, we had a $120 bill. But it was delicious.

Usually it’s around $60? We’ve been going to the Washingtonian list of cheap eats. Which by the way, PSA to Billfolders in the DC area, is the best way to choose a restaurant. But Tuesday was not a cheap eats night.

I also like that you picked saving $10K over paying off loans more quickly. Because if you don’t have savings, you will always end up with more debt. Right? Is that a true-enough financial axiom?

Yes. (I’d probably be able to borrow from my dad, but it’s still his savings and it’s still my debt to him.)

In addition to paying off your debt, do you have any other long-term financial goals?

Paying off debts by 30, saving money until I’m 35, buying a house at 35, paying off the house by 65, retiring from the government and collecting my social security (hah!), my pension (double hah!), and my TSP money and riding off into the retirement sunset.

BOOYAH. That sounds like a plan.

LOL yes.

I’d like to give my mother a substantial financial gift for letting me live with her in grad school mostly rent-free.

Oh, that sounds lovely!

Thanks! It was very kind of her.

I hope you are able to do that.

Just two more questions. First: what surprised you about doing money as an adult?

Huh.

One thing I really was not expecting was that student loans matter. That the $325/month I pay affects some of the choices I made and continue to make. (I had a full ride offer for college but turned it down to study where I wanted. Really, I’m lucky I only had like $22,000 of debt after undergrad.)

Plus I recently visited the Midwest and looked at housing prices and frankly, differences in costs of living still shock me.

Were you considering living in the Midwest at some point?

Yes! My girlfriend and I are considering/trying to move to Kansas City, Missouri. I can move anywhere with my job, and so if she can find a good job there we’ll move. Though right now she seems to be prioritizing career over moving, which is fine.

Prioritizing career is smart. Especially if you are in your 20s/30s.

Yes, definitely!

So last question then: what advice do you have for Billfold readers?

Oh gosh.

Doing what you love doesn’t have to pay the bills. Find something that you like doing, though, because (at least) 40 hours a week is a lot of time to do something you hate. Keep advancing in your career so you don’t get bored. Go outside of your comfort zone, at least sometimes.

We are currently looking for more Doing Money volunteers! If you’d like to chat with The Billfold about how you do money — and yes, you can be anonymous — email nicole@thebillfold.com.

Photo credit: Yogesh Mhatre

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