How a Couple in Portland Does Money

When you earn enough for the present but not enough to save for the future.

“Yvonne” is a 28-year-old administrative staff member at a university. “Rick” is a 27-year-old baker in a boulangerie. They both live in Portland.

So, Yvonne and Rick, how much are you making?

Yvonne: I make $32,000 and Rick makes $23,000.

How does that compare to your expenses? Do you feel like you’re earning “enough,” whatever that means to you?

Yvonne: I would like to earn more to have a little bit of breathing room. We have a really strict budget where almost every dollar is accounted for and goes towards bills/food/rent.

I’m currently contributing 10 percent of my salary into a 403(b) through my work (thankfully, the university matches up to 6 percent!). We also have quite a bit of student loan debt to pay off which really takes away from retirement and savings.

I will feel like it is enough when we are both contributing into retirement accounts and have three months’ emergency savings.

Rick: I feel like we earn enough to live comfortably. We aren’t struggling to pay our bills. I’d like to earn more to pay off credit card and student loan debt, though.

Yvonne: We both feel like we’re earning enough for the present but not enough for the future.

So tell me a bit more about your budget. I’m curious what the biggest line items are (I’m guessing rent’s near the top) and I’m also curious how you created it. Was it something you thought about beforehand, or something you kind of realized when you noticed you had no money left over at the end of the month?

Yvonne: You are right, the biggest line item is rent. Rent in Portland is increasing at a scary rate! We live with our friend in a two-bedroom apartment underground close to downtown and pay $900 for the two of us. It feels like a steal with the crazy rent hikes.

The next line items are student loan debt, which is about $600 a month in total. The lovely credit card comes next because our car fell apart and we couldn’t pay cash to fix it. Rick goes to work at 4:00 a.m. and there are no buses at that time… so the car HAD to be fixed.

The budget is an Excel spreadsheet that includes the total amount we make each month and all of our bills! I think it is beautiful. We know how much money we have and where it is going.

We have combined bank accounts now, but before we combined accounts we tracked everything we spent on a spreadsheet so we could pay each other back for things like rent/utilities/groceries. We learned from this spreadsheet (and from a lot of conversations) that we had similar spending habits, so a joint account made sense.

On the subject of credit card debt: there’s always going to be somebody who says “well, Rick could have RIDDEN A BIKE or CARPOOLED, you didn’t HAVE to GO INTO DEBT,” so let’s just cut that line of conversation off now. What are all of the blindingly obvious reasons why biking and carpooling weren’t options?

Rick: Well for one, I don’t feel comfortable riding my cheap bike in the rain at night. I don’t have any rain gear, and the bike lanes to get me to work are a little sketchy. And it was also just time to get the car fixed before it started costing us more later. I am planning on biking this summer, to save on gas and maintenance. I have no excuse for not carpooling though. Ha!

You have coworkers who live close enough to your apartment, with the same start time?

Rick: Maybe with one coworker sometimes. But the other coworkers are coming for different directions.

See! It isn’t that easy.

Yvonne: Also, I’m mad at the car. I HATE the car. Because of the debt.

Right now you’re earning enough to cover your basic expenses and you’re steadily paying down debt and saving for retirement, but you don’t have enough to cover an emergency expense. Is that an accurate assessment of your finances?

Rick: *nods head*

Yvonne: That is the truth.

Do you see this situation changing in the near future? Maybe in the next three years or so?

Rick: Most definitely! I like how we have an actual plan now.

Before we moved in together, I was just flying by the seat of my pants. Just paying whatever bills I had and trying to pay just barely over the minimum payment on my credit card. Now, we have two great jobs and a plan for paying down debt as fast as possible. The credit cards are my biggest worry because I’ve been carrying that debt for years and now I see light at the end of the tunnel (even with the car troubles).

I don’t see us being this far in credit debt in the next two or three years.

Yvonne: I feel like things are getting better. I just started grad school for my Masters in Education and I’m excited to start looking for jobs higher up the university ladder in the next few years. Onward and upward! Debt is the enemy!

Rick also makes the debt feel lighter. I’m a planner and I have a hard time handling unplanned events (like that car). But he is super chill and we work through it together as a financial super team.

You mentioned earlier that you had similar spending habits. How did you decide to “do money” as a married couple? Was it something you talked about, or did you both get lucky in that your financial viewpoints and values were so similar?

Rick: It was a really big part of the conversation when we moved in together. We talked about it all the time and just tried to make it work in the best way we could figure.

When we had separate accounts it got to be a hassle trying to figure out who owes how much to whom at the end of the month. It lead us to think about it as a team effort and to simply pool the money together. Yvonne’s Excel skills helped frame it out and we discussed whatever came up. I think our values are similar and that was lucky. So it’s a bit of chance and preparation.

Yvonne: We also both have separate “fun” accounts that allow us to buy whatever without having to discuss it. Now we have discussions about what is considered individual or joint purchase. We just started the fun accounts, so we’ll see how it goes. Actually, I think I got the idea from a Billfold article now that I think about it…

You mean this one?

How Do Couples Use Joint Accounts?

What do you feel like you do well, financially, and what do you wish you could do better?

Yvonne: Financially, I’m a frugal person and I try to make things last as long as possible to save money/pay down debt. With that, being frugal is a thin line to cheapness. I could wait and spend more money on something durable, but often it’s too late and I need to make a purchase immediately.

Like last week, I knew my work pants were looking shabby and that I should replace them. But I waited too long and I busted a hole in my pants and had to grab a new pair during my lunch hour. I wanted the money from not buying pants to go to something else, when really I just needed pants.

Rick: I feel like I do well on staying within my budget. I always keep a mental tally when I’m out buying groceries or wherever and I keep the cost of my trip pretty low. Most of the time at the store I’m looking for good deals and sales. I never buy random FUN items unless I know that I have the extra cash.

With that in mind, we are trying a new system where we both have our “Fun Money” accounts. We set up individual checking accounts with $50 for each of us a month to do whatever we wanted with. This is a brand new experience for us and we think it will help us stick really closely to our Excel budget. So when I go out with friends, I’ll buy that round of beers with my Fun Money. Or that video game I wanted, or take myself to the movies, etc.

I wish I could do better at saving for retirement. I know that’s just a numbers game, but the actual “giving up money for the future’ part is hard to not resent.

It looks like your near-term financial goal is to pay off your debt and get that emergency fund built up. How long do you see that taking? When you’re done with that, what comes next? Travel? Homebuying? Saving MORE?

Yvonne: I’m hoping to have my credit card ($3,000) and student loan payment ($6,400) paid off in three years. Grad school is slowing down the repayment process for me, but that’s okay because I love it and it is an investment in my career. Thankfully, my work pays for 70 percent of my tuition! Otherwise, I would not have gone back to school.

Rick: My credit card is also at the top of the list ($2,500). We are hoping to have that paid off within a year because I’m throwing $300-$400 at it every month.

The student loans are an enormous burden and I have to say it feels like the university really took me for a ride. I mean, forcing a student to stay on campus at exorbitant rates for food and housing? I don’t know how I justified that, except that they said financial aid will help. Gross. At any rate, I fell for it and now owe them a lot. I’ll be paying them for about 20 MORE YEARS.

It would be really nice to spend that money on a down payment for a home, too.

Yvonne: We’ve also been saving up for a honeymoon trip to Ireland this summer. When we got hitched, we asked friends and family for money to help us go on this trip instead of for stuff. This trip would not be possible without the help of those that love us! Travel is definitely something we’d save up for, with or without debt.

Rick: Yeah, that was a great idea for us. I really didn’t want a toaster either. I feel like travel is something you should do as early as you can and pay for it by budgeting and saving up. There are many options out there for traveling on the cheap. Hostels are perfect for young travelers on a tight budget.

Yvonne: And homebuying? LOL Nicole. That is so hard to think about right now. We’ll probably be one of those couples that moves to a new state because we can’t afford to buy in the city we live in. Portland is not a long-term situation for us. We want a small town and some land and a pack of dogs to follow us around everywhere we go.

Rick: Yeah, maybe we can get a home loan someday by building our credit and saving up a down payment. Or winning the Lotto.

Lastly, what advice do you have for Billfold readers?

Yvonne: I feel like Billfold readers already know this, but learning to talk about money is a skill that needs to be developed. I practiced talking about money with friends and family and I made sure that when Rick and I started dating seriously that we talked about it regularly to normalize it. The more I talk about money with people, the easier it is. It has also made me more confident in asking for things, like a raise.

Rick: Avoid credit cards. Read The Billfold. Make your presents instead of buying them, it’s more from the heart and often way cheaper. Even if it looks terrible, they will love it.

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