How a Communications Professional in the Bay Area Does Money
Nancy (not her real name) is a 29-year-old communications professional in the Bay Area.
So, Nancy, how much are you making?
I currently make a little over $65,000. My combined income with my husband is around $188,000.
We just got married this summer, so we changed our withholdings to 0 and our take home is now $10,200/month. Out of that, we generally allocate 25 percent to housing, 40–50 percent to our credit card bills, and then 25–35 percent to savings/investment.
Nice! What is your housing situation like? I know that the Bay Area can be impossible for both renters and homeowners…
We live in a rent-controlled one bedroom apartment (not in the cool part of San Francisco, but we have an amazing view). Our rent right now is $2,350, which is below market rate. It varies a little bit each year, but usually they raise our rent probably 1–2 percent per year.
So you and your husband lived there before you were married as well?
Yes, we did. We’ve been living together in the Bay Area for the past six years. We’re saving up for a house but it’s been difficult. I will say that we’ve been incredibly lucky and fortunate in that our families paid for our college and we have no loans.
Do you have any outstanding debts? I noticed you mentioned credit card bills.
No, the credit card bill is basically our spending for the month. We use credit cards for our purchases to accumulate points and miles.
So you’re living below your means—like, way below your means when you include your savings/investments. How were you and your husband able to get to that point? Was it something you’d always done?
No, I was dead broke when I first moved out here. We were paycheck to paycheck for a few years. I will say that my husband is an electrical engineer and his employer has consistently promoted him and given him an incentive to stay there. It was only within the last year, when they gave him a $20K raise, that we reached this point where I finally felt like we were making “enough.”
And I feel like its important to bring up that our financial situation has become more tense, I guess? His parents filed for bankruptcy secretly in the months leading up to our wedding, and when we came back from our honeymoon they asked us to pay their rent ($3K). So we’ve been doing that for the past three months, and therefore have not been saving anything.
Oh wow, that’s unfortunate.
Yeah. I think they didn’t say anything for years about their financial situation due to cultural factors, like shame. (They are Korean.)
We’ve already run through all the possible scenarios. We could move in with them (they’re near LA), they could move in with us, or we could continue to live separately and we just send them money each month (this is our preferred situation).
We’re also paying for their health insurance because my husband’s brother has a mental condition that requires medication.
Are they on the ACA?
Yes, they are. Once his brother turns 26 hopefully we can get him on MediCal.
So it appears like you and your husband are supporting yourselves and helping to support your family, and although you aren’t saving as much money right now you’re still making it work while staying within your budget. How does all of this affect your long-term financial goals?
We’ve decreased our retirement contributions to pretty much the bare minimum to get the employer’s match. Luckily, I get a very generous match: I put in 6 percent and my employer puts in 10 percent. My husband puts in 5 percent and his employer matches that.
I will say that we have a lot saved for retirement due to family help. Our retirement accounts’ value is about $210K. My parents were war refugees and immigrated here in the late ’70s and have done very well for themselves. My mom opened up a retirement account for me when I was young and contributed to it on my behalf. I know this is super rare and unnecessary, but knowing that we already have a good nest egg going makes me feel better about going forward and helping out my husband’s family as best we can.
Oh wow, good on your parents for setting up that retirement account. And good on you for paying it forward and/or back by helping out your husband’s family.
I am really anxious to get them out of their current lease ($3K is excessive for a family of three in SoCal). It’s not really sustainable and we’ve been net negative for the past three months.
The crazy thing is they asked my husband secretly to apply for this lease under his name and asked him not to tell me. I was very unhappy about it initially but again, the cultural aspect and shame and whatnot. (Maybe they were afraid I wouldn’t want to marry him if I knew?)
It’s super tense but I just want to make it work. I am looking for a new job so we can afford to give them more per month.
I hope you find one soon, then!
Let me change the subject slightly: how did you and your husband pay for your wedding? Since you just got married—and congratulations, by the way!
My mom paid for the entire thing. We had around 130 people show up, and our original budget was ~$65K but we went over. I know we are so privileged to be able to do that. And it was an amazing experience, but I would have been really happy to simply elope if we didn’t have the financial support from my mom.
That sounds amazing. And it also sounds like your mom has a good financial head on her shoulders. Did she teach you about money as well when you were growing up?
Yes! My dad and mom lived very simple lives, but they were the epitome of the Millionaire Next Door. They were super low key about their wealth. They taught me about investing from a young age, but I really got into it in college. I bought my first stock I think around 2009 (it was one share of AAPL).
…how much did that end up earning you?
I ended up selling it almost exactly one year later. I think it had doubled in price. I’ve since bought more shares at various points, and wow I wish I had more money back in 2009 to buy more shares. I would be doing really well.
Unfortunately I was a college student and had limited funds at the time.
“What would you have bought if you had more money at the time” would be a great Billfold question, actually.
Ha yes, my answer will always be buying more AAPL.
I’ll wrap this up with two of my favorite questions: first, what do you think you do really well financially and what do you wish you could do better?
I think I am good at managing my and my husband’s money, and have a solid understanding of investing. We regularly check in with each other about our financial situation and I like feeling like we are part of a team. He is a better saver than I, but I am better than he is about deciding where to allocate our savings.
I am a pretty anxious person, so one of my biggest goals is to not let my anxieties about money affect me. Especially with this situation with his family, where everything is very unstable and unpredictable. And I should not stress too hard when I actually do have a safety net (my family) and honestly at the end of it, it’s just money and hopefully we will be able to weather this current storm.
I hope so.
Last question, then: what advice do you have for Billfold readers?
Don’t forget to invest in the stock market. At the very least, buy the S&P 500 Index. It will add up over time, and will be well worth it, at least until the Fed eventually raises interest rates.
This story is part of The Billfold’s Parents Month series.