10 Questions and a Pizza Place with Leigh’s Financial Journey

Today is the 54th edition of our periodic guest post series called 10 Questions and a Pizza Place. (The 1500′s are pizza fanatics.) We have a list of 17 questions we pose to fellow financial bloggers, and they are free to pick and choose 10 or answer all 17. Let us know if you would like to be featured in a future edition of 10 Questions. Note: We’ll be switching up our questions and starting a new feature very shortly. Stay tuned…

I first came across Leigh’s Financial Journey way back in July, when FI Fighter listed her among his favorite blogs. I hopped on over to her site, and loved it. She is a young woman, working in the high-paying tech industry. But rather than drive a Mercedes, carry a Louis Vuitton bag, and walk around in Louboutin’s, she saves her money.

Her story is quite interesting. She has a crush on math. (I don’t share your crush Leigh, but understand it on those rare occasions where my work gets me to the right answer.) She shares her spending, saving, and goals for each year, which I think is so helpful. I am always so impressed when I see younger people on the right financial track. In today’s society, it is easy to be led astray. Too bad they don’t make reality TV shows about personal finance…

Tell me about your blog and why it’s great.
I blog with real numbers, from the perspective of someone in their twenties who makes pretty darn good money. (I grossed just under $200,000 in 2013.) I want to show the world that not everyone with a high salary spends it all. I started my blog because I found all the financial advice on the internet for twenty somethings was to contribute to a Roth IRA while your income is low! Well I surpassed the Roth IRA contribution limit my second year out of college, at 23, so that didn’t apply to me. I also bought a condo with 20% down at 23 and started maxing out my 401(k) at 22. I am neither a partying twenty something nor a “let’s get married and have a bunch of kids” twenty something. That voice didn’t exist! I think I’ve carved out a bit of a niche and it’s been going well.

What would you do if you inherited $1,000,000 (after taxes) today?
Oh that’s easy! First, I would pay off my mortgage in full (there is about $150,000 left today). Then, I would set aside the rest of the money into one year CDs at four different banks (since you should give it some time to think before acting on the windfall). Honestly, after a year, I would probably lump sum the money into my regular AA and then call it quits. I’m pretty burnt out from the tech industry and would love to try something else. My net worth right now is around $500k and another $1 million would most definitely be enough to call it quits for good, as that would give me about 35 years’ expenses saved with the mortgage gone.

What kind of car do you drive?
A subcompact! Think Toyota Yaris, Honda Fit, Ford Fiesta, Mazda2, Nissan Versa. Yes, I bought it new in 2010, but it should last me for 10-20 years hopefully and it’s great on the gas mileage. I spent under $400 on gas in 2013 😉

If you could go back in time and give yourself one piece of advice, what would it be (don’t say ‘buy Microsoft,’ everyone says that)?
I would tell college me that she doesn’t have to be dating someone! She can say no to going out with someone if she’s not interested. P.S. I’m far too young to have had the funds to have bought Microsoft when it was worth much 😉

What advice would you give to a 24 year old, just out of college?
A 24 year old?! I graduated at 21 😉 Track your spending, your real spending. Contribute at least as much to get the full match on your workplace retirement account. Build up a cash buffer of 6 months expenses before doing anything else. Then contribute to a Roth IRA, max out your work retirement account and finally, start stockpiling cash for buying a house or a car or your other big life goals and if you don’t have any big life goals for the next few years, just open up a taxable investment account and buy index funds. Don’t forget about donating! Make a habit of that early.

What is the best financial move you have made?
It may still be too early to tell, but I think it was buying my condo two years ago. I bought in the dip, so my carrying costs were the exact same as renting, except that part of the mortgage payment was going to principal, and I paid no closing costs. With how little goes to interest each month now, my costs are about $900/month less than I would be spending renting, which is a savings of about $10,800/year. That is insane. Plus, my place has appreciated about $100,000 in value (just under 30%) since I bought it. I also really love my place (it’s a two bedroom/two bathroom) and it’s a good size for my boyfriend as well! We should hopefully be able to stay here for years and enjoy the cheap-ish housing costs, for the central location we have at least.

What is the worst personal finance mistake you see people making?
Buying real estate while assuming that they will continue to have the same income they do today. And two incomes at that. My place is affordable on just my base salary from when I started working, by myself. Then again, I don’t want the multi-million dollar home with a view and bedrooms for multiple kids, just the spacious two bedroom condo with a solid HOA. This means that I can walk away from my job without worrying too much about money.

What’s your favorite tip for saving money?
Save your raises and bonuses. No, seriously. I know not everyone sees income increases like I have over the last few years, but I’m still living off of the same $40-45k I did my first year out of college, despite the fact that my gross income has doubled. ($40-45k sounds like a lot, but about $20k of that is housing) Also, spend on the items that are important to you rather than what your friends have. Yes, I bought a new car, but it isn’t something fancy like a BMW.

Dogs or cats?
Dogs all the way. I’d love to get a dog in a few years, once I convince the HOA in my condo building to allow me to since I’ve already convinced my boyfriend 😉

What is your fondest memory?
Honestly? Falling in love with my boyfriend. We’ve been friends for a long time (since college!) and falling in love with him caught me off-guard – I completely wasn’t expecting it. He is the sweetest, most wonderful guy and I’m so happy I get to spend my days with him 🙂 I’ve had quite a few crappy relationships and this one has just been amazing from the start. Don’t get me wrong, we have our differences, but he is so supportive and we are great at communication that they’re not really a big deal.

Thanks Leigh, for giving us a peek at your life. Catch up with Leigh’s Financial Journey here.