How a Chicago Woman Making $47K Really Lives
Here’s her month, by the numbers
Look, we’re never not interested in other people’s budgets—especially if they live in an expensive city on a limited salary. This time, we checked in with a 26-year-old account executive at a Chicago marketing firm that works exclusively with nonprofits. Read on to learn all the ways she spends, saves and co-owns a house with her boyfriend. (Bonus: We’ve got Kelly Lannan, director of Women and Young Investors at Fidelity, to weigh in with some genius budgeting advice.)
Annual salary: $47,000
Take-home pay each month: $2,874
$1,100. Our mortgage is $2,400 a month and my boyfriend covers $1,300.
$100. I add $100 to my mortgage payment to account for utilities every month. My boyfriend puts in $150.
$200. We save up together for our biannual tax bill, which in our neighborhood is $4,500 twice a year.
$800. I have three student loans (one has less than $1,000 left, so I’m hoping to pay it off before the end of 2016) and about $250 goes toward my car payment. I purchased a car when I used to drive to work, but now I consider it a luxury that I can drive to the grocery store or around the city if I need to.
Kelly says: Debt is a very emotional and stressful thing. What’s important is that you recognize that debt and savings go hand and hand. You really can do both. Never prioritize paying off debt at the cost of saving for your future.
$125. It’s $90 a month to take the CTA [Chicago Transportation Authority] to work, and I spend the rest on Ubers.
Kelly says: Since Chicago is a city that is easy to get around by utilizing public transportation and you mention your car is a luxury, it could be worth selling it and putting the money from the sale toward your student loan payments or into an investment account.
$15 to 60. I’m an avid runner, and pedicures keep my toes happy.
Kelly says: I know the importance of keeping your feet happy, but a good challenge would be to skip one monthly manicure or pedicure and instead put that money into an investment account. Over 25 years, that $15 to $60 a month has the power to grow into a $100,000 investment.
$150. My boyfriend and I split our grocery costs, so in total we pay about $300. Sometimes it’s a bit more if we need to stock up on essentials. We cook at home a lot, so we typically buy meat for four days—sometimes at Costco to save money—as well as yogurt, milk, veggies and cheese. We take salad for lunch every day and sometimes we get a fresh loaf of bread and new spices if we want to splurge. We also aren’t loyal to one particular grocery store. For example, we have a new one that just opened, which is a mile away, but they offer $5 off $50 every week, so to me, it’s worth going there.
$25. We cook a lot. If anything, we get Thai and use coupons sent in the Money Mailer ads.
$35. I buy birth control three months at a time and it evens out to this cost. If my inhaler—which I need to run outside—is due, that’s a $100 prescription, even with insurance.
I actually don’t have a 401(k) at the moment. My company has an ESOP [employee stock ownership plan] so the better we do, the more I have put away for me. The longer I stay, the more money I’ll have with me. That said, I save and roll-over credit card rewards into my savings (all work charges on the credit card and gas—that’s it). With my debt, I’m not in a position to be putting away additional funds until my student loans and car debt are paid.
Kelly says: Retirement may seem like a long way off, especially when faced with student loans and other debt. But even if you only have a little to contribute, starting early can make a huge impact down the road. It’s as simple as opening an IRA and making automatic contributions. Just be sure to bump them up at regular intervals every six months or year. Even an additional 1 percent can go a long way.
It depends. I only buy clothing as I need it, and if I do buy something, it’s no more than $50. I recently had to buy a dress and shoes for an awards ceremony. That cost $110. I used my Macy’s credit card to save 30 percent on everything and I will pay it off in full this month. For purchases like that, Macy’s always makes it easy for me to save money, and I promise myself I will pay it off that month—otherwise, I can’t buy it.
$75 to 150 a weekend for myself (we split meals out). If we go to a fancy restaurant, we don’t eat out for the rest of the weekend. We used to go out to brunch every weekend before we lived together, but now we value eating yogurt and bananas at home and splurging on gourmet coffee out at places like Bow Truss or Intelligentsia. I always bring my own travel mug for a 25-cent discount. That adds up!
Going Out with Friends
$30 to 50, if that. My friends and I have coffee dates, work out together or have a few beers. Sometimes we like to try new restaurants or go to a concert, but that’s typically a special occasion and I always bring cash so I’m not aimlessly charging things or using my debit card.
$50 max. I start saving money in August or September for Christmas gifts. That way, I’m able to spend $500 to $600 at Christmas without worrying. I also always look for coupons and deals and try to find unique gifts without exorbitant price tags.
It depends on the month. Traveling home for the holidays is about $250 a flight. I try to fly exclusively on Southwest so I can keep my points high and maintain my A-List status. Typically, if my boyfriend and I are traveling, I’ll pick up the rental car, room stay (with Marriott points) or a few meals out and he might buy the plane tickets.
$0. I’m grandfathered into my parents’ plan and they cover the $25 fee for me—for now.
Kelly says: Since you’re technically saving the $25 each month, it might be a good idea to put this into an emergency fund or toward your retirement. Even though it seems like a small amount, it can grow over time, providing you with a financial leg up on your savings.
$65. Worth every penny. I have a pool, classes, a rock-climbing wall and indoor cycling. It is really a great deal versus spending $25 on just one class.
$50. I treated myself to a manicure at the Ritz-Carlton while we were on vacation. We got a conference rate and decided to make a weekend of it. Another splurge: $37 for two accent pillows at HomeGoods. We split all of our house purchases, so he’ll buy a rug, I’ll buy a piece of art. He’ll buy a couch, I’ll buy a bench. We try to keep it even and we always use Wayfair, HomeGoods or Amazon to minimize shipping costs and maximize coupons and savings.
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