Dollar Diary: 24-year-old executive assistant shares look inside her spending

Dollar Diary is an inside look at the spending – and saving – habits of your fellow 605 residents.

It’s sponsored by The First National Bank in Sioux Falls, which is ready to help you no matter what your financial goals. If you’d like to keep a Dollar Diary for a week, email us at info@pigeon605.com.

In today’s edition, we meet Amy, a 24-year-old who works as an executive assistant and is keeping her financial future in mind.

Age: 24

Occupation: Executive assistant

Salary (approximate):  $45,000

Do you get income from anything else? Side hustle? Passive income? No.

Neighborhood/living situation: I rent and live with a roommate.

Do you own your car or have a payment? I own my car, so there’s no payment.

How about debt? Anything you’re obligated to pay each month? We split the rent, so my share is $625. Our utilities and internet are included in the rent.

• Car insurance: $90.
• Student loans: $102.75.
• Cell phone: $70.
• Netflix: $10.99.
• Amazon Prime: $10.

And now, the diary.

Here’s what a week of spending looks like:

Monday: I did a hot yoga studio drop-in session and spent $10.12 on a drink at 22Ten.

Tuesday: $0.

Wednesday: I purchased a book about the Enneagram for $19. My leader is an Enneagram enthusiast. I want to be able to support everyone better through knowledge!

Thursday: Met friends at Krav’n for dinner and drinks. I had a $50 gift card from my boss. The total was $54.10, and with an $8 tip, the total was $62.10. My portion was $12.10 — $62.10 minus $50.

Friday: Wedding weekend! It was $51 for gas, $100 for the gift, $18 at Subway on the road, and I spilt the $225 hotel room with five girls, so my portion of that was $45.

Saturday: Brunch and mimosa. I spent $116, but it was a great lunch!

Sunday: $0.

What I learned: I am always willing to spend money to do fun things with my friends and/or colleagues. Also, you’ll notice there’s nothing in diary about groceries. Full disclosure: My roommate’s mom stocks our fridge.

What’s next for Amy?

What big purchase are you saving up for?

My first home and maybe buy my mom a home.

How would you describe your broader financial goals? Do you feel like you’re on track?

I have less school debt than most of my friends, so I feel really good there. I will have it paid off by the time I am 26. I put 25 percent of my income away for retirement. I have six months of expenses in an emergency account as well.

And, finally, retirement. What’s your approach to planning? Do you think it’s working for you?

Yes. I am starting young based on the advice of the people I work with.

The expert’s take

Of course, it’s just one week, but Amy’s Dollar Diary gave First National Bank’s chief wealth management officer, Adam Cox, a high-level look at her budget and financial goals. Here’s his take:

I am so impressed by Amy’s current financial situation — she’s in a much better place than I was at 24 years old! Amy is doing a lot of things really well, so for those of you reading this, here’s what you should be taking notes on:

• Six months of expenses set aside in an emergency fund.
• No car payment and on track to pay off student loans within a couple of years.
• Contributing 25 percent of income to retirement savings.

When it comes to planning for what’s next, there are a few things Amy should be keeping an eye on. First, there’s a limit to how much you can contribute to a 401(k) each year, which is currently $20,500. Amy isn’t there yet, but as her income increases, she’ll want to watch that number to make sure she isn’t exceeding the maximum yearly contribution. And, if she’s not already doing it, Amy could consider splitting her retirement contributions between pre-tax and after-tax dollars. She would pay a little more today by using after-tax dollars, but those amounts would grow tax-free and become even more valuable in the future.

It also sounds like Amy would like to purchase a home at some point. She may want to start setting money aside now on a regular basis to build up toward a down payment. With her student loans being nearly paid off, she could then add those payments and increase her monthly contributions toward this savings goal. Then, when Amy is ready to begin her home search, she should start by getting pre-qualified; this will help her determine the home purchase price that fits her budget.

To say that Amy is doing all the right things at this stage of her life would be an understatement. Life is about balance, and while Amy prioritizes spending money on fun experiences with family and friends, she’s able to do so without guilt because she has established such strong savings habits. Well done, Amy!

If you saw similarities between Amy’s financial situation and your own, send us a note. We love helping young professionals set and achieve their financial goals!