Dollar Diary: 26-year-old Realtor shares week of 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 [email protected].

In today’s edition, we meet Ronda, who is 26, a Realtor and has an unpredictable but definitely above-average income for someone her age.

First, the basics:

Age: 26

Gender: Female

Occupation: Realtor/investor

Salary: My commission can vary dramatically. I can go a month without a paycheck and then make $20,000 in one month. The average net for a year is $100,000 to $175,000.

Do you get income from anything else? Side hustle? Passive income? I earn $1,350 from four rental properties and approximately $500 per month from a partnership I have with an insurance company, so I make passive income when my clients use that insurance company. It’s a win-win — my clients get better insurance pricing, and I get some ownership.

Neighborhood/living situation: I own a single-family home with an $1,800-per-month mortgage and live with two others who pay $600 per month.

Do you own your car or have a payment? I have two vehicles. I have a $500-per-month payment on my Tesla.

How about debt? Anything you’re obligated to pay each month?

Student loans: $250/month
Car insurance: $125/month
Gym membership: $135/month

And now, the diary.

Here’s what a week of spending looks like:

Since I have a Tesla, I am lucky I don’t have the crazy gas prices right now. It increased my electrical bill by about $40/month, and I have to maybe stop twice a month to charge unless I’m driving a lot.

Monday:

Coffee — Starbucks most likely: $5.76
Supercharger: $8

Tuesday:

Doggie day care: $45/day for two dogs
Stop at gas station to stock up on water/Sparkling Ice: $5.44
Lunch on the road: $12.36 — Pita Pit, get 10 percent off because of YPN

Wednesday:

Nails: $95 — usually every three to four weeks
Random Amazon spending on my house: $250
Supercharger: $4

Thursday:

I had a business meeting for breakfast at La Luna Cafe: $16
Pita Pit: $13.36 — yes, Pita Pit again
Ticket to Hey Sioux Falls: $10
Groceries: $48
Quick gas station stop before volleyball for a snack and Propel: $13.95
Massage: $90

Friday:

Doggie day care: $45/day for two dogs
Lashes: $65
Lunch: A couple of friends and I met for lunch at MacKenzie River — $15.40
Gift: $15 — my assistant got a new puppy so I wanted to surprise her with puppy goodies!

Saturday:

Doggie day care: $45/day for two dogs

Sunday:

Pizza and beer for friends: $75
Dog bones and toys to keep the dogs busy: $10

What I learned:

This week was a little crazy, but many of my weeks are. Most of my money is spent while I’m on the road going from house to house or networking with other professionals in town. The last few weeks, I’ve been working on my spending eating out for dinner, as that gets spendy super FAST! I was able to have a little me time this week and pamper myself. I usually do this once a month to decompress because I’m usually working 12-plus hours a day from working with new clients or doing research on new investment opportunities in the Sioux Falls area. The obvious realization is most of my money is spent either picking up food or on my dogs. Doggie day care is worth every penny with two VERY energetic dogs.

What’s next for Ronda?

What big purchase are you saving up for? How would you describe your broader financial goals? Do you feel like you’re on track?

There really isn’t anything BIG in sight that I’m saving for. My intention is to always be ready to be able to pull the trigger on the next investment property to build my portfolio. My goal is to have 40 doors by 40. By the end of the summer, I will be at nine doors, so almost one-quarter of the way there!

While I’m working on building my portfolio, I am also working on paying down my student loans and car loan.

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

I am working with a financial advisor to help with retirement planning outside of real estate investing. I want to have a diverse portfolio so I can have a solid foundation later in life. I have recently sat down with my planner to help create a more direct plan. I don’t enjoy talking about it or understand it, so I wanted to have someone help me navigate through all the different options.

The expert opinion

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

Can I just say how much I love people with hustle? Ronda has some pretty serious goals and ambitions for her career and finances, which is commendable for someone who’s only 26. She should be proud that she’s a homeowner and has established multiple revenue streams. That’s huge!

While her income is certainly in a good spot, it sounds like Ronda is also taking steps to become debt-free. Once her student loans and car payments are behind her, she can continue to put her money to work in other ways. In Ronda’s case, she could either buy more investment properties or further diversify her wealth by increasing her retirement savings.

It’s also great to hear that she has taken an active role in planning for retirement. The secret to building wealth for retirement is to start early, so the fact that Ronda has recognized this is really important. Working with a financial advisor is another step in the right direction. While it can be tempting for a high performer like Ronda to manage their own investments, research has shown that an expert advisor can add 3 percent in net returns annually.

One thing that Ronda may want to consider as part of her overall financial plan is life insurance. If you’re someone with debt or have people financially dependent on you, life insurance is very important. On the latest episode of our podcast, “Common Cents on the Prairie,” we sat down with Jeff Zander, the CEO of Zander Insurance, the only insurance company recommended by Dave Ramsey, to discuss all the different kinds of life insurance and how you can figure out which one is right for you. You can listen by clicking the player below or find it wherever you stream your podcasts!