Dollar Diary: 28-year-old in marketing shares a 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.

In today’s edition, we meet Ava, who is 28, lives in central Sioux Falls and earns between $40,000 and $50,000 as a marketing professional.

First, the basics.

Rent/mortgage: I bought my first home within the last year. I live by myself in central Sioux Falls. My monthly mortgage is $808.

Car payment: I have a monthly car payment of around $117, and insurance is $75 per month. Now that I work remotely more frequently and only live a few miles from work, I only have to fill up on gas about every two weeks at the most.

Other income? Side hustle? I work seasonally, part time for the city of Sioux Falls. My hours range from two to 10 hours per week, so this income isn’t something I rely on — just nice to have a little fun money. 

How about debt? Anything you’re obligated to pay each month? I have around $300 in medical bills that I pay monthly. I also have student loans that are around $225 per month. My gym membership is $80 per month.

And now, the diary.

Here’s what a week of spending looks like:

Monday: Nothing.

Tuesday: $61.04 – I bought feminine products, Emergen-C, toilet paper and a keyboard and mouse.

Wednesday: $17.23 for my water utility bill and $12 for a Jimmy John’s delivery for lunch.

Thursday: $450 for three months’ worth of three different prescriptions.

Friday: $25.99 – Dinner and drinks at 18th Amendment with friends.

Saturday: Nothing.

Sunday: $34.87 for groceries at Hy-Vee. I try to make one main meal each week and eat leftovers for several meals. Otherwise, I make up a frozen salmon fillet, eggs or something else I have on hand in my pantry or fridge. Breakfast is usually Greek yogurt, and I stock up on that when it’s on sale.

What I learned: Not much of my purchases were spent on “fun” things this week. It was mostly necessities. While the $450 spent on medical supplies this week only happens every three months, I still have medical bills due every month. It’s expensive to stay healthy.

What’s next for Ava?

What big purchase are you saving up for? I have several house projects I’d like to do over the next year that I am saving for. I’m also hoping to do some traveling this year.

How would you describe your broader financial goals? Do you feel like you’re on track? This is a good question. I don’t have specific financial goals besides just putting money away in my savings each month. I’m getting closer to paying off my student loans. I’m not sure I’ll ever not have medical bills, but I’d love to get to a place where I could pay them off completely rather than monthly over time.

The expert opinion

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

“Ava is off to a great start in her financial journey,” Cox said. “At 28, it sounds like she is on track to pay off some debt, which is one of the first steps to building wealth for her future. At the same time, we’d want to make sure she is gradually increasing her retirement savings.”

Cox and the First National team recommend working up to saving 15 percent to 20 percent of your gross annual income for retirement. And the sooner you can start, the better. He explains that time is the main ingredient for compounding. Investments generate earnings, and then those earnings are reinvested to generate more earnings, which all takes time.

“She’s also just purchased her first home, which is a huge financial milestone!” he said. “At Ava’s age and income level, it sounds like she’s in a good position to pay down her debt while also being able to take the next steps in her financial journey.”

First National’s podcast, “Common Cents on the Prairie,” offers advice and information on how people can make smart decisions with their money. If you’re a young professional like Ava, and you want to make changes to your financial plan, check out the “8 Steps to Managing Your Money Better” episode below or stream it wherever you get your podcasts!