Dollar Diary: 36-year-old insurance agent with farm shares 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 Ava, a 36-year-old who works in insurance and leverages her farm for food and extra income.

Age: 36

Occupation: Ava is an insurance agent who recently opened her own agency.

Salary (approximate): $40,000

Do you get income from anything else? Side hustle? Passive income? My spouse’s income and a small income from farm goods. We sell chicken eggs, jams and jellies, salsa and produce from our farm, and I also sell herbs for teas and seasonings.

Neighborhood/living situation: We live on a farm.

Do you own your car or have a payment? We own three vehicles outright and have a loan on one.

How about debt? Anything you’re obligated to pay each month? Our mortgage, utilities and medical bills.

And now, the diary.

Here’s what a week of spending looks like:

Monday: Gas $43.21.

Tuesday: Groceries $76.18 for a family of four. This was actually a very high week for us. We can and freeze produce from our garden to help alleviate our grocery budget. We also purchase beef by the quarter annually, so we don’t need to purchase beef. We raise chickens, so we don’t purchase chicken either. Our Christmas present most years from my mother-in-law is pork.

Wednesday: Last-minute gifts $23.95.

Thursday: Gas $41.02.

Friday: Auto payments came out for insurance, phone, utilities $568.13.

Saturday: Nothing.

Sunday: Nothing. For entertainment, we mostly stay home and work on things on the farm. I quilt and read, my husband does some automotive work and work outside even in the cold. My son is 17 and earns his own money for entertainment. Our 4-year-old follows us around and does whatever we do.  She’s learning puzzles, and we bake together.

What I learned: It’s definitely easier to watch spending when I have to log every purchase. I do a lot of driving sometimes for work, and gas goes quick.

What’s next for Ava?

What big purchase are you saving up for? We will need a new septic tank in the next year or two. Thankfully, it’s only the tank that’s needed as a new drain field was put in two years ago.

How would you describe your broader financial goals? Do you feel like you’re on track? We were on track prior to me opening my own agency, and we will get there again. They say the first three years in business are the hardest.

And, finally, retirement. What’s your approach to planning? Do you think it’s working for you? We have a financial advisor who helps keep us on track and works with us within our budget. It is working for us. The biggest thing I would say is to stick with a budget, and when your income increases, your spending shouldn’t.

The expert’s take

Of course, it’s just one week, but Ava’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 really appreciate Ava’s hustle — running your own business is no small feat. And at 36 years old? That’s awesome!

Sure, the initial expenses of opening a business can set you back in your financial plan, but Ava is young and has plenty of time to get back on track. Plus, she does a good job of supplementing her income with extra cash flow from farm goods, and the money she and her family save on groceries is a real game changer.

Ava said it best: When your income increases, your spending shouldn’t. I would like to see her contribute those future income increases to her retirement savings. By sending that money straight to her retirement plan, she won’t even notice the difference in her paycheck. But she will notice the difference when it comes time to retire and she’s built a nice nest egg!

I also love to know that Ava is working with a financial advisor, who will be able to help her adjust her retirement contributions as they align with her income and budget. If you’re interested in working with a financial advisor but don’t know where to start, check out our podcast, “Common Cents on the Prairie” below. In the episode “Not All Financial Advisors Are Created Equal,” we discuss the questions you should be asking before hiring a financial advisor.

And if you’re looking for someone who follows the fiduciary standard, reach out. We’d love to work with you.