Over a year ago, Christian shared his thoughts on personal finance as part of the Two Cents series. As a reminder, Two Cents is a Q&A series that reveals how individuals of different ages, cities, and professions feel about their current financial situation. Let’s see how much has changed for Christian in the past 13 months.
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Heyyo Cash Fasting readers! Good news, I’m still employed and I have more than two cents to my name.
It’s been a year since we’ve heard from you – how are you doing?
Well, I’m still a senior research analyst at a cable network, doing more of the same. I was supposed to be in line for a $10K a year promotion, but, as the media industry goes, the company has hit some hard times so that’s no longer a thing in the near future. This leaves my future up in the air. Do I stick around and wait until the dust clears to get the promotion both my director and SVP think I deserve, or do I try to cut my losses and change companies?
What major life changes have you experienced in the past year?
It’s been an eventful year! A new lady has entered my life, her name is Ricki and she’s a brand new Camaro I bought on the 4th of July (MURRICA🇺🇸). Granted, a new car is a depreciating asset and historically new muscle cars are not very good at holding value, but I have wanted one since the 5th generations came out in 2010. Plus, I’m only young once and it’s easier to come with a muscle car than to convince a potential spouse that she should have the family while dad rides around in style.
I also made another big purchase last year! A brand new… ACL! Yup, that’s right. I tore a second ACL playing beach volleyball. It’s not the most exciting purchase I’ve made and they didn’t give me any sort of BOGO deal, but I decided that I still wanted to play sports so it was a necessary operation.
Talk about PT inspiration…
Has your personal (financial or otherwise) trajectory changed as a result?
Oh, most definitely. The money I wanted to use to open up my own Fidelity account to play in the stock market went to funding my knee surgery and corresponding physical therapy. Although I don’t wish this upon anyone else, if you do find yourself in this predicament, DO THE PT. That’s a note for a whole different kind of blog, but just trust me on that. You’ll regret it otherwise. As soon as I wrap up PT, it’s back to saving up a couple grand to open up that account.
Last year, you were still paying off some car debt. Any updates there?
I finished one car loan to start another. If you recall, in my previous post I was paying $400 a month for my non-fancy car to minimize the total interest paid. I have since sold that (which I only owed a couple thousand on) and put down a nice $8k down on my new vehicle. I took out a car loan at a low-interest rate (thank you good credit and USAA) and wound up with a car payment cheaper than my old car. However, since I knew I was used to living on a budget which included a $400 a month payment, I’ve opted to continue spending that much a month on my new car. The difference between the two goes straight to principle.
What does your budget look like? How does it compare to people in your area?
About the same as last year, but with much less going towards food. I’ve since gotten a Sam’s Club membership and can buy certain products in bulk saving on overall costs, not just in food. I’ve also started cooking much more; now I average one meal a week from the work café as opposed to all five. I’ve found that meal prepping isn’t just for the health conscious, but the cost-conscious as well. I’ll usually cook two different kinds of meals to vary between the two through the week. Truth be told, my knee had a big part in this change. I need to cut some weight if I want to continue playing sports at the level I used to and I need to cut costs to get my savings account back to what I deem a healthy balance.
According to a Federal Reserve Bank of New York survey, about $2,000 would get the average person through a normal crisis and is the bare minimum you should have in a savings account. However, given that knockout punches usually come in combinations, I prefer to have 4-6 months worth of expenses in my savings. My surgery, which came out to about $3k, knee brace and other equipment at about $300, and physical therapy sessions at about $300 a month, ran right through that savings.
Luckily, I was able to take the hit while not having the change my contribution to my retirement which is still a smidge above 10% of my income. Since we last spoke, my company has increased, albeit barely, its contribution to my 401k to a whopping 3%. I’ve matched the 3% and then dedicated the rest of my retirement savings to a Roth IRA.
Compared to my peers at work and in my friend group, I am saving at a higher rate than most. I attribute this mostly to starting to save early. Not only does saving early help you save more in the long run, I think it prepares you to live within a means that includes a retirement contribution. For example, there’s a young guy I work with who lives rent-free, likes to go out, contributes the 3% to his 401K, and has a very snazzy BMW leased. He is looking to leave home and start paying rent but has gotten too accustomed to his bachelor lifestyle with the nice car. At some point, something has to give.
In your last post, your short-term financial goal was to have a lower living cost. Have you achieved this?
NOPE. It turns out if I want to live close to work I already have the cheapest rent available, at $1,350 a month. All the new apartments being built in this booming part of town are luxury buildings and cost a minimum $1,650 a month. Ultimately, if I want a lower cost of living it’s going to require a more drastic change, like a change of job/city.
What’s the most surprising thing about your current lifestyle that you least expected a year ago?
My second ACL, most definitely. Having a sufficient amount of money in a savings account really saved me. Not only in the time of my knee “crisis” but even when it came to switching cars. I knew I wanted to put down at least $7k down on the Camaro and there were a couple months there where I had two cars while I was trying to privately sell my original car. Those savings gave me the buffer I needed for those two months.
Have your short & long-term goals changed since your last post?
Short-term has changed, as my new priority is increasing my savings. After that I want to fidget around in the stock market, mostly buying on bad news. Long-term, the American dream of owning your own house still looms in the back of my mind. Plus, it’ll mean I can get another dog.
Meet Ridley, aka Riddles the Fluff Butt
Anything else you’d like to add?
The best tip I ever got from my first director: At least once a year, interview for a job. It doesn’t matter if you’re not looking, get an interview. It keeps you in good practice, it keeps your resume up-to-date, and it might just throw a few unexpected opportunities your way.
With the shake-up at my company happening now, I thankfully have a few connections at other companies that I can reach out to and am not scrambling to update my resume like some of my coworkers.
Come to think of it, a few years ago I mentioned to my manager NBC had expressed interest in me. I’ve been very fortunate to have a manager that very much cares about me as a person and as a professional and wound up with a counter offer from my company before I even had an offer from NBC. They secured an employee and I secured a nice bump in my lifetime earnings.
“I find that luck is quite predictable. If you want more luck, take more chances. Be more active. Show up more often.” -Brian Tracy
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Thanks, Christian, for the detailed update! I especially agree with the part about interviewing for a job at least once a year; that’s something I do myself. In comparing where Christian is now versus a year ago, it’s great that he was able to manage his injury without compromising his financial stability. That’s the value of an emergency fund!
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