The name is John Steiner and I live in Southern Maryland with my better half/muse/wife Abi. I’m 27 and Abi is 25; we’ve been married since December 2015 and have no kids.
I’m the CFO for the family, but Abi is the household CEO.
At the beginning of 2018 we had more than $44,000 in debt. We wanted to become financially independent and were able to pay it off in five months. To do that, we became more frugal and also depleted some of our savings.
In my younger years, I wasn’t always financially responsible; I used to spend a lot of money at bars and restaurants. But when Abi and I married, a new sense of responsibility fell upon me. I thought that if I were to drop dead tomorrow then I’d be leaving her with many financial problems.
Now that we’re debt free and financially independent, I have the peace of mind that if I were to drop dead tomorrow, then she’d be left with no financial burdens.
Our Income and Expenses
I’m an engineer and make $66,000 a year, and Abi is a per diem nurse and makes roughly $58,000 a year. We have a combined income of roughly $124,000 a year — but we live on a budget that is less than $40,000 a year.
Since the start of our marriage we decided to live on a single salary to get into the habit of living with less; the $40,000 budget was a happenstance of this behavior.
We’re currently living on $35,341 annually. Let’s look at the monthly expenses:
We’ve cut costs by only buying certain things new. For example, we buy new underwear, but we started buying all our other clothing from thrift stores for a fraction of the price. As a result, we reduced our clothes expenses in the first five months of this year by half!
Abi and I promised to never take out a car loan, so our 2005 Honda Civic and 2010 Ford Focus are paid in full. We do plan on replacing a car in one or two years, but our goal is to have only one car to reduce our insurance costs.
We rent our home and therefore have no property taxes. Maryland has fairly expensive housing and we’re paying only $200 per month more for our three bedroom townhome, compared to our initial one bedroom apartment. The only reason we got a bigger home was due to an understanding that we’d need the space in the near future.
I also have a life insurance policy in the event of my untimely death which would allow Abi to move close to family, take some time off of work, and pursue any dreams that she may have.
We don’t pay for cable or satellite services. Unfortunately, we had a hard time finding a good Internet provider in Southern Maryland; the best price that we found was with Verizon for $40 per month.
For entertainment, I read aloud to Abi, and we also use our Amazon Prime Student membership for television. We also do a lot of trail running, biking, swimming, and hiking.
We limit ourselves to only seeing six movies a year in theaters. When we do go out to eat, it’s at restaurants where dinners typically cost less than $10.
The extra income that we do have we are allocating to building our wealth for an early retirement. I have set personal and financial goals to achieve those ends.
I contribute 10% of my salary to an employer match 401K and also cover health, dental, and vision insurance for our family. By August 2018 we will have enough saved in the HSA account to begin investing that as well. We have a Roth IRA with Abi’s previous 401K money that we rolled over and are now contributing to monthly. We also have multiple brokerage accounts to invest in the market.
Since we live well below our means we are able to save a lot of our income. I save 15% of my paycheck instantly to a savings account and use the rest to cover our expenses. From my base pay, after all deductions, contributions, and taxes are taken only 55% of my check goes into a checking account. All of Abis earned money gets allocated to our different investment accounts.
We have less than $10,000 at a time, usually $8000 to $9000, saved in a traditional savings account because most of it is being allocated to investment accounts. However, part of the reason for a smaller nest egg is because both Abi and I are educated and work in completely different fields. If I were to lose my job, she would be able to work and support our family and vice-versa. That current flexibility allows us the freedom of not needing such a large nest egg. Even if we were to be blessed with children I could still be a potential stay at home father.
Closing Thoughts and Tips
Since becoming financially independent we’re no longer stressed about money, but we do have lots of goals that require money to achieve. I spoil Abi rotten, but luckily she doesn’t like to spend a lot of money!
Finally, here are a few tips:
- Understand that when you’re in debt you’re essentially enslaved to your creditors; you owe them part of your earnings. If you make $1000 a month but owe $300 a month, then you’re really only earning $700 a month. Debt takes away your freedom!
- If you’re determined and think you can do something, you can do it. Just be sure to set realistic goals.
- Patience is a virtue. Wait for opportunities and also seek guidance. People are willing to help. If you feel overwhelmed there’s a community out there that’s experiencing similar struggles.
- Surround yourself with people who you want to be like.
- Lose the idea that spending more increases your quality of life. Think about what really improves your quality of life and then allocate your funds towards that; drop everything else.
- Read and listen to blogs on financial literacy and financial independence. The topic may seem boring but this is something that you’re going to be dealing with for the rest of your lives. Educate yourself!
- Help others. Volunteering your time or money helping others not only improves others’ lives, but yours as well. It’s a great way to network too.
About the Author: John Steiner is the proprietor of the 20SomethingInvestor blog. You can contact him at: firstname.lastname@example.org
If you’re a household CEO who is successfully making ends meet on roughly $40,000 per year or less, I’d love to hear from you. Contact me at Len@LenPenzo.com and be sure to put $40,000 in the subject line. If I publish your story, you’ll get a $25 gift card or an American Silver Eagle!
Photo Credit: Courtesy of John Steiner