53-year-old CPA worth $1M has tracked every dollar in Excel since their 20s
Local advice on how to earn, spend, and invest money is hard to find. Many cultural barriers exist for talking about money, yet it can be therapeutic to do so.
Money Snacks – People Stories is a anonymous way for people in Hamilton County to share their financial journey with others.
Age
53
Children
No kids!
Living Situation
We refinanced our mortgage in 2020 when interest rates were really low—moving from a 30-year fixed to a 15-year fixed. This helped us pay down our loan faster.
Now that we’re approaching retirement, our plan is to sell our house, downsize, and use the equity to pay for the next home in cash. My advice is to refinance when market rates decline, if you can.
Also, if you’re able, “round up” each mortgage payment to the nearest $100 or $1,000, and use any annual bonuses to make a 13th payment.
Job
CPA
Salary
My salary is currently variable because I’m starting a new business.
Salary Growth
Over the years my husband and I played leapfrog with our individual incomes with each of us surpassing the other every year or so. When I earned my CPA certification, that changed and I became the primary income earner.
My advice – do what you love, but take the time to get the industry certifications, if applicable, to make yourself stand out to employers.
Debt
I currently have a mortgage, car loans, and home improvement loans. I am downsizing my home, so the mortgage and home improvement loans are expected to pay off with the house sale, but I also have a strict budget planned scenario to pay off debt if the house doesn’t sell.
You can’t rely on the unknowns to be favorable and therefore need to plan for the unexpected possibilities to throw a wrench in your plans.
Budgeting
Budgeting is critical. You can’t get out of debt or living paycheck to paycheck if you don’t know how much money you have to spend and where you are spending it.
I am obsessive about tracking in Quicken and in Excel. Every year since I was in my 20s I have created an annual budget in excel and included debt repayment schedules and interest rate calculations.
#1 Splurge
Experiences. Life is short, and in the end, we are left only with the memories we shared with the ones we love. Whether it is a great meal at a hot new restaurant or a favorite haunt, seeing a show, traveling the world, or splurging on an exquisite bottle of whiskey to share with friends, those are the things that, while fleeting in actual time, stay with us and with those we love till the end. International travel is one of my favorites though because I get to learn about new people and their ways of life.
It expands my horizon and gives me more empathy, understanding, and gratitude. I also highly encourage supporting nonprofit organizations either with money or time because doing good in the world around you benefits you even more than the good it does for others.
Local Hack
Pay cash or don’t buy it. Figure out how much your costs are each month for food, housing, debt repayment, and other necessities. Then subtract a reasonable amount to add to your savings account – strive for 10% of your income. After that, set a reasonable cash allowance for yourself to use to splurge on fun things.
If you have enough cash, you can buy it – but avoid using your credit or debit card whenever possible. Alternatively, you can use a low-limit credit card just for these expenses and pay it off monthly.
Favorite Local Restaurant
I am always looking for a new place to try. Can’t wait to read the recommendations.
Savings and Investments
Max out your 401K as soon as you can afford it. If you are early in your career, use a ROTH IRA take advantage of long-term tax-free growth. Get a financial advisor early. When you get raises, increase both your 401K and savings contributions. Watch interest rates and work with an advisor to determine the best strategies to grow your savings.
Open a savings account at a different bank than your checking account and have a portion of your paycheck direct deposited to it. Make it hard on yourself to withdraw or transfer funds from savings so that you really have to be intentional about taking money out of savings.
Best Money Decision
Working with a financial advisor and taking advantage of the right strategies at the right times.
On Your Mind
Budgeting for my new home when I don’t know for certain what my current house will sell for