How a Consultant in a Long-distance Relationship Does Money
Amy (not her real name) is a 28-year-old consultant living in New Jersey.
So, Amy, tell us a bit about your finances.
So I currently make $94,000 a year with a potential bonus of roughly $15,000 a year. I have some student loans; about $26,000, which I pay off at about $350/month.
I live at home, which allows me to save some pretty substantial money, but I also have a long-distance boyfriend, so that depletes some of that.
You live with your parents?
Yes, I live with my parents. I moved in with them (again) about two years ago.
About how far away is your boyfriend? Are you buying plane tickets regularly?
He’s in D.C., so I am buying Amtrak tickets very regularly. I rarely fly, even though at times it is cheaper, because it is a bigger hassle.
I tried to do some prepping for this interview, and I figured out that I spend about $1,500 in travel expenses every three months.
Are you doing other travel as well, or is the $1,500 “the cost of a long-distance relationship?”
The $1,500 is the cost of the long-distance relationship. I do other travel that I didn’t account for.
It only comes to $500 a month, though, so that’s not that bad!
Yes, our relationship has an operating cost of about $1,000 a month. He also travels to me, and we try to keep it equal.
I have a credit card that gives me points for Amtrak travel, which helps because I can use points.
That’s good! Are you on Amtrak Guest Rewards too? I found that to be super-useful when I was in the Northeast Corridor area.
Yes, which is great. I probably get at least one free one-way trip a month, sometimes two.
So tell us about some of your long-term financial goals. Are you paying off debt? Looking to move out of your folks’ place? Thinking about savings and retirement?
All of the above, ha ha. I used to live in Manhattan and made approximately $40K for my first three years out of college. I also paid way too much in rent. My lease was up after three years, so I got a new job making a lot more money and decided to move back in with my parents to try to undo the damage that three years of living in the city with no safety net had done to my financial situation.
Within a year of moving home I had more than doubled my salary. I decided I should probably take advantage of this time while I waited to see where my relationship was going (at the time I wasn’t sure whether I would move to DC or if my boyfriend would move to me). With my parents’ home so close to the city, it didn’t really affect my commute. So I opened my very first adult savings account. I paid off my small amount of credit card debt and tried to refinance my student loans. I paid off the interest on my loans so now I am only paying principal balance which is great because even though I still have the loans, I know there is no rush to pay it off more quickly.
Up until last week, when I read this article on The Billfold about how we are all screwed because the “401(k) experiment failed” I wasn’t worried about retirement at all! Now, I assume I am doomed like everyone else.
Ha! Yes, we are all doomed. Have you read Pound Foolish yet? It’s a great book to keep you awake at night. Similar themes.
I haven’t, but I will definitely check that out.
We did a Billfold Book Club on Pound Foolish last year. It’s fantastic. But back to your finances! So how much debt do you have at this point, and how much have you paid off?
So I came out of college with about $40K in student loans and I am now down to $22K, and I will probably just continue to pay that debt off over the next 10 years, since I have taken away any incentive to pay it off quicker.
That’s great, though; you’ve already paid down about half of it! How long did that take?
Six years, with most of it coming in the last three when I upped my payments/paid off the interest with some savings and some of my first bonus.
And now you’re expecting to take your time with the back half of the debt?
Yes, now that the number is static, it’s just like a very expensive cell phone bill to me.
That’s how I feel about my debt payment too. It’s one more bill I have to pay.
Right, I think once you just start calling it a bill and not your scary student loan, it makes you less anxious. But I understand that concept can’t work for everyone. If you have a bill that is more like the cost of a mortgage, it’s hard to just call it a bill.
Right. And yet that’s what it is, in the end.
As far as other debt goes, that is really it. I was not allowed to have a credit card in college (and I am thankful for that now) so I was always wary of them. Now I have two credit cards, and I am trying to be that person who puts everything on credit cards and “get points” and be savvy.
Do you regularly pay those cards off, or are you carrying a balance?
I always pay it off, but some months are much harder than others because I really try to treat my savings like I am “paying rent.” But credit cards are bottomless and you have to be so much more conscious, not like a debit card that will just start telling you “no.” And thus, some months I am like “whoa! why did my credit card let me spend so much?!?”
I often think to myself that I was better at managing my money when I had less of it. Disposable income can make you do some irresponsible things.
That is a very true statement. What else have you learned about money since you started earning more of it? Did anything surprise you?
So many things!
1. You are going to think your take home pay is going to be wayyyyyy more than it is when you first see your salary figure.
2. You’re never going to actually think your pay is enough, even though when you had your former salary, you would have thought it was a lot of money. I think that has a lot to do with the NYC metro area though.
3. You’re probably around the same level of happiness at all income levels, and you will always worry about money just as much as you did before.
Do you feel like you are earning “enough” now? Whatever that means to you?
Yes, when I think rationally about it, I think I am earning “enough,” but I also believe in work-life balance, so I think I will always consider other benefits with my salary.
Do you get any cool benefits at your current job?
I have a flexible work arrangement, i.e. I can work from home a lot. Most importantly, I work with people who want you to produce a good product, not just put in the face time to seem like you are working hard.
I think a lot of the “big bucks” are made at places that have a mentality for staying late at the office even if you aren’t really doing much work.
Any final thoughts for Billfold readers?
I guess, if I have learned anything from my own experiences and from other people I know: If you’re good with money, you’ll be good with any amount of it and if you’re bad with money, you’re going to be bad with any amount. The idea that having more money will make your money problems go away just isn’t true.
This story is part of our relationships month series.
Photo credit: jpmueller99