More spending from real couples

Many of you wrote back last week and said you want to see more real spending Can't view this email properly? [View in Browser]() [Podcast Newsletter Header Final.png]() {NAME}, Many of you wrote back last week and said you want to see more real spending from real couples, so here you go! My team has selected a Conscious Spending Plan from the hundreds I’ve received recently for me to analyze. I don’t know who they are. All I see is the CSP — and in this case, the fact that they live on one income. Below are my off-the-cuff reactions. --------------------------------------------------------------- Learn from the world’s best [Masterclass]() I recently took a new Masterclass: an interior design class with Kelly Wearstler and I loved it. It helped me understand why certain spaces, like my favorite hotels, feel so creative and inspiring. Masterclass offers over 200 classes to pick from, with new classes added every month. Right now, IWT readers can [get 15% off an annual membership](). --------------------------------------------------------------- Real spending from a real couple Here’s a real couple who sent in their [Conscious Spending Plan](). A few details about them: - Dating and living together - Ages: 40 and 31 - Living on one income - Reside in: Anaheim, California NET WORTH $ Assets (current value of car, home, property, business) $8,400 Investments (include 401K, non retirement — all investments) $107,173 Savings $1,000 Debt (student loans, credit card debt, mortgage) $73,585 TOTAL NET WORTH $42,988 INCOME Gross monthly income (all income before taxes added up) $9,196 Net monthly income (how much you take home after taxes) $6,600 FIXED COSTS (50-60% of take home) 70% Rent / Mortgage $1,930 Utilities (gas, water, electric, internet, cable, etc.) $261 Insurance (medical, auto, home / renters, etc.) $369 Car Payment / Transportation $460 Debt Payments - Student Loans $211 Groceries $558 Clothes $50 Phone $75 Subscriptions (Netflix, gym membership, meal services, Amazon, etc.) $106 Miscellaneous (automatically adds 15% for things you forgot) $603 FIXED COSTS TOTAL $4,623 INVESTMENTS (10% of take home) 17% Post-Tax Retirement Savings $300 Stocks $0 401k CONTRIBUTIONS $828 INVESTMENTS TOTAL $1,128 SAVINGS GOALS (5-10% of take home) 4% Vacations $125 Gifts $25 Long Term Emergency Fund $100 Add your own here $0 SAVINGS TOTAL $250 GUILT-FREE SPENDING (20-35% of take home) 9% GUILT-FREE SPENDING TOTAL (Dining out, movies, anything you want!) $599 My take: - OK, this will be interesting. I don’t know why they’re living on one income — maybe one person is a student or disabled or any other reason, but let’s see what I can figure out - Their assets are relatively modest at $8,400. Probably tells me they’re young (I’m guessing in their late 20s or 30s as they’re dating and don’t own a house). - Investments are disproportionately high for the low asset number. I don’t mind. If you added up my assets, they would be relatively small (and basically consist of clothes) compared to my investments. But this is fairly rare. - Savings are low. Debt tells me they probably have student loans. Maybe CC debt. - Annual income is around $110K. Fixed costs… - Fixed costs are too high. Let’s see...housing is around 23%, which is good. So why is Fixed so high? - Ah, it’s basically groceries, debt, and their car payment. Individually, none of them are too crazy. But with a monthly take-home of $6,600, it gets expensive pretty quickly. - Here’s my thinking: At 70%, it’s high. But there aren’t any egregiously expensive areas. Also, I assume Partner 2 is going to start earning at some point. Finally, some of these payments will eventually end, like the car payment. - I also really like that they used the “Add 15% to Fixed Costs to account for things you didn’t predict,” which is part of my CSP template. Very good sign of being savvy with money. - If it were me, I would make a few minor changes like reducing subscriptions (they can use our partner [Rocket Money]() to automatically cut back on subscriptions). - For debt, it says student loans. If it’s low-interest debt, paying a small amount like $211/mo is fine. But if that interest rate is anything above 5%, I would pay it off more aggressively. - Let’s continue on... Investments and beyond... - Investments. OK, this explains a lot. They’re contributing about $13,500 per year to their 401(k). They could reduce their 401(K) contributions and have more spending money, pay off debt faster, but they’ve intentionally chosen to invest. Assuming they’re young and that — as I noted above — some of their income will increase and expenses will decrease — this looks like a reasonable move to me. - Savings: Fine. No comment - Guilt-Free Spending: 9%. Usually, I wouldn’t love this. But I get the sense this couple is intentionally frugal (you can see that from their grocery spend and car payment, both of which are fairly low). In this couple’s case, I actually believe them. All of my above comments stand IF: - Partner 2 is going to eventually earn money, and - IF they will eventually pay off their car and hold it for the long term, and - IF their student loan debt is fine. Basically, they’re making an intentional, strategic decision to deviate from my rules while setting themselves up for the future. Fine with me! What were your biggest takeaways? [Signature] P.S. Get this book if you want to start a business Congrats to my friend Noah Kagan on his new book, Million Dollar Weekend. If you want to start a business, get it [here](). P.P.S. This week on the podcast: “We only have $2k in savings, but she can’t stop going to the mall” Check out my conversation with Kevin and April [here](). [Podcast]() [Programs]() [Podcast]() [Netflix show]() [Books]() [Website]() [IG]() [in]() [X]() [YT]() Was this forwarded to you? [Sign up here](). [Unsubscribe here](. 548 Market St #89946 San Francisco, CA 94104-5401