The Budget of a 37-year old Government Auditor Making $100K in DC

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Author’s Note: If you would have told me that I would be on this path and going at this velocity, I wouldn’t have trusted you. After helping over 200 people through small business ideas, resume reviews, financial support, community wealth building, and etc… Your problem is not a lack of money (per se). The problem is with your relationship with money, and by proxy, your relationship with yourself. Your mindset shift will go a long way toward improving your life. The rest is just a function of learning and time.

The Net/Max Financial Plan worked for me. Following a grueling amount of self-re-education and course correction through past mistakes, I was able to come up with a solution-oriented plan which empowers the user and elevate them into maximum adulthood.

This plan is tailored for 1st generation, minority young professionals who weren’t equipped with money management tools. This focus is important since this generation suffers from the advent of indebted interest from consumer credit cards to rampant student loans. On top of that, the self-first marketing slogan manipulated years of personal resentment which for the lack of better words, forced us to “stunt on ‘em”.

This generation is turning the corner from our 30s to our 40s. Our parents are retiring while broke. The burden falls on us. We can approach this strategically or fall helplessly into mental depression. To avoid all the stress, I went as far as to create the Net/Max Vault – a downloadable excel resource sheet that provides shortcuts to FREE financial resources.

You are already rich. If you can read, You have access to a vast library of resources. Most of which, can generate money Or foster a better version of yourself.

Here’s how my monthly budget broke down for 2019:

Table of Contents

Avg. Monthly Take-Home: $4,790 (Up from $4,172 in 2017)

Same old story. Make a bunch of money and the government will be there to receive their cut of the action.

I ended up with an annual take-home of $57,478.

I received two bonuses (taxable) and after a long govt. shutdown, we did get the 2.1% retroactive upgrade. To avoid the crazy 24% tax bracket, I put the maximum allotted levels in my 401k, IRA, and Health Savings Account (HSA).

The effective tax rate settled at 7.9%. It really pays to understand taxation.

Free resource: 2019 NetMax Tax Estimator

Avg. Monthly Housing Costs: $595.33 (Down from 1,526.37)

Primary home w/an extra bedroom for House Hacking. This time around, there were fewer home repairs which helped significantly. I went through the first roommate flip on the rental property. It continues to surprise me, I’m fortunate to have consistent tenants, with payments and management coordinated through cozy.co.

The goal is to pay down the rental mortgage in 3.5 years. Tackling the first primary mortgage by 7 years. Owning an affordable home from the get-go goes a long way.

An affordable home with total housing expenses that’s less than 28% of take-home pay while Net/Max Savings and investing is the fix. You avoid being “house, savings, and investment poor.” Payoff your mortgage in 5 years or less. That’s next level savagery. Next switch a home in the first 4 years. Rent the old one out at a profit before moving into a new higher level affordable home.

Free resource: Home Estimator

Set yourself up for success.

“But Lawrence?” ⇢ Hey it’s your life. Housing cost over 30% + Car cost over 13% + revolving $10k+ of credit cards + savings at 5% is not the recipe for a stress-free life. It’s mathematically unsound.

Cost of Food and Drinks: $377.41 (Up from $336.26)

The cost of food is constantly going up. It makes it more imperative to meal prep. Merging meal prep with the fiancée translates into mining pure gold.

It’s fun to work together and generally healthier. We don’t brunch as much but we don’t get many invites either. At this point, I need to own stock in Pret-a-Manger. They do give me free coffee and food on occasion.

We do invite people over more. It’s fun and ends up being a better alternative over the loud environment and the anxiety, $30+ parking fee in DC.

Student Loan PMT: $656.30 (Up from $631.12)

Student loans went up to $733 per month. That average will keep going up until 2025. I’ll be student loan debt free around that time.

I’ll also be a flight risk. I’m going to give a friend my passport so I can’t escape into the happiness quadrant of society.

Credit Card PMTs: Varies (From $500-$2,000)

I use credit cards for churning points for travel and cash back credit card payments. I’m not too worried about them since I rarely ever carry more than 3% total credit overall. My credit score is up to 846. Not sure if confetti drops at 850. Resource on how to improve (click).

The myth is real. The bank forgives any transgression. I get better customer service. I think I wait for less. Life is better on the other side.

I’m closing out the year with $149.22 in credit card interest fees (less than the anticipated $505). In total, the number of fees since I’ve been using mint to track it back in 2012, $6,590.07.

Utilities and Phone Bill: $301.20 (Up from $328.03)

Continuing splitting costs with friends for T-mobile (+Netflix). We all pay on average less than $25/month each. I take what I can get but temps keep changing and the price sucks.

I still have to upgrade my Air Conditioning unit and make efficiency changes. My primary home needs about $30,000 investment in the future to make it an easy rental option by 2023. Finally cut the cord. Got Disney Plus as a crew. And Google Stadia. I should be saving $1,000 from now on. I would highly recommend cutting and making sure you aren’t loading up on subscriptions instead. It can be just as costly in the long and short run.

Savings and Investments: $3,333 (Up from $3,150+)

The reduced housing costs and max contributions in 401k, ROTH IRA, and HSA are working wonders. On average, I’m setting aside at least $28,500 on autopilot as a single taxpayer. I even received $5,000 as a 401k match. On top of all that, growth in the market yielded over $25,000 in 2019.

Dave Ramsey’s baby steps argue to pay off all debt first. I disagree. If you are 45+ that’s a good approach, however, if you are a millennial, you might be leaving $100,000+ of compounded matching on the table. It’s a tough call but I’m going about this my own way. It’s working. Furthermore, I joined a small investment group. It pays to capitalize on every opportunity to close the wealth gap.

For example, the Chime, an online bank referral can earn you $50. My personal capital referral can add another $20 in Amazon Prime cash. And there are several other banking deals going down. I opened a Chase Checking and earned $350 (in 2019). It’s really just a game to grab all the pieces.

Health & Fitness and Personal Care: $437.11 (Up from $254 in 2018)

Since I included racing events and the gear as well as medical in this section, it went up.

I started being more intentional about my long term approach to repairing my body. Next couple of years, I’m going to need at least semiannual massage therapy and dermatology.

My Black cracks a lot. I know keep new shoes updated so that my Marine Corps injury doesn’t resurface. It’s a story about jumping down with over 100lbs of gear and weaponry without a later into an embassy.

Epic but it’s bound to leave a mark.

Everything else: On average $1,547.68 per month

The bulk of that average was pushed up by Travel Expenses for the year at a total of $12,083.49 (avg. $1,006.96 monthly).

Going through 12 counties in 14 days was bound to drive prices up, on top of other travel trips. Going FWD, this cost will likely be permanent but hopefully no more than $12,500/year with wife and kids.

Additionally, I usually front-load travels for the next year by December to save money on flights and hotels.

Entertainment and Shopping shot up as well. Will stabilize after marriage.

“Sometimes you spend to live but try not to just live to spend.”

Conclusion

Avg. Monthly Expenses of $2,944.61 (Up from $2,909.72)

I saved 51% of my income because there is value in money management.

The net worth jumped by 100%+. Saw my credit score top 846, traveled to 13 countries. Got engaged; God proved to me that a real helpmate is 100% on board with team us.

People never realize how much work and struggle you have to put in to be successful. It is non-negotiable. But once set in motion, it’s on autopilot. Those who don’t mind their money end up losing track of their own time and destiny.

These choices must be timely. Or you will be stuck being busy doing absolutely nothing.

Got featured on a few renowned and exceptional podcasts ie @paybalances @hisandhermoney@asklovely(Instagram handles). Written over 60 financial articles. Shared tons of ways to improve the lives of people in the community. As of now, my life is filter-free. Wake up and change.

If you want to follow my finances to fact check, see this link. If this impacts you; share, discuss, and inspire others. Sharing good information matters, like this Million Dollar Life Plan. Made tons of mistakes. Failed dozens of times. Got fatter so I’m struggling to run. Had spiritual droughts. But still moving.

New 2020 Stock Update, who dis?

The Year in stock was wild with people swearing that a recession was coming… If you fell for that, you missed out on great returns.

Not a bad haul at 26.68%. Trailing the market and learning.

Currently teaching myself Do’s and Don’ts on investing. Goal to reach up to $10,000 in D.R.I.Ps in a year. Back to the old Excel sheet to visually understand what’s going on. 2020 is a rebalancing year since I’m heavy on tech. I’ll be pushing for more communication ETFs for growth, and REITS, Health, and Utilities for sector allocations.