How a 24-year-old woman who earns $ 100,000 spends her money
This story is part of CNBC Make It’s Millennium Money series, which details how people around the world earn, spend and save money.
It’s not every young graduate’s dream to live with their parents and younger sister, but Kristina Truong sees it as a blessing.
Struggling with nearly $ 25,000 in student loan debt, the 24-year-old returned home to Fairfax, Va., After graduating from James Madison University in 2018 so she could pay off her loans. faster. She got a job as a project manager at a digital consulting firm in the Washington, DC area, earning $ 100,000 a year, and by the end of 2019, was out of debt, had saved over $ 50,000, and was preparing to move on her own.
But then the coronavirus pandemic struck, and like so many around the world, Truong reconsidered his plans. Before the pandemic, she believed that earning a certain salary would make her feel fulfilled; now she sees security differently.
“I put a lot of emphasis on money because I was raised without a lot, so I thought that was the end of everything,” Truong told CNBC Make It. “Now one of my goals isn’t how much more I want to earn, but it’s the comfort I feel in not having to worry about living from paycheck to paycheck or how whose mortgage or rent we are going to pay. “
This last point is particularly important for Truong. When she was 8, her parents moved the family from Virginia to Phoenix, Arizona, where her father bought a house he thought was a good investment. Her mother opened a nail salon and her parents operated it for a few years.
Then the housing market collapsed in 2008. Every day fewer and fewer clients came to the salon, and her parents made the decision to pack their bags, sell the salon and their home at a loss and return to the living room. Virginie to live with their family. . Truong remembers the daily stress of not knowing how the family would pay their bills or where they would live.
“I felt guilty because I was so young and really couldn’t do anything, and I wish I could do it,” she says. “Watching my family go through this was difficult, not having control of it.”
Although she was still in elementary school at the time, the experience had a profound effect on Truong’s relationship with money. “The most important lesson I’ve learned about money is to always have an emergency fund,” she says. She worked throughout college so that she could start paying off her loans before she graduated (a cousin also paid half of Truong’s tuition) and attended as many events as she could. could to get free meals.
In addition to paying for necessities, Truong tries to save as much of her paychecks as possible so that she – and her family – are never without a financial cushion again.
“Being so young and watching my parents struggle with their finances gave me the mindset of not wanting the same for myself,” she says. “Saving and being frugal with my expenses really marked me from an early age.”
Before the Covid-19 pandemic, Truong contributed $ 400 to his parents’ mortgage of $ 2,100 each month, paid utilities and household phone bills, and set aside a few hundred dollars each month to help pay for her younger sister’s college education. When her mother lost her job as a nail technician in March, Truong began filling the household budget gap by paying for groceries and other necessities.
She considers it the least she can do for her family. Truong’s parents immigrated separately from Vietnam to the United States and met in an English class in the early 1990s. Both parents lived with several siblings before they married, often working 12 hours a day in restaurants, convenience stores or nail salons. Truong, the first in her family to go to college, says she is the beneficiary of all their sacrifices.
Her parents inspired her to work hard and be thrifty with her money, she says. The rest of his financial acumen comes from YouTube tutorials on taxes, investing, and other complex topics. She uses her knowledge and considerable salary to pay him back.
“I had the privilege of growing up in America and having all of these opportunities,” she says. “It makes me want to work even harder so that I can support my parents as they provided me.”
Here’s a look at how Truong is spending his money in August 2020.
- Savings: $ 2,000 (in a high yield savings account)
- Investments: $ 1,366 (divided between his 401 (k) ($ 732), Roth IRA ($ 500) and his brokerage account ($ 134))
- Donations: $ 670 (to charities, including the Roever Foundation, which helps injured veterans and builds schools in developing countries)
- Lodging: $ 400 (towards his parents’ mortgage of $ 2,100)
- Food: $ 200 (for groceries; his parents also pay part of the family’s food)
- Business: $ 200 (for social media campaigns and supplies for District Cupcakes, a cupcake catering business that she operates with her sister and mother)
- Telephone: $ 160 (for the four telephone lines of the family)
- Transport: $ 149 (for car payment, gasoline, insurance and Uber trips)
- Utilities: $ 135 (for cable, electricity, heating, water and Wi-Fi)
- Various: $ 103 (for entertainment and shopping)
As a devout Christian, Truong donates around 10% of her salary each month.
“Ever since I came to know the word of God, I have been really involved in my religious community,” she says, adding that she attends virtual mass every weekend. “It’s great to have this community of believers that I can count on and to call my friends.”
Outside of work and his faith, Truong runs District Cupcakes, a cupcake catering business, with his sister and mother. She spends a few hundred dollars each month on social media campaigns and supplies.
In early 2020, the company was filling 20 bulk orders per month for weddings and corporate events. But business has slowed since the pandemic hit and now it mostly places individual orders for birthdays or other small occasions. His mother and sister take care of the baking while Truong finds customers, wraps and delivers the treats. Currently, all of their profits are reinvested in the growth of the business.
“I always ask for help, but my mom and sister told me to stay as far away from the kitchen as possible,” she says.
Although she loves living and working with her family, Truong is also looking forward to buying her own house nearby one day. By August, she had saved about $ 55,000, most of which will go towards her sister Jessica’s tuition from fall 2021, and the rest towards a down payment on a house. Truong plans to continue saving while Jessica is in school to pay off any loans she will have to take out.
When she moves, she also hopes to have helped her parents return to a more stable financial situation.
For not having [my parents] worrying about how they’re going to pay off their mortgage or how they’re going to pay my sister’s school fees is a really great feeling for me, ”she says. “It makes me feel like I’m working towards something more than just myself.”
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