Another sample budget with John

Next in this series of sample budgets, we have John. John graduated from college 3 years ago, with a bachelor's degree, and he now works as a software engineer making $91,500 a year before taxes. 

He has:

• $29,520 in federal loans left, at an average rate of 3.72%, which his minimum payments will allow him to fully clear in 7 years
• $44,900 in his retirement accounts, which earn the historical average return of the S&P500
• $26,700 in a brokerage account which is earning the historical average return rate of the S&P500
• $17,100 in a high-yield savings account earning 4.5875% interest annually
• a mortgage on a house he bought as soon as he graduated for $420,000, which he could buy because his grandparents gave him the down payment, with  2.599% interest on the $350,000 he borrowed 

Here are his monthly expenses:

Gross Income per month	$7,625.00
Student Loans	$400.00
Taxes	$2,003.00	$24,036.00
Retirement	$1,000.00
Take-home Income	$4,222.00	$4,222.00
Invest	$   570.00	$3,652.00
Mortgage	$1,400.00	$2,252.00
Health	$425.00	$1,827.00
Groceries	$350.00	$1,477.00
Transportation	$375.00	$1,102.00
Utilities	$400.00	$702.00
Netflix	$15.50	$686.50
Clothing	$35.00	$651.50
Charity	$150.00	$501.50
Fun	$100.00	$401.50
Tax Filing	$20.00	$381.50
Rainy Day Fund	$381.50	$0.00

 John's girlfriend Mandy looks at his budget and has a few recommendations.

He's paying his student loans always on time and at exactly the amount required to finish paying them off in 7 years.  She had enough scholarships to graduate without any debt, so she 

1. offers to take care of all the payments for their dates
2. suggests he cut his charitable contributions by a third, just for now, because, as she says, "It's great that you want to help people, but you need to put your own oxygen mask on first and get out of your own bad situation before you can do charity-- without your debt on your back, you'll be able to give much more!"
3. gives him her Netflix password so he doesn't have to pay for his own subscription
4. recommends that he cut his grocery bill by $110 per month by going to the less-upscale grocery store and buying in bulk when he can,
5. and tells him she thinks he should use all the extra money to pay off his debt faster by asking the company that's processing his payments to apply the extra money to the principal.
   

This way, Mandy tells him, he'll pay $300 more toward his student loans every month, and, applying the money to the principal, he'll be done 3 years and 3 months early, and he'll have saved almost $1,900 in interest. 

As before, let's do a 10-year check-in. 

• John has changed jobs twice. Every year, he got a 3% raise, but in the 2 years he changed jobs, his salary increased by 12.5% each time. John now makes $146,700 in a significantly more senior position, as does Mandy. 
• John has cleared all his student loans. 
• John and Mandy have now been married 6 years, and they've combined their finances. 
• They have $217,000 in a joint savings account
• $17,000 is for emergencies
• $200,00 is for the down payment on the home they want to buy
• They have been paying $400 extra every month since they were married 6 years ago (after 7 years of John making exactly the monthly payment, 3 of which were before he met Mandy), toward the principal on the mortgage John had, where they moved in when they were married, where John had previously lived alone. They have $220,300 in equity in the house, in part because of those extra payments Mandy convinced John to make once they married.
• Each of them has $377,000 in their retirement accounts
• They have combined their previously-solo brokerage accounts, and have been putting aside $1250 since their marriage into this account, which had about $107,200 in each person's separate before they combined the accounts when they were married, and the now-joint account is worth about $567,400
• John and Mandy's combined net worth, as a married couple, is the value of those accounts, minus what they still owe on the house, and counting all of that, they have $1.758 million, thanks to money-savvy Mandy recommending that John cut back when he still had student debt, the gift from his grandparents, consistent investing, and paying more than they owe each month on their mortgage.