Curious how your spending and money management stack up? In this series, we talk to real folks just like you, who’ve shared their tales of spending, saving, and searching for loose change.
Today, we hear from Mitch and Kaley, public school teachers in their early 30s who are balancing saving for retirement, paying off their student debt, and raising two little girls. They adore the wealth of free events and parks that Kansas City has to offer. It enables them to enjoy the culture of city life while being able to invest in their family and their future. Their plan to retire at age 65 will depend on how they make decisions around student debt payoff timelines and how much they are putting away for retirement. See how they are maintaining their goals, paying off their education, and investing in their family of four.
MITCH & KALEY’S PROFILE
Occupations: Public school teachers (middle and elementary)
Age: 32, 31
Location: Kansas City
Combined salary/income: $87,500
MONTHLY SAVINGS AND INVESTMENTS
Roth IRA (per month): $0
Savings (per month): $300
Employer-sponsored retirement plan (per month): $350 (for both)
Housing costs: $1,500 / mortgage
Groceries and home supplies: $800
Dining out: $300
Loans: $500/month in student loans
Health, dental & vision insurance: $300 / whole family
Auto, homeowner, and umbrella liability insurance: $450
Life insurance premium: $60
Lawn service: $0
Gym membership: $0
Credit card debt payments: $250
OUR CHAT WITH MITCH AND KALEY
How difficult is it for you to put money away for retirement? Have you had to give up anything?
It isn’t so much difficult as it is confusing. The biggest question in the back of our minds is what comes first? Paying off student debt, building up savings, saving for college, or investing in our retirement? Due to the required student debt payment per month, that debt has become our number one priority. Saving and investing in retirement have equal weight in our life at the moment. But roughly twice a year during back-to-school time and the holidays, we find ourselves scratching our heads trying to figure out where the money went so fast. Our savings always takes a hit at those times of the year.
We also love to travel! The change we made when we had kids was to travel more locally. Now we drive in the car or go camping versus some of the more extravagant trips we would take as a couple before our kids were born. Taking a simpler approach to life gives us room to save and invest in our family’s future.
If you had to put away more money for your retirement, what would you cut out of your budget?
We love the “simplicity approach” in our life. And we might try something different for Christmas this year, a little trick we call “shopping in our closets” — that is remaking, reusing, and enjoying experiences together as a family. We discovered our girls play more with the laundry baskets and boxes than they do with toys. To that end, we would like to take the money we save from Christmas presents and put a lump sum toward our retirement at the end of the year.
What are your retirement goals? What age do you want to retire? What do you want to do in retirement?
We think 65 is a good age for school teachers to retire. It is a demanding job — one that is full of long hours and emotional investment. We take a lot of pride in what we do, and it is important to the two of us that we are stable, interested participants in our students’ lives. With summers off, we have our side hustles along with curriculum development and landscaping. Needless to say, we are pushing hard at this time of our lives and are really looking forward to a fun retirement where we can get back into traveling overseas.
What does “health” mean to you?
If you follow the simplicity line of our thinking, you’ll see how “health” plays out in how we eat and how we exercise. It is fun to cook as a family. It’s a chance for all of us to catch up on our day, be a little silly, and make a simple, wholesome meal. How we get our exercise echoes our cooking — we all do it together. We found a great, used double jogging stroller on eBay for half the cost of a new one. We take the girls jogging or go to the park and let them run around while we use the outside exercise equipment. When it is colder, we do some home workout videos together. It is cute to see the girls hop on Mitch when he is trying to do pushups.
Are there luxuries that you always need to include in your budget? Housecleaner? Grocery shopper?
Date nights and a babysitter at least twice a month are the biggest luxury we include in our budget. We try to make sure we also take time for in-house date nights each week, which consist of putting the girls to bed, cooking a nicer dinner, and grabbing a nice bottle of wine.
In addition to saving for retirement, what are some of the big picture items you are wanting to invest in?
We are really excited about investing in a pop-up camper in the next few years. We do a lot of camping. But we’d love to elevate the experience a bit and be able to head out for longer periods of time during the summer. Beyond a pop-up camper, we would like to remodel our kitchen in the next five years or so.
What intimidates you in planning for retirement or what questions do you still have?
Our nightmare is that we are still paying off student debt when we retire. Obviously, that isn’t going to happen, as we are on track to finish it up in the next 10 years. When we think about what we’re going through with trying to juggle student debt, saving, and investing, we look ahead for when our girls are ready for college. We hope to help them navigate college choices that reduce the amount of debt they will graduate with. We’re excited to see them set up in a little better position than we were starting out.
Mitch and Kaley enjoy the simplicity of their lives. It enables them to do the things they love: spend time with their young family and explore the world around them. Financial decisions feel relatively straightforward right now, but they know they will have the opportunity to make some unconventional choices that will be great lessons for their family. They’re excited to ramp up international travel when they retire but are content with being great parents and teachers in their little corner of the world for the moment. Learn how to pay down debt to save more for your retirement dreams here.
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker-dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, legal or financial advice or guidance. Please consult your personal independent advisors for answers to your specific questions.
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