Money Snapshot: A Management Consulting Director Shares Thoughts on Student Loans and Taxes

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For today’s Money Snapshot, we’re talking salary, net worth, debt, and more with reader JG in New Jersey, who works as a management consulting director at a Big 4 firm. She noted, “[My husband I have] both been very fortunate to benefit from merit scholarships and our parents, who covered our undergraduate school debt. We both took on significant grad school debt, so without that, our life milestones and financial picture would look pretty different.”

We got a few requests from readers to launch our own “money diary” series, so we’ve asked willing readers to fill out a form with lots of details about debt, spending, saving, and more! If you’d like to fill out the form and be considered for a future personal money snapshot, please click here to submit your response! You can see a PDF of the questions if you want to review them ahead of time. See others in the Personal Money Snapshot series here.

Please remember that this is is a real person who has feelings and isn’t gaining anything from this, unlike your usual friendly (soul-deadened, thick-skinned, cold-hearted, money-grubbing) blogger — so please be kind with any comments. Thank you! — Kat

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Name: JG
Location: HCOL — Monmouth County, NJ
Age: 34
Occupation: Management consulting director at a Big 4 firm
$225,000 base, bonus of $25,000
Family: Husband, 40 years old, attorney who recently made partner; two kids
Household net worth: Including retirement accounts, cash in hand, savings, and equity in our home, around $300,000, minus our joint remaining student loan debt of approximately $60,000.
Net worth when started working: I worked part-time jobs from the time I was 16 through undergrad. When I started full time work, my net worth was probably around $5,000–$10,000, which included saved-up cash from part time jobs and a teeny brokerage account.
Living situation: Own home


What does your debt picture look like?
Student loans are the biggies. We have a great interest rate on our 30-year mortgage so there’s no plan to rush that payoff. With our federal loans frozen (five out of seven loans), we’ve been throwing extra down on the principal while we can. Given our recent salary increases (about $150,000 increase in the last two years due to my husband’s job and my promotion to leadership), we’re aiming to pay the remaining ~$60,000 off in about three years. Highest interest rates first (mine are over 6%).

Our two cars (one lease, one purchase), remaining mortgage (23 years left), and student loans add up to about $400,000.

How much money are you spending each month to pay down debt?
Removing our mortgage from the equation, we pay $1,000 for the cars and ~$1,500 against student loans. I’m aggressively paying my graduate debt off, as the interest rates are highest and payments are currently frozen (yaay federal student loans). The SL will fluctuate, if we’re close to paying one off we’ll sometimes pay extra to knock it off the ledger.

How did you pay for school?
Both of us had our undergraduate debt covered between scholarships and our parents. We worked throughout for expenses not covered as part of tuition (books, food, sometimes rent, etc.). We then each took out loans for our graduate degrees (an MA for me and a JD for husband). We started out with about $120,000 of loans when we first got together.

Do you own or rent? How much do you pay monthly?
We own our house. We purchased it in 2015 and pay $2,600/mo. for a 4-bed 2.5-bath. $1,000 of that number is property taxes.

Home debt: Share your theories and strategies with us (including any that lead you to rent rather than own). 
Our mortgage, including NJ property taxes, is $2,600 a month for a 30-year fixed-rate mortgage. When we first bought in 2015, we were coming from a rental so we had the benefit of time. We started looking in NJ to be close to our jobs, but anything in our price range had taxes of $20,000 and up. Talk about sticker shock. So we ended up looking in central Jersey where we both grew up and stumbled into our current town. Neither of us were aware of it growing up.

We stretched our budget for our home, ultimately paying about $20,000 more than our intended max and had to pay PMI as we suddenly were under a 20% down payment. Our goal was to keep monthly payments no more than 30% of our net pay, so we definitely pushed out of our comfort zone. In the last year though, our area has seen just astounding real estate purchases. Houses are going for 50% more than they would have even two years ago. Things don’t stay on the market more than a week. Thanks to this insanity, the equity in our home has almost doubled in six years; most of that wasn’t due to principal payments. We bought at a time of historically low interest rates, so we’re don’t plan to accelerate payments at this point.

Have you paid off any major debt? 
$70,000 in student loan debt felt pretty good. It really came down to extra payments on principal whenever we could swing it. This isn’t necessarily debt driven, but my husband lost his job for about half a year (pre-pandemic). We had a lot of medical debt at the time (close to $10,000) to deal with, but we were able to make it through on my salary (less than half of what I currently earn). We had to drain our savings and oh-sh!t fund, but we were able to get back on track with focused effort.

Savings, Investments & Retirement 

How much do you save each month or year in retirement vehicles like 401Ks, Roth IRAs, and others?
I max out my 401k, and my husband does the same for his IRA. I have a small pension from my prior firm, and up until recently my current firm also provided a pension. I did the math and I think they’ll net out to $300 monthly payments if I retire in my late 60s, so not much.

How much money do you allocate to other tax-savvy investments/accounts like HSAs, 529s, FSAs, and others?
We had drained our brokerage account a few years back to make some capital investments in our home. Unfortunately whenever we had an HSA or FSA we ran through it before we hit our out-of-pocket max, so none of that money ever ended up rolling over into actual investments. We’re opening two 529 plans before the end of the year for the kids, and plan to start up our brokerage account again, but because of strict independence rules I’m restricted in a lot of where I can and can’t invest.

How much do you save outside of retirement accounts?
Ignoring the money we need to save on our own for taxes (~$50,000 each year), we save approximately $40,000–$50,000 a year outside of retirement accounts. Extra when either of us get a big bonus. We have automatic payments set up twice a month so it’s mostly on autopilot and we budget around that number.

Talk to us about investments. Do you have a financial adviser/planner?
I used to, but we drained that account a few years ago. I have a little bit of cash sitting in it at the moment, and plan to actively start investing again now that we’ve rebuilt our oh-sh!t fund and made so much progress on our student loans.

Do you have an end goal for saving or are you just saving for a rainy day?
Definitely a rainy day. Sometimes I daydream about stepping back from my consulting job to do something less intense but less lucrative, so that’s in the back of my mind. I’d like to retire one day and I want to pay for my children’s undergraduate tuition without taking out more loans, so that is definitely a goal. I sometimes daydream about setting aside enough money to get a little apartment in Paris, but unless I make partner one day that will remain a daydream.

When did you start saving seriously? How has your savings strategy changed over the years?
I started saving passively (and with no frequent additions to saving) when I had summer jobs as a teenager. I’ve always kept something in the way of an oh shi!t fund, but it wasn’t until my husband lost his job that I got really militant about setting aside minimally six months of reserves. I shoot for 8–10. Living in our area that means somewhere in the $70,000+ range. I knew it was important to max out a 401k if you had the opportunity, so as I progressed in my career I would set my contributions to automatically increase a few % every year and took advantage of employer matches.

As an adult now, I’ve become hyperaware that I need to plan for my old age with my husband, and want to provide a clean slate for my children, so I’m constantly concerned I’m not doing enough. I also know I don’t have the mental space to really organize this stuff (and my husband doesn’t have the knack for it), so we’re in the process of finding a financial planner to help us out.

What’s the #1 thing you’re doing to save money, limit spending, or live frugally?
We’ve severely reduced the number of times we go out to eat. We’ve also made an effort to meal plan and stick to what we purchase so we aren’t tempted to order out.

Have you ever made a big money move or investment with savings in mind, such as rolling over an older IRA into a Roth IRA or superfunding a 529?
No, but we’re planning to superfund the 529s as soon as we open them, hopefully to the tune of $35,000 a year. I’d rather do that now so in the near future I can stop funding that and let it grow in interest.

Do you have an estate plan in place? A trust?
No. Another blind spot for me!

How much do you have in cash that’s available today?

How much do you have in cash that’s available in a week? 

How much is in your “emergency fund,” and did you include it in the previous question?
~$70,000. We keep it in a high interest account with an online bank. Yes, it is included.

How much do you have in retirement savings?
Around $200,000 combined

How much do you have in long-term investments and savings (CDs, index funds, stocks) that are not behind a retirement wall?
Not much at this point — maybe $6,000

If property values (home, car) are included in your net worth, how much are those worth?
Our house is currently work about $650,000–$675,000, and the cars combined are probably worth $40,000–$50,000.


How much do you spend on the following categories on a monthly basis?

Groceries: $1,200
Restaurants, bars, takeout, and delivery: 
Clothing and accessories: $200 (mostly myself and the kids)
$1,500 (around half of which is car payments and the other half are gas, NJTransit, and Metrocards)
Rent/living expenses: $2,600
Kid-related expenses: $2,000
Other major expenses: We have a ticket package for the state hockey team — it runs us $2,700 for the year; my husband gets season tickets for his college basketball team, another $500 for the year.
Health care – premiums and other costs: Our yearly premiums are $12,000, with out of pocket maxes of $5,000 for the family. We’ve usually hit it in the last few years due to multiple hospital stays, major surgeries, and maternity expenses.

What’s your spending range for these things? What’s your average?

Vacations – Range: $4,000
Vacations – Average:

Charity – Range of donations: $1,000–$5,000
Charity – Average donation or giving amount:

Individual items of clothing – Range: $5–$1,800
Individual items of clothing – Average:
Things like suits are closer to $1,000; T-shirts and pants for the kids in the $5–$20 range.

Apartment or house – Range: $1,800–$2,600
Apartment or house – Current main residence: $2,600

If you have children, how much do you spend for childcare and/or education?
Until this year, Kid 1 went to full-time daycare from about four months of age. Yearly childcare was around $18,000 each year, with some fluctuations (older kids are less expensive to care for, apparently!). Kid 1 is now in public school and Kid 2 just started daycare. We expect it will be closer to $20,000 this year since Kid 2 will be in the infant room.

Any other large personal expenses?
My husband recently made partner, which means we have to set aside money for quarterly tax payments. We need to put away about $3,500/mo. for those. Because the tax reform a few years ago removed SALT deductions, I put away another $1,500/mo. so we don’t get slammed with a big bill during tax season. We owed $12,000 at tax time in 2020 and $16,000 in 2021. We’ve since learned our lesson.

Also, whenever I get a bonus I split it where 50–70% will go directly into savings. The other portion I will spend on something frivolous (a coat, a fancy work bag, etc.); I also purchased a Tempo at-home gym over the pandemic and that was a pricey decision ($2,400), but ultimately I know I’ll use it since I don’t need to drive to the gym.

Fill in the blank on this question: I could save _____ if I stopped ______, but I don’t because _______.
I could save $2,000 each month if I pulled back on our fun money budget, but I don’t because I like the ability to randomly spend money on non-critical things. I don’t expect to be able to do that for most of my life so I’m trying to balance enjoying it now without neglecting my savings.

When was your wedding, how much did it cost (total), and how much did YOU pay?
2014; $60,000. My husband and I paid about $15,000, my parents $30,000, and his parents $15,000.

Tell us about it!
It was a blast and a big party. We both have huge families and invited about 300 folks. My opinion is that receptions are for friends and family, so we spent probably 70% of the money on the food, booze, and band. We had attended about eight weddings in the 18 months before ours so we benefited and could decide what was worth doing.

If you own, how much did your car cost?
Husband owns; his cost $33,000.

If you own, how much did your home (permanent residence) cost?

If you have vacation homes, timeshares, or income properties, how much did those cost?
$5,000 for timeshare fees; we share these with my parents so whoever uses the property that year pays a share of the maintenance. I did not include these in vacation costs, however.

Have any large medical expenses (including nursing homes) for yourself or others played a role in your financial picture?
Not yet

Does your family provide any non-financial support? 
Irregular childcare, especially during COVID. When schools are closed they will take the kids so my husband and I can work.

Money Strategy 

Do you have a general money strategy?
Balance saving with enjoying life and stick to a budget. I reassess the budget a few times a year based on how well (or not well) we’ve stuck to it.

Time vs. money — do you spend money to save time (e.g., cleaning service)? Do you donate your time instead of money? What else does this phrase mean to you?
Absolutely. We use a cleaning service. The older kid will sometimes do chores around the house but at five years old, it’s not very helpful. For things like school fundraisers and other charitable opportunities, I find time to be in short supply so I participate by donating money.

What are your favorite resources for personal finance?
Jill on Money is a great podcast — that’s the only thing that comes to mind.

What advice would you give your younger self about personal finance?
Get your 401k maxed out ASAP. Don’t pause transferring money to your brokerage account.

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