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Thirtysomethings: A Look At Two Couples' Financial Approach

By Clifton Linton (37 years old)
Writer, mPower

Here's a look at how two couples in their 30s manage to keep on an even financial keel as they deal with personal issues and life's struggles.

Kevin Pendley and his wife, Madonna, hate budgeting but love to travel. Sonia and Colby Green are struggling to pay off debts and raise a son. One common belief the two couples have is that saving for retirement is very important, and is their responsibility.

While their stories are unique, the issues they grapple with are common for many folks in their 30s.

Kevin Pendley: Using Discipline To Keep A Long-Term Focus

You would figure that as a financial journalist, Kevin Pendley, 36, would micromanage his money.

That's far from the truth.

He doesn't have a personal budget. "It's not worth the time or effort," he said.

He doesn't dabble in the stock market -- a fact he regrets. "I made a mistake by not participating in the stock market boom," he said.

And he has two relatively expensive hobbies - betting on horse races and travelling the world. "I would rather spend my spare time walking on top of the Great Wall of China" than playing with finances, he said.

Yet, even as he admits he's a poor financial planner, he and his 35-year old wife, Madonna, have amassed a retirement portfolio worth a little more than $300,000.

How did they do it?

As much as Pendley professes that he hates dealing with personal finances, the couple's behavior suggests that they're pretty disciplined when dealing with money.

"My wife's a CPA. My wife has never bounced a check," said Pendley.

The horse-race betting could be at the root of Kevin's discipline. "If you aren't disciplined, you will hit some painful stretches," he admits.

Other than that, he learned money management habits by "trial and error."

The pair doesn't have any debt. "We did amass some credit-card debt in the early 1990s. We made a conscious decision not to carry debt. We tried to pay off our car (loans) early," he said.

When it comes to travel, the two start saving three to six months ahead of time.

They contribute the maximum to their 401(k) plans and get a full employer matching contribution.

Further, they allocate their money appropriately. Keeping a long-term outlook, they invest aggressively in growth stock funds.

This jibes with advice given by Minneapolis-based financial planner Donald Boegel. For folks in their 30s, "common stocks should represent 100% of retirement savings," he said.

Thirtysomething: Colby Green Looking Out For His Son's Future

Like the Pendleys, the Greens also admit hating budgets. Here's how they deal with their situation.

Six months ago, Colby Green, joined the fatherhood fraternity when his son Harrison was born.

The birth shook up the Green house in all the typically happy ways. "Harrison is our leisure activity," Green proudly said.

Green, who turns 30 this year, and his wife Sonia, 31, made giving their son a good education a top priority.

"We will both be very involved in his education," Green says, even if that means sending Harrison to one of the top private schools in town.

Indeed, Harrison's birth added new financial burdens on top of some pretty hefty debts.

"We're both reasonably bad at budgeting … and having money left over for savings," he admits

The Greens are still paying off $100,000 in law-school student loans. Also, they have a $135,000 mortgage on their two-bedroom high-rise condo, as well as an $18,000 home equity loan. Retirement savings suffered because until recently, they've used extra cash to pay off the student loans, rather than opening IRAs.

Green expects to pay off the student loans in six or seven years, just about the time he'll need to pay for Harrison's private school. But, it may not be a big stretch. "We've been looking at private-school tuition from $7,000 to $12,000 a year. That's what we pay in student loans. … It doesn't strike me as a big change," Green said.

Additionally, Green wants to fully pay for his son's undergraduate degree.

While the financial burdens seem huge, the couple finds ways to scrimp and save.

Green uses the automatic payroll deduction plan at work to contribute $6,000 a year to his retirement fund, because "it makes it easy to save," he said.

Between the two of them, Sonia and Colby have managed to build a $50,000 retirement savings portfolio.

Two days a week, Green goes home from his law practice early. He does this for two reasons: the first to spend some quality time with his new son and the second, to allow his wife, Sonia, 31, to go to work as a law professor. The extra income helps as does the amount Sonia contributes to her 403(b) retirement through her employer.

And Harrison's grandparents are likely to help with saving for college, Green said. "They have talked about a fund, to give them something to do with their excess money," he adds.

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.
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