Coming Full Circle

Nik Whittington

I GRADUATED FROM the University of Central Florida in 2001 with a degree in information management systems. Thanks to academic scholarships, working part-time and family support, I graduated debt-free and, indeed, had some $15,000 in savings. Amid the economic turmoil of the dot-com bust and subsequent recession, I was fortunate to land a fulltime job at Fiserv, a banking software company.

That’s where I met my wife. We were engaged six months later and married in 2002. I used about $13,000 of my cash to purchase an engagement ring and make a small down payment on a three-bedroom, two-bathroom house. At that juncture, we didn’t have much of a financial plan. My wife and I both contributed 6% of our income to our 401(k)s so we’d receive the full 3% employer match. But our remaining money went toward bills and paying for our lifestyle.

I grew up fishing the crystal-clear waters of the Florida Keys, and I couldn’t wait to return to the ocean, now that I had a house and a job. I borrowed $10,000 to buy my first boat in December 2002 and spent most of my free time fishing the waters off Central Florida. Thanks to the memories, experiences and time with friends, that boat was probably the best “investment” I made early in my adult life.

My wife became pregnant in 2004, and we were blessed with twin daughters in 2005. The twins were born 10 weeks premature and spent the first months of their lives in the neonatal intensive care unit (NICU) at a hospital in downtown Orlando. Their birth propelled me at breakneck speed into the adult world of finance and parenting.

The first lesson I learned, through the birth of my daughters, is how fragile life is. Very quickly after that, I also learned that NICU hospital care is extremely expensive and that we were rapidly approaching my insurer’s lifetime health-insurance limit. We eventually settled up with the hospital, and the government later forced insurers to remove such lifetime limits. Still, dealing with 2005’s intertwined health and finance issues was one of my life’s most stressful seasons.

With our family’s health stable, a new life began to take shape in early 2006. I was now 26 years old, the sole earner for our family, and suddenly concerned about school districts and our proximity to extended family support. What followed was a flurry of activity. We sold the house we lived in, sold another house we built but never moved into, sold my boat, and traded in both of our cars. In exchange, we ended up with a four-bedroom, two-bathroom house in Saint Augustine, Florida, a used minivan, a used three-row SUV and a new software job for me at Citigroup, making $63,000 a year.

We were strapped financially, and the Citigroup job required grueling hours. But the move put us a few houses away from my wife’s sister and her family. The support our two families were able to offer one another, along with gaining access to a top-rated school district, made it all worthwhile.

With our family settled into our new home, I read everything I could about personal finance. I knew that with our twin daughters, and their health challenges, we could face large financial obligations. Retirement was also on my mind. My wife and I couldn’t count on employer pension plans, like our parents had.

Thankfully, the move to Saint Augustine left us with enough cash to pay off all loans except our 30-year mortgage. I further reduced our monthly expenses by eliminating anything we didn’t need, such as our landline, and by refinancing our mortgage when rates fell. I left Citigroup for an insurance company in 2008, and received a salary increase slightly north of 20%. With my higher income, and my wife going back to work as a teacher, I knew the next step in our financial journey would involve investing.

I didn’t know a lot in my 20s, but I did know that home equity and our 401(k)s seemed to be the only way we were building wealth. I set our retirement savings rate at 10% and opened up 529 accounts to fund higher education expenses for each kid. Initially, I was able to contribute just $25 a month to each 529, but I wanted to at least get started.

We’ve been blessed with steady employment, and an escalating income through our 30s and 40s. Over that time, we’ve gradually boosted our retirement savings rate from 10% to 20%. We’ve also increased our 529 contributions so that our kids have enough in their accounts to supplement any shortfall that scholarships and a prepaid tuition plan, funded by a generous grandmother, won’t cover.

We keep our investing low-cost and simple. The 529s are in Utah’s age-based global fund, which increases the bond allocation as the college target date gets closer. For retirement, we own Vanguard Wellington Fund (symbol: VWENX), Fidelity Multi-Asset Index Fund (FFNOX) and Vanguard LifeStrategy Growth Fund (VASGX) in our tax-sheltered accounts, and Fidelity 500 Index Fund (FXAIX) in our taxable account.

With bond yields low through the 2010s, we decided to make extra-mortgage principal payments on the remaining $180,000 we still owed at 3.25%. Doing so allowed us to pay off our mortgage in early 2022. We’ve been pleasantly surprised by the peace of mind that total debt freedom brings.

I’m now 44 and can sense a new life chapter emerging. The kids are working part-time, saving part of their income and earning associate degrees at a local state college. They plan to move out in 2025 to finish their bachelor’s degrees at the University of Central Florida, my alma mater. We aren’t sure how things will unfold, but it appears their money journey will start at the same place mine began.

Nik Whittington and his wife live in St. Augustine, Florida. He’s a technology director for a startup in the sports industry. Nik enjoys saltwater fishing, boating, scuba diving and working out. On Sundays, you can find him cheering on the Jacksonville Jaguars and the Tampa Bay Buccaneers. He loves to cook, read and learn new things. Nik is also a bit of a foodie.

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