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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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So smart the way you and your daughters are working to fund their degrees. My husband and I both went away at 18 to a four-year residential school, ironically the same one I’m a professor at now. But that was a long time ago and it cost a lot less. He got a full academic ride and I had enough family support plus working part-time to get through in four years with no debt.
One of our daughters also went straight to a four-year residential state university out of high school. Even back in 2006 when she started, it was about $25K/year to cover tuition and housing (very expensive area). Our younger daughter did like yours and lived at home and went to a community college before transferring as a junior to a state university. The difference in price points was startling.
I also see how much stress my own students go through trying to work and keep up with their studies to attend what is now an expensive school to live and study at. I feel like in the future, a new model of how to do this just has to emerge. It’s not sustainable for families to spend this kind of money, and even though that’s where I’ve worked, I’m not sure they should.
DrLefty, I too am concerned about the affordability of higher education for today’s generation. I appreciate you sharing the daily challenges your students face. I believe two changes would help the situation you describe. The first is to compress two years of education between high school and university. A coworker recently shared that there is a program like this in CA where high school students graduate with an associate degree and go straight to their final two years of university. The second change I am pushing is increased industry and university cooperation. I would like to see improved employment pipelines that allow more students to work part-time, in their field, while pursuing degrees. My wife and I went this route and my niece recently did so too. She in fact did so well in her internship that the company offered a full-time job before she graduated.
Nik, you’ve learned a very valuable lesson about delayed gratification. You had a lot of toys, and debt. You got serious and got rid of both. Life will continue to be so sweet for you! Congratulations!
I couldn’t agree more Donny. I don’t miss the maintenance or the expense.
I agree, you did great. I’m always intrigued when I learn what others spent on their engagement rings, because I got away so relatively cheaply, about $5K in today’s dollars. Yep, it’s a tiny stone, but my wonderful spouse has always refused my offer to “upgrade”; such is her emotional attachment to that ring. Occasionally we’ll privately ask each other, “What do you think they spent on THAT rock?!”, but that’s as far as it goes, thank goodness. No criticism – everyone makes their own choices, as it should be.
Engagement ring? I never had an engagement. My wedding ring was $200 (the lady at the jewellery store was shocked to learn that that was for my wedding), my husband refused to have a wedding ring, and we’re still together 23 years later.
If memory serves, the ring was around $2,000 with the rest of the 13k going toward the down payment on our home. That ring was eventually stolen during a burglary, found by the police at a pawn shop, and repurchased by me for an additional $500 -$600. Consequently, we both have an emotional attachment to it.
Kudos! I think you did great. If every American did what you did there would be no retirement or college “crisis.” When retirement comes you’ll have earned the respite your hard work will afford you…and maybe another boat.
Thank you Ben. I actually did have another boat during the 2009-2012 years but found chartering and renting to be much cheaper and easier. My dive buddy is a CFO and always reminds to keep costs variable and fixed expenses low.
Nik, thanks for sharing your story. I also had premature twins who spent way too much time in the NICU. The hospital costs were indeed a financial wake up call. Sounds like you are doing all the right moves. Remember to share your story with your kids, and pass your wisdom to them!
Hope your twins are well and sorry to hear they had a rough start. Definitely doing my best to help the next generation learn from my experience.
Great job Nik. You have definitely had some challenges many do not face but you overcame those challenges, and have done a great job providing for your family and your future.
Thank you Jerry. I appreciate the encouragement.
There is a money journey to be proud of. At 44 you are clearly an exception to what seems to be the norm for too many Americans when it come to money and thinking of the future. 👍
Thank you R Quinn. I owe it to a frugal upbringing and what I’ve learned from personal finance authors like Clark Howard, Dave Ramsey and Jonathan Clements.
Nik, great job getting yourself on track financially, and putting family first. You live in one of my favorite Florida towns. I grew up just north of Jacksonville and have many memories visiting your home.
Thank you Edmund. It took a while for my south Floridian blood to adjust to the frigid Jacksonville winters. After it did, I have learned to really appreciate the area. I also like to visit the northern part of the region by Fernandina.
Thank you for sharing, Nik. I think your story highlights what I have been realizing lately. If we keep making steady, responsible decisions we get to graduate from those cash strapped phases of life. For us it was a mortgage, 2 kids in childcare at the same time and early-career-pay. Also me working part time for a few years after each child was born. Now we can enjoy a little relief from the small changes we made when it seemed like they were too small to ever add up to anything!
I think I just experienced some PTSD when I read about paying for childcare. Glad to hear you are reaping the compounding benefit of small, incremental, positive changes.
Go Knights!
Charge On!
: )