Freelance product design consultant: My budget and planning for the future

I'm Mikaila Waters. I'm a product design consultant, and I make 120,000 a year. I paid for my undergraduate studies through scholarships, through a loan, and then my parents helped a little bit with basically room and board. I went to an in-state SUNY school. I grew up in New York state, and then I got a scholarship through the honors college at the University of Buffalo, which meant that my tuition was free. So for me, my expenses were just living expenses. Buffalo is pretty affordable, and I worked while I was in my undergraduate studies, so a lot of my expenses just weren't too bad. I took out a small loan to do a study abroad in Tokyo. For graduate school, I took out a few loans to be able to pay my tuition and my living expenses. Boston's a lot more expensive than Buffalo. During my second semester, I was given a scholarship that gave me full tuition for free because of my grades and then recommendations through professors. Unfortunately, I left that behind when I took my sabbatical to start a company, so I still have to pay off the loans from the first semester that I was there. When I left grad school to start my company and work for myself, that was a little bit of a difficult financial situation. We weren't making very much money for a while, and I had debt from school, but I was able to put my loans on hold and just do some consulting work on the side to make ends meet. I also learned how to budget and to try and live within my means, which were pretty small at the time, especially in Boston, but it was kind of exciting, and I'm happy that I was able to do it because now I know that if anything ever gets rough financially I'm able to survive. So I left graduate school owing 50,000 in loans. I've gotten that down to about 32,000. I set up automatic payments to pay off my loans. I don't really think about it too much. I just try to make sure that I pay it every month. I would say that the idea of debt is something that stresses me out a lot. I've tried to avoid buying things that I can't afford. Part of the reason I left grad school was because I didn't think I would be able to make enough in the path that I was on for architecture to feel comfortable with the debt I was accruing, and so I knew there was more money to be made in the startup and product design path. My annual salary is 120,000, which means monthly I take home 10,000 pretax. Because I'm a consultant, I have to make sure that I take out 3,590, around there, for taxes because you really don't want to be spending that money and then having to pay it either quarterly or annually, not realizing that you owed it, so it's important to take out ahead of time, and then I pay about 240 a month for insurance. Since I live in Massachusetts, there's a lot of great insurance options available to someone like me who's consulting, who's not working for a large company, and because I live in Boston, I was able to get great insurance at a great price independently. I take home 6,410 a month after taxes and health insurance. My rent is 1500 a month. My gas and electric is 200, and my TV and internet is 100, and my phone bill is 200 a month. I save a lot of money biking everywhere, so my commuting expenses are pretty minimal. I bike from March if possible until late November, early December depending on when it starts snowing. I'm on kind of a messy line in terms of the T in Boston, so I just prefer to walk if I can. Otherwise, it's a little crazy in the morning trying to get anywhere. Then my student loans are about 510 a month, and my food, I normally allocate 600 per month. I love cooking, and I love eating a good meal, so for me, that's a great place for me to spend my money. I have about a $250 travel expense every month and spend around $50 on books. I really love having books available either for work or just for fun, and I think that's another great way to spend my time and my money, and then I usually spend about $400 on entertainment, restaurants, yoga, anything that... Depending month by month, whatever's happening in Boston, that's what I try and allocate just for fun. Leftover, that means I have about 2600, and I put 1000 in savings, so 1600 of it is what I use for an emergency fund. As a consultant, I have to make sure that I'm not letting my savings run too low, so I try to have about six months' worth of finances available in cash just in case I am waiting on another job to come through. Boston is definitely a very expensive place to live in terms of apartments. I think it's tough to find a place that you like that's clean and your roommates are friendly. You basically always have to have a roommate, so it's nice to have someone that you can get along with that you trust. For me, living in Boston is worth it because I have a really good network here, and financially, I feel like I can make enough money to live here through the jobs that are available to me. Being a product designer in other cities I think would be tougher unless it was somewhere like San Francisco or New York, centers that really have a lot of startups, early-stage companies that are looking to hire people with my skillset. Right now, my financial goals are mostly just to continue saving money so that way I have kind of a reliable nest egg. I'm living in a city where it's pretty difficult to buy your own home as a single person, and so I don't see that or any other very large purchase in my near future, so it's mostly just about continuing to save and continuing to save for retirement and also getting debt free and paying off my student loans. I wish I had been a little less intimidated about saving for the future. Someone told me early on that I should open a Roth IRA, and I thought, because I was young and because I wasn't making very much money, that it wasn't worth it if I couldn't put in the maximum amount, and now I realize that that's not true. Even if you can put in a couple hundred dollars when you're very young, it grows tremendously over time, and also just to get into the mindset of saving for the future, even if you're very young, even if you're not saving that much, is really helpful and a good pattern to get into.