A couple earns $227,000 a year in Chicago and aims to save $2.5 million

That's the amount the couple – both 30 and childless – estimate they will need to reach financial independence.

For them, this means “being able to make changes in our lives, whether that means taking six months off or making another career change just because we can. This is what we care about, and we don't have to worry about where the change is.” The money comes from,” Bhalo tells CNBC Make It.

With about $885,500 currently invested, they are well on their way.

Both Bhaloo and Desai entered into a relationship with healthy financial habits. But as they grew older together and married, they became focused on setting financial goals and chasing them as a team.

Together, they earned $227,071 in 2023. Bhalo earned $69,314 between working part-time while finishing her MBA at the beginning of the year and working full-time in July. Her annual salary is $125,000. Desai earned around $158,000 from his work in the technology field.

While they are working hard to reach financial independence, they are not overly restricting their lifestyle now to get there.

“You should be able to enjoy your life and experience all the things you want to try,” Bhalo says. “You can take [your] Investments go to work for you while you have fun [life] And spend on things you love.”

Bhalu holds both a master's and bachelor's degree, and is fortunate to have not incurred any debt from her academic journey. She received a full scholarship to cover the costs of her undergraduate studies and part of her master's degree in public health from Boston University, where she graduated in 2016. Her parents helped cover the rest of the costs of her graduate studies at Boston University.

To earn her MBA from Duke University's Fuqua School of Business in 2023 without taking on debt, Bhalo relied on a combination of scholarships, savings, part-time jobs and help from her parents. She was earning $80,000 a year before she started business school.

By working part-time during school, she was making not only money — about $30,000 during her first year — but also valuable connections. The internship she received during her second year turned into a full-time job at the same company she works for now.

“My parents always focused on education more than anything else,” Bhalo says. “They were very willing and happy to help pay for my tuition and living expenses.”

Bhalu and Desai married when she was about to finish her MBA in 2023. Soon after, Desai decided he wanted to go to business school himself.

Although the couple's finances were separate and Desai did not support Bhalu financially while she was in school because they were not yet married, he provided the encouragement and care she desperately needed.

“Neil was very supportive in making sure I had everything I needed at home so I could focus on school and making this big change in my life,” Bhalo says.

Things are different now that they were married while Desai was in business school. Desai and his parents pay his school fees, so this has been factored into the couple's joint budget. That's okay with Bhaloo, as she says Desai's move has helped them formulate their future plans.

“Now that I'm done with school and Neil is at school, we're able to plan [for the future] A little more and we think, 'We're married now, what are our goals as a couple?'” she says.

When they set their goals, the couple made it a priority to live below their means. Bhalo says they could have afforded to rent a larger apartment, for example, but chose to stay where they are now. The couple is constantly “evaluating” how much they feel comfortable spending on future rent or mortgage.

The $3,300 monthly rent for their two-bedroom apartment is slightly higher than Chicago's average rent of $2,744 for two-bedroom apartments. According to Zumper. But it still represents just 17% of Bhaloo and Desai's combined annual profits — far below experts' recommendation of keeping your rent at or below 30% of your income.

“[Rent] “It's a big portion of your expenses, and if you can get that number under control, you can set up the rest of the year to spend on other things you enjoy doing,” Bhalo says.

Here's how Bhaloo and Desai spent their money in September 2023:

• Saving and investing: $7,256 in combined 401(k) contributions.
• Housing and amenities: $3,546 for rent, gas, electric, water and internet
• Available: $3,107 Pet care, clothing, personal care, books, health care, gifts for friends, wedding thank you notes
• Travel: $1,825 during a trip to Vancouver and flights for onward flights
• food: $1,446 on groceries and dining out
• phone: The $1,301 includes the purchase of a new Bhaloo phone and the monthly plan
• insurance: $156 for health care through Desai's employer
• Gym Memberships: $82
• communications: $80 for public transportation and ridesharing

Bhalo received three paychecks in September, making her monthly 401(k) contribution higher than usual.

The couple says using budgeting app Tiller to track their spending and having a central location to see their full financial picture helped them consolidate their shared expenses.

“Right away, we were able to see our net worth together, what our transactions were, how much Neil was charging his credit card, and how much I was charging my credit card,” Bhalo says. “Using a system that allowed us to integrate our accounts and see them together was extremely helpful.”

The couple loads many of their expenses onto credit cards for rewards, but they pay them off each month and continue to live debt-free.

She says learning about how Desai spends his money has also helped Bhalo focus on the things that are most important to them as a couple.

“One thing that really surprised me about Neil's spending habits was that he would only spend on things he really liked and would invest in those items,” she says.

For example, Desai bought a piano in 2020. Bhalo says seeing him willing to invest in a “well-made, high-quality” product helped her understand “the importance of really spending on things you love and stopping spending money on things that don’t bring you happiness and joy.” . happiness.”

Food and travel are two spending areas that Bhaloo and Desai prioritize, and they're not afraid to splurge a little here and there.

“One of the things that's really important for us is to make sure that we enjoy our life today, and not wait until we're 60,” Bhalo says. “For us, that means traveling. It means cooking really great foods and eating out.”

As remote workers, they enjoy the opportunity to work from anywhere and hope to continue exploring different cities. They may move abroad for a period in the future.

While both Bhaloo and Desai have had a very strong financial foundation from their families, they continue to increase their financial knowledge by reading books and checking out the YouTube channels of their favorite financial gurus.

“Financial health is an ongoing process,” Bhalo says. “It will never be perfect, but you always can [be] Strive for the best and make adjustments along the way as your life changes.”

They're fans of Ramit Sethi's book and Netflix show, which has inspired them to think about what their “rich life” might look like. Continuing to pursue their love of travel is definitely on the agenda, and Bhalo says hiring a personal chef would be a luxury they'd like to explore.

Their next steps haven't been fully decided yet, but they say that's part of the fun. Once Desai finishes his MBA, the couple “definitely” would like to move abroad for a while, but exactly where is to be determined.

“From there, we will see where life takes us,” she says. “We can go back to Chicago, and we can also move anywhere else. There's a lot of excitement in that unknown.”

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