This story is part of CNBC Make It's Millennial Money series, which profiles people around the world and details how they earn, spend and save their money.
On a quiet suburban street nine miles outside of Chicago, Gabriela Ariza is showing off her '91 Ford Mustang. Her dream car could use a bit of work — the convertible top needs to be replaced and the A/C is broken — but the 27-year-old couldn't be more proud.
"I always wanted a Mustang, and it happened to be something that my mom was able to find," she says, adding that it was a college graduation gift. "It does need some work, but I like it to be a project car, because that way I can learn how to work with cars more."
It's one of two cars Ariza owns. The other, a 2016 Subaru Impreza, is currently being rented by someone via Turo, an online car rental platform. Ariza has a lot of experience making the most of her possessions: Not only does she earn extra money renting her car, she also rents out part of her garage to another classic car owner and the second bedroom and basement in her house.
Ariza doesn't necessarily need the extra money — she earns over $100,000 pre-tax between her full-time job as a cybersecurity specialist and her part-time job working in the IT department of a library on the weekends — but it's part of her plan to accomplish her two big financial goals: buying an investment property and retiring by 55.
Those are lofty goals, but Ariza is confident she'll accomplish them. She already owns her own home in Brookfield, Ill., and she's investing aggressively in a 401(k) and a Roth IRA, all while steadily building up her emergency savings. In her mind, there's no goal she can't reach by putting in the work.
Her own upbringing taught her the importance of financial stability: While she was growing up, her parents were fairly well off, with good jobs and some successful real estate investments. That all changed in an instant, Ariza says, when she was around 18.
"One day, my dad decided to take all the money," Ariza tells CNBC Make It. She says he took her college fund, her mom's retirement savings and all of the couple's investments. "My mom had to file for bankruptcy, and we were pretty much out in the streets."
Almost a decade later, her mom is doing much better — she has a good job, Ariza says, and will be able to retire soon — but seeing her struggle changed how Ariza relates to money. She was always an overachiever, but there's more urgency to her work ethic now. She doesn't want to be caught blindsided again by someone she relies on. Her house, aggressive savings rate and multiple income streams are meant to ensure that she won't have to.
"I don't want to depend on other people for money," she says.
Ariza works seven days a week, every week. At her day job as a cybersecurity specialist for Motorola Solutions, she makes sure 911 and dispatch systems are secure for county and state governments across the country. During the week, she often travels to sites across the country to run network scanning and provide security advice, earning $85,000 per year.
"I'm able to protect people, I'm able to help the police and the military," she says. "If any of their systems go down, then that can cause a crisis, and that's really important for me to help those people."
On the weekends, she works in the IT department for the Arlington Heights Memorial Library, which is a 30-minute drive from her house, earning $18.50 per hour. In the free time she doesn't seem to have, she volunteers at a food pantry.
"I'm waiting for her to burn out," Erik McMinn, Ariza's supervisor at the library, tells CNBC Make It on a recent visit to the branch. "She has a terrific work ethic; she just keeps on ticking."
Ariza bought a two-bedroom house in Brookfield in 2018 for $205,000. She rents out one of the bedrooms and the basement to tenants, for $550 and $650 per month, respectively (she only rents out the bedroom for a few months out of the year, bringing the average monthly rental income to $833). She rents out half of her garage for $70 per month, and rents her Subaru on Turo, bringing in around $200 per month, though that fluctuates depending on her schedule.
"In five years, I hope to have a rental property in addition my regular home, and I hope to have more financial freedom," she says. "I definitely want to be able to work less and not have to work seven days a week."
Here's a breakdown of how Ariza saves and spends in a typical month.
Ariza keeps a fairly strict budget on her path to financial independence. Outside of savings, her biggest expenditures are her mortgage, which is subsidized by her renters, and her car, which she also rents out.
"I don't want my possessions to own me, I actually want to be able to make my possessions work for me," she says. "The house is something that costs money, but I want to see if I can go ahead and just make it produce money for me."
Much of Ariza's monthly income goes toward savings and investments. She has a high-yield savings account with her local credit union, and automatically transfers at least $2,000 per month into it. This money is used for emergencies and any house projects that come up. Recently, Ariza had to replace the furnace and upgrade her A/C, among other projects.
She invests $1,000 per month in a Roth 401(k), though she'd like to try to max out her account in 2020 (to hit 2020's $19,500 limit, she'd have to contribute roughly $7,500 more over the course of the year, or $625 more per month), and her company matches her contributions, up to 4% of her income. She contributes an additional $250 each month to a Roth IRA. She also has a pension from a previous job with around $9,000 in it.
Some months Ariza has more money left over than others. When this happens, she'll either add the excess to her savings account, or double up her monthly student loan payment (more on that below).
Ariza would like to have the ability to retire at 55. "I just want to have the choice, because you never know with life," she says.
Born and raised in Seattle, Ariza came to Chicago for undergrad, quickly fell in love with the city and decided to stay. It has endless entertainment options, she says, but it's also relatively affordable.
"Chicago has so much food, so many festivals, so much culture," she says. "I just love that about Chicago and to be close to that is really important to me."
Once she decided she wanted to stay in the area, she spent a long time looking at neighborhoods around Chicago, knowing that she'd like to eventually sell her house at a profit. She considers Brookfield ideal: It has good schools and is close to public transportation and downtown Chicago, but still retains a "suburban" feel. Ariza also wanted to find a two-bedroom house so that she could rent out the second room.
After grad school, she started saving around $1,000 per month for a house, and she quickly amassed enough for a down payment. She put 15% down on the $205,000 asking price.
She rents out one of the bedrooms, the basement and part of the detached garage to offset her mortgage and any additional maintenance costs.
Ariza's Subaru payment is $232 per month, which is subsidized by her Turo income. She also pays around $140 for gas and train fare and budgets another $5 per month for any maintenance costs that crop up. If she needs to fix something on the Mustang, that money comes from her savings.
Each month, Ariza pays $50 for eyelash extensions and $60 for a massage.
"Because I work so many days a week, I want to be able to have some free time for myself and just kind of pamper myself," she says. "I know that working so many hours is very stressful, and even a massage once a month just helps with all that tension."
Many of the furnishings in Ariza's home were purchased secondhand via Facebook Marketplace, Craigslist or at a thrift store, and she tries to buy consignment whenever she can. She budgets around $150 per month for thrifting.
"It's a great way to find quality pieces," she says. "With a lot of the fast fashion, there is no sustainability in there, and I think when you purchase clothing from these thrift shops they're actually quality clothes, and they last a long time."
She also spends around $15 on food for her two-year-old rabbit, Fetty Hop, and budgets $90 per month for entertainment, which includes dinners and drinks out with friends.
"We don't go to super fancy restaurants, but it's nice to try little mom-and-pop restaurants and just try different foods," she says.
Ariza owes a total of $55,000 for her undergraduate and graduate degrees. She started going to college when she was 16, through a program called Running Start, which enabled her to take community college classes instead of high school classes. Her first two years counted as dual-credit and were free, and she graduated two years early as a result with a degree in interactive media studies.
She then pursued a master's degree in information systems while working 60 hours per week at three different part-time jobs.
"When I turned 18, I graduated high school and also had two years [of undergrad] under my belt for free," she says. "It was definitely an investment in me, and I think it was very well worth it."
She hopes to pay off all of her student loans in around 13 years ("I think I might do it sooner.") On months when she has some excess cash, she doubles the amount she's paying toward her loans.
Her food budget varies each month depending on Ariza's work schedule. When she's traveling for work, her food expenses are covered. Otherwise, she tries to meal prep as much as she can so she doesn't buy takeout throughout her seven-day workweek.
"Sometimes it can get really difficult because I'm always on the go," she says.
- Insurance: $314 (health and car)
- Utilities: $294
- Phone: $10 (she pays her mom to stay on the family plan)
- Hulu: $1 (a Black Friday deal)
CNBC Make It asked Carrie Schwab-Pomerantz, president of Charles Schwab Foundation and certified financial planner, to comment on what Ariza is doing right with her money and where she could improve.
Schwab-Pomerantz says Ariza is "off to a strong start," particularly given how much she's saving and the different income streams she has. But there are a few things she could tweak to get herself in a better financial position.
While Ariza wants to have cash on hand for any housing issues that come up, Schwab-Pomerantz says she could contribute less to her savings account — which is likely yielding 2% or less — and increase her 401(k) and IRA contributions, even if it's only by 1% to 2% a year. At the time of filming, Ariza had just over $6,000 in her savings account, which could cover many home repair emergencies.
"If she doesn't want to tie up the funds for retirement, sitting down and taking a close look at her upcoming expenses and goals will help her divvy up how much she may need soon, later and much later," says Schwab-Pomerantz. "She can allocate any surplus savings to different investment accounts accordingly."
"In this day and age, it's pretty easy to be subject to a lawsuit," says Schwab-Pomerantz. "Having renters increases that risk."
She suggests Ariza check with her insurer for any gaps in her policy and pay for an umbrella policy, which "are generally not very expensive and can provide additional peace of mind."
Mortgage rates have been falling throughout 2019, which means it might be smart for Ariza to refinance, given she bought her house in 2018. In fact, rates are about 1.25 percentage point lower than they were at this time last year. Refinancing at a lower rate could potentially save Ariza a few thousand dollars a year.
"Accelerating the payoff of the mortgage can help her build equity faster and make sure she's in the free and clear at retirement," says Schwab-Pomerantz. "She'll want to compare the interest rate savings and costs of refinancing with continuing to make additional payments on her student loans."
Her mortgage and student loans are Ariza's biggest liabilities. Refinancing her mortgage can help her with the former, while the latter should be prioritized if she really wants to retire by 55. It's smart to continue to double her student loan payments, and keep up with her part-time work and side hustles a bit longer will only help her.
To figure out if there's any other wiggle room, Schwab-Pomerantz advises Ariza to sit down with a financial planner. Given her assets and income, it's smart to create a long-term plan.
"Disciplined savings and smart investment strategy is setting up Gabriela for a secure financial future," says Schwab-Pomerantz. "Paying down student loans and mortgage debt with rental income and a [part-time] side hustle will give her more peace of mind and freedom sooner to pursue whatever comes next."
Ariza is already starting on her next venture: She wants to create a center of technology to teach children about cybersecurity.
"I definitely don't want to keep working like this all my life," says Ariza. "I just want to make that sacrifice right now, while I'm still young and while I'm still healthy, to be able to build up almost like an empire, and in 10 years be able to see that flourish."
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