Growing Their Wealth

Richelle Perazich is a stickler for detail. Every day she looks at her spreadsheet to make sure she and husband Niko are staying within their budget. “I’m a little over the top,” says Richelle, who talks gleefully about the ability to make adjustments, track spending, and to see peaks and valleys in their cash flow. “I get a rush seeing our bank account go up,” says Richelle, 30, a budget analyst.

The newlyweds, who married on Valentine’s Day in 2008, are of the same mind on money matters. “I don’t like debt. I don’t want to owe. I don’t want to feel like someone has the upper hand on me,” says Niko, 30, an office manager.

In 2006, Richelle purchased her first home, a $258,000 condo now worth $410,000. In 2008, the couple bought a $400,000, three-bedroom, three-bath house in Washington, D.C., which was purchased with 100% financing. Mortgage debt is their only debt. They have a household income of $148,000 and about $70,000 in savings and CD accounts. She has $6,500 targeted for retirement and Niko has $28,000, along with $3,500 in individual stocks.

Frugality is paying off for the couple. Each month, they net about $2,000 to $3,000 after all their expenses are paid. They are close to meeting their goal of having $100,000 in accessible cash by the end of this year. Now that they have purchased a home, they are weighing whether they will rent out Richelle’s condo.

Their secret is simple: “We live below our means,” says Richelle, who has a master’s degree in accounting and considers it fun to find ways to cut expenses and save. They carpool to work.  Richelle has never had a car note, paying $13,000 in cash for her car. “We don’t do anything,” jokes Niko of their social life. However, they occasionally order dinner in or go to the movies.

Going forward, the couple sees increased expenses in their future. Their home is 80 years old. While the home is livable, it does need major renovations, including electrical and plumbing systems. “It had been a rental property, so it didn’t get a lot of TLC,” explains Niko. Because the fixer-upper is in Georgetown, a prime location, renovating should prove a good investment. They estimate the home will be worth $745,000 after renovations are complete. Then too, they realize the clock is ticking on their car and it will need to be replaced. The biggest change, though, is likely to be the children they want to have. “We plan to start working on our family this year,” says Richelle.

They, like many people, are a little nervous about the economy. “It’s scary, you never know what could happen,” says Niko. “While our jobs seem secure, nothing is 100% secure,” adds Richelle.

So they will continue to be careful with their money. In the meantime, they want to build a more diverse portfolio of assets.

Advice

Walt Clark, president and CEO of Clark Capital Financial in Columbia, Maryland, analyzed the newlyweds’

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