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Thirty-eight-year-olds Al and Lesia Riddick of Fairfield Township, Ohio, have practiced disciplined money management since marrying in 2002. So, when their household income dropped from $225,000 to $104,625 after Al’s job loss in 2010, the couple quickly adjusted to bringing home less.
“We used to go out a couple of times a week, or leave the country three or four times a year. We had to back that down to two times a year,” says Lesia, a business analyst at a consumer products company.
In 2007, the Riddicks finished paying off $150,000 in debt: the mortgage on their three-bedroom ranch and Lesia’s student and car loans. Since then, they’ve lived on 52% of their income, so when Al lost his job, though they felt the loss, it wasn’t traumatic. After the couple pays for utilities, groceries, recreation, and other living expenses, they invest 10% of their income in their Roth IRAs; another 10% goes toward charitable donations; and 9%, toward their whole life insurance policies.
Without any debt, the Riddicks are free to focus on building their net worth and planning for a comfortable retirement. They contribute the maximum allowable to their 401(k)s and so far, the couple has accumulated about $593,000 combined in their retirement accounts.
“We strongly believe in giving every dollar that flows through this household an assignment,” says Al, who, after being laid off, started Game Time Budgeting L.L.C., a financial fitness coaching organization. “We still live off one income and reinvest the profits from GTB back into the business.”
“We don’t believe in being house-poor. A lot of people tell us that they expect us to be in a bigger house or drive a more expensive car,” says Lesia, who drives a 2000 Toyota Solara. “People say, ‘You’re an engineer, you should be driving a Benz.’ But we think other things are more important.” Al drives a 2008 Mercury Mariner that he purchased from his previous employer for $13,500. “I still drive my old company car because I was in sales,” he says. “When you get laid off they want their car back, but I ended up buying it.”
However, Lesia admits that she didn’t share Al’s discipline about money until after they started dating. “I had to get out of the ‘it’s time to upgrade’ concept. I was the one with new cars. When we started dating, I had just bought my car as a gift to myself because I had finished my master’s. Al was like, ‘Why did you do that?’” jokes Lesia, recalling that conversation in early 2000. But today she says, “He’s become a role model to me. Now I realize that all the material things aren’t that important.”
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