We get you, Senator Rubio!

In light of recent press coverage on Marco Rubio’s personal finance woes, I did the math for the poor guy. It turns out that he is not living that financially dangerously. In fact, his personal finance journey mirrors what a lot of young families are going through nowadays.



Take his early years in the Florida House of Representatives. He made $90K a year and had a $330K mortgage. That means his monthly take home pay was $5,500 and the mortgage payment was $1,600. Even if I added in property taxes and HOA fees, his housing spend was about $2,100 a month, less than 40% of his total take home pay. That leaves ample room for student loan payments, car payments, occasional splurges, and savings.

When he worked for a law firm making $300K a year, he made significant improvements in his lifestyle: a bigger house, private school education for his kids, a fancy Audi, and even a “luxury” boat. With a $1 million mortgage, the monthly mortgage payment would be about $5,000, but the guy was bringing home $18,750 a month after tax. My guess is that housing spend was about $6,500, which was less than 35% of his take home pay. Adding on private school tuition ($4,000 a month), car payments ($1,000 a month), student loans ($1,500 a month), and another $2,500 for miscellaneous living expenses, he still had $3,250 a month left for savings and splurges. So the guy really likes boats (after all, he lives in Florida). He can spend $1,500 a month on boat payments and still put aside $1,750 a month towards savings. That would be an annual $21K contribution towards the nest egg :).

Troubles began when he became a senator and made a lot less money ($174K, a 42% drop in income). According to my calculations, his bills and living expenses were running at about $15K a month and his take home pay was only about $11K a month. Housing alone was about 60% of his income. He had to change that financial picture. And we see him proactively doing that - selling one of his homes, increasing earnings with teaching and a book deal… and while running for President! The one big lesson here is to lower your bills. That makes you less financially vulnerable.

Well, Senator Rubio, we get you! You are trying and it is not easy out there! The reality is that for most young people today, housing spend alone consumes about 40-50% of take home pay. Adding on student loans, car payments, and just food and laundry, cost of living can easily be 70-80% of income, leaving very little room for personal enjoyment and savings. That is why we created Hummings to help us spend smarter and live richer. Check us out at www.hellohummings.com

Assumptions: i) Housing cost: mortgage + 30% in other housing cost, e.g. property taxes, HOA fees. ii) Fancy Audi: MSRP for 2015 Audi Q7 is about $50K. Monthly lease is about $650. Car loan would be $800 per month. Plus $200 a month on car insurance. ( http://www.audiusa.com/myaudi/finance)

Photo by Alex Wong/Getty Images

Katherine Chen - Founder, Hummings. A New Yorker. Likes data. Enjoys good food. Loves to travel. Skis as often as I can afford. Learning to ride a bike. Reach me at katherine@hellohummings.com