Happy New Year All,
I started tracking my spending in January 2017, after reading Your Money or Your Life, and boy was it a wakeup call. After finding MMM, ERE, JLCollins, and other blogs I made some serious changes, but still feel stuck so I’m hoping for some advice and motivation from the Forum.
About me: 33-year-old single female, childfree, no pets living in a HCOL area in the Northeast, USA with a roommate. I have a BS in Environmental Science and am currently employed full-time in public service (read: low pay) as an Environmental Scientist since May 2015 and have been increasingly miserable at my job. There is great healthcare and a pension (vested after 10 years), but there is no matching to the 457, no increases in pay (no, not even COL thanks to last Governor), and promotions are non-existent. At first my plan was to use the PSLF program to have my loans forgiven after 10 years (120 monthly payments), however I really want to relocate to a LCOL area with lower taxes, better quality of life and (hopefully) a better paying job.
Gross Annual Salary: $47,107.06
Gross per check: $1,811.81 Pay is bi-weekly, 26 pay periods per year
Federal income tax: $188.00
FICA: $32.40
Medicare: $25.37
Pension *: $132.99
Unemployment Ins*: $7.70 < I think this has a cap as I only paid $142.38 in 2017
Temp Disability Ins*: $3.44 < I think this has a cap as I only paid $80.40 in 2017
Pre-Tax Dental: $4.94
Pre-Tax Health: $57.10
Family Leave Ins*: $1.63
ROTH 457 (1%)*: $16.78 < This is the lowest contribution I can make, since I already opened it
Union dues*: $20.90
Total Deductions: $599.74
Net Per Paycheck: $1,212.07
Net Annual (x26): $31,513.82
*I cannot get rid of any of these deductions BUT I will be able to rollover the ROTH 457 and all that I’ve put into the pension (about $8,500 currently, since I’m not vested) upon termination of employment! This is the only hope holding me together right now, as I’m literally in tears every time I see my paycheck.
Side jobs: About $3,000 net in 2017 from working as a horseback riding instructor/trainer. This job is over for winter 2018, but I will be looking for more paid opportunities as this is mainly how I get to pursue my passion for riding and horses. I work at another barn in exchange for lessons/riding time. I tried driving for Uber/Lyft (it wasn’t worth it)
As of January 2017:
Debts (rounded)
Student loan (5%): $47,000 < Min $182.06 (income based repayment). Consolidated for PSLF : (
Auto loan (1.9%): $22,000 < Yes, facepunch (sold in July 2017, balance paid off by dealer, valuable lesson learned)
Credit cards (17-21%): $6,000 < Balance transfer 0% in January 2017, the balance is now paid off as of December 2017!)
Total debts: $75,000 < The wakeup call
As of January 2018:
Debts
Student loan (5%): $37,511 < Min now $503 (without IBR). Denied refi by SoFi and Earnest due to high debt, low income
Balance transfer (0%): $4,500 < 0% until November 2018. This is from buying a used 2007 Pontiac Vibe when I sold the financed car as I did not have enough savings
Costco Citi (0%): $1,200 < 0% until March 2018, all credit cards will be paid in full forevermore
Total debts: $43,211 < Still an emergency
Assets
ROTH 457: $4,790 < About 85% stocks, 15% bonds or other
Ally Savings (1.25%): $1,156 < Emergency fund
NetSpend (5%): $1,000 < Experiment
Pension payout: $8,500 < Not sure if I should count this
Total assets: $15,446
Net Worth: -$27,765
2017 Expenses totaled $22,664. Please keep in mind my expenses were high the first half of 2017 – my ex was very spendy and I stupidly experienced lifestyle inflation. For the last several months I cut my expenses to the bone (Sept-Dec averaged $1,400 per month, not including debt) and have been aggressively paying off debt, therefore saving very little. Reading other case studies here there was a poster who said something along the lines of “do you want to be a debt free worker bee or financially free living off a fat stack of investments?” to the OP. Since I certainly desire the latter, it made me think I’ve made a mistake, hence this post for help!
*Sept-Dec Average Expenses (Down from $2,000-$2,300 per month from Jan-Aug)
Rent: $600 < Includes internet, Netflix, and all utilities) with awesome roommate
Phone: $48 < Stuck with T-mobile, got phone for free from ex but it’s locked and I can’t unlock it
Household products: $20 < Paper towels, toilet paper, dish soap, etc.
Gas: $80 < The barn is 1 hr each way
Car insurance: $65 < Progressive, paid in full every 6 months
Car maintenance: $300 < Used car was having starting issues, this should be lower in 2018
Food, incl restaurants: $250 < Working on lowering this further
Doctor: $15 < Chiropractor, as needed
Personal care: $10 < Toothpaste, skincare
Clothing: $10
Total per month: $1,398
2018 Budget (maximum $15,000 planned, will require more cutting)
Costco: $120 < Renew in July
Laptop: $700 < Laptop is 6 years old, hoping it will last the rest of this year at least
Phone: $350-600? < I would like to switch to Project Fi, but would need a new phone. Suggestions?
$31,513.82 (2018 net pay) - $15,000 (2018 expected expenses, not including debt) = $16,513.82 (left for debt/savings) + any additional income from side hustles
My ultimate goal is to reach FIRE, live and work/volunteer (Workaway, WWOOF, horse riding holidays, etc.) in different countries. I’m very interested in geoarbitrage and have considered switching careers, perhaps to teaching abroad (would need TEFL or teacher certification). I feel stuck in analysis paralysis with making a solid attack plan for paying off debt and saving for FIRE.
*I’m not sure of an exact FIRE amount yet, much of what I want to do abroad will likely have room and board included or cheap (perhaps a $150-250k stash?)
*When the student loans get down to about $30,000-$32,000 or my income increases I will try to refi again.
*I’m most interested in relocating to Washington, Oregon, Nevada, Colorado, or basically anywhere in the western USA, but I'm searching everywhere. Any suggestions for LCOL areas would be appreciated!
Specific Questions:
*Would it be optimal to take the balance transfer payment ($409 minimum needed to pay in full by Nov 2018) and pay the allowed min ($69) while putting the remainder ($340) into a Netspend/Insight saving account (5% interest) to collect interest until payoff date?
*Should I re-certify my income to get a lower monthly payment for the student loans, even though I have been paying more than $503 per month?
*Should I throw as much extra money as possible at the student loans OR should I add to investments (such as a Vanguard ROTH IRA or NetSpend/Insight account)?
*When I find new employment would it be optimal to max out a Traditional 401k, instead of just to matching (if any) as my rate is 5% on the student loan per the investment order post?
Sorry for the length of this post, thank you for reading! Don’t be afraid to be tough, I won’t get offended or defensive by any suggestions.