Life Situation:
31 year old Air Force Veteran, no kids, one dog. Grew up lower/middle class in rural Kansas and joined the military to get my education paid for. Living in the Cincinnati area. Renting a very affordable 1 bedroom apartment. Brand new to the idea/concept of FI. Graduating in May with a degree in Health Services Administration. Started working (again) as a respiratory therapist in early April once I was furloughed from my co-op for graduate school. Currently, most hospitals and health systems aren’t hiring administrative staff so my degree is the equivalent to a finance degree in 2009. Luckily, I’m able to live off of my VA benefits for the majority of my expenses.
Income:
$31/hour working as a PRN respiratory therapist. I am able to get close to 30 hours/week on average. Hours vary though, with some weeks being able to get into overtime. All very variable.
$1,900/month VA disability and compensation payments (tax-free)
Pretax Deductions:
401k/403b: 10% pretax, 10% Roth option
My current role as a respiratory therapist offers the 403b option while my coop offered the 401k option.
Taxes:
Claiming zero, Ohio state, Cincinnati local
Current Expenses:
Rent: 700/month
Auto: 640/month
Phone: 40/month
Charitable Giving: 350/month
Utilities: 80/month
Dog: 120/month
Food: 250/month
Auto/Renters Insurance: 1680/annually
- Note: I utilize VA health benefits so I do not pay for health insurance.
Entertainment: 200/month
Gas: 100/month
Licensure/Continuing Ed requirements: 500/annually
Total Monthly Expenses: 2,580
Assets:
Roth: 85,000 (6,000 contribution 1st of January every year)
Traditional: 29,000
401k Roth: 6,000
403b: 11,000 (Traditional) 2,000 (Roth)
Cash: 29,000
Cash back rewards: 1,400 (will use for trip to Belize once the world opens back up)
Total Assets: 163,400
Debt:
Auto Loan: 19,500 (3.54%) on 2019 4Runner (original loan was for 42,000)
Student Loans: 8,300 (4.1%) - in deferment until December 2020
- Used my GI Bill for Graduate school and took student loans out for undergrad
Credit Cards: Zero (Pay off every month to take advantage of cash back rewards)
Total Debt: 27,800
Thoughts, Questions, Goals:
1. I know my vehicle payment is high but I “treated my self” after finishing the didactic portion of graduate program.
2. I am currently applying for numerous jobs as a respiratory therapist for full time positions until the administrative market opens back up.
3. Should I pay off the entirety of my truck and just be done with it? Thoughts? I anticipate it running for another 10+ years.
4. Since student loans are in deferment, should I even worry about those now? I could potentially see something happening with student loan forgiveness due to Covid.
5. Is it worth looking into converting my Traditional IRA into a Roth?
6. Big goal #1: be debt free this year
7. Big goal #2: buy a home
1. I can utilize the VA Home Loan program and put zero down, pay no funding fees, and I don’t have to pay PMI. I prequalified for a 300k home loan.
8. How much cash/emergency funds should I be holding right now?
9. I’m in no hurry to retire early, but I am invested in becoming financially independent. I do enjoy working but want to have that flexibility.
10. Any other thoughts, advice, commentary? Things I should be considering?
Please, roast me gently. And THANKS!