Hi
@FormerHomemaker ! Welcome!
First of all, great to hear you've escaped an abusive marriage. That's the best decision you could have made in your life. Also, good to hear you're going back to school to get a degree. It sounds like you married and quit working young so getting a degree is going to be vital for you to find a stable job with good benefits.
If you have $3000 and no debt, you have custody of several children and you're in the former marital home. I have a few more questions:
- how old are your kids? Young, primary school, high school?
- do you own the marital home without a mortgage, is there still a mortgage on the propery, is there some type of deal with your ex-husband that you can stay there for an X-amount of time? Or are you renting?
In general, as a single mother, working a job and going to college, I think it's vital to have a good emergency fund. You don't want to get behind on bills if you lose your job for some reason, or your ex doesn't pay in time, or your car breaks down etc etc. Of course the exact sum depends on your personal situation, but if I were you I would aim for about 6 months in expenses. Looking at your income and how much you can save, that's probably around $15.000 . Yes, that's a boatload of money and it's going to take time for you to save that kind of money. But it's much better than ending up in debt due to some emergency when you're debt-free now.
Doing some simple maths, that sounds like until you're done at college, if I were you, my first goal would be to save money in your EF instead of investing. You're probably not going to reach that 15k while in college, but if you are used to living on 35k and get by, that means you can immediately start to invest 20k a year as soon as you find a job and possibly 40k year in the future when you have completed additional training. I'm not American, but other people on MMM can tell you exactly how you can save this money in a tax-deferred account, which basically means you end up with a lot more money compared to investing post-tax.
The 25 x spending rule almost guarantees that you're never going to have to touch the principal. You can retire on less money than 25 x spending, but it means that you might run out of money at some point in the future. If you get any type of pension or social security when you're older, or are willing to sell an expensive home and downsize, the amount of money you would need to retire would decrease. Also, sooner or later, your kids will not be financially dependent on you anymore, so your spending will decrease.
Say you would need 25k in income every year to retire. That means having a stash of $625k. If you would get 10k in social security or a pension, you would only need an additional 15k which means a stash of $375k. Downsizing might allow you to free up $100k or more. A stash of $625k sounds like a massive amount of money, but assuming a 7% rate of return that would only take you 17 years if you can invest 20k a year. Which means you could retire 17 years after starting to work, or 20 years from now, in your early 60s. And if you got a pay rise and would be able to invest 30k a year, it would only take 12 years.
In short: you are in a fantastic position to start a new life for yourself and your kids. The most difficult part is behind you. The next 3 years aren't going to be easy, but 10 years from now you're going to reap the rewards. My mother also married young and divorced after a very long and abusive marriage. She's about 20 years older than you and separated in her 50s. She's doing amazing and is much happier than I ever saw her before. She's still working and will be working until the age of 68, but she's working parttime now and enjoying life for the first time. To me, she's the living example that it's never too late to change your life.
