Author Topic: Case Study - Advice needed for future development  (Read 5532 times)

konstrukt

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Case Study - Advice needed for future development
« on: May 18, 2015, 12:39:29 PM »
Life Situation: Filing status - Claim 1 Dependent, Dependents - Wife and 1 child @ 11mths, I am 31 years old, currently in Washington State

I could give my whole life story as to why I'm in my current situation but it boils down to not doing my research and making choices without a plan.  If I do go back to school the top contenders were web development, accounting, or software engineering.  I'm not sure this is the place to ask for career advice, but I would like to know if its even a smart move.  I have done my research for each one of these and for the most part what careers lie ahead for each.  Just taking a look into the future hopping from one job to another and only being capable of getting 10-12 bucks an hour at most is scary.  Downsides to software engineering and accounting is I have little experience in both, but it looks like there are a lot of well educated people on the forums here, would I be expected to know much about these fields before I signed up?  I feel like the cost of the education is actually holding me back confidence-wise in whether I could complete the degree for any of these, even though I have done extensive research in the computer science fields and I never had issues learning math during my years in school.  Any advice would be appreciated here - small note though, I am looking for something that would allow me to have a life with my family :) I'm a big dreamer

Staying with family and only paying 100/mth - Not sure how long this will last and would prefer to get out on my own with my family as soon as financially possible.

Gross Salary(Adjusted Gross)/Wages: 25,480/yr or 980/bi-weekly (This is an average)

Pre-tax deductions: None

Other Ordinary Income: None currently

Qualified Dividends & Long Term Capital Gains: None

Rental Income, Actual Expenses, and Depreciation: None

Taxes: 1300 Federal, 1586 ss, Medicare 390 for an average year or 50, 61, 15 respectively per pay period

Current expenses: School Loans 177 and 146, Cellphone 95/mth, Auto Insurance 59/mth, Baby Needs 300/mth, Grocery 80/mth, Gas 80/mth, Entertainment/Dining 200/mth(knocking down some of the monthly recurring stuff), Rent/Other 100/mth

Current expenses I don't have but could change based on increased income: Health Insurance - currently provided free to my family by the state, School private loan @ 3% based on hardship would increase back to 9% (I am assuming and hope it does not go higher than it was previously)

Assets: Yr-2000 Truck (worth 4,500), Savings 350

Liabilities:
School Loans 42,891 Total
22,509 Private @ 3%-specialized rate currently, was 9% - Unsubsidized (Original loan 20,874 - First bill due 9/28/2006),
20,383(2 loans combined) Federal @ 2.875% Subsidized (Oiginal loan 9,792+11,838=21,630 - First bill due 9/19/2005),
Just signed up for Income based repayment on Federal and required payments starting out are 0,
Monthly Payments 177 Private and 146 Federal(before IBR),
My current plan is to try to get back onto the 3% specialized rate for my private loan for another year, it ends in June and its based on hardship,
the Federal loan I want to pay the smallest amount I can to prevent payments skyrocketing throughout the rest of the loan life, but the reason for this is to put the extra money toward my higher interest private loan that may end up going back to 9% if not approved, but its still a higher interest and Federal may disappear if my situation doesn't improve enough to just pay it off early.

Payoff Dates
Private (no longer shows up due to specialized rate which requires auto-payment but last time I was able to check it was 2028-2029)
Federal 2026

Specific Question(s): I'm asking for advice on whether I should go back to school for a higher paying career since I have 35+ more years of work ahead of me.  My goal would be to own my own home w/ FI and if I get lucky ER but I don't currently have plans for it since I'm so far behind financially.  My other option would be work my heart out and just pay loans for a while and hope that my living situation doesn't change during this process, I may not have the opportunity to go to school when we are on our own.

Thank you for any advice on my situation even if not related directly to my specific question.
« Last Edit: May 18, 2015, 12:41:43 PM by konstrukt »

ADK_Junkie

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Re: Case Study - Advice needed for future development
« Reply #1 on: May 18, 2015, 01:48:08 PM »
How much time to finish school?  You already have a ton of loans, how much schooling does this account for?  Get into a local public university, and push it through (life will suck, and you will need to give up any social life for the next couple of years, but be sure to play with your kid everyday). 

My neighbor just got his BA, just had the birth of his 3rd child too, said the BA was the toughest thing he's ever had to do (including his two tours in Iraq) when you factor in working full-time and taking care of a large family.

I would strongly suggest software development, based on availability of jobs and pay scale.  Accounting is ok, but working conditions are awful (especially if you already have a life/family).  Web development has limited job opportunities and weak pay (relative to software engineering).

Good luck, and go to school!  It will be worth it.


MDM

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Re: Case Study - Advice needed for future development
« Reply #2 on: May 18, 2015, 01:52:49 PM »
Gross Salary(Adjusted Gross)/Wages: 25,480/yr or 980/bi-weekly (This is an average)

Taxes: 1300 Federal, 1586 ss, Medicare 390 for an average year or 50, 61, 15 respectively per pay period
If $25,480 is your gross salary (not sure if you mean that - or AGI?) then do you get $1K for child tax credit and ~$3,063 for EIC, changing your federal tax from a bill to a payment to you of ~$3,975?

konstrukt

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Re: Case Study - Advice needed for future development
« Reply #3 on: May 18, 2015, 01:56:42 PM »
I forgot to add that I had an associates degree in multimedia/graphic design from ITT - I didn't actually get any jobs for this field after so even with the degree I never actually used it other than for hobbies.  I'm not even 100% certain the credits would carry over, plus it was from 2002-2004 school years.

So if I chose software development it would probably be 4+ years going back since I don't think the credits would carry, unfortunately.

Thanks for your advice!

@MDM
Yes I received around that amount not including paid in taxes from deductions by paying school loan, so that would be extra income that I didn't mention.

MDM

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Re: Case Study - Advice needed for future development
« Reply #4 on: May 18, 2015, 02:00:46 PM »
@MDM
Yes I received around that amount not including paid in taxes from deductions by paying school loan, so that would be extra income that I didn't mention.
If you fill in the spreadsheet downloadable from the case study sticky, how close does it come to reproducing your actual tax situation?

Crestlin012

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Re: Case Study - Advice needed for future development
« Reply #5 on: May 18, 2015, 02:05:57 PM »
There is a lot of negative here, but also a lot of positive things.  It's great that you have no credit card debt.  Some further information about education/degree and employment field might make it easier to suggest options.

If you're interested in software development, look at treehouse.com  There is a two week trial period that will let you assess how you might handle learning in this environment.

In your expenses I can see two areas that need some immediate work: cell phone and dining/entertainment.  This is ~$300/month that you can't afford.  Take a look at other cell carriers asap.  Consider doing all your food prep at home to cut out your dining out problem.

Given your school and work experience, there may be other profitable side gigs that would help supplement your income.  Take a look at these two blog posts:
http://www.mrmoneymustache.com/2013/07/25/50-jobs-over-50000-without-a-degree-part-1/
http://www.mrmoneymustache.com/2013/08/05/50-jobs-over-50000-without-a-degree-part-2/

Congrats on recognizing your challenges and taking steps to face them.
« Last Edit: May 18, 2015, 02:10:31 PM by Crestlin012 »

konstrukt

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Re: Case Study - Advice needed for future development
« Reply #6 on: May 18, 2015, 02:16:53 PM »
Yes as far as cell carriers I do get a discount on my current plan since I work as a technical support contractor for AT&T, but it would be better if I were working directly for them.  I have a plan to drop it down another $15.00 per month.  I agree on the dining entertainment.  I think we went overboard and created unnecessary habits after I paid off my truck and our med bills from the baby, will definitely be working on that.

Sibley

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Re: Case Study - Advice needed for future development
« Reply #7 on: May 18, 2015, 02:28:51 PM »
I'm an accountant, currently in internal audit, previously public accounting doing taxes and audits. Accounting doesn't have to be long hours. It depends on what you do and where you work.

You can get a basic accounting education and get a job as a bookkeeper. Then can continue education and work your way up (likely changing companies). Accounting is a good, solid career. You're not likely to make the big bucks, but a comfortable living is very likely.

I know plenty of accountants who changed careers later in life. With an accounting degree, you can do accounting, reporting, taxes, auditing, and the list goes on.

konstrukt

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Re: Case Study - Advice needed for future development
« Reply #8 on: May 18, 2015, 07:40:30 PM »
Thanks for the info Sibley, Ill definitely keep that in mind for this decision.

In general is there really much of a stigma on where you go to school or graduate in any of these fields?

Sibley

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Re: Case Study - Advice needed for future development
« Reply #9 on: May 18, 2015, 08:01:34 PM »
Thanks for the info Sibley, Ill definitely keep that in mind for this decision.

In general is there really much of a stigma on where you go to school or graduate in any of these fields?

For accounting - Not that I've noticed, but I went to a good school so probably wouldn't see it if there is. I'd make sure it's a reputable school and not a diploma mill. Otherwise, I judge based on performance, including ability to learn.

Note about accounting though. If you hate it, you're not going to learn to like it. Don't torture yourself.

former player

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Re: Case Study - Advice needed for future development
« Reply #10 on: May 19, 2015, 12:56:44 AM »
Keep an eye out for better paying jobs.  Anything federal/state/local government could be a solid choice with decent benefits.  Think outside the box a bit - don't limit yourself to your current skillset, but look at everything you could develop the skills for on the job - there are a lot of jobs where you can train up at work rather than going to college. MMM has posts on 50 jobs that don't need a degree and pay $50k, which would be double what you are getting now.

If you are staying with family, does that mean there are babysitters available so that your wife can work?  Can your wife work in the evenings when you are home?  You need more income, and your wife cannot afford not to have income-generating work.  If she has the potential to earn more than you do, how about she goes out to work and you stay home with the baby?

Also, no more babies until you can afford them.

Baby needs at $300 a month seems high, especially if your wife is not in paid employment and has time at home with which to put in place frugal tips and tricks.


konstrukt

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Re: Case Study - Advice needed for future development
« Reply #11 on: May 19, 2015, 02:11:49 AM »
Yes definitely want to get paid more if I can and wouldnt mind a government job, Im just not sure what kind of positions they have without degrees.  The last time I was researching, most of them were on army bases and you had to be in.  I will try to do some more research on this,

The baby is definitely expensive, spend about 50/wk in formula alone but he can switch to regular milk in about a month.  The rest is just diapers/wipes and sometimes clothing, he is growing fast, currently in the 100% weight and height compared to all other babies at the same age.

Thank you for the advice!

BlueHouse

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Re: Case Study - Advice needed for future development
« Reply #12 on: May 19, 2015, 05:37:03 AM »
I forgot to add that I had an associates degree in multimedia/graphic design from ITT - I didn't actually get any jobs for this field after so even with the degree I never actually used it other than for hobbies.  I'm not even 100% certain the credits would carry over, plus it was from 2002-2004 school years.

So if I chose software development it would probably be 4+ years going back since I don't think the credits would carry, unfortunately.
Why don't you pick up the phone, call a few schools, and find out?  Knowing this info might alter the advice that people give.

rmendpara

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Re: Case Study - Advice needed for future development
« Reply #13 on: May 19, 2015, 09:33:47 AM »
Congrats on the kiddo!

In the short term, you can cut expenses to help right the ship, but medium/long term, you're not going to get anywhere on a 25k salary. Even if your wife goes back to work in a few years, maybe 50k total between you both?

I will preface the remainder of my words with a general comment: your success depends on many things. Some include your own talents/interests, a little bit of timing/luck, and the most important category is how hard you work for it.

My undergrad degrees were in finance and accounting, so I'm biased, but the accounting/finance world can be very lucrative if you work hard and do things right. Of course, your expected return in anything is lower if you enter a less "hard working" or less lucrative path. I chose public accounting because even despite the 60-80 hr weeks for a few months throughout the year, it did wonders for my resume and progressing my career. I started with a "Big 4" public accounting firm, worked in auditing for 2 years, made a mid-50 salary plus bonus/benefits, so let's call it ~60k. Today, 2 years after that (~4 yrs out of undergrad), I earned my CPA and make a base of 80k plus bonus/benefits, so let's call it ~95k total. Of the friends I started working with out of undergrad at my 1st job, most are probably making somewhere in the 65-100k range today... depending on which path they chose and how aggressive they were in growing their careers (and how lucky they were in coming across good opportunities).

I don't expect to increase my pay by 50% every two years, but even coasting through and working diligently for the next 20 years could earn me a solid middle class lifestyle and much more if I don't squander it.

With that said, engineers of all types also get paid well and so do skilled trades (plumbing, electrical, welding, etc). If you love building things, then maybe that should be your avenue. If you like numbers and financial stuff, then maybe accounting/finance is better.

If you don't care about any type of job, but are willing to slug through it for better pay and lifestyle, then just choose whichever seems most attainable and which you have the academic aptitude to make it through a decent program.

As far as schools go, yes, it does matter where you go. The students from Stanford will get better jobs than the students from Iowa State... ON AVERAGE. Of course, there are exceptions, but that depends more on the person than anything else.

So, consider a few things:
- your own aptitude/interests
- your lifestyle preferences
- school/programs available nearby, or far away if you can find a way to make it work financially

Then, go for it!

Good luck

konstrukt

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Re: Case Study - Advice needed for future development
« Reply #14 on: May 19, 2015, 01:22:29 PM »
Thank you for the advice rmendpara!  I've always been a numbers guy, creating new budgets for my family anytime something changed in our finances(wife always rolls her eyes when I start a new one, lol).  I definitely agree that it will take a lot more work to create a better future.  I would say my strengths are in creativity and math (up to trig) - I never got to take any calculus classes in ITT or high school so I'm not sure how much different that would be compared to all of the math before it (but I know its required in engineering) as well as others.  If I did go into accounting I would probably go for CPA for the pay increase which would be extremely important in the long run like you said, but I was steered a different direction when people talked about accounting with the "Big 4" and stating that you will always work 80 hours per week while you are with them.  Working long hours isn't new to me, my previous job was 12-14 hours a day, but I don't think I have ever pushed 80 hours, I'm sure it would be learning how to give up your normal lifestyle again and use your free time with your family every second you get - It was definitely an eye-opener when I went from a regular 40 hour job to 60 hours minimum, I thought every day was in slow motion for my first year or so.  One thing I worry about is my academic aptitude.  I don't have a problem w/ the interest factor in learning something new that I know is going to benefit me in the future, but I don't know how to range my capabilities of retaining and applying what I learn, especially in a field I haven't prepared for.  I always like to know what I'm getting myself into so I enjoy hearing other people's experiences and what the career entails.

@BlueHouse
I will definitely be checking it out, I don't want to spend more money or time than I have to for this education.  Thank you!

mozar

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Re: Case Study - Advice needed for future development
« Reply #15 on: May 19, 2015, 04:27:56 PM »
With a cpa you need a bachelors degree and then another 30 credits on top of that. You can do online classes for those extra credits. Then to get a good job you should do two years in public accouting (those 80 hour weeks during busy season, usually march and april) then get a good internal audit job. Problem with bookkeeping is that those jobs are being automated. If you have actual aptitude for math (you think you can handle a little calculus) i recommend going the software engineering route. You would just need to finish your bachelor's to get a job making 50k.

NorCal

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Re: Case Study - Advice needed for future development
« Reply #16 on: May 19, 2015, 04:49:33 PM »
I work in finance, so I can give some advice on the accounting track.  I'll stay away from the other options, as I know less about them.

A lot of basic bookkeeping jobs are disappearing as more of those tasks get automated.  If you go into accounting, your goal should be to get into a Big 4 firm.  This is incredibly important for your school choice.  Make sure you go to a school where the Big 4 recruit from.  Otherwise, you could easily end up with a lot of debt and minimal job prospects.

While I haven't done Big 4 work, I have lots of friends that have.  The work is long, and pay (in the first few years) isn't great.  But you know what?  Most people leave the big accounting firms after ~2 years.  Once you have the Big 4 experience and a CPA, you can go anywhere you want.  Go on a career site for nearly any Fortune 500 company and look for accounting jobs.  I guarantee every single one will have job postings looking for CPA's with Big 4 experience.  You'll have your choice of geography and company type.


konstrukt

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Re: Case Study - Advice needed for future development
« Reply #17 on: May 19, 2015, 07:21:18 PM »
Im going to look into calculus and see if I can grasp it.  Thanks for the advice mozar!

Thank youNorCal!  That is a primary concern in my choice and it makes sense to go where they recruit directly if I go that route.

seattlecyclone

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Re: Case Study - Advice needed for future development
« Reply #18 on: May 19, 2015, 07:40:42 PM »
Software engineering can be very lucrative, with lots of jobs available in the Seattle area and elsewhere. It's perfectly possible to go into a computer science degree with no prior programming experience. Many people go into college planning on another technical major, take a required CS course, decide they love programming, decide to major in the subject, and end up doing very well in school and the workforce. I might recommend trying an online site like codecademy.com to get a taste of programming to see if it's something you would be interested in spending the next part of your life doing.

formerlydivorcedmom

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Re: Case Study - Advice needed for future development
« Reply #19 on: May 20, 2015, 01:13:01 PM »
Computer programming is a good, lucrative career field.  You don't need any prior experience when you start your education, but you need a good grasp of logic to be successful.

Unfortunately, as you've found, ITT classes do not have a lot of respect in the market, so you will most likely be starting over.

If at all possible, start with community college.  They may be more likely to accept your credits.  At the very least, it will make the first few years that much cheaper.  You can also take an accounting class and a programming class and see what you like.

konstrukt

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Re: Case Study - Advice needed for future development
« Reply #20 on: May 20, 2015, 02:27:54 PM »
Thank you seattlecyclone and formerlydivorcedmom.  I think my research in software engineering was giving me the idea that its only possible to complete a degree with background experience prior to going or if you are extremely smart.  Im really looking at this though and with all of the career possibilities and demand, its hard not to.  Thanks again!