Author Topic: Low income single lady  (Read 10419 times)

Oneforthemoney

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Low income single lady
« on: October 04, 2013, 08:18:21 AM »
No, this isn't a personals ad. I need some advice regarding saving and the future. I am new to the Mustachian concepts and I really have no idea where to start. I'll give you the facts, first and then I will ask the questions.

Monthly income (after taxes):1500$
Bills, Bills, Bills:

Rent(utilities included): 350$
Phone Bill: 50$
Car Insurance: 175$
Car payments: 220$ (I have 8,000$ left to pay.. my interest rate is 1.39%)
Gas: 150$ (I am experimenting with this one.. it may be able to be lowered a bit but I live and work on main roads that aren't bike friendly at all. It's a 15 minute drive from my apartment to my work.)
Gym Membership: 45$
Groceries+ Household items: 150$

Money in saving: a big fat 0$ (I just blew through my savings on a vacation this summer)
Retirement: 0$

My dilemma is: where should I put the rest of my money? Thus far, I have been putting extra money on my car note and then just blowing the rest. I'd like to pay off my car note as quickly as possible. And I'd like to start saving for a house in the future. I'd also like to put money into retirement. Should I start doing this all at once or zone in on one thing at a time?

I am 26 and I am in administration making 12/hr- this is pretty good, starting off, for my area. The odds of me ever getting out of administration seem pretty bleak, as I don't have a college education nor would it seem that I could have the means/time to get one. At the company I am at now (which is a really good one) I don't see much opportunity for advancement... so lets just assume I'm stuck here for a few years.

Peony

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Re: Low income single lady
« Reply #1 on: October 04, 2013, 08:33:24 AM »
I'm sure others will have thoughts/strategies on the $8000 car note, but to me it seems that you could use a second job or side hustle, since your expenses are quite low and there's not much to cut. (Though if you had a cheaper car with no loan, you could downgrade to the most basic auto insurance, which would be a savings.) I assume you're single and childless, so maybe look for a job you wouldn't hate (and might actually enjoy) doing on weekends? Bartending, waitressing, babysitting, retail all come to mind.

iamlindoro

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Re: Low income single lady
« Reply #2 on: October 04, 2013, 08:48:39 AM »
You can take some money off that $50 phone bill-- what kind of plan is this, and at what provider?  I pay $30 a month for unlimited talk, text, MMS, and a decent amount of data, and $40/month ups that to a huge 1 GB of data.

Is that $175 in car insurance every month?  If you, that is freakin' PREPOSTEROUS.  I pay less than that in an expensive car insurance state every *six* months, so there may be an opportunity for a big win here.

Needless to say, car payments are a tool of the devil and hopefully not a mistake you'll even get yourself into again.  I'll leave it to the numerous main page articles that you can go and read to see why.

So yes, since your car payment is your only debt, put every penny towards paying it off-- no more vacations or any other luxuries until it is completely gone.  I would estimate that you can liberate at least $350 every month by destroying the car payment, getting some sensible and minimal insurance, and modifying your phone plan.

A 15 minute drive from work is pretty far.  Can you move?  If not within your town, how about looking out of the area for a place with better job prospects?  You are young and single, now may be your only change to make big life decisions that will affect your job prospects for the rest of your life.    You have to run an analysis like this for anyplace you consider moving to see if it would allow you to save more money, but I suspect there are some places with better prospects for a young and motivated person such as yourself.  If you dream about going to college, how about getting a job at a university (or local community college) doing administration and taking advantage of tuition reimbursement/free attendance there?

MissStache

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Re: Low income single lady
« Reply #3 on: October 04, 2013, 08:52:44 AM »
One thing that really jumps out to me is your insurance.  That is so, so expensive.  Do you have an accident or tickets or something that is causing it to be so high?  I have full coverage with low deductibles and I pay $350 every six months.  I would recommend shopping around for that immediately and it could clear up some extra money for you.

The gym could also go.  That's a luxury you don't really need.

But you aren't in horrible shape.  Having a car loan as your only debt is pretty great, in fact, do kudos to that!

Your $0 in savings # scares me, so if I were you I would put everything I could into building that back up to be 2-3 months of expenses. 

Do you have any options for a retirement account through work? 

Oneforthemoney

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Re: Low income single lady
« Reply #4 on: October 04, 2013, 09:10:21 AM »
Maybe I could do some better shopping on car insurance but because I have a car loan I am required to have full coverage and compared to most of my friends 175$ is a pretty good deal. I bought my car in December, before that I paid about 75$ a month for liability only.
If I moved closer than 15 minutes from my work, I would have to pay more in rent and that would defeat the purpose. I am looking at new job opportunities but trying to make a plan that fits my current job situation. My work does offer a 401k program with some sort of matching plan, but I don't know the percentage.

The "0" in savings really freaks me out too.

iamlindoro

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Re: Low income single lady
« Reply #5 on: October 04, 2013, 09:33:26 AM »
Maybe I could do some better shopping on car insurance but because I have a car loan I am required to have full coverage and compared to most of my friends 175$ is a pretty good deal. I bought my car in December, before that I paid about 75$ a month for liability only.

Why did you buy the car under a year ago?  For what it's worth, don't just accept that car insurance is the way it is.  Actually go out and aggressively comparison shop.  You can get a quote on Geico.com without even talking to a person-- convenient and private.  Even $75 a month in liability only is just out of control.

If I moved closer than 15 minutes from my work, I would have to pay more in rent and that would defeat the purpose. I am looking at new job opportunities but trying to make a plan that fits my current job situation. My work does offer a 401k program with some sort of matching plan, but I don't know the percentage.

Have you done the actual math?  If you take a $50 increase in rent but can bike to work and eliminate the gas cost nearly entirely, then that's a net increase in saved money.

You have the power to really change things, but it may mean making some decisions that take you out of your comfort zone or you don't see your peers making.  You are not in a disastrous situation and yes, there is room without changes in job or living situation to find some moderate savings-- but if you're committed and willing, you also have a chance to make/save a lot more money.

CU Tiger

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Re: Low income single lady
« Reply #6 on: October 04, 2013, 09:45:04 AM »
No, this isn't a personals ad. I need some advice regarding saving and the future. I am new to the Mustachian concepts and I really have no idea where to start. I'll give you the facts, first and then I will ask the questions.

Monthly income (after taxes):1500$
Bills, Bills, Bills:

Rent(utilities included): 350$
Phone Bill: 50$
Car Insurance: 175$ Have you shopped this around? Go online and see if you can lower this? For years I overpaid for insurance because I wasnít aware that what I was paying was higher than people around me. A little online browsing, a couple of phone calls, and I cut my bill by about 40%
Car payments: 220$ (I have 8,000$ left to pay.. my interest rate is 1.39%)
Gas: 150$ (I am experimenting with this one.. it may be able to be lowered a bit but I live and work on main roads that aren't bike friendly at all. It's a 15 minute drive from my apartment to my work.)
Gym Membership: 45$ Have you heard of a book / workout dvd called You Are Your Own Gym? It is a good workout and all you need is a place to work out, your own body, and a computer or something that can play a dvd. Check out some of their stuff online. Saving $45 a month is saving $540 a year.
Groceries+ Household items: 150$

Money in saving: a big fat 0$ (I just blew through my savings on a vacation this summer)
Retirement: 0$

Sigh. You are young. Now is the time to start setting the basics up so you can retire early and enjoy your life. Having no savings now is not a huge disaster, but if you keep going like this, you are going to find yourself an elderly person with no savings. Working as a greeter at WalMart is fine if that is something you do to because you want to get out of the house and see people every day. Doing it because you like to eatÖnot so much fun.

My dilemma is: where should I put the rest of my money? Thus far, I have been putting extra money on my car note and then just blowing the rest. I'd like to pay off my car note as quickly as possible. And I'd like to start saving for a house in the future. I'd also like to put money into retirement. Should I start doing this all at once or zone in on one thing at a time?

You need to set up a regular amount of savingsÖletís say start with 15% of your income. Put that in some sort of savings vehicle where you can get to it until you have an emergency fund (EF).

Also, if your employer has any retirement plan that matches, get into it RIGHT NOW.

If you learn how to make good, frugal choices, soon you could start investing money for retirement and saving for a house. There are folks on this board who are saving/investing 50-70% of their pay. Itís not impossible, but saving for financial independence (FI) and early retirement has to be your priority.

You have no money in savings or retirement, so donít be in too much of a hurry to get into a house. You can live your whole life in a rented place, lots of people do. You can be retired and living happily in a rental. But if you donít have savings for emergencies and a retirement investment plan, you may be living in a van down by the river and looking up recipes for how to cook dried beans tastily for every meal. Kidding. But not entirely.

Oneforthemoney

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Re: Low income single lady
« Reply #7 on: October 04, 2013, 09:55:29 AM »
Thanks for the advice, I will definately start looking for cheaper insurance today. I think that the reason for high rates is because walking/bike riding isn't done here. We don't even have sidewalks.. just roads and ditches.

 I bought the car because my old car died and I didn't see any other way around it.

As far as moving closer to bike to work... its not happening. My work is surrounded by subdivisions of high income houses (probably the richest in my city/surrounding cities) and the cost of rent even with roomates would be outrageous definately more than 50$.

MissStache

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Re: Low income single lady
« Reply #8 on: October 04, 2013, 09:58:48 AM »
My work does offer a 401k program with some sort of matching plan, but I don't know the percentage.


Find out more about that immediately and start contributing to your match at a minimum.  You are throwing away free $ that will be a huge boon to you in 15 years.  That should be step #1.

Numbers Man

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Re: Low income single lady
« Reply #9 on: October 04, 2013, 10:00:46 AM »
You pay about as much on your car insurance as it costs me to insure 3 cars. There could be several factors that are impacting you insurance such as you don't live in the right zip code according to the insurance companies, you have had accidents or speeding tickets and your DEDUCTIBLES are way too LOW. Raise your deductibles to at least $500. Also, pay your insurance premiums every 6 months instead of monthly. You are paying a monthly service charge every month that you don't need to pay. Another factor that could be impacting your insurance rates are a bad credit history. Although, based on the interest rate that you got for the car loan, I doubt that a bad credit history is the problem.

Use your extra money to save for emergencies such as when your employer decides to downsize and you don't have a steady income. Save about $6,000 to give yourself a cushion. After that, you should start putting money into your 401(k) fund. Then get down to the local library and start reading about investing and other financial books to educate yourself about the world of money.

The car payment is a pain, but I wouldn't really worry about paying that loan off. Keep aggressively adding to your emergency fund and 401(k) plan.

You should table the idea of buying a house until you have saved at least 20% for the down payment and some more savings on top of your emergency fund since houses always seem to need new roofs or some other expensive things to fix.

Frankies Girl

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Re: Low income single lady
« Reply #10 on: October 04, 2013, 10:15:29 AM »
You actually have several things to cut if you're serious about building a stache.

You've got zip in the bank, have a low paying job, and are in the hole over $8K with that new car, which also forces you to have insanely high insurance. With no emergency fund, you are just one little accident or breakdown away from a debt spiral. But you are interested in trying to change your financial picture, so that is great.

Your rent is good. Utilities included is awesome for that price. But I'm going to throw this out there just to get you thinking. If you moved close enough to walk to work and the stores, how much more would it cost? If it was below $700, then you'd actually be able to sell the car (kill off that $8K as long as you could sell it for at least what you owe), drop the insurance ($175) and still come out ahead. You could always ask a friend for a ride if it was necessary and you'd be SAVING MONEY and getting exercise too.

Drop the gym membership like yesterday. There is a huge amount of exercising you can do without paying someone - jogging, working out at home, riding a bike... that's all much better than spending $45 a month.

Gas cost... You're driving an average of 15 minutes to work? I'm going to figure you live within 10/15 miles then. Are there any coworkers in the area that you could carpool with so you could all reduce your driving and gas cost? I'm not going to get on you for saying you can't bike, because I am in the same situation (there are areas on my route that prohibit biking by law even).

Start doing major research on your car insurance. Ask about discounts and carry the absolute minimum you can, and make sure to speak to actual agents so they can work the numbers for you. Unless you're a high risk (accidents?) or have a car that is high cost to insure (sports car? Oh please tell me it's not....) you should not be paying that high in insurance. I live in one of the larger cities in the country that also happens to be in the top 10 for car drivers (they love the cars down here) and I'm paying waaaaaay less for full coverage on my almost new vehicle, and even when I was in my 20s it wasn't that much. 

Your food budget could also be cut down. If you're eating out, cut that completely. You can make many tons of simple, filling meals using beans, rice and veggies (frozen veggies are cheaper than fresh and better than canned, but fresh is best), eggs... this site is AWESOME and can save you quite a bit of money while still eating pretty darn well:  http://www.budgetbytes.com/

If you do all that, you should be able to pull out at least $100-$125 to start funding an emergency account.

Any chance of a raise? Sit down and talk to your boss about your career path. Ask what you can do to move up and be more valuable to the company. Let them know you're open to overtime. Be eager and willing to work hard to get more. You should also look for a side gig if your regular job isn't going to offering more money any time soon. Find something on the weekends if you have those off, I'd be doing retail or night stocking at a grocery - whatever it takes to get a bit more money coming in. Even if it's only an extra hundred bucks in your pocket each month, that added to what you already would save from above would be a solid $250 a month into an emergency fund.

About that car. I can't even fathom why you bought a new car with your salary so low. A nice, reliable older car would have been under $6K and you'd be paying less in insurance. A car is a depreciating asset. You will never get back the money you put into it. Buying a new car that you have to finance just means you're pouring more money you don't have into something that is going to lose value every second you own it. I'm not saying never buy a new car ever... but you have to see it for what it is. It's a tool to get you from point a to point b and it being shiny or having all kinds of fancy gadgets isn't necessary or smart when you are trying to stay out of debt and build a nest egg. That car is bad for you, and if it is at all possible to sell it for enough to clear your debt on it, and get a cheap running around car (that is still reliable) then I'd do that in a heartbeat.

If you can get a few months' worth of expenses saved up (which you should be able to do within 6-8 months), then I'd see about jumping into the 401K and finding out about the match. I know right now you're leaving money on the table, but you have to have some emergency money before you take the next step to investing in your future.

« Last Edit: October 04, 2013, 10:28:12 AM by Frankies Girl »

Dee18

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Re: Low income single lady
« Reply #11 on: October 04, 2013, 10:20:52 AM »
At age 26 you have many, many years ahead of you.  Consider looking for an administrative job at a good college or university.  Many will let employees take courses for free, and some even let you adjust your work schedule around that.  Also, universities have lots of administrative jobs.  They tend to have good insurance and retirement benefits as well. 

Oneforthemoney

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Re: Low income single lady
« Reply #12 on: October 04, 2013, 10:25:31 AM »
Thanks for all of this advice, guys... y'all definately have my wheels turning!

StarryC

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Re: Low income single lady
« Reply #13 on: October 04, 2013, 10:31:07 AM »
Right now you have about $350 extra a month.  First, do the things people are saying to get that higher.  But, for the first 3 months or so, I would put that money right into an emergency/car maintenance/medical expenses fund.  Most of those emergencies are under $1,000.  Some may argue that car repair and medical expenses aren't a true emergency, because you should plan for them, but for now, for you, they would be. 

Next up, 401K or IRA.  At your income, you could get a big benefit.  You should contribute at least $2,000 a year if possible, or $166 (pre-tax) per paycheck if you make a $20,000 salary. 
You can get up to a $1,000 savers tax credit for up to 50% of the amount you put in to the account.  It's not refundable though, so it only counts if you do end up paying some taxes each year.  (Look at last years taxes to determine if you were refunded all, more than all, or less than you paid in taxes.)   If you are eligible, save $2,000, and get 50%, and that takes your tax bill for the year from $1,000 to 0, that is like additional free money!   Let's say that is the scenario, AND your work matches 50% up to 3%.  Your salary is probably actually $20,000 a year.  They will match the first $1200 you contribute with $600.  You contribute $2,000.  You now have $2,600 in the account.  Your paycheck is about $150 less a month (because the contributions are pre-tax).  Then, when you file taxes instead of getting no refund, you get $1000 back.  You have $2,600 in your account based only on living without $1,800 for a year, and you got $1000 back you can put into the E-fund!  Even if the 401K totally sucks and provides 0 returns after inflation/fees you just got a 160% return on investment! 

Then, after you have started that, use the remaining "extra" every month to increase your emergency fund up to the $6,000 suggested.  Why not finish the emergency fund first?  1) Free money, as illustrated above.  2) If you get in an emergency you CAN access the 401K funds. So lets say after you have the $2,600 in the account you have an emergency.  You take the money out at your usual tax rate (say 10%?) and you pay a 10% penalty.  So you get $2080.  Wow! That is still more than twice as much as you put in after accounting for the saver's credit!   

willn

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Re: Low income single lady
« Reply #14 on: October 04, 2013, 10:45:43 AM »

I am 26 and I am in administration making 12/hr- this is pretty good, starting off, for my area. The odds of me ever getting out of administration seem pretty bleak, as I don't have a college education nor would it seem that I could have the means/time to get one. At the company I am at now (which is a really good one) I don't see much opportunity for advancement... so lets just assume I'm stuck here for a few years.

See if you can begin to change this self limiting belief. Start looking for small ways to make more money.  Start thinking about what you love, and turning that into a career option in the long run.  Start looking for small ways to improve your current position.  Start believe you are, or will be, worth more, because you put in some extra effort.  Start viewing "How To" videos on Youtube.   Set a goal that in 2 years you'll be at 20/hour.  Or whatever.

This is just an example to illustrate:If you love animals, start volunteering at a shelter. Tell a vet you'll help out 1x a week to learn about the business.  The idea is that when you start looking for things and engaging people that you find interesting, and start learning about a new field, then you'll start discovering ways to add value to someone's business, and find a career path or side job.  Formal college education is not a requirement for being a high earner!

At this point, if you can scrape together a second part time income, 500/month changes your world--it means you get out of debt in just over a year.  Then you can start to pay for classes and exploring further skills and interests.

There is a blog post or two here talking about jobs that earn 50K / year without a degree.  See if it generates some ideas for you.

snuggler

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Re: Low income single lady
« Reply #15 on: October 04, 2013, 11:40:02 AM »
See if you can begin to change this self limiting belief. Start looking for small ways to make more money.  Start thinking about what you love, and turning that into a career option in the long run.  Start looking for small ways to improve your current position.  Start believe you are, or will be, worth more, because you put in some extra effort.  Start viewing "How To" videos on Youtube.   Set a goal that in 2 years you'll be at 20/hour.  Or whatever.[/quote]

This is great advice. Admin assistants at law firms can make good money ($50-90k/year), if they have experience. Ditto with personal assistants to CEOs. If that is what you want to do, think about how to increase that paycheck. It may require moving, but if it changes your overall career prospects, and financial prospects, that is worth seriously considering.

I'd also look for a side hustle to help me increase my efund and retirement fund more quickly. Could be part-time babysitting/childcare, dog walking/pet-sitting, creating WordPress blogs for others, etc.

Also, I'd personally start saving in my efund and retirement fund before paying off the car note (unless you decide to sell the car, which would be a good idea). I say this because the interest rate is so low on that note.

Jamesqf

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Re: Low income single lady
« Reply #16 on: October 04, 2013, 11:54:41 AM »
I would really take a close look at the car.  You say you live 15 minutes from your work, so that's a max of about 30 miles round trip (assuming it's all freeway).  Now with any car that gets even halfway decent mpg - let's say 30 mpg to make the figuring simple - that should be under 1 gallon ($3.75?) a day, or $75/month for commuting.

Swap that car for say an older Honda or Toyota that gets 30+ mpg, and you've saved $75/month, and are out from under the car payments and full insurance coveraage.

onehappypanda

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Re: Low income single lady
« Reply #17 on: October 04, 2013, 04:41:50 PM »
I am also living on a limited income, and here is what I would do:

- Either sell the car and get an older once (since you don't need to drive much anyway) or pay it off early. This helps you save in two ways: no more car payment AND you can drop your insurance down to a lower level. Also shop around for insurance - I'm not sure where you were going that charged you $75 for liability only, but Progressive and Geico charge me $30 for liability and I'm relatively young too.

- Once the car situation is settled, take all your freed-up cash and stash it in a savings account. Since my income isn't huge but my expenses aren't either, I like to have $1,000 in my savings in case an emergency pops up.

- Drop the gym membership and any other unnecessary expenses, at least until your debt is paid and your savings are built up some. You can't really afford it.

- Stop looking for excuses to believe that you can't do better. You can, either now by looking around or in the future by making some choices and sacrifices to put yourself in a better position. Saying that you don't have the time/resources is a flimsy excuse if you haven't really sought out other options. If your area doesn't offer much opportunity, can you move?

JohnGalt

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Re: Low income single lady
« Reply #18 on: October 04, 2013, 04:54:33 PM »
I am also living on a limited income, and here is what I would do:

- Either sell the car and get an older once (since you don't need to drive much anyway) or pay it off early. This helps you save in two ways: no more car payment AND you can drop your insurance down to a lower level. Also shop around for insurance - I'm not sure where you were going that charged you $75 for liability only, but Progressive and Geico charge me $30 for liability and I'm relatively young too.

- Once the car situation is settled, take all your freed-up cash and stash it in a savings account. Since my income isn't huge but my expenses aren't either, I like to have $1,000 in my savings in case an emergency pops up.

- Drop the gym membership and any other unnecessary expenses, at least until your debt is paid and your savings are built up some. You can't really afford it.

- Stop looking for excuses to believe that you can't do better. You can, either now by looking around or in the future by making some choices and sacrifices to put yourself in a better position. Saying that you don't have the time/resources is a flimsy excuse if you haven't really sought out other options. If your area doesn't offer much opportunity, can you move?

Great advice here - particularly the last bullet.  There's no reason to give up on yourself.  If you're current job doesn't offer you an real opportunities - you should constantly be looking for something that does and improving yourself to get help you get there and succeed. 

Lans Holman

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Re: Low income single lady
« Reply #19 on: October 04, 2013, 05:41:02 PM »
I just want to echo the advice about finding ways to improve yourself and your earning potential.  There are so many ways besides college to do this.  You are young, don't have kids, and are eager to make a positive change.  Assuming you are working 8 hours and have a 15 minute commute, there should be a lot of time in your day to work on learning new skills that will make it possible for you to set your sights a little higher.  Think of it as an investment in yourself. 

grantmeaname

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Re: Low income single lady
« Reply #20 on: October 04, 2013, 05:48:21 PM »
Are you not contributing to your 401k at all (assuming you're in the US and the private sector and that's the correct name for your retirement plan)? Every dollar you put in will only cost you like 75 cents out of your paycheck and with employer matching it's immediately doubled. If what you're doing now is "saving" some money for part of the year and then going on vacation, that's not "saving", that's spending unevenly across the calendar year. Saving is when your expenses are less than your income.

Freckles

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Re: Low income single lady
« Reply #21 on: October 04, 2013, 06:19:13 PM »
So much good advice here!

I could never top all the budgeting advice, but I was thinking about how you could improve your income.  Have you read MMM's posts about 50 jobs that don't require a college degree?  http://www.mrmoneymustache.com/2013/07/25/50-jobs-over-50000-without-a-degree-part-1/ and http://www.mrmoneymustache.com/2013/08/05/50-jobs-over-50000-without-a-degree-part-2/  There are a lot of good ideas there, and there's also the post about the interview with the CEO of an online learning company.  The post and the comments have lots of information about very cheap ways to train for high-paying jobs.  http://www.mrmoneymustache.com/2013/02/07/interview-with-a-ceo-ridiculous-student-loans-vs-the-future-of-education/

One more thing.  There is no "a" in definitely.  I'm not trying to be bitchy, I just think you should know that to help you at your job.  I'm sure you have to write emails, send faxes, etc., so you should spell correctly.

daverobev

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Re: Low income single lady
« Reply #22 on: October 04, 2013, 10:54:48 PM »
Assuming you want to keep the car - if it's 1.39% for the life of the loan, don't bother paying it off early. It's cheap money, better invested. You may have already paid a premium price for the car to get the low interest rate - and if you did, it's done.

But yeah, that insurance is brutal. It's more than we pay in Ontario - and Ontario is expensive!

onehappypanda

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Re: Low income single lady
« Reply #23 on: October 05, 2013, 07:25:19 AM »
Assuming you want to keep the car - if it's 1.39% for the life of the loan, don't bother paying it off early. It's cheap money, better invested. You may have already paid a premium price for the car to get the low interest rate - and if you did, it's done.

But yeah, that insurance is brutal. It's more than we pay in Ontario - and Ontario is expensive!

My advice to pay off the car is largely because the insane insurance and the car loan are linked. If you owe on a loan, you have to carry really expensive full insurance. If she pays off the loan, it frees the money that's going to payments up to go elsewhere, and it ALSO allows her to drop down to much cheaper insurance. At least that's how it works around here.

daverobev

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Re: Low income single lady
« Reply #24 on: October 05, 2013, 12:40:13 PM »
Assuming you want to keep the car - if it's 1.39% for the life of the loan, don't bother paying it off early. It's cheap money, better invested. You may have already paid a premium price for the car to get the low interest rate - and if you did, it's done.

But yeah, that insurance is brutal. It's more than we pay in Ontario - and Ontario is expensive!

My advice to pay off the car is largely because the insane insurance and the car loan are linked. If you owe on a loan, you have to carry really expensive full insurance. If she pays off the loan, it frees the money that's going to payments up to go elsewhere, and it ALSO allows her to drop down to much cheaper insurance. At least that's how it works around here.

Good point!

Gerard

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Re: Low income single lady
« Reply #25 on: October 05, 2013, 12:57:45 PM »
One more thing.  There is no "a" in definitely.

And unfortunately spell check suggests/corrects it to "defiantly"... whenever I see a post that says, "I am defiantly not getting a raise at my current job," I picture somebody yelling "Fuck you, raise!"

Freckles

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Re: Low income single lady
« Reply #26 on: October 06, 2013, 10:11:27 AM »
Haha, Gerard.  Yeah, some people really hate raises.  Thanks for the chuckle.  :D

Petunia 100

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Re: Low income single lady
« Reply #27 on: October 06, 2013, 01:11:40 PM »
I have full coverage with a $500 deductible. My car is worth about 8k.  I pay $532 for 6 months.  You're paying $1,050.  Shop your insurance coverage.

Daleth

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Re: Low income single lady
« Reply #28 on: October 06, 2013, 03:51:48 PM »
I agree with all the other advice (shop for insurance, raise the deductible on your insurance to at least $500, ditch the gym membership, start using your 401K to get the match,look into higher-paying admin positions such as in law firms, create a side gig...). But I also want to run this by you: So you have $8000 left on the car loan... How much is the car worth? Have you looked on the Blue Book? Run your car's info through the Blue Book here: http://www.kbb.com/

The reason I ask is hopefully obvious... if it's worth $10k and you owe $8k, you could sell it, replace it with a high-MPG $2000 used car, and be out from under BOTH the monthly car payment AND the high insurance, since you could do liability-only insurance. That would take you from $395/mo for your car to $75/mo, or probably less once you shop around for insurance. (Try Progressive... try everyone.) And if your new car gets better gas mileage than the one you have now, you also save on gas.