Author Topic: Need Financial Advice and Encouragement  (Read 3277 times)

LilTazzy

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Need Financial Advice and Encouragement
« on: December 24, 2016, 02:01:03 PM »
Hello everyone and Happy Holidays! I am a long-time lurker, but a first time poster. I am looking for advice on my current (frustrating) financial situation.

I am 38 years old, no children, and not married. I am employed as an attorney with state government for the last 3 years (I was a self-employed attorney before) and make $30 an hour, with no opportunity for overtime. My parents are spendthrifts and I did not grow up being taught to save money. As a result, I spent money in my younger years as fast as I would make it and did not start a ROTH IRA until very late in my 20s. I am extremely frustrated with  my current student loan debt, which now has a balance of approximately $67,000 (started with approximately $150,000 in debt).

My current debt is as follows:
Mortgage - $69,000
Student Loan - $67,000

I can expect a pension from work of approximately 50% of my income if I stay until 65. I also participate in Deferred Compensation (currently contribute $75 a month) and have a ROTH IRA with a balance of approximately $46,000 (I contribute the max each year).

This year has been difficult for me as I had to have a new furnace, AC, and hot water heater installed. Also, one of my pets had a serious medical problem which left me with some expensive ER and vet visits. My health has generally been good but I did have some unexpected medical expenses late this year.

My monthly bills are as follows:
Mortage payment - $744.49
Condominium Dues - $175.00
Student Loan payment - $500.00
Eating Out / Groceries - $450.00
Precriptions / Medical Bills - $125
Cell Phone - $50
Electric / Gas for Condo - $125
Water/Sewer - $75
Gas for Vehicle - $125
Internet for Condo - $50
Pets (including medical expenses) $100
Gifts - $150
Entertainment (movies, clothes, misc) - $200

As you can see, my expenditures almost equal my monthly income. I am trying to cut down the grocery bill and the entertainment costs, but do want to enjoy life a little as well. I have been looking for a part-time job teaching in the legal field and do have applications out there. Would it be worth it to me to find a lower paying part-time job just to get some extra money coming in? I would like to stay in my state government job if possible because I do enjoy the work. I would appreciate any suggestions on how I can improve my situation. I feel so completely overwhelmed by the student loan debt and feel lost. :-) Thank you in advance to all who reply!!

mousebandit

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Re: Need Financial Advice and Encouragement
« Reply #1 on: December 24, 2016, 11:03:23 PM »
Hi!  I'm fairly new to things myself, but the areas in your budget that I would say you could cut would first be entertainment and gifts.  That's $350/mo right there.  Not sure how much of the $100/mo for pets is ongoing, and how much is paying off their vet bills, but that seems like a high amount.  The food budget could be slashed as well. If it's just you, that could be halved.  Now you can more than double your student loan payments, or really begin to slam investments. 

You're spending $125/mo for gas.  Is that just commuting?  How far are you from your job?  What kind of car do you drive?  Can you ride a bike a few days a week?  Is it time to look at moving closer to the job?

Are you on track for loan forgiveness?  Do you qualify, working in a state job?

I would highly recommend you do a full blown case study (see the sticky post about how to format it), so the more experienced members can really help you! 

marty998

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Re: Need Financial Advice and Encouragement
« Reply #2 on: December 25, 2016, 03:26:58 AM »
What's the interest rate on the student loans?

You gotta find a substitute for monetary gifts... $150 a month is a lot.

2Birds1Stone

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Re: Need Financial Advice and Encouragement
« Reply #3 on: December 25, 2016, 05:54:41 AM »
I also suggest a case study.

Looks like you know where the low hanging fruit in the budget is.

Entertainment, gifts, groceries, eating out.

You own a home and are single, is renting a room a possibility? Maybe Air B2B? Or if you are near a university you could rent to someone in the pre-law/law program? That could bring an extra $400-500/month.

Tutoring as a side hustle?

Cativa

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Re: Need Financial Advice and Encouragement
« Reply #4 on: December 27, 2016, 01:33:01 PM »
Eating Out/Groceries - You can easily bring this down.  I don't know what the breakdown is, so I'll make some guesses:  Are you hitting up a restaurant every day?  Even if its just one meal a day, its too much.  Are you shopping at trendy stores?  Beware the Whole Foods, Trader Joes, etc.  They can have some good deals, but they can also rape your wallet if you aren't careful.  Are you buying a lot of convenience foods?  If most of your food comes from the freezer section or in a box, re-evaluate what you are buying.  Sure PF Chang from the grocery store is cheaper than going to the restaurant, but with a little practice you can make your own stir fry for a fraction of the price.  How much of this is alcohol?  (This is my weakness so I understand!)  You may need to buy cheaper booze, and/or drink fewer days a week.

Electric/Gas - This seems high to me, but it does depend on where you live.  Can you bring up/down the temp in the condo a bit?  Heavier clothes and an electric blanket?  Space heater instead of heating the whole condo?

Gifts - $150 A MONTH?  I'm going to assume this is a tithe, otherwise I cannot fathom why you'd be giving away $150 a month when you are in debt.  If it is a tithe, think hard about if this is completely necessary in the short term.  You can always get back to it after your student loan is paid off.

Entertainment - Enjoying life is important.  Spending money to do it isn't always necessary.  The last great night we had out our friends coordinated an appetizer party.  Everyone brought an appetizer and inexpensive bottle of wine.  My deviled eggs and $10 wine went over great and cost us very little for a great night "out" with friends.  Look for inexpensive (or free!) ways to entertain yourself.  If your friends only want to do expensive things, than I would say you might want to expand your circle.

marielle

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Re: Need Financial Advice and Encouragement
« Reply #5 on: December 27, 2016, 01:44:11 PM »
Agreed with what everyone above is saying and I want to stress a bit more about renting a room out to a roommate or Airbnb. You could basically live for free if you have more than one room to rent out. This is what I'm doing and I basically save $550+ a month to live with a roommate who is a nurse and never home anyway. I've heard of people even doing Airbnb on their couch/futon/air mattress in the living room and paying their rent like that...but that's a little extreme (unless you're really that serious about paying that debt off!). If you need to buy a guest room bed, check Amazon for memory foam mattresses. You can get a full or queen for under $200.

mskyle

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Re: Need Financial Advice and Encouragement
« Reply #6 on: December 27, 2016, 01:48:41 PM »
So, realistically do you expect to work at this job/for the state for 27 more years (until you are 65)? If so, will you get raises (above inflation/COL adjustments) or have you maxed out? Because unless things change, a pension of 50% of your salary isn't going to get you very far.

If you have an extra bedroom a roommate could help out with your expenses significantly (not just the rent they would pay but also the utilities you would split with them). It can be really tricky to find a good roommate when you're older and used to living on your own (I am a voice of experience on this!) but it would be a big financial win. Even if you didn't stick with it it could help you get ahead a bit - you might want to give it a try at least (say a six-month or even three-month lease).

I'm also a little concerned about some expenses that are missing from your budget - car insurance and/or savings for a future car, for example. If you're spending $125 a month on gas then it seems like you're driving a fair amount, and presumably you will need a new car at some point.

Fishindude

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Re: Need Financial Advice and Encouragement
« Reply #7 on: December 27, 2016, 02:00:35 PM »
Rather than living any more frugally, I'd suggest you start looking for opportunities to improve your income and earning potential.  I understand people like the security of public employment, but there is likely much better earning potential in the private sector.  Could even consider picking up a second job of some type.

SwordGuy

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Re: Need Financial Advice and Encouragement
« Reply #8 on: December 27, 2016, 02:14:05 PM »
Lots of good advice in the posts above!   

You are spending $1,120 a month for your lodging and utilities. 

A renter splitting that cost in 1/2 would bring in $560 a month.  Or, if inexpensive living arrangements are tough to find in your area, as much as $800 a month.  Think how much faster those loans would evaporate if you were shoving an extra $6,720 to $9,600 a year on them!

Your gross salary is around $62,400?  (52 weeks * 40 hours * $30 per hour)?  Based on a quick google search you're leaving another 50% to 100% on the table.   Start thinking about getting a better paying job.   What would you need to do to be considered a good pick for a better paying legal job?




LilTazzy

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Re: Need Financial Advice and Encouragement
« Reply #9 on: December 30, 2016, 09:00:00 AM »
Thank you to all who replied for the thoughtful advice. Have a Happy and Prosperous New Year!

Nickels Dimes Quarters

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Re: Need Financial Advice and Encouragement
« Reply #10 on: December 31, 2016, 06:36:25 PM »
I too work for state government. I get to do work that others only see on TV shows or movies. It makes me happy even if the pay isn't as high as the private sector. Any chance your student loans qualify for the public service repayment program? I am 4.5 years into the 10-year program. My plan is to retire early after that pay-off date.

Lucky for you, it isn't too late to get control of the money you earn and how you spend/invest what you have. There is a lot to learn and this site is great for getting educated. Read everything. There are wonderful teachers here. Visit your library and read all of the books on money, growing it, managing it, and maximizing your tax position.

Getting a side gig is a must. My side business is my first rental property...a four-plex. I live in one apartment and the rest are rented. It is a great source of money with only a few headaches here and there.

All the best, this is an exciting journey!
NDQ


cchrissyy

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Re: Need Financial Advice and Encouragement
« Reply #11 on: December 31, 2016, 11:07:18 PM »
whoa, where do you live that an attorney only makes $30 per hour?

LilTazzy

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Re: Need Financial Advice and Encouragement
« Reply #12 on: January 01, 2017, 12:49:49 PM »
Hi cchrissyy, I work for the State of Wisconsin...and, sad to say, $30/hr is on the higher side for many state-employed attorneys here.