I'm a long time reader (over a year) and first time poster, so please go easy on me. :) Here's my case study with a scary big debt emergency...
Life Situation: Single, no dependents, 31 years old
Gross Salary/Wages: $175,000.00/ year paid biweekly
- Biweekly gross pay: $6,730
- Biweekly net pay: $4,050
Pre-tax deductions:
- Biweekly health insurance: $71
- Biweekly dental insurance: $13
- Biweekly FSA: $19
- Biweekly pre-tax transportation: $35
Total: $103
Annual Taxes (federal, state/ local, FICA, etc.): $66,813
Current expenses:
- Rent: $1810 (HCOL area)
- Utilities: $30
- Groceries: $300
- Restaurants/ Fast Food: $100
- Cell Phone: $42
- Federal Student Loan Payment: $115 (will soon increase to $1322)
- Private Loan A Payment: $85
- Private Loan B& C Payment: $139
- Private Loan D Payment: $81
- Misc.: $300
Total: approx. $3000
Assets:
- Cash: $37,000
- 401k: $8,200
- Roth IRA: $12,000
- Rollover IRA (from old job): $19,000
Total: $76,200
Liabilities:
- Federal Student Loan (Unsubsidized): $79,500 @5.75%
- Federal Student Loan (Subsidized): $42,200 @5.75%
- Private Loan A: $10,800 @3.23%
- Private Loan B: $8,200 @3.73%
- Private Loan C: $8,000 @3.73%
- Private Loan D: $9,100 @3.05%
Total: approx. $158k
Specific Question(s):
I understand I should be prioritizing debt repayment right now, but should I also be investing? My employer does not offer a 401k match and I have already paid a bunch of the loans down. I also don't know how long I will stay in this current job, as it is a high burnout job. I'm doing my best to stay as long as I can, pay off debt, and save. What recommendations do you have, specifically on the psychological side, on how to pay down the debt without getting super burned out from working so hard just to pay down debt?
I wouldn't feel comfortable not having a large emergency fund in case I lose my job for whatever reason, so I wouldn't want to just throw my whole cash savings at the debt all at once. Also, my parents will be needing my help starting in the near future, so I will need to set aside some money for them as well (around $500/ month). I would like to get a better handle on what steps I should be taking to improve my financial life. One of my mid to long-term goals is to be able to have the option to do work that is more rewarding and less demanding but doesn't necessarily pay as much, without having to feel unstable financially.
Advice? Tips? Am I missing something here? And anyone in a similar boat and willing to offer moral support?
Thanks all!