Hi everyone,
I'm brand new to both the MMM blog and forum and also to the world of responsible personal finances. I want to drastically change my life if I can, so I'm looking for advice/resources and accountability for myself. I have a TON of questions about my business, my debt, my car, and my living situation below. I don't really expect anyone to answer all my questions; I am just completely overwhelmed and put it all out there.
I don't think I'm too much of a complainy pants, but that being said, I better assimilate the information from gentler facepunches, like with a kitten instead of an actual fist... :-)
My Basic Story:
27 years old
Massage therapist, both self-employed and an independent contractor (first year practicing)
Renting a 1br apt in Boulder, CO with my boyfriend and my dog
I HAVE A BIKE! but not a trailer yet :-(
Income:
My income is variable, but I make $2,600 - $3,000/mo
99% of my income comes from working as an Independent Contractor at two different companies
1% of my income comes from my own rented office, but I use it solely for business expenses (I'd like to change this ratio, more info on that further down)
Note: I haven't paid taxes on any of this income yet because it is my first year practicing, and I'm not sure what self-employed taxes entail. I accept that my ignorance here probably deserves a facepunch.
Current monthly expenses:
Rent - $120 (boyfriend pays remainder, total rent is $995)
Gas/Water - $20 (I pay whole bill)
Electricity - $30 (I pay whole bill)
Health Insurance - $105 (high-deductible catastrophic coverage, just me)
*Groceries - $300 (has been at $500, so I'm working on getting this down already)
Pet food - $50
*Household stuff - $50
Phone - $85 (WAIT WAIT, BEFORE THE facepunching commences, I'm going to switch to one of Republic Wireless's new plans in November)
Internet - $30 (for now, on a promotion)
Gas for car - $120 (I can get this down to less than half; I've been excessively lazy)
*Bodywork for myself - $50 (I consider this a necessity to physically be able to do my work)
Office rent - $475
*Other business expenses - $30
Total Monthly Expenses - $1,535
Monthly Savings for Intermittent Expenses:
Taxes - $800
Loan Interest - $275 (some of the loan in grace is unsubsidized, so this is for paying off the interest before it gets added to the principal)
Car Insurance - $60
Car Registration - $10
Professional Association Renewals - $20
Total Monthly Savings - $1,165
Total Monthly Budget - $2,700
*if my income doesn't exceed my budget, I skimp in these areas first, then the other flexible areas
Assets:
$2,000 at this moment in the bank (both savings and checking)
$2,400 in a Fidelity IRA (JUST rolled over from my old employer and I don't think it's doing anything)
2000 Toyota Camry XLE V6 (according to Edmund's and Kelley Blue Book, it's worth around $2,000, but it's really not in great shape, so I'm skeptical of those numbers)
$2,300 in my business - $900 in the bank and about $1400 in office furnishings.
Liabilities:
$2,000 in Collections debt from unpaid medical bills after an ER visit (no need, I'm facepunching myself here.)
$23,000 in student loans (in grace period until April 2014)
$3,500 in student loans at 6.8% interest (also facepunching self here.)
Other notes:
I have no idea what my credit score is, the only things on it are the liabilities listed above. The medical bills in collections are obviously hurting it, I've always my lesser/older student loan on time, and the big student loan is brand new and I'm not scheduled to make payments yet, so I'm not sure how each of those affects my score.
My boyfriend earns $1,700 to $2,000/mo and has a monthly budget of about $1,200 - essentially rent and student loans. Right now, the remaining $800 goes toward mostly his beer cellar but basically all play... he's not much of a future-thinker. I'm encouraging him to throw all of the excess minus some emergency money at his loans. Other suggestions?
Specific Question(s):
I feel like my budget is relatively trim but I know I can do better with my phone, gas for the car, groceries, pet food, and getting massage for myself. That being said, do I have blind spots? What other changes can I make and how?
What should I do about my car? I feel like it's nearing end of life because I have not maintained it well and it's been in a few accidents. Reading MMM has re-inspired me to get on my bike more, so I can already save on gas, but I do legitimately need a car a couple times a week. I've been thoroughly scared into not financing one, but I can't afford another out of pocket, so should I drop $1,000+ in repairs to keep it going for... I have no idea how long? Should I risk it dying suddenly as I work to save up enough to buy something else? Should I sell it and invest in a scooter instead? Should I just reorganize my life so that, for example, I don't need one (which would probably impact my income)? Or should I do something else I haven't thought of?
Speaking of working, what should I do about my business? I foolishly jumped in not really knowing what resources I needed and now I'm flailing. In order to pay my bills (because I don't have enough clientele at my own office), I am now working pretty full schedules at other offices that provide clients. I earn less than half as much as I could make at my own office, but if I open my schedule to allow time at my office and don't get clients, I don't earn money. I don't have cash on hand to invest in a big marketing push to ensure more clients, but I can't seem to earn enough to start working less hours elsewhere and simply wait for my business to grow. Should I get a business loan and start focusing on my business immediately? Should I bide my time at my jobs until I have more savings to slowly ease my schedule into more office hours? Should I close my office and save that $575/mo and covert the assets to cash for debt payoff? Should I sublet the office to earn income on it?
And lastly (for now), what should I do with the $2,400 sitting in a Rollover IRA? I know nothing of retirement funds or investing of any sort other than it was a few numbers on my paycheck when I was employed and automatically enrolled in the company's 401(k).
Thanks for reading! I look forward to other perspectives, being able to make some clear cut goals, and seeing them come to fruition.