I am 40 years old, single, and after years of working social work jobs that paid below poverty level, I've finally finished a master's degree and am working in a job with full benefits and a decent salary, something I've never had. Due to a medical emergency while in graduate school, I was unable to work and since I was a student had no disability or unemployment insurance, so I've racked up some credit card debt from that time period. I can't figure out how to cut costs any more, and am hoping for some insight from the community. I currently live in Washington, DC, but for my field which is global this is pretty much where all of the jobs are. If not they are in other expensive cities like Boston or New York. I don't think I can cut back on housing costs, I current share a house with 5 other people and even share a bedroom. I don't have a car. Based on how intense my job is, I can't have a side hustle. I've also hustled in the past, working multiple jobs and 7 days a week and it took a toll on my health so I'm trying to take care of myself at this age. My only travel is rare, and that is taking a $200 round trip train to visit my family, usually once a year. Here is a break down of some of my expenses:
$125 on my Metro card each month for transportation, taken out of my paycheck pre-tax.
After all taxes and deductions my monthly take home is $2520, this is the most money I've ever made. This should go up as this week I stopped most of my retirement investment so that I could have more $$ to pay off CC debt. For my field I also have a good chance not to be rich, but to get raises and rise to more responsibility long-term, but nothing in the immediate future.
Expenses:
$30 - I pay about this much for Lyft/Uber when metro is not an option.
$200 - monthly savings - just started this - have paid off thousands of dollars in medical bills and finally can start savings. Have $600 in savings currently.
$60 - cell phone, this is one area I know I could cut to about $30
$600 - rent
$100 - all utilities
$490 - student loans - this is on a 20 year repayment plan - it is income based repayments
$250 - tithing - this is one expense I will not cut as I feel strongly about my personal faith
$160 - food - I shop at Aldis and make all my food, pack my lunches, plus a couple of times a month a hold dinner parties for friends
$80 - miscellaneous expenses - something always seems to pop up here, I was using this category previously to help pay down medical bills, but now I am caught up and hope to apply it to credit cards
$100 - recurring medical costs
$100 - clothing - this includes shoes, underwear, work clothes, everything, I only buy on sale, nothing fancy - mainly TJMaxx, Marshalls, or sales and cupons at DressBarn, etc. For example, I will need to buy a new winter coat this fall. I've been wearing a "free" coat I picked up from a donation pile from 4 years ago, and it has just about had it. So I try to find things from clothing swaps, consignment, etc, but I've found that to have basic reliable shoes, coat, etc., it can be hit or miss.
$40 - prescriptions
$40 - holiday savings, covers Christmas travel and gifts
$30 - gym membership - this is the only way i'm motivated to work out, and after my health issues I need to do intense physical therapy regularly
$220 - credit card payment - this pretty much only covers interest and it is a major problem
$20 - renters insurance - mainly because I don't live in a great neighborhood, and I don't have funds to replace things I need if they are stolen, mainly computer and jewelry I inherited. It would also cover me in case of fire - including hotel to stay at, etc. I had a roommate who worked for the Red Cross. It was her job to help people in the city, and so many were destitute without insurance. I live in a very old city row house, so it is not something beyond the realm of possibility.
Credit card debt: $9,000.00, interest rate of .025%.
Student loan debt: $140,000.00.
Retirement: This is my first job with a 401(K), I was putting 8% in it for about 7 mos. Total I have about $4,500 in the 401(k), however, I just decided I want to knock out my credit card debt and just changed my 401(k) investments to 1% so that I have more in my paycheck to pay on credit cards. My company matches 3%.
I own very few belongings, my room is furnishes, basically books, clothes, and photos/mementos, and they fit in half of a master bedroom. I've sold anything I think I own of value - a fancy book I had, jewelry I don't wear. I do need to buy clothes as I've never been a clothes collector - I have about 2 weeks worth of outfits that I rotate and that is it, and they usually wear out after a few seasons. My biggest frivolity is books, but I usually buy two used books a month, and that is what I consider a cheap hobby/cheap entertainment, it would cost me the same amount to take the metro to a library and back home and check out books.
Another scary option is that my company will be laying off 1/3 of its employees at the end of September. I don't know if that will include me, but my small savings will be needed just in case.
I'd like to have a plan, where I can one day, I understand it will be hard work, but be able to afford property, pay off my student loans sooner than 20 years from now, etc. and right now it seems that waiting for a raise is the only option, and that not going to put out the fire in my pants I know I have. Other than phone, I don't see many places I could cut, and don't see where I could increase my income. I think there must be creative ways to deal with this. If anyone has any insight into ways that I can improve my finances, I am all ears. Thank you!
Thanks to those who have answered - I've tried to answer most of your questions through modifications and will do so for future comments.