Author Topic: How screwed am I? (Read 9392 times)

Cicada · « **on:** December 30, 2015, 07:43:00 AM »

I'm 39 yrs old and have no retirement savings.

Due to pretty severe depression in my 20's and early 30's, I've only just gotten a non-retail job in the last couple of years.
I'm currently working in administration making about 28k a year.

I share an apartment with a roommate for $400/ month.
I bought a new Nissan Versa last year for 13k and still owe 6k.
I try to keep general spending down by buying clothes at Goodwill, not eating out, etc.
No other debts besides car and about 10k total in savings. (just a savings account)

JLee · « **Reply #1 on:** December 30, 2015, 07:48:39 AM »

Sounds like your cost of living is quite low already, which is good - and you're not digging yourself out of hundreds of thousands in student loans/etc!

I am unsure if you have a college degree or not, but have you read this? I would look into streamlining your existing budget (post a case study in Ask a Mustachian), and then look at ways to increase your income.

This is a good read on that topic.

Paul der Krake · « **Reply #2 on:** December 30, 2015, 07:50:36 AM »

Early retirement is probably not in the works for you, but you are far from screwed.

Even if the 28k/year was a glass ceiling (it's not), saving non-trivial amounts money on that salary is possible.

The best time to start is always now.

Apocalyptica602 · « **Reply #3 on:** December 30, 2015, 07:55:10 AM »

You're way less screwed than a lot of people in this country, many who don't know exactly how screwed they are. Minimal debt, low expenses and a desire to save for retirement is amazing, despite your misgivings about your age and lowish income.

Hopefully you're in a much healthier place now re: your depression. The fact that you're here and posting is a great thing.

Your spending seems to be in a good place and you're already doing things that a lot of unmustachian complainypants would find a hard pill to swallow (sharing an apartment, buying clothes at goodwill, etc) we need more detail here though.

I'd argue your emergency fund is high compared to your cost of living. I'd consider maxing a Roth IRA for 2015 (you have until April 15 2016 I believe to make 2015 contributions).

Blammo! You now have retirement savings. Do you have a 401k at work? Do they match? If so make sure you contribute enough to get the match, free money!

I'd argue you don't need a new car, but a 13k Versa brand new half paid off in a year, drive it until the wheels fall off I'm not gonna facepunch you about it.

Cicada · « **Reply #4 on:** December 30, 2015, 08:16:33 AM »

Yeah sorry, I didn't realized I'd posted this and then posted out a more detailed version above. Here are the rest of the details:

No 401k and my company doesn't offer one. I should be eligible for a small pension of $200/ month from retail job.
No cable or smart phone.
I do spend on trips with friends in the summer, but try to keep it reasonable (splitting a mountain cabin 6 ways or renting a kayak for paddling trips)

Every month I try to put $100 in savings, $100 towards a trip I'd like to take, and $100 towards the principal on the car loan (in addition to the $200 car payment) At this rate I will pay off the car completely in two years.

So...I don't think I'll ever be able to retire early, but would like to know any advice to get more on track with savings.

Right now my plan is:

1. to find a better paying job and move to an apartment as close as possible to that job with the hopes that I can bike to work. I still wont be able to go car less however, as I live in Raleigh, NC which is pretty car-centric.

2. Hopefully new job will offer a 401k so I can start one.

3. Start a Roth IRA and put even just $100 a month into it to start.

4. Keep the car for 10 yrs or more if possible.

thd7t · « **Reply #5 on:** December 30, 2015, 08:17:18 AM »

You are not screwed! However, it's hard to know if you're in good shape without more information. I'd recommend doing a case study:
http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/
This will get lots of specific advice for you. Just be ready for a lot of people to try to get you to up your income. It's going to be part of the picture. However, if you lay everything out, there will probably be some good advice for you even at your current earning level.

In your position, even an IRA is going to have good tax implications, because you're eligible for the saver's credit.

Cicada · « **Reply #6 on:** December 30, 2015, 08:25:04 AM »

Thanks for the link JLee. I do have a BA in Anthropology but I will check it out!

Apocalyptica602, I was expecting a face-punch but yeah I'm definitely planning to drive it til the wheels fall off. I'll consider the 2015 Roth IRA. Job security is a little iffy, which is why I have so much in just a savings account.

I'll work on putting together a case study. I realize I'm going to have to up my income at some point!

Thanks everyone!

onlykelsey · « **Reply #7 on:** December 30, 2015, 08:26:14 AM »

Not screwed, especially with no debt! My husband is 32 and deserves many facepunches for being worth -40K at his age (with no medical emergencies or other good reasons).

Especially if you can find a small extra income (dog walking, housesitting, babysitting, whatever), you can make a killing savings rate happen with your expenses as low as they are. I'd second the IRA contribution. If it makes you twitchy, put in 3K in the beginning of the year and the rest when your job feels more secure or you have more savings.

TomTX · « **Reply #8 on:** December 30, 2015, 08:29:45 AM »

Quote from: Cicada on December 30, 2015, 08:25:04 AM

Thanks for the link JLee. I do have a BA in Anthropology but I will check it out!

Apocalyptica602, I was expecting a face-punch but yeah I'm definitely planning to drive it til the wheels fall off. I'll consider the 2015 Roth IRA. Job security is a little iffy, which is why I have so much in just a savings account.

I'll work on putting together a case study. I realize I'm going to have to up my income at some point!

Thanks everyone!

You can always pull your contributions (but not earnings/growth) out of your Roth with no penalty. If you have thousands sitting around, there's not much downside to putting most of it into a Roth. Some hassle/delay pulling it later if you have to.

JLee · « **Reply #9 on:** December 30, 2015, 08:30:39 AM »

Quote from: Cicada on December 30, 2015, 08:25:04 AM

Thanks for the link JLee. I do have a BA in Anthropology but I will check it out!

Apocalyptica602, I was expecting a face-punch but yeah I'm definitely planning to drive it til the wheels fall off. I'll consider the 2015 Roth IRA. Job security is a little iffy, which is why I have so much in just a savings account.

I'll work on putting together a case study. I realize I'm going to have to up my income at some point!

Thanks everyone!

I am not sure how much career research you've done, but maybe this link can provide some ideas?

Guesl982374 · « **Reply #10 on:** December 30, 2015, 09:48:29 AM »

It all depends on how hard you are willing to work to increase your income. As others have stated, low expenses and minimal amounts of debt isn't a terrible place to start. You need to be willing to work harder and smarter than most people to get ahead. Keep your day job but find ways to make money (at a higher hourly rate) on the side. If you are willing to put in the time and work, you can double or triple your income in the next few years. Just remember, people pay money for added value. The more value you can add to others, the more money you'll make.

http://www.mrmoneymustache.com/2013/07/25/50-jobs-over-50000-without-a-degree-part-1/
http://www.mrmoneymustache.com/2013/08/05/50-jobs-over-50000-without-a-degree-part-2/

TheAnonOne · « **Reply #11 on:** December 30, 2015, 12:53:37 PM »

It sounds like all you need to do is make more money...

Your expenses are low, your debt is low, and your income is low. Luckily, with a low income, it is easy to make more! (due to having many options)

okits · « **Reply #12 on:** December 30, 2015, 01:44:18 PM »

You're starting from a pretty good place, just starting at a later age. That is okay.

Biggest priority is to safeguard your mental health. If that was a long-term barrier in the past to being able to function well or improve your life you don't want that to hold you back again.

Lots of people have mentioned increasing your income and you've said you're looking for career advancement. Good plan.

No one has mentioned investing yet. You need to learn about investing and do it. Even if you take a very conservative approach, every dollar of your net worth needs to work as hard as possible for you (within your logically-established risk tolerance.) Your savings need to keep pace with inflation and earn you money so you'll have security through retirement (and not have to work quite so hard prior to retirement.) There are lots of free resources online to learn about investing, and people here will answer your questions if you post them.

I hope you're encouraged by the feedback you're getting, as you have a lot going for you. Keep looking for ways to improve and keep us updated!

arebelspy · « **Reply #13 on:** December 31, 2015, 07:05:52 AM »

So here's the thing: Whatever level you're at, or not, you are there.

How you got here doesn't matter.

What matters is what you will do from here.

You can do nothing, and it won't get better from where you're at. Do the work, and it will.

It's that simple.

Good luck!

newton · « **Reply #14 on:** December 31, 2015, 08:24:00 AM »

I applaud you for taking the right steps for a successful financial future!! I agree with the previous post, and if we all could do it over I'm sure we would change a lot of things.

You have a lot of good things going for you in that your expenses are low and your debt is relatively low. If you can keep your expenses down and get rid of the debt, you have a lot of years left.

Anyway you can work a second job for a while to get that car paid off?

Good luck and keep moving forward!!

2Birds1Stone · « **Reply #15 on:** December 31, 2015, 08:51:14 AM »

With such a low cost of living any bump in annual salary will be tremendous! 39 is not too late to get some certifications/skills and drastically increase your income!

sleepyguy · « **Reply #16 on:** December 31, 2015, 09:00:51 AM »

First thing to change is your attitude... and no, you are FAR from screwed.

Born in a war torn country, with 0.01% chance of making it out is pretty screwed.

Chin up, better yourself each day, work towards goals and network with positive people.

Fishindude · « **Reply #17 on:** December 31, 2015, 09:05:35 AM »

Low cost of living, some savings in the bank and minimal debt. You are in far better shape than much of America.

You don't say much about your job, but at your age, you are not making near enough money.
First order of business should be to start working towards getting a better job with more money and good benefits.

mathlete · « **Reply #18 on:** December 31, 2015, 09:28:33 AM »

Just adding one more voice to the, "You're not screwed at all" bandwagon.

Others have and will contribute more in the ways of nuts and bolts suggestions. I just want to say that you should be sure to keep that "severe depression" thing in check. Judging from your timeline I assume that this issue is mostly in the past which is good. Just make sure you do everything that you need to in order to cater to your mental health. Nothing is more important than that.

Roland of Gilead · « **Reply #19 on:** December 31, 2015, 10:22:15 AM »

First thing to do (and you can do it for 2015!) is to fund a Roth IRA with $2000 of your $10,000 in saving.

When you do your taxes, you will get back $1000 of this money.

50% return with no market risk!

At a later date if you really needed the money, you can access Roth contributions without penalty (but not gains).

Edit: To get the full 50% match, you need to have your adjusted income below $18,000 or so. It might make sense to fund a traditional IRA instead of a Roth such that it brings down your income. HSA can also bring down your income if you qualify for that.

dmbsux · « **Reply #20 on:** December 31, 2015, 10:36:44 AM »

You're not screwed at all. You're in a good place.

You simply have a cash inflow problem. With a BA, there are plenty of jobs that pay at least 40K. I'm guessing you are not working any of those because you either feel they are below you (outside sales, call center, etc), or you feel like you wouldn't be good at them.

I am someone who is an okay sales person - definitely not a natural because I don't particularly like people. But: I was willing to endure and suffer an outsides sales job for several years because it was a great way to make more money. So based on my experience, if someone is making 28K, it's because they are intentionally choosing a very low stress job (which is fine, you're trading money for less stress)... or because they think that job is beneath them, or it's because they simply don't know how much money can be made in sales.

I hope you realize that at 39, you are still a baby. You're not too late, and you're certainly not screwed. What's the line from The Natural? We have 2 lives: the life you learn with, and the life you live with. You're just concluding the life you learn with... and now it's up to you to take those lessons and choose to be happy the next 39 years.

Peace.

PhrugalPhan · « **Reply #21 on:** December 31, 2015, 12:16:04 PM »

Ah yes, to be 39 again. How did I look then? I was in a dysfunctional marriage (she wanted to live paycheck to paycheck - it was bad), maybe $25,000 in my retirement account, and a house with a few thousand in equity. In the coming year I would start 1.5 years of unemployment, and followed that with a two year battle for a divorce. 14 years later (I'm 53) I have $500k in investments, am vested in a pension plan, have a paid off house & car, and a GF with more in her investments than I do (we surprised each other when we started looking at our finances). It wasn't always easy, and I learned a lot on the way, but it can be done.

This site is the perfect place to learn a lot of tricks to get your financial life in order. I was a mustachian before it became popular. But even I learn things by reading the blog and forums. The first few years were the hardest for me, but then it became easier and easier. If you stick with it, you can turn your life around.

frugal_c · « **Reply #22 on:** December 31, 2015, 12:49:19 PM »

As others have said, the best thing is to look for a higher paying job. Talk to as many people as possible, you will find something.

Even at your current job, you are clearing what about $2k a month? Throw in a side gig that pulls in $300 per month and you are in a position to save 10k per year (if not more). Do that until you are 55 and you should have close to $200k. If you have decent retirement benefits at 65 you could then take the next decade off and burn through some of the savings. This is all assuming that your income doesn't go up. It won't be a luxurious early retirement but I think you have some options.

Cicada · « **Reply #23 on:** December 31, 2015, 02:21:22 PM »

Thanks for the tips and encouragement! You have given me a lot to think about. At the very least, I am definitely going to take the advice to put at least 2k in a Roth IRA for this year.

The short version of the story behind my low earning is: mostly unemployed with some odd jobs through most of my 20s (depression and social phobia era) followed by 8 years supermarket retail and with the last 2 years in admin / office management. I've gotten to learn and use HTML, CSS and some Photoshop in my current job as well as managing social media and making email newsletters so I'm hoping to find something in a similar vein but with better pay / benefits. I've been doing online courses in JQuery and Wordpress and eventually hope to get a more technical job, even if it's just content management or something. I don't feel like I LOVE coding enough to compete with all those who do. But I noticed several tech jobs on MMM's blog post about jobs not requiring a degree so that is a good sign!

mxt0133 · « **Reply #24 on:** December 31, 2015, 02:54:19 PM »

You don't have to love coding to get a job as a web developer. There is so much demand out there that companies are hiring people out of coding boot camps with literally no work experience. You are not shooting to work for Google or Facebook, but there are tons of companies that just need people who can develop run of the mill web pages.

You have have to be willing to put in the extra time and effort, take on-line courses, this site is pretty cost effective and is good with introducing the basics. There are also other tons of training sites that are free. You will easily double to triple your income if you put in the work within a year.

https://teamtreehouse.com/

Big Boots Buddha · « **Reply #25 on:** December 31, 2015, 11:56:15 PM »

Depending on where you want to live you could also go abroad for 10 years and save serious amounts of cash.

Dependable teachers in East Asia can save 20k+ USD no problem. The more you work, the more you save. Always an option since you have a bachelors degree.

frugal_c · « **Reply #26 on:** January 01, 2016, 12:25:48 PM »

Quote from: Big Boots Buddha on December 31, 2015, 11:56:15 PM

Depending on where you want to live you could also go abroad for 10 years and save serious amounts of cash.

Dependable teachers in East Asia can save 20k+ USD no problem. The more you work, the more you save. Always an option since you have a bachelors degree.

What countries in east asia are you referring to? I had no idea the pay was that lucrative, or is it more that your living expenses are paid for?

zinethstache · « **Reply #27 on:** January 01, 2016, 03:11:41 PM »

You already have a degree, just get a web dev certificate or two and you should be set. Im now 22 years in IT and have had managers with non it related degrees:) I think you are in good shape and are forming a plan. You will do great!

I have one strong suggestion, go get a web hosting plan, buy a domain and make something real. It will help you learn and will give you an instant portfolio to boot.

News:

Author Topic: How screwed am I? (Read 9392 times)