I’ve been looking around, but most everything I’ve seen seems to start on the assumption that you have a lot of debt and that that’s the primary thing you want help with. **They also often seem aimed at a much higher income level than I am. ** I don’t have credit card debt (I have cards, paid every month). I have a small car loan but it’ll be paid by the end of the year. I do have student loans, and that is part of what I’d like to discuss with someone, but thankfully all of mine are federal direct loans, not private.
I’m looking more at things like, say, getting further education without going into debt, saving money on rental costs without putting myself at too much risk from roommates, figuring out extra income without overloading, managing retirement savings, managing medical bills, that sort of thing. I’m single and looking for a new job because my current one, given the health insurance I have, doesn’t pay enough to live on my own. It would also help to have someone who could talk about the sorts of unexpected expenses that pop up.
Any suggestions? I know Ramsey is really popular around here, but his fees are very high and most of it seems aimed more at established middle class people who have overspent rather than those of us who are lower-income and trying to put things together.
Edit: I would also want something that assumes I know basics. I can put a budget into a spreadsheet, I can calculate interest, that sort of thing. I know better than to leave charges on a card to accumulate interest. So I understand the basics of “how to keep a budget.”
I think you are quite right that a lot of mainstream financial advice assumes a fairly large income and that everything is basically OK (that’s definitely the vibe you get from the financial advice magazines).
You can pick up Dave Ramsey’s The Total Money Makeover from the library. It’s not going to have career planning advice or roommate advice (you’ll have to get that elsewhere), but it will offer an easy to follow and understand financial roadmap.
daveramsey.com/baby-steps/
(Saving a downpayment and buying a house is at 3b. When you have an extra $100, I suggest you do his Financial Peace University. That’s aimed at a pretty broad audience.)
You are probably at Step 1 (save $1,000 emergency fund).
I think the Baby Steps would make a lot of sense for you. I have to mention that DR is actually pretty flexible on the radio show (which is also free). So, for example, if you’re in an emergency or anticipate an emergency soon (new baby or job loss), he encourages you to stop doing extra debt repayment and save the money until the crisis is over. Even an upcoming wedding might get the same treatment of stop extreme debt repayment, save modest wedding fund instead, get married.
However, the sticky question is, how do you get your income up so that you can actually move forward in the Baby Steps?
If it’s a second job, I think you can be pretty ruthless about just bailing if you get overloaded. This sort of thing might be a nice second job, by the way:
t.vipkid.com.cn/faq/payment
That’s online English tutoring for overseas Chinese kids–a friend of mine is looking into it, and she says that 5-8 AM is their busy time. It runs $14-22 an hour, which is better than a poke with a sharp stick. We have a bipolar friend who works for another company that provides similar service, and he’s been very happy with it (he’s otherwise unemployable). I would think that if you have prior teaching experience, it shouldn’t be $14 an hour. (Presumably one has to pay a lot of independent contractor taxes out of that, so one has to be prepared for that in advance.)
DR would tell you not to worry about retirement savings yet, but to pay off your loans aggressively. (But I might tell you to split the difference if you foresee that your loans are going to be around for 10+ years.)
You need emergency cash savings a lot more than you need retirement right now.
I wonder if there isn’t a community college office that might be helpful to you. Maybe flip through your local catalog, see if a particular job training program looks doable, then go talk to the department?
With regard to budgeting, even DR doesn’t go into huge detail. And come to think of it, I suggest getting Elizabeth Warren’s All Your Worth and having a look. She encourages a 50/30/20 budget plan, with 50% of budget being your basic necessities, 30% being frills, and 20% being savings (either debt pay off our actual savings. The beauty of Elizabeth Warren’s approach is that should you hit a rough patch, you are already set up to live on half of your previous income, as you can just stop spending the 30% frills and doing the 20% savings. The trick, as you can see, is arriving at the point where you only need 50% of your income for necessities–but it is a good guide (although I think it works better for a single person than a family). Another rule of thumb is to keep housing costs below 25% of household income.
There are actually some nuances to budgeting that you may not have thought of. Once you have the room for it in your budget, I would suggest starting some sinking funds–these are small internal savings funds for upcoming expenses that don’t rise to the level of emergency. Some examples:
–car maintenance (our family puts $80 a month into our fund, which covers maintenance, repairs, and any surplus is available as saving for our next car, but anything you can put in there will be helpful)
–Christmas (even $10 a month could be helpful for you)
–medical/dental/therapy/glasses (we do $125 a month, but there are 5 of us and we have decent insurance)
–electronics maintenance and replacement (depending on needs–$10 goes a long way)
Best wishes!
