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Hey Everybody! I posted in the Newbie personal finance thread and it was suggested that maybe I make my own thread since I might benefit from it. So here is my original post! : I'm in a bit of a bind at the moment. 24 y/o. 59,300.04 in Student Debt. (25,169.39 Wells Fargo at 8.75 APR) (34,130.65 Federal [these are multiple small loans with interest ranging from 3.4-6.8 but I have a consolidated payment plan] ) 8,141.96 in my bank account. That is my only asset. No other bonds or etc. I don't own a car, a house, or horse. Income : 35k a year. I make roughly 35k a year. This is ambiguous because I work as a server in NYC, some weeks are better some weeks are worse, and also I take home cash tips which I don't declare, then use on groceries and miscellaneous poo poo and promptly forget I ever got it. (I'm recognizing I should keep better track of this money). But I would say I probably made 35k, and as I get more responsibilities and a larger section at my job I can project I might make 40k this year. Not the job I want to be in ultimately but it is what I do right now. Monthly expenses: 680 Rent 100 Utilities 116 Public Transport 150 Groceries ____ 1046 base survival expenses I have just started throwing bigger amounts of money at my loans. I was pretty freaked out my first year being on my own and afraid I would bottom out so I was only doing the minimum payments on both loans. Once I realized I was stable I realized I was capable of putting more towards them. I have recently started paying 800$ to my Wells Fargo, and 200$ towards my Federal. I graduated from school with a degree in acting. I'm here in NYC pursuing that and art stuff for the time being. I would eventually like to maybe move into a more stable and lucrative career but I'm not quite ready to give up pursuing this for the time being. That being said I would like to start a retirement account and I would like any guidance and input on being more financially responsible. How much can I safely put into a retirement account? Vangaurd has a minimum of 1k before you can start investing it. Should I hold off on building a retirement account until I conquer my debt? I'm trying my best but I don't have a lot of guidance from my family or help. I can't move in with my family to save money on rent since my mom is being evicted and there are drug issues. Anyway... Thanks a bunch! 
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Aug 7, 2016 01:04
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| # ? Apr 26, 2024 10:35 |
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RebBrownies posted:I don't own a horse. You don't need to be investing right now with debt over 8% interest imo. I would make minimum payments on everything else and whack away at that Wells Fargo loan with everything you've got. In order to do that, you need to have better tracking. As of right now you're spending close to $1k/month on stuff that you're not tracking in your budget. Where is that money going? You can pay down your loans twice as fast if you get in better shape with tracking. This is what I'd do: - use Mint or YNAB to track your spending. - Make sure you record all those tips! That could be a lot of money down the drain. - Figure out where any big leaks in your spending are, and work to plug those up. - Spend your free time building your marketable skills instead of going out and spending lots of money. If that means hitting up lots of auditions, great. If that means learning graphic design and/or building your art sklls so you can do some commercial work, great. Or an etsy shop, or whatever. You are young and now is the time for you to really dig in and get your skillset up in a bunch of different ways - you have more energy and fewer responsibilities than you will ever have in your life. Don't waste that time! - Go to parties that are free instead of drinking out at expensive bars. Invite friends over for dinner instead of going out. Hopefully everyone you know is poor and won't mind, but this is a good chance to start flexing your frugal muscles. Cutting down expenses will serve you just as well as building income, if not better in the long term. Once you've gotten rid of your high interest debt, then you can start in on investing for retirement. It's great you're thinking about it early but you're not in a great position to start right now. Get rid of that debt and you will be!
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Aug 7, 2016 01:45
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Oooof, it really hits home how regressive and painful public transport costs are at that income level. Still way cheaper than the insane gymnastics required to maintain car ownership at lower income levels I suppose.
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Aug 7, 2016 04:24
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Also, make sure you're paying your taxes on those tips. The IRS has a pretty shrewd idea of what a server should be making, and if they decide you're not claiming enough they can and will audit you and force your employer to pull back credit card slips to make their point. https://www.irs.gov/pub/irs-pdf/p1244.pdf Liquid Communism fucked around with this message at 04:31 on Aug 7, 2016 |
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Aug 7, 2016 04:28
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Thanks everybody for the input so far. The bulk of my tips have been on credit cards (80%) so I have been paying most of my taxes (lol). But I'll start declaring. I'll focus on paying down my loans and declaring taxes to start lol.
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Aug 7, 2016 05:44
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Liquid Communism posted:Also, make sure you're paying your taxes on those tips. The IRS has a pretty shrewd idea of what a server should be making, and if they decide you're not claiming enough they can and will audit you and force your employer to pull back credit card slips to make their point.
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Aug 7, 2016 22:21
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How closely are you tracking how much you eat out? $150/mo for food in NYC? I'm not saying it's impossible...but that would be impressive. Do utilities include cable, internet, phone, etc.? Pryor on Fire posted:Oooof, it really hits home how regressive and painful public transport costs are at that income level. Still way cheaper than the insane gymnastics required to maintain car ownership at lower income levels I suppose. I have to disagree on this...$116/mo is insanely cheap. The average car payment on a new car is $479/mo. If you got a decent used vehicle (say $10,000), you would have to keep it 7 years to match that rate of payment. And that doesn't include any money for loan interest, insurance, gas, oil changes/tires/regular maintenance, non-regular big mechanical problems, accidents or parking fees. Seeing this relatively minimal charge as "regressive" is scary because if people push for them to get cheaper to "help" low income earners, you're going to end up screwing them over when the routes just get cancelled altogether. Buses and subways don't run on hopes and dreams, and they can't be maintained by good intentions. In almost all cases, public transportation already operates at a loss, but is kept afloat because of the service it provides. But if you start to push that too far...goodbye.
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Aug 8, 2016 02:49
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Utilities do include internet, phone, electric . My food budget has been hosed up lately due to mad birthday parties, but for the most part I shop at Trader Joes and eat a lot of beans and rice. But it can really vary. I'm going to try to track my spending better. Yeah I thought about moving home to save on rent but then I'd have to get a car and that was a whole new expense. :/
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Aug 8, 2016 03:04
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How do you manage to get such a cheap rent in the NYC area?
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Aug 9, 2016 17:49
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I live in Washington Heights which is upper Manhattan and split a 3 bedroom with two other girls. I took the smallest room. The area can be kind of sketchy and it isn't super picturesque but there are some pretty parts. I'm just nervous I'm going to be rooming with multiple people forever. 
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Aug 12, 2016 16:58
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RebBrownies posted:I live in Washington Heights which is upper Manhattan and split a 3 bedroom with two other girls. I took the smallest room. The area can be kind of sketchy and it isn't super picturesque but there are some pretty parts. there's no need to be nervous... it's guaranteed!
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Sep 9, 2016 06:22
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what are your drug issues, spending money on drugs is gonna be bad for savings
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Sep 12, 2016 20:28
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RebBrownies posted:Should I hold off on building a retirement account until I conquer my debt? Yes, unless you find a retirement account that pays more interest than you're paying on the loans (doubtful).
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Sep 12, 2016 20:32
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Hey everybody I'm back. Still throwing 1k a month at my loans, haven't really gotten better at the food stuff because my life has been a little hectic lately, but I'm back asking about job advice. I have been thinking a lot the last two months and I really think I would like to get into a higher paying job with benefits and something that was more inspiring than waiting tables. It's really hard to say this because after 2 years of being here I actually booked a co-star role on a television show, and I'm really proud but I can feel that practicality has finally caught up with me. I'm so much more stressed about my debt and actually saving for my future that a lot of what I thought I wanted doesn't seem as compelling anymore. I can't tell if I'm giving up or if this is all going to be ok and I just don't like this life anymore. Anyhoooo I really really really want to find the job that is right for me. I want to feel fulfilled and secure. I just don't know what that is  . I feel pretty lost at 24. That being said I'm still interested in creative stuff. I've been playing around with the idea of a podcast or some sort of content production in my free time, but in the meanwhile I would like to work at a company that specializes in something creative (maybe something to do with media?) . I live in NYC so there are a few openings but I have some anxiety about this whole process. Problems: I have a degree in Acting (BFA), I'm afraid this doesn't look to hot on a professional resume I have spent the last two years waiting tables and sporadically acting , I'm afraid this doesn't look very dynamic or good on a resume. Maybe this is that whole thing where women are less confident about pretending they are qualified for jobs lol? I make 35k as a waiter, is it possible I find a substantially higher paying job (45k-60k?) with an acting degree and 2 years at a restaurant?? I really need to get full time employed, I could be working more at the restaurant but it drives me crazy.
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Nov 22, 2016 05:52
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It's not unusual to feel a bit lost in your 20s and realising that a low paying job doesn't make you feel that great is a good motivator for change. First thing is the debt. If you give up paying it off and revert to only paying the minimums your future self will be pissed off at you. Clearing the debt is important to free up more cash flow in the future. If you want to see the impact your payments are making look at the difference in total interest now compared to when you started. It makes a difference but that difference builds up to a big amount in the future. It's great that you have a co-star role. This is really a point of difference. Remember on set how you treat people makes a big difference as the people who work on set may influence opportunities. Don't be surprised if someone working on lighting or sound may also direct or write films on other projects. It's worth treating people well and getting to know them. With respect to higher paying work or work you might like more you already have a BFA in acting, surely you have a lot of other skills relating to production. There are many roles other than acting that can get you regular work. At worst a lot of my friends did a one year course focusing mostly on production and post production. That course feeds people into the local film industry where I live. You may want to talk to people on set about a course like that if you want post production work. That can lead to work on large productions or like some of my friends they started their own business to produce videos for various companies. So with the above I have assumed you still like the film industry. If you don't and you are going for a professional job in another field having a degree at least shows you can stick with something. Usually you leave out degrees for lower paying jobs. Having no gaps in your work history (you know 5 years unemployed doing nothing, etc) is always good as it shows you will turn up to work. Part of interviewing is having an answer if you are changing fields. Being motivated to improve your life and move on from unpaid film work etc, are explanations for adult decisions. You can bullshit your way into some jobs and that's fine provided you are able to learn the job while doing it. Whichever way you go I thought film and television production would be the logical path. I know a few actors that focus on acting but they all have day jobs. Whereas the people I know who are on the other side of the camera (and sometimes act) all have film jobs. I help people out with film, lighting and occasional directing. I have science and engineering degrees, nothing to do with film.
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Nov 22, 2016 06:36
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RebBrownies posted:Maybe this is that whole thing where women are less confident about pretending they are qualified for jobs lol? ... is it possible I find a substantially higher paying job (45k-60k?) with an acting degree and 2 years at a restaurant? Er... no. You are indeed grossly unqualified for such mid-end white collar jobs, particularly in the tough creative industry. As a man, I also would have trouble faking it with your poor resume. Doesn't mean you shouldn't give it an honest shot, especially with the economic recovery. But don't blame your gender, just work on your resume and interview skills instead. If this doesn't pan out, you can then look at the lower-end white collar jobs and attempt to work your way up. John Smith fucked around with this message at 06:57 on Nov 22, 2016 |
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Nov 22, 2016 06:54
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Depending on how solid you are with writing, creative skills can transfer to technical or proposal writing(and being able to make fancy graphics helps out with the latter especially). This can get your foot in the door at a consulting firm and ultimately lead to a lucrative, if not necessarily glamorous career. I could see acting/public speaking skills coming in handy in such a scenario down the line. I think proposal writers at my company in Chicago start around 35-40 and we take all sorts of people who are waiting tables with art and Chinese studies degrees. It's a tough job but I'm sure firms in NYC pay at least as well.
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Nov 22, 2016 13:00
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Awesome thanks for all the advice everybody!!!!! Lol I know that was a weird comment phrasing I was trying to refer to the study that showed that women on a whole were less likely to apply to jobs they didn't feel qualified for (which is subjective lol). I'm really trying to focus in on my Wellsfargo loans while paying the bare minimum on my federal. I'm going out of town for a bit then I'm coming back in December to apply for jobs! :>
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Nov 23, 2016 17:22
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| # ? Apr 26, 2024 10:35 |
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moana posted:Keep this up and you'll be financially stable in no time It took me a minute to get that, but it was worth it 
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Nov 26, 2016 23:35
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