Hi! I feel embarrassed to ask this advice. I am 45 years old and grew up as an artist doing entertainment work. I currently am a dance teacher and I’m grad school for mental health counseling. My student loans are astronomical, and I pick up little side jobs to pay my bills in addition to teaching. I make barely enough to get by, and I also haven’t been smart with my money. All the “stable” jobs I’ve tried to work make me miserable.
My question is, how do people go about getting out of the hole? I have an extra $300 and am thinking of putting it in an IRA of some sort.. but I also have no emergency fund, so I’m not sure if I should more so focus on that. I don’t where to start; I’m so used to living paycheck to paycheck and getting bursts of money, using it to take care of things I’ve let go (car repairs, expensive doc appointments that my insurance doesn’t cover, etc.), that I have ZERO savings and the looming dread of paying these student loans back keeps me up at night.
I don’t have credit card debt, but that’s the least of my worries at this point lol
Help! Lol and thank you 🩵
I am 45 years old and trying to get out of the hole
byu/MatterIndependent248 inpersonalfinance
Posted by MatterIndependent248
12 Comments
Budget. Sounds like you need more income. And attack your debt.
I would think emergency fund would be your priority. Your loans are looming but with the grad school hopefully comes a bump in pay, you’ll handle a repayment plan when you get there.
But for now, you need to have a little safety net established for that next car maintenance or medical thing. Shoot for 3-6 months of your typical living expenses saved up in a high yield savings account, that will pay you a little risk-free interest each month along the way.
Generally, most people are going to say get out of debt first. That’s a weight around your neck that will continue to hold you back. Then, establish a one month emergency fund. Once you have that, continue slowly building that to a 3 month emergency fund while also starting to contribute to an IRA. Once you have have no debt, an emergency fund, and the beginnings of a retirement fund think of that money as gone, out of your reach. Don’t dip into it unless it’s a true emergency. If you were able to put off the car repair and doc appointments then I would not consider those emergencies.
Just some ideas. Maybe not necessarily right.
Emergency fund should always come first, IMO. Especially if you’re paycheck to paycheck.
You have to make more money. Increase the amount you make from dancing. Maybe be an online life coach while doing school? Can you work somewhere that will pay your student loans when you finish?
u don’t need to “invest” right now u need to stop the bleeding. emergency fund is step 1 survival mode not retirement planning yet
You haven’t really listed any numbers (income, monthly expenses, etc.). But, there is no magic bullet here. You need to increase income, and cut out any unnecessary expenses. Might be easier said than done in some cases, but there isn’t much more to it at this point.
You may be a good candidate for the Dave Ramses method. It’s simple and built for these types of situations. Yes it’s a basic program (with some controversy mainly around Dave as a person) but it’s designed for folks starting from the hole and it sounds like you’re there.
There are a number of resources available. If you are a visual learner, have a look at ‘the flowchart’ which provides a list of things to do in order to build a strong financial life. Beware these steps typically play out over many years depending on a given person’s situation:
[https://imgur.com/personal-income-spending-flowchart-united-states-lSoUQr2](https://imgur.com/personal-income-spending-flowchart-united-states-lSoUQr2)
In short, the preliminary steps are to create a budget, pay your monthly essential bills, insurance, and loans, then build a $1000 emergency fund. Then pay non-essential bills. Then pay into an employee-matched retirement account, if available. Then use one of 2 techniques to pay off “high interest” debt, then build an emergency fund of 3 to 6 months living expenses. There’s more but that’ll probably be more than you need for now.
If your financial situation doesn’t make you more miserable than the stable paying jobs do, I am not sure that any advice will help. Step one is to make a mindset shift that you don’t want to live like this anymore and set out to do whatever it takes to change it, even if it is uncomfortable.
Honestly you need to focus on finishing grad school and getting your income up ASAP. Optimizing $300/month is barely going to do anything. The way out of your current situation is make more money.
It’s been mentioned, but..
1. Take a moment and be proud of yourself. 45 y/o and no credit card debt is something you should be very happy about. Done? 😊Ok now get to work on…
2. Savings. Build an emergency fund in a HYSA. As I type this my hot water heater is being replaced unexpectedly. Life happens. I’m not sweating it because I have savings.
3. An IRA is the way. It’s never too late in my opinion. A Roth would probably be good for your situation.
4. Try to create financial buckets, maybe even separate bank accounts to funnel money for different lifestyle purchases. A travel account, a shoe account, going out on the town bucket…whatever you love to do because we aren’t designed to just work ourselves to death
5. Read up and educate yourself. There are a ton of books that will teach you money and finance and many of them are written for everyday people.
I’m no expert but these steps in order have worked for me. Good luck!