Hi everyone I suffered from crippling addiction for a long time and basically did nothing. Eventually I cleaned up got myself through school and got a bachelors in a stem field and I’m starting my first job at the ripe age of 40.
I have barely any debts (under 2k). Basically what I spent to move for the job.
I don’t have any savings. I don’t have any retirement.
I don’t have any expensive habits. I’m quite frugal really.
My parents can and would happily help quite a bit if I asked. So I’m not at risk of homelessness or anything. But I’d really rather not ask. I feel like they’ve done too much already and I should be able to sustain myself in the situation I’m in.
Salary for this job is 85k and it’s in a low cost area. They do 401k matching up to 6%.
I do not have a vehicle. Nor a drivers license actually. I should probably focus on that next tbh.
Okay. So. I’m trying to figure out if this is a decent plan or if I’m missing something obvious.
Rent is about 800. I didn’t get a roommate or anything. I’m not super opposed but this doesn’t seem like a make or break situation.
I haven’t been feeding myself for long enough to truly know precisely what’s my monthly here. But I’d say 300-400.
All subscriptions and phone are 50.
Health care they gave me a bunch of options between 15 and 180 a month. I haven’t done any research on it yet. I should probably pick a higher end one though right ?
Utilities are around 200. I’m super new in this place. So this is more or less an estimative.
Okay. So. Top priority here is paying off the 2k debt, which should be done by next week. matching 401k. Getting a vehicle then saving aggressively right ? Probably having a 3-4 month emergency fund then actually just throwing it all in stocks ? Is there a better option?
Does anyone know of a good route for starting life at 40?
New to life. No debts. No clue.
byu/Dependent_Draft_1768 inpersonalfinance
Posted by Dependent_Draft_1768
6 Comments
Do you have bank accounts? If not, get a truly free spending account opened. Try a credit union local to you for that. Also open a HYSA (probably at an online bank.)
If that is high interest credit card debt, pay it off as soon as you can. From now on, don’t buy anything with the credit card that you couldn’t otherwise pay for in cash.
Contribute 6% to your 401(k).
Open a Roth IRA and contribute something.
Start building up that HYSA until you have about 6 months worth of expenses saved. In case you ever have to move again unexpectedly, you can use this money instead of running up CC debt. If you absolutely need a car, save in this account for a car first. Once you have the car, use this account as your emergency fund.
All of this is in the WIki/FAQ at the right side of the page. It will get linked in a reply. There is advice for people of various ages. Given your situation, you should start with the advice for 20 year-olds and make sure that you tick all of those boxes. Then move on to the advice for 30 year-olds, and 40 year-olds.
Get a credit card. Use it to pay your phone and subscriptions. Pay it off every month and build your credit.
Getting a car/drivers license is very useful to prioritize, if you need it. Also, reality check your budget (actual inflow, outflow), this may change if you need to take on more debt to finance a car, or as you live and see actual expenses. If you don’t immediately need the car start allocating and saving up for it.
Your 401K match is spectacular so I would try to get that (investing). Likewise, as you noted it’s wise to build an emergency fund (I would target 6 months over 3, but I’m more risk adverse). Beyond this you can consider further investing, but I think your plan of action is logical
Consider an electric bike for transport – cheap, and at 20 mph you’ll get to work pretty quick. If your health is good consider taking the high deductible healthcare option. When I did the calculation I was surprised how big the annual savings was if you stayed healthy, and how little the difference was once you reached the deductible if you did get sick. On the other hand, if you are using mental health services to control addiction, that should be considered. Congratulations on beating that – one day at a time.
Congratulations on the recovery and the job! The comments are full of useful suggestions; my only one would be to not get overwhelmed with everything, which could derail your success. It’s all doable, but maybe not all at once. Good luck!
Be careful when you go to buy a car, ideally you would put 20% down. Do not finance it for more than three years (36 months) and your payment should not be more than 8% of your monthly pay, which would be about $530.