Studenomics is all about the community. If I don’t help you guys get to financial freedom, then I have failed.
One reader is working towards freedom by trying to pay off their debt. In September we touched base with Jacquelyn to help her become financially free.
[Check out: Help out Jacquelyn.]
Let’s check out the update for January 2015!
What are the financials like?
Let’s start off by seeing where the financials are.
- Income is the same at $55,000 annually.
- Take home monthly is $2,954.
Our combined take home (until she gets the promotion) is 4156 with shared expenses.
Rent at 1515 a month. I have $450 in monthly expenses outside of shared expenses and she has $250. With all of that, it leaves us about $1,914/month to send to debt, not quite the $2,800 I need to get myself out of debt but it put some things into perspective. Her tax refund is going to clear out the rest of her credit card debt, which will help a lot.
- I got a $732 bonus because it was the New Year. That was a nice surprise. I’m expected to obtain a bonus in June but it is set up in a jaded way, so that the bonus is spread out over the course of the year instead of as a lump sum. I don’t know what my bonus structure is yet.
- I cannot partake in the employment 401k until I have been there for a year but they only allow enrollment twice a year: June and Dec. I started in July so I will have to wait until December. I’m trying to find the best place for me to begin a 401k or IRA, eventually both as my knowledge expands so that I have the best form of savings no matter where I land on the employment scale.
- My savings plan is $20/week for now as direct debit to an account I don’t touch with a decent APR (once the value is substantial).
What are the biggest financial concerns right now?
My biggest fear is our lack of any back up for emergencies, it makes the debt paying even more stressful as we want to make sure we pay our bills/debts and selves first but don’t put ourselves back into a credit card pickle.
I was able to transfer the remaining $2,000 on my capital one to my CUD card with no balance transfer fee and a 4% APR decrease, leaving that amount with an interest rate of 4.24%. There was $1,500 on my CUD card already so that portion will maintain the 8.24% APR.
I’m still learning how that changes my payment schedule and how interest is actually accrued with a balance greater than $0 when the payment date passes. For me, this was a great choice because my credit card debt is consolidated and once that balance is gone, it’s gone. My next step will be my loans, which actually have a higher interest rate but I want to be out of CC debt first.
I have to figure out the best way to leverage my payments into my student loans. That’s a bridge I’ll cross as it gets closer in the next few weeks. Essentially, just putting my payment to the loan that will bring me the greatest return, considering they all share the same interest rate.
I also figured out how much I pay on student loan interest monthly, if you want that. As far as I can tell my Fed loans were “consolidated” on the site but not by interest as I pay about $35-40 per loan in interest every month, totalling about $120. I pay $201.03 a month on those loans because they messed up some of my payments when I changed to lower my monthly amount and I didn’t foresee it getting better especially knowing I would be done with CC debt sooner.
The other loan I pay about $21/month of interest with a payment of $55.
My next big venture is to figure out the most effective way to pay those down.
What are the future plans with income and life?
Side income is currently random dog watching jobs, the last one landed us about $1200 but was a nightmare having six dogs. However, managing 2-3 dogs and making an extra 200-500/month would help A LOT.
The biggest step for me is just working my ass off.
If I want to avoid a part time job to focus on my online business, then I need to hold myself accountable because I won’t leave a job without solid income in place.
I’m working with Martin, a few writer mentors and ABM actually to build the business and gain different perspectives. I really have no excuse to not have my name out there. I have an ass ton of time and just need to develop habits, not routines.
Mostly, just trying to create an audience, be visible and reach the people I want to reach so I am not sitting in an office wishing I could be home doing what I know I’m supposed to.
What’s stopping Jacquelyn from her goals?
My fear is not the big dream, my fear is all the little things I have to give myself to in order to get there.
It’s the wishing and wanting without the drive to get it. A lot of me is driven by proving that I can be who I want and not feel like a total disappointment, but that’s what my story is all about. Defying expectations that have been placed on me by others or by a result of my experience with others.
This is my story to financial freedom and I no longer have to live shackled to a life I thought I was supposed to hold.
A personal update from Jacquelyn…
So this is a brief synopsis of where I’m at, not much has changed with my actual income or side income. The dog sitting was my partner’s idea. We are working on a way to shuffle the money to the appropriate places. Her income and debt is about 1/3 of mine.
We are hashing out specific budget numbers to make our decisions for us, so when we feel like we going out or spending money that doesn’t align with our goals, we have a reminder that says :
Just because you have the money in your bank account does not mean it needs to be spent…at least not there.
Most the time, the money is just in my account as a safety net until the next paycheck so that I have an easier time paying debt right away.
What are some must read articles from Martin?
It’s time to go back to school if you’re not 100% on top of your finances. Actually, this is the opposite of school. Lame personal finance advice comes to Studenomics to die.
I didn’t want to repeat myself so I’m sharing the must read articles for Jacquelyn and all readers in a similar situation.
How-to drink without going broke — This is key. I can’t tell anyone not to party. I would be the world’s biggest hypocrite. I can only suggest ways to save money on this expense and to not let it consume your life.
Start an online business in 6 easy steps — You can start your own online business and make money in the future (it won’t be easy). This is a fun hobby that could POSSIBLY lead to money down the road.
How you can save $25k by 25 — Proven tactics that have worked for me. No excuses! The title says it all and it applies to every age.
The ultimate guide to crushing your debt — Over 2,000 words on destroying your debt. The best possible guide on the whole damn web. You’ll find a strategy that works for you in here.
Add play to your life and never feel miserable again — A quick guide to helping you feel good. Being in debt can really bring you down. You need to do everything possible to stay positive.
Do you have any advice, tips, or praise for Jacquelyn?
17 thoughts on “Update From a Reader Working Towards Financial Freedom [Student Case Study]”
Nice job on the side hustle! That is a decent chunk of change. That sucks that the 401k enrollment is only twice a year. They should have let you enroll in June but not contribute until July. The good news is that your start date should be the start date of your service hours to the firm. So if you are vested over 5 years, technically, you already have one year vested. Anyway, that’s how it worked in my plan. Good luck as you continue on your journey and keep us updated!
The dog sitting with the large sum was a result of a lot of dogs at one time during the holidays. I must admit the pain I felt during that time dissipated completely when the debt went down a lot for Nico. It’s definitely been nice to have, every little bit counts, we have learned and I am okay with that.
Plus, we have made some friends as a result, which has been nice considering we are still new to the area.
I would hope that is the case for the 401K but it is something I want to look into, mostly I am trying to figure out the best solution for me individually versus with my company. Obviously, I want to be able to contribute to both if the company matches well but I don’t want to wait to save something for me. Like I said, it’s nerve wracking to lack an emergency fund aside from a credit card.
By the way, I love your blog LaTisha! I am so happy to see you on here 🙂 Your story is great motivation.
It sounds like you’ve really put in the effort on communicating, hammering out the specifics, and putting together a plan. I love the extra income through dog watching thing too, that will definitely help. If it were me I would just focus on one debt at a time until it’s gone, and then move on to the next one. Keeping at it will make all the difference!
As of right now, that is a lot of what I have been doing. Transferring my Capitol One to a lower interest rate and having all my CC debt on one card is great. I can watch that number decrease. I know what I need to pay to get it gone by the end of February and it eliminates confusion of additional payment dates.
The updates will be better, more concise and the finances will be laid out much better than they are now, but that’s all been part of the journey! Thanks for following!
These posts always make me nervous but as I have gotten a better hold on where I stand, what I need to do and what I am going to do, I am less nervous and more anxious to get rid of the debt.
Lots of things to come I anticipate. 2015 is our year!
It sounds like you’re making great progress, so congratulations! I particularly love how you’re looking for ways to make more money; that’s a great step toward really making a big dent in your debt quickly.
You got it! My goal is short term pain to get rid of it. When I have talked to other people, I know I could be a lot worse off with debt and I am lucky to have the “small” amount of school loan debt, compared to my other friends.
I am always looking for effective side hustles too. Tips and ideas are appreciated. 🙂
Congrats! Sounds like you are on the right track. I like the idea of the dog business. Side businesses are a great way to increase income to help reach financial goals and if you can develop a client base it could one day turn into it’s own business if you were looking for something you could build and one day sell or employ others.
It’s great you say this! After seeing how effective good reviews are, we are excited to know we are still getting new, and old, hits that will help get through the less common travel times.
We have built rapports with people that are consistent travelers and that is the biggest help. The goal is definitely to get to a point of self-employment and learning from other businesses to build my own has been great.
We are lucky to be in a great location with a mix of affluent people who are more willing to make more financial sacrifices to know their kids are protected. 🙂
Thanks for the support!
Thanks for being brave enough to share your finances. I’m sure others will be encouraged that change is possible, and that making sacrifices today does pay off tomorrow. 🙂
I would hope so! Ultimately, this started as a personal goal for myself but I hope to inspire others. The light at the end of the tunnel is knowing my income will actually be profit and knowing more about my finances. It’s critical for future success and has evoked my entrepreneurial spirit!
There will be the day my loans are gone and it is set for December 31, 2015. I so look forward to that day!
Very interesting. It takes time, doesn’t it? But unlike a diet, there’s no weird metabolic thing going on to undermine you!
Ha! That’s true, but there is always the potential for unexpected bills…that’s what we aren’t yet prepared to handle without a credit card or debt delay.
Let’s hope for no metabolic bumps…or if we have them, ones we will be covered for!
Congrats on making strides! I loved seeing that you’d utilized a balance transfer. BTs often get a bad rap on personal finance sites (lots of credit card hate), but if you use them effectively (and don’t spend on the BT card) they can be financial life savers. Nothing helps pay down debt faster like slashing interest rates, especially down to 0%. If I may be so bold as to give you an unsolicited suggestion, would you consider transferring off the CUD card to a 0% balance transfer offer? For example, Chase Slate (no, I don’t work for Chase) offers 0% with no fee for 15 months. So does Citizens Bank, but it can be harder to get approval there. If you have a 700+ credit score, it might be worth doing. Keep up the side hustles and having honest, open communication with your partner. It’s great to see the two of you are supporting each other.
I had considered looking to transfer to a 0% interest but the paperwork that goes into the BT, more the time it takes was frustrating for my debt payment plan and I ended up having to pay interest on something I thought I would avoid (not a huge amount).
Quite frankly, I want to see what type of options I will have for my student loans. I plan to have my credit card debt paid off by the end of February, which would entail one payment cycle of interest at about $2200-2500. It’s still interest I know, but I am not sure it’s worth the hassle right now. Besides, this is added motivation to insure I don’t have anymore pesky credit card debt. It’s crazy to think that 2 years ago this time, I had maybe a couple hundred dollars…maybe.
Thanks for the tips! I love learning and have really fallen in love with personal finance and all its nuances.
It’s most important to know yourself and your weaknesses. If you feel another credit card would tempt you into spending, then stay away! In my opinion, BTs are ideal for folks who ended up in credit card debt because of an emergency (car break down, medical, etc) and aren’t normally big spenders.
I’d be happy to talk more at length via email (firstname.lastname@example.org) with you about student loans and any other issues you’re facing if you want another person’s input (not to take anything away from Martin’s awesome site!).
Thanks for reaching out! There are a few things I’m trying to figure out moving forward, some that his Canadian residence can’t answer! 😉
I am usually not a big spender, it was just a series of things and I fell into the trap of thinking it was “free” money. For now, with my goal to dominate the CC debt, I will be happy staying where I am but when I did the transfer, I realized it was smarter to find a 0% interest BUT when I tried that previously with my Capital One card, only a small portion was able to be moved, leaving me with extra payments, still some interest to pay on it and more stress.
If I could have been guaranteed the offer, I would have taken it but again my naive ways bit me in the butt then! Not something I would have happen now, not without extensive research or advice!
Look to an email from me!