[-$15,685] A Game Plan Forms

Thanks, everyone, for all your advice, well-wishes and words of encouragement in the comments. And thanks to those of you who used ‘Contact Me’ to reach out directly. Thanks for talking me down from the ledge so-to-speak. I feel like I have a gameplan for the upcoming months.   

The Job

Things are getting slightly better at the job. My optimism remains very guarded. I was able to get a portion of work done and turned in, which has satisfied the crew for now. Last week was particularly bad and stressful as I was working down to the wire. In comparison, this week has been noticeably better. However, the crew is already asking about when they’re going to get the next things I need to get done. Sigh.

I’ve been at the new job for 1 month now. The time seems to have passed very slowly. LoL. I’m kind of surprised that I’ve lasted this long. If I don’t get fired, a few things will open up for me shortly that will impact my take-home pay. First, I’ve become eligible for the 401(k) and second, I will soon get access to health insurance coverage.

401(k)

I was going back and forth about whether I should invest in the 401k. Drmaddog’s comment from my last post stayed with me. I shouldn’t lose sight of saving for the future no matter how unhappy I might be today. I decided it was important to continue saving in at least one vehicle and it will allow me to benefit from some tax savings. I’m going to contribute about 16% from my pay. This employer does not offer a match, sadly. Those missing dollars will take a good bite out of my paycheck, but it’s for a good cause.

Health Insurance

My insurance coverage starts next month, so I have to quickly decide how I want to be covered and how much I’m willing to pay. I have a few choices, an HMO, a PPO, and an HDHP. I need to figure out which one will be most useful and cost-effective in both the long and short term.

The HMO is cheapest, but has the least flexibility. No out of network coverage. The PPO has good flexibility and lower deductible, but has the highest premiums by far. The HDHP has good flexibility, and lower premiums, but has a high deductible and out of pocket max. The HDHP does not come with an HSA, sadly. I’ve got some investigating to do. I’m looking forward to having health insurance again.

Student Loan Debt

Not much to say about it at the moment. My monthly minimum payment of $332 was processed this past week. My current balance is $15,685.

“Life Fund” Savings

I’m going to stockpile cash right now because of the uncertainty I’m feeling around employment. Most of my paycheck this week went to cash savings, which brings my Life Fund total to $3,500. I’m building it up week by week. In the coming months, if I need it because I get fired or I finally have enough and run away screaming from that place, I’ll have this cash available. If things somehow improve, I can toss it at the debt down the road.

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW Archives)

18 comments

  1. Afro Penny · July 14

    As someone who is now on a similar journey, I am rereading through your blog to see how you grappled with the savings versus debt conundrum. So valuable to see someone else who has crawled out of a deep hole. Is there any chance you could explain the difference between your “Emergency Fund” and the “Life Fund?” Do you still contribute to your ef-und each month? Or did you get it to some point ($10,000.00) and you no longer contribute to the e-fund and just the life fund?

    I am so happy to hear that work has gotten a bit better. I hope they continue to get better.

    Like

    • C@thesingledollar · July 15

      Hi! I looked at your blog and am looking forward to following you. I’m an ex-academic so I’m pretty familiar with moving around to follow university work and dealing with not great university salaries.

      I also divide my savings into an E-fund and a life fund, although I think Denise uses hers a little differently than I use mine. My e-fund is reserved for things like car repairs, plane tickets related to a funeral/other emergency situation, or meeting my medical deductible. I refill it on a rolling basis (currently I contribute $100/month and have about $6100 in there) and I would not spend it on anything non-urgent — say a down payment or travel.

      My “life fund,” which is pretty big ($40K right now) since I don’t have debt now, serves a few functions. It could be used for a house down payment, for moving expenses, for a new car if I needed one, furniture if I needed it. I don’t overdo this, but I also use it in a limited way for travel/experiences–I’m about to use it to pay for a few weeks of immersion classes abroad, for example–and it’s available to help me manage freelance cash flow issues, too. (This month I took $2000 from it at the beginning of the month to use for bills and expenses, then repaid it when an expected check came in.) So, “life.” This is money that’s available to be spent, unlike the e-fund, although I try to be reasonably cautious about what it gets spent on; no lattes.

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      • C’s Life Fund is a real savings fund.
        My Life Fund is temporary and a way to help mitigate the financial risk of my precarious employment situation.
        I was going to call it my “Shit Just Got Real!” Fund, but “Life Fund” sounded more blog-friendly.

        Congrats, C, on your financial success this year! All that work is really paying off.

        Like

      • Afro Penny · July 16

        Thank you C! I just read your blog (and back to your earlier posts when you were in debt) and you really do get it. I am planning to write the “how I got here” post later this evening but…yea. You might get a private message from me with some more life/money questions…just sayin’. 🙂

        Thank you for the explanation. That sounds reasonable. My emergency fund is beyond pitiful at the moment (like a $1,000.00) and as I spent my twenties doing meaningful but not moneyful things, my 401K is similarly pitiful. It seems like I should have a life fund, but given the significance of my debt, and the daily compounding interest, it seems irresponsible…

        Like

        • C@thesingledollar.com · 29 Days Ago

          Definitely feel free! I’m probably going to delete my blog pretty soon but my email — thesingledollar at gmail — will still work! As you know if you read my blog I didn’t have a dime in retirement savings until age 35. Balancing debt payoff and savings is not always easy, but you make the progress you can make, and try to live a good live otherwise (which you obviously do.) I also think it’s natural for one or the other to predominate at different points if you have a long journey. I was able to pay off my debt in a year, and it made sense to me to just go hard at it for that time. With more debt I might have strategized differently.

          Like

    • Hey Afro Penny,
      Good question. My “LIFE FUND” is new and only temporary. When my employment was more stable I had more savings accounts (e.g. travel, health maintenance, etc.). Now that I’m dealing with job insecurity, I’ve shelved all that and am just focusing on hoarding cash until things feel more stable. My Emergency fund is for emergencies. For example if I have to move suddenly because the owner of the house I live in sells it and we have to vacate or something happens and I end up in the emergency room. (I currently have no insurance until next month). My Life Fund is a security buffer in case I lose my job. I don’t want to dip into my Efund for that unless as a last resort. If I don’t need to use it because my employment stabilizes or I get a good new job, then the money will be applied to the debt.

      I don’t contribute to my Efund anymore because I have prioritized other things for now. Once my debt is gone, I want to save up more money in my Efund and in other savings accounts that I’ll bring back. Everyone’s system is different. You’ll need to decide what will work best for you.

      Thanks. I hope it gets better too.

      Like

      • Afro Penny · July 16

        Thank you DDSW for both responses. So I actually went ahead and created separate savings account just now and labelled it “Life Fund” and transferred $50.00 to it. I get paid monthly and will transfer $50.00 each month. When I am further along in my debt payoff journey, I hope it will function like C’s fund, but for now I think it will function more like what you described… While my job situation is stable, I don’t have sinking funds or savings other than my baby e-fund and this seems like another way to protect myself as I move forward on long debt repayment journey.

        Thanks for sharing your story and time.

        Like

  2. Paul, London · July 14

    I hope you are able to keep going with this job. Each week you’re consolidating your position and getting more familiar with things. It seems like you could be almost debt free by the end of the year.
    Best of luck.

    Like

  3. Drmaddog · July 14

    I’m so glad I could help. Since you do not have a match a work, it may be better for you to allocate enough of your retirement savings to max out a Roth IRA, unless you are in a top tax bracket. You don’t get a tax break today, but all the growth will be tax free later. Additionally, you can withdraw your contributions (but not the growth). So in a very worst case, very dire scenario, you could access the principle you put in. Of course you don’t need to max or your Roth then start the 401k, just figure how much it would take to max out the Roth per month then out the remaining dollars each month to the 401k. Vanguard has many many very low cost funds.

    Also I know your career has become very stressful but you are SO CLOSE. Look at it as the last two miles of a marathon. Just a little more pain then your world changes. Best of luck and I’ll be reading.

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    • Thanks for the tip. I’m prioritizing 401k now because 1) I pay through the nose in taxes and need the tax benefits and 2) the Roth IRA can be caught up next year before the tax deadline, while 401k contributions stop at the end of December for 2019. I’d love to be able to max them both out, but I have other things to consider. I will have to see what I can manage.

      Like

  4. Nina · July 14

    I agree with Drmaddog – perhaps a Roth IRA would be more beneficial at this point in time. Max is $6000/year and you can withdraw contributions without penalty. After 5 years (per contribution), you also have access to the earnings.

    Also, I know your HDHP doesn’t have an HSA, but you can open one yourself and put money away ($3.5k a year) for the future if you need it. I know Fidelity has their own for individuals now, so maybe that’s something you can look into if you’re have a “light” medical year to help save for a “heavy” medical year.

    Like

    • My HDHP doesn’t appear to be a “qualifying” HDHP as determined by deductible and out of pocket max allotments to open an HSA myself. I’ll take another look, though.

      Like

  5. Maria · July 14

    Sounds like a solid game plan!
    Fingers crossed your job continues to improve – and more than slightly. Sigh.

    I would encourage you to make choices that you think, overall, will be best for your mental and physical health. Sometimes that choice will be to push through, sometimes it’s better to stop pushing. Sometimes it’s best to keep an eye on the future, sometimes it’s even more important to secure the present. You know your situation best!

    Rooting for you!

    Like

  6. Cynthia · July 16

    Hang in there, DDSW! You are doing great! You got this! Just keep taking it one day at a time.

    Like

  7. C@thesingledollar · 12 Days Ago

    Hey, just been thinking about you, hoping you’re still hanging in there.

    Like

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