Dear Penny, College was a struggle for me. As a student with a learning disability, I struggled and school took longer. When I graduated with my masters of arts in 2008, the economy collapsed, and we went into survival...
College was a struggle for me. As a student with a learning disability, I struggled and school took longer. When I graduated with my masters of arts in 2008, the economy collapsed, and we went into survival mode.
After 10 years of struggle, I FINALLY found my dream job, which is part time. Now I have a second job that uses my masters degree, but its only 10 hours a week. With family help, we were able to buy a house. With two jobs, I am finally able to start paying on student loans and not defer them.
We are struggling to stay on a budget with three kids. With increasing prices for basics, we find ourselves back in that space of struggle, overdraft and panic. We've tried using budgeting apps and find them confusing or hard to keep up with.
We have done everything we can to survive: We got our grocery budget down by eating a lot of rice and lentils, by getting eggs from a friend and milk from a local farmer. We use free apps and the library for streaming apps. We make our own toothpaste. We are thrift store champs for clothing.
But I want savings. I want a future. I want to know I can one day retire. So, how do I do that? How do I get started?
-J.
Dear J.,
People dont go broke from buying grocery store eggs and name-brand toothpaste. What you have isnt a spending problem. You clearly have an income problem meaning you arent bringing in enough income to pay for basic expenses and save for the future.
Theres only so much you can cut from your variable expenses, i.e., the ones like groceries, clothing and entertainment that you have some control over on a daily basis. Your fixed expenses, like housing, transportation and student loans, tend to eat up a much bigger chunk of your budget, and theyre a lot harder to cut.
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You have two part-time jobs. But two part-time jobs often dont add up to one full-time job in terms of compensation. You may not qualify for benefits like health insurance or a company 401(k) match when youre not a full-time employee. Career advancement can also be hard when youre a part-timer. Thats not to mention the brain drain that often comes with working two jobs.
You dont say what subject you earned your masters degree in. But it sounds like its not in a particularly lucrative field.
So you need to ask yourself some tough questions. Would you rather work your dream job or a job that offers financial security? How important is it that your job actually uses your masters degree?
If you earned your masters in a discipline like arts or social work, you may need to accept that a better-paying job may not take advantage of your degree. Thats not to say youll never use the skills you acquired from your education. But you may need to shift gears and look for jobs that dont require your specific degree.
Taking a hard look at your current jobs is going to be difficult. You finally found your dream job after a decade of struggles. You made significant sacrifices to earn your masters degree, and youre still paying for your education.
Keep in mind that most people arent working their dream jobs. That doesnt mean they dont pursue their passions. Its entirely possible to work a full-time job because it offers good pay and benefits, and then do what you love on the side. There are countless 9-to-5ers whose true passion is blogging, podcasting, volunteer work or playing in a band.
As you figure out your long-term career path, you still need to get a handle on managing your day-to-day expenses. Since budgeting apps arent working for you, Id suggest something called the cash envelope method. Essentially, you keep paying bills like your mortgage and student loans as usual, but you withdraw cash for your variable expenses. Then you label an envelope with each budget category.
For example, you might have separate envelopes for groceries, clothing, gas and pet expenses. You put the amount of cash youve budgeted for each category in the envelope. If you run out of cash for that envelope, youre done spending in that category for the month. Only in a true emergency do you turn to your debit or credit card.
This approach can help you avoid overdrafting. Sometimes it helps people identify areas where they didnt realize they were overspending. But I suspect that in your case, this method will highlight the difficult reality so many Americans are facing right now, which is that income is the problem.
Theres so much youve done right here. Youve found creative ways to be frugal, while still providing for your family. You own a home. Youre making progress on your student loan. Now its time to take stock of how to maximize your income, even if that means your passion wont be your full-time job.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com or chat with her in The Penny Hoarder Community.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.