In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. The participants and experts are discussing retirement issues among their commentaries this month. Read this introduction to learn more about the series.
JW is thirty-one years old and a father of two. He works in retail and is underemployed, and his wife and kids are on state medical plans. Their household income is supplemented by SNAP (food stamps). Read his bio for more information about his family’s situation.
His goal is to be able to provide for his family while still tithing 10% of his income to his church. JW is on Team Neal, with Certified Financial Planner Neal Frankle. Get up-to-date on JW’s progress by reviewing his update from las month. Today’s financial report describes his progress throughout May 2013, with comparisons from the two previous months.
Keep reading for JW’s March update. JW’s own analysis and comments are followed by feedback from Neal Frankle and budgeting expert Jacob Wade from iHeartBudgets.
JW’s comments and analysis
Paydays. I received three paychecks this month instead of the normal two. I got the last one on the 31st. The direct deposit posted and will be used for the first half of June’s bills. It made our income statement high for the month, but because we didn’t get it until the month was over, we were unable to use it for additional payments.
Student loan. My income-based repayment plan was renewed for another twelve months. The payment will be $0 based on our income. The unpaid interest was rolled into the balance. This raised the balance on my loan from $15,450.37 to $15,492.16. We also made some extra payments on my wife’s loans this month. Because of the late additional payday we should be able to make additional lump sum payment to her loans in June.
Piano. My wife’s piano lessons provided extra high income this month. Multiple students paid for May and June at one. Also, every year before the spring recital, my wife gets new shirts for her students with her piano-teaching logo. Some students buy the shirts, increasing income a little. This increase is then used to pay for the shirts, and then we have higher expenses than usual. We added a net $768 to the balance sheet of $500 budgeted.
Job search. I was not selected for any of the previous positions. This leaves me feeling stuck wondering if trying to advance within my current field is the right decision. There was recently another similar position posted at yet another location. I applied and expect the interviews to be scheduled in June. I have been informed to expect an interview.
Mother’s Day. This was the biggest change in expenses this month. We planned to spend $250 total for Mother’s Day. This included a nice dinner out at Red Lobster and gifts. The holiday for us involves my wife, my mother, my mother-in-law, and maternal grandmothers on both sides. We ended up spending $232. For comparison we budgeted $200 last year and overspent.
Retirement. My wife has a retirement account from a previous job. My company matches contributions for the first 4% of salary deferral. We are not currently making use of this plan. In discussing this with my wife we don’t feel this is something to prioritize at this point in time as we still make use of assistance to make ends meet. We will review this during our annual family planning conference.
At this point we have not begun to look toward retirement. It is still another lifetime away. Our focus has been on getting out from under debt and underemployment. Right after college I was able to put 12% away in a 403(b). I’d like to get back to this level or higher. In 2008, I was fired from that job, and I cashed out my entire account to pay off debt. If I could go back I’d have left it invested in the 403(b) or rolled it into an IRA.
Feedback from Neal Frankle, CFP
Thanks for your update. I can see that you are focusing on the job search and that is not without merit. I am sorry to hear that your wife has a medical condition and I am inspired that you both are working hard to do the best you can.
This might be a painful question but, why do you think you weren’t selected for the job you interviewed for? Is there something you can do to become a more competitive candidate within your own company?
What is your approach to investigating a new field? What other options are available to you right now? I would like to hear more about the alternatives and your game plan.
I realize that all this is not easy. I realize that it may be very difficult to do while you are employed full-time, but it seems like that is the main option you are entertaining so it bears discussion.
Feedback from Jacob Wade
Sorry to hear about the job opportunities. Hopeful for the June interview! Are there any other fields that would fit your skillset and resume that have more earning potential than you are currently bringing in? I ask because if you can branch out a bit and just get something that puts your head above water a bit more, you would be able to manage all the moving parts a bit better.
Since the goal is to get you to move away from paycheck to paycheck and move toward financial stability and having some cash put away, I would suggest looking at taking on another job if you can swing it. I know it’s tough, but sometimes you need to make some time sacrifices to get ahead. I am currently working 2.3 jobs (complicated, I know), and though it hurts to disappear during tax season, and spend some evenings working from home, I know it’s keeping me in a place where I can provide for my family and put us in a solid financial position. I value time with my family over everything, so I totally understand not wanting to take any more time away, but you’re in a place where something has to give. I’m rooting for you!
Updated July 3, 2013 and originally published June 20, 2013.