I am currently going through a divorce after being with the same guy for over 8 years and need to figure out my finances.
401k: ~110k
I recently lowered my contribution to 18% of my salary (from 25%), and my company matches 10% after that.
Roth IRA: 25k
I plan to continue maxing that each year.
Cash savings: 10k
No debt aside from a mortgage but my ex and I are selling the house and will come out with a decent profit.
Being newly on my own, I will be spending more in just day to day life. I have what I think is ok in cash for now and when we sell our house in June/July I will come out with another ~45k. Rent is expensive where I am and I work remotely so I could take that money and buy a house in a low COL area if I wanted. OR I could do something like an FHA loan, buy an expensive property like a multifamily, live in it and rent out most of it. I know that will be a lot of work and is riskier but I'm trying to stay focused on FIRE and the thought sounds appealing. I just have no idea where I should live/buy in that case. Or where I should buy if I do the other option either. Maybe NC/TN? Cheaper housing with lots of nature which sounds nice. I'm just feeling really lost and I'm not sure where I want to live or what I want to do. What would you say is the best thing to do in my position? Wherever I go, I do plan to make a few trips there and scope out the areas so it won't be too much of a shock. My parents have never been good with finances and say not to worry and blow the money on trips or a new car and that just isn't me, so I have nobody IRL to talk about this to.
Salary is ~76k (just got a raise from a 71k salary and it hasn't even shown in my paycheck yet), and I work 4 hrs of overtime a week which comes out to ~84k pretax if I do it all year. I would like to not rely on OT time because it won't always be available.
I know I will need to buy a car at some point but I'm going to attempt to live without one for now. I have a 6 month lease in a walkable city and I think I'll be okay without it for the time being even though it isn't ideal. Although the reason I wanted to live here at all is for all of the nearby nature and without a car it will be hard to enjoy any of that. I've also never lived without a car so this is new territory for me.
What I believe my monthly expenses will be:
Rent: $1300
Pets: $200 (2 cats with insurance plans-- this includes that and their food/litter)
Phone: $40
Food: $400? I haven't figured out what a decent idea for food spending is
Uber (assuming I don't buy a car): $200?
Entertainment (Spotify, Netflix, going out, drinks, etc.): $500?
Credit card annual fees work out to about $70/month. I will look into closing a couple cards but the benefits for most of them honestly outweigh the cost. I travel a lot and get a $300 credit/year, priority pass, global entry/tsa precheck, a free hotel night with IHG, free hotel night with Marriott, and some other things I'm probably not thinking of.
This is will sound stupid but botox will be about $30/month ($120 every 4 months). It's important to me and I cheap out on mostly everything else so I want to spend this.
My take home is $3880 after taxes and 401k contribution (on the 71k salary, idk yet with the raise) .
So... that's about ~$1140 left after everything. It will be a little more with my new salary but I also haven't budgeted strictly before so I'm still figuring out costs. $5500 a year will go towards the Roth IRA, so that's an annual cash savings of a little over 8k. I know I will end up buying a car in the future too so instead of a $200 uber monthly fee, it will be more like $500 with a car payment and car insurance.
So my questions:
- Should I put less in my 401k considering how unbalanced my savings are? I could take the leftover money and put it into a brokerage account, or I could also save more in cash and then buy an investment property or something.
- What should I do with the money I will be getting from the house? It is enough for a down payment and I don't love the idea of paying rent for more than what a mortgage would cost. The only downside would be that it would tie me to wherever that house is. Although, my ex and I did buy a house and ended up making a decent amount of profit from renting it out, and we previously saved a lot by not paying rent for the few years we lived there.
- Should I think about buying a car? Life would be much more easier/more enjoyable with it but it's another payment I'm worried about making while I transition into living with a single income.
Thanks for reading if you've made it this far.
Submitted February 26, 2019 at 05:03PM by saddivorce23 https://ift.tt/2EynxUk
