Hi Money Minder,
So, I’ve got 10,000 bucks saved up and I’m a 28-year-old dude living in a high-cost state (NY/CA). I live with my fam right now but need to figure out my next move. I’ve got some student loan debt and medical bills, but no credit card debt. My credit score isn’t great, around 600-620.
I’m making around 85k a year, with some side hustles for extra cash. My job doesn’t offer a 401k, but it pays more than other places. If I switch to a more stable job, I’d have to take a pay cut, which worries me. Rent in my area is crazy expensive, and I’m not sure if I can swing it.
I did the math and I need around 5,200 bucks a month to cover everything, which is more than I make now. I’ve only got about 300 bucks a week for extras like food and hanging out with friends.
So, any ideas on what I should do with my 10,000 bucks? Should I risk taking a pay cut now for a better future, or stick it out at my current job? I don’t want to move out of state, ’cause all my friends are here and they’re super important to me. I’m scared of getting stuck in the renter’s loop and not being able to save. Maybe buying a condo could be an option for some stability?
I’m freaking out a bit, so any advice would be awesome. Thanks!
Sincerely, Future Homeowner
Response from THE MONEY MINDER:
Hello There,
It sounds like you are facing some serious financial challenges right now, and I want to commend you for being proactive in seeking advice to address them. First of all, I’m sorry to hear about the debt you are dealing with, especially your student loan and medical debt. It’s great that you have managed to save up $10,000 despite these financial obligations.
Given your current income and expenses, it’s essential to take a very realistic and practical approach to managing your finances. While it may seem tempting to invest your $10,000 in hopes of growing it, my advice would be to prioritize paying off your debts first. With a credit score in the 600-620 range, reducing your debt burden can help improve your credit over time. This could potentially lead to better financial opportunities in the future.
Additionally, considering your concerns about affording to live on your own in a high cost-of-living state, it might be helpful to reassess your current living situation. Have you explored the option of finding more affordable housing or a roommate to share expenses with? It could be a temporary solution to help you save more money while you work on improving your financial stability.
As for your career dilemma, it’s important to weigh the potential benefits and risks of taking a pay cut for a more stable job. While a higher income is crucial, job security and potential for growth are also vital factors to consider. Ultimately, you’ll need to decide what trade-offs you are willing to make and what aligns best with your long-term financial goals.
In terms of the fear of falling into a renters trap, owning a condo could be a viable option to build equity and provide some stability. However, it’s essential to carefully assess the financial implications and ensure that you have a solid financial plan in place to afford homeownership comfortably.
I understand that these decisions can be daunting, but remember that taking small, manageable steps toward financial security is key. It’s essential to create a budget, set clear financial goals, and seek guidance from a financial advisor if needed. All the best from THE MONEY MINDER as you navigate these important financial decisions.
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