I recently received the following email from a reader, who I will call Annie:
I’ve been reading your site for a while now, and while I do enjoy much of your advice, I must admit there is one thing that really frustrates me. You talk a lot about saving and investing, but what if you’re living paycheck to paycheck? What if you have just gotten out of college, have over 100k in student loan debt, dislike your current job, work long hours, but make only enough money to cover rent? Are there ways to get out of a job you hate and even a career you regret majoring in when you’re smothered in debt? Is it safe to do? If you could maybe write something on handling student debt I would appreciate it. I’ve always been a saver, and it frustrates me to no end that I have to choose between saving 5 dollars in the bank or buying food for the day.
So, how can we come up with a plan to help Annie out? First of all, let’s make a list of the problems:
Significant debt Annie has more than $100,000 in student loan debt, a pretty significant amount.
A low level of income From this email, it seems as though Annie is only making enough to cover rent, her utilities, and her student debt payments.
Career dissatisfaction She also seems very unhappy with her career to this point, particularly in the sense that the hours are longer than she is comfortable with.
However, Annie has some major advantages, too:
Youth She’s pretty freshly out of school, which would generally indicate youth.
No dependents She’s apparently not married, and also apparently has no children.
Some degree of intelligence She managed to complete some level of college, which is better than the majority of Americans.
What follows is my personal advice to Annie. I am not a professional planner in any way; these are merely personal suggestions on what I would do in Annie’s shoes.
First of all, I would get out of the job. If a job is bad enough to make you question every choice you have made since leaving high school, then there’s a problem. Start searching for anything besides this job, even if it’s not in your field. If the pay is truly low as you describe, there may even be jobs like working at Home Depot that are appropriate (Home Depot pays well – I have family members that work there that make surprisingly good incomes).
Why quit the job before anything else if the finances are in dire straits? The job is pretty clearly creating some significant stress and a rather negative mindset about the world for Annie. If a job is such that it is making your whole world view negative, it’s probably also causing you to miss out on a lot of other opportunities that might be going on in your life.
Second, spend some time figuring out what you really want to do. It may be that the job has just poisoned your taste for what you majored in, or it may be that your life has a different calling. You need some time away from the situation to figure that out, which is another advantage of getting a job in a completely different career path. It may also be worth your while to move to another part of the country, to a place where the cost of living is lower than where you’re at right now.
Third, learn to live frugally. Many people who are stuck in a routine of working long hours for low pay often don’t eat well or prepare their own food. Give it a try. Also, look at the things in your life that are monthly, regular bills and ask yourself which ones you could remove. Are you paying for cable? Toss that out for a while and enjoy some books instead. Do you have an expensive cell phone plan? Get the cheapest plan you can – or ditch the cell phone entirely. Do you have subscriptions to other entertainment services, like Netflix, etc. Cancel ’em. Sell stuff you have that you don’t need, especially anything that has sat unused for a few months.
Fourth, look for community support. I’m not talking about food stamps. Look for community organizations, even churches, that offer things that might be useful to you. Maybe a community group has a freewill supper on Wednesday evenings – stop by there, enjoy a meal on the cheap, and meet some people. Perhaps you can pay a visit to a pastor in the area who might have ideas of things you can do.
Finally, know your debts. Find out if your current student loan debts have any extra benefits if you pay a certain number of payments on time, or if you direct deposit your payments. Also, look into consolidating your loans, especially if you can find ones that make you eligible for such benefits. With $100K in student loan debt, even shaving off a quarter of a percent can make a big difference in the monthly payments. If you have no idea where to start, the financial aid office at the college you attended and ask for help.
Good luck, Annie.