In Ask Sherry

Ask Sherry: I am 40. Am I too late to get my life together, financially?

You asked, and I am answering every Friday once I have enough questions!

https://docs.google.com/forms/d/1DKFg6SD0Kmb_0U5yb4OTNfkvfmsf5dWxJJbZTzUtH7M/edit

You can ask any question using the form here.

Hi Sherry, thanks so much for your site – I stumbled across it today. I have been in lala land about my finances for most of my life – I have an MA but have been underemployed since 2008 and then took a few years to stay at home with my son (who’s now 3.5).

In a nutshell, I only woke up to the fact that I need my own savings and need to be financially independent about two years ago (I’m turning 40 this year). I’m working part-time now and in the last 2 years I’ve managed to:

  • save $6000 in my investments (with Wealthsimple) and am afraid to look at them since Corona[virus or Covid-19]. I don’t plan on touching this for another 20 years at least so maybe better not to look.
  • Save $1000 in an emergency fund.
  • I also have my own credit card.

Sorry for the long message but I want to get the type of place where you’re at right now. Financially independent and secure.

What should my next steps be?

  • How much should I have in my emergency fund?
  • What else can I do?
  • I’m working part-time because I like the work-life balance and being less tired and more present for my son.

But maybe I need to change my strategy. Would really appreciate your advice. Warmly, A.

Hi, I put your name as “A” just for privacy’s sake. 🙂

You have a bunch of questions / comments in there that I’ll touch on.


1. Listen, I am almost 40, myself. (GASP!)..

I am edging up there and I have never felt better or stronger in my life.

IT IS NEVER TOO LATE. NEVER. EVER. TOO LATE to take care of your money. No one is late to anything. Better now than at 60, am I right?

2. Don’t touch your investments, or your face

My portfolio has tanked. TANKED. I try not to log in because I’ll hyperventilate in the corner with a paper bag if I do.

So.. you’re not alone.

3. $1000 is not enough for an emergency fund

I am sorry to say, please have 3-6 months saved.

$1000 is only when you have debt to clear and it makes more sense to save $1000 there, because you’ll just go right back into debt otherwise if you get into an emergency bigger than $1000 anyway.

How much do you spend monthly? You need at least 3 months of that saved.

4. You’re only Part-time? Why?

So.. I don’t know your situation.

What’s the contribution of your partner to your finances here?

Is he/she providing a fair amount of money to compensate for you working part-time and part-time taking care of your son?

I’m a little worried you have no savings except $6000, due to the fact that you’ve been underemployed since 2008 and then stayed home with your son.

If you’re working part-time and getting nothing from the financial pie, I’d revisit that. I don’t know your situation so I can’t ask you to ask him/her for a fair share of the pie, seeing as you are giving up your time to be at home (even if you ‘want’ to)….

Extra Reading material:

Or are you just choosing to not make money?

If you have no partner and you are raising your son alone but only working part-time and yet want to be financially independent I’ve got some warm, but blunt advice for you:

Get a full-time job.

You can’t save enough money on a part-time job, frankly unless you’re making $200K a year still working 20 hours, in which case, kudos! … but the main ingredients to being rich? Income and low expenses (relatively speaking).

If you don’t make any money, how are you going to save it? :-/

50% of $0 is $0…..

5. Short To Do List

1. Make as much money as possible between now and when you want to retire

50% of $0 is … $0. You need to make more money.

If you choose NOT to work and stay part-time to be with your son, you are making a conscious decision to not make more money to save it aside to reach your goals.

That’s fine either way, but I strongly recommend you make sure you can/will be provided for if you need to be.

2. Figure out what financially independent means to you

I can tell you that everyone will have a different idea of what that means and I do not know your money situation.

If you don’t know how much you need NOW (not necessarily if you were alone without other financial support given), then you need to start tracking your expenses and learning how to budget your money.

My idea of financial independence is I can live alone with my son, cover his expenses, mine, and still hit my retirement goals of being able to have at least $30K income a year to live on until I am 90 years old.

It would be tight, but it is doable and I’ve reached it already, it’s called “lean” retirement. I don’t love it as a permanent solution, and I LOVE MY JOB, which is why I keep working, but .. you need to figure out what your number is.

3. Keep investing consistently

Small consistent investments, over a long period of time will return a greater bounty of money at the end than stopping and starting, throwing big chunks in at various irregular periods of time.

4. You need a bigger emergency fund

At least 3-6 months of living expenses as your first emergency fund plan.

I’d even do a second EF plan where you are alone and raising your son, to see what you need in that situation (I’ve done it for myself, and am prepared if the time ever comes..)

Again if you don’t know what you spend, you need to start tracking your expenses and learning how to budget your money.

Good luck! (Respond back to the Form if you want to clarify / add more info and I can do a follow-up.)

Still have a burning question?

You can ask any question using the form here and all of my previous Ask Sherry posts are here.

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Sherry of Save. Spend. Splurge.

Millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. Since then, I have paid my $600K home in cash (my half was $300K), my $180K casr in cash, worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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