I earn $26K and can’t do this any more. Please help me figure this out.
That, was the subject of an email a lovely reader sent to me in the deepest throes of her despair.
I won’t post all the entirety of our email exchanges, but she had a long-term illness, and long story short, she was in debt, earning $26,000 a year and wanted to break the cycle but did not know how to, so she reached out to me for help.
I wanted to post her story and what happened as an aftermath because I feel like inspirational stories like this for people who want to change their life, can be quite motivational if you are in the same position.
I know when I was $60,000 deep in debt, I looked to articles and stories of other people making it happen to help me get out of the debt I was in, and personal stories are what motivated me.
With her permission I have posted the following removing identifying details:
“What do you advise me to do with such little? In your opinion, is it okay for me to concentrate (for now) in fulfilling my basic needs (food and housing) instead of saving until I get a higher salary?
I feel really ashamed that it took me almost 4 years from university graduation to land a job, even a low paying one as this. I’m also dreading the fact that if and when I go for more schooling, it will push me into debt yet again.”
I, not knowing her personally, nor her situation, gave her the best advice I could, writing back:
- My first piece of advice is: YES. ABSOLUTELY concentrate on living. Food and housing instead of savings or clearing your debt. I do not know your budget but if you are living on the edge, like $1 ramen meals at Dollarama because you’re trying to save then you are definitely being asked to focus on food and housing.
- My second piece of advice is to seriously reconsider school. That is even more debt, and ONLY IF you have done your research and you are sure of 2 things: (a) you can succeed and (b) you know what job / profession that is hiring in the medical field that WILL hire you and what the salary is (higher than the ROI it will take to get said degree plus the debt you already owe)
If you are unsure of A and/or B, then consider another field of work.
You know blue collar work seems very lowly but it does pay well. Being an electrician, a/c repair person, printer repair person, etc. I don’t know how to get into those trades, but I know that they make good salaries and are always in demand. Just food for thought.
My third piece of advice is to consider taking on a second part-time job at minimum wage. I do not know your medical condition, but if it is a possibility, consider it. You need to make more money which means you need to work more.
Throughout the course of last year and this year, she managed to:
- Negotiate for 21% raise in her salary bringing it up to $38,000 which was the max they could pay her in that job description and level
- Stuck it out where she was because of the experience that would look great on her future CV (the paradox of working for very, VERY little pay but knowing it will help set the foundations for your future)
- Took advantage of the company’s situation to go back to school and pass the exam with the certifications required (again, more building blocks for her career)
And just recently? The best news ever in my inbox the other day:
“I do not know if you remember me, we corresponded some time ago and lost touch. I am sorry for this lapse as I had a great deal that happened in the last year.
I went for another position, this time in finance, and I am happy to tell you that I will be starting at 93K which is nearly triple of what I had been making when I had come to you in total distress.
- The Ideal Household Budget for Spending (I use The Budgeting Tool to automate / track everything)
- Should Debt be part of your budget?
- The 5 Step Plan for getting out of debt
- How do I create a budget?
- 10 Golden Rules of Personal Finance
- Flip Flop Budgeting: For those who hate to budget
- How to guess what you are spending before budgeting
- How to start cutting in your budget
- How to cut your own budget and handle it wisely
- What is your real wage per hour?
Read more posts on budgeting.
- Why do we think women can’t make as much money as men?
- How to answer a random business scenario interview question
- Negotiating early on for as little as $7000 can give you 8 more years of wealth
- How I negotiated a $30,000 increase in my job offer
- How I got a $13,000 raise each year
- How not to screw up a negotiation
- How I got my job as a high paying consultant
- Becoming a freelancer: Part One
- How much should I charge as a freelancer?