As a personal finance blogger who is NOT in her 20s, I know I’m behind. I read about all of these awesome 20-something bloggers who are rapidly saving, putting money into IRAs, paying down their student loans aggressively, and sitting on solid emergency funds.
I know it’s better late than never.
Sometimes it’s hard to remember that personal finance bloggers aren’t the only people out there to compare yourself to – a crap-ton of people are doing a crap-load less than I am.
However, that doesn’t make the bank balance any bigger. I feel like I’m going to have to work way harder than my counterparts who started at 22 to aggressively pay down debt and save… probably because I will.
Also, I married into some crazy student loan debt. But I’d do it all over again. ❤
I just wish I’d paid a lot more on my student loans from the beginning (though mine have a significantly lower interest rate than H’s) and saved a lot more.
My husband’s retirement funds aren’t looking too shabby, but mine are pitiful. I’m glad part of mine is an IRA, which is doing better than my state retirement account by a long shot; however, the total is still much lower than I’m comfortable with.
However, we have to balance saving for retirement with paying down debt.
The first paycheck from my side hustle went to paying down some credit card debt (that should be reimbursed because a large amount was H’s business expenses; some will also be a tax-write off next year), which was disappointing. We put a large chunk into the car loan, but not as much as what I wanted.
For my next paycheck (which arrived today!), I’m trying to figure out how to use the money. It’s a surprisingly high number – a little over $1600! This is a fantastic problem to have.
Possible scenarios for this and future side hustle checks:
- Every penny from side hustle funds goes to paying down the car loan. (That would lower us to about $700, which would be easy to pay off in by June 15th, which is my goal!)
After that, every penny goes into paying down the 8% student loan. After that, break down side hustle income into percentages:
- 50% savings
- 25% Roth IRA
- 25% Crazy 8% on $6K student loan with Sallie Mae
2. Side hustle funds broken into the following percentages:
- 80% car loan
- 10% Crazy 8% on $6K student loan with Sallie Mae
- 10% Roth IRA
After the car loan is paid off, then it would be 90% towards the student loan with the other 10% being put either into savings or my Roth IRA.
3. $1K of side hustle goes to car loan while anything over that number goes into another fund.
Here’s the problem: while options 1 & 2 seem like a good idea, I also feel like maybe I would prefer to do it by number instead of percentage. For instance, dedicate $1000 of each of my side hustle paycheck to one thing, then designate the rest of it (whatever amount is left over) to some other thing. I just can’t decide how to use that remainder. I could divide it equally between the the IRA and Sallie Mae, but it won’t be as satisfying because the IRA won’t get much bigger very fast, and the Sallie Mae loan balance won’t get much smaller very fast. I know that I will immediately get the rush of paying down a loan faster than watching the IRA grow, but I know how math works, and I know that the more we can get into a retirement fund right now, the better it is in the long term.
You know what the best answer would be?
Option 4: Make even more money!
Any advice? How would you use that $1600? The only stipulation: it has to go to debt repayment, retirement, or savings! This money is NOT for spending!