As I mentioned last week, I’m starting a new job in a couple weeks. And this means that I have a lot more clarity on certain topics than I did a month ago. I know where I’m going to be working, I know what my salary will be, and I know when and where I’m supposed to show up on my first day.
But there are a lot of details that I don’t know yet, and I’m feeling very impatient about finding them out. If you could put a magical microphone up to my brain and listen in on my thoughts for a few moments, they would sound something like this (imagine me talking reallyreallyfast):
What is my take-home pay going to be? How often am I going to get a paycheck? Weekly? Monthly? Bi-weekly? Does the 403(b) have employer matching? If it doesn’t, which it probably doesn’t, should I even bother with it? Or should I just contribute to my Roth IRA instead? Should I contribute to both? Or should I not contribute anything to any retirement accounts this year and just focus on paying off my loans? What if I can refinance my loans and get a better interest rate—THEN does it makes sense to contribute to a retirement account? If so, which one? And how low would the interest rate have to be for this to be a good idea? What kind of health plan should I choose? Do I have a choice? How much is the health plan going to cost me? What are the chances I’m going to need to see a doctor this year? What if my health plan costs more than I think it will? Do I need dental? Do I need vision? What is my take-home pay going to be? How much money can I possibly put towards debt repayment each month? $500? $750? $1000? $2000? Okay, probably not $2000. Why do I have an emergency fund? Should I just take my emergency fund and throw it at the loans, and just live without an emergency fund for a while? Could I pay back my loans faster if I stopped buying mascara? How about if I stopped going to yoga? Or stopped eating apples? What if I ate only pasta and peanut butter for every meal for a whole year? How fast could I pay back my loans THEN? Can I refinance my loans before I know what my take-home pay is going to be? What is my take-home pay going to be? What is my take-home pay going to be? What is my take-home pay going to be?
Okay, deep breath.
I’m going in to meet with the HR person tomorrow, and after that meeting I’ll have a lot more information about things like 403(b) employer matches (rumor has it that there either isn’t one, or it’s very small) and health plans and maybe even take-home pay. But until that happens, I won’t know how much net income I’ll actually be working with from month to month, which means that I can’t yet construct a loan repayment plan.
However, here’s what I do know: no matter what health plan I choose, or what type of interest rate I’m able to get by refinancing my loans, or how frugal I am, I am not going to be debt-free anytime soon. Do not make the mistake of thinking that having a PhD necessarily means making tons of money. I am not going to be making tons of money.
That being said, I will be making more than I had been making as a grad student, and more than I’ve ever made in my entire life (not a very high bar, but still!).
Which brings me to Part Two of this post.
So in addition to the crazy mental merry-go-round of thoughts transcribed above, I also have a second mental merry-go-round that tends to be in hibernation mode for much of the day but occasionally wakes up, temporarily pushing the first merry-go-round aside and spinning around on its own crazy axis. Here is what the second merry-go-round sounds like:
Okay, so obviously I’m definitely definitely definitely going to put a huge chunk of my salary towards debt repayment each month, no question. But, I mean, maybe I could also put a tiny bit of it towards other stuff? Like what if I got a massage every month? Massages are like a health thing, and health is worth investing in, right? Okay, fine, what if I only got a massage every two months? Also, I wonder if I could join my friend’s swanky gym, because that’s a health thing too, and honestly it’s SUCH A NICE GYM, and I’m not one of those people who would pay for a gym membership and then not use it, I would totally use it, and I’m paying like $80 a month for yoga classes anyway so why not just pay a little more to go to the swanky gym that has not only yoga classes but also barre classes and those crazy power-lifting classes and free shampoo in the showers? Also, I wonder if I could afford to get my own place instead of living with housemates? Maybe I could even get a place with laundry! If I could find a cheap one-bedroom, or even a studio, with laundry, how much of a rent increase would that be? Could I still live on the Red Line? If I got a cheap studio on the Red Line and also got a massage every three months and also joined my friend’s gym, how much could I still put towards loan repayment every month?
Don’t ask me how these two merry-go-rounds can be co-existing in my brain this week, because I have no idea. Making sizable loan repayments each month and moving into my own apartment are mutually exclusive alternatives, so basically I’m counting my chickens in two totally different and incompatible ways. Just for the record, I’m definitely going to choose the sizable loan payments. But that doesn’t mean I’m not thinking about the apartment and all the other stuff I’d be able to consider paying for if I didn’t have this debt to get rid of.
I guess this is the point when all this personal finance stuff gets real, eh? It’s all well and good to blog about being responsible with money when you have very little money to spend, but these next few months are when we’ll find out if I can actually be responsible about paying my loans back, or if I’m going to slide into making minimum payments.
So stay tuned.
Have you ever had two totally incompatible plans about what you were going to use your money for? Want to give me your thoughts on the retirement savings vs. debt repayment question? (My current interest rate is 6.8%, but I’m positive I can refinance it to something lower.) Want to weigh in on whether it’s possible to be a personal finance blogger and also have a gym membership?