budgeting, career, questions, retirement, student loans

Chicken-Counting

Chicken-Counting

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?

Sigh.

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?

Disease Called Debt

58 Comments on “Chicken-Counting

  1. Oh, boy do I understand this merry-go-round of thinking. It is exhausting! But for real: you need an emergency fund:) You could use a massage every three months, too. I just got the doc to prescribe my massages, so that might be an option. Paying off debt is stressful! It can cause a lot of muscle tension! Once you get your healthcare up and running, that might be an option.

    Do you have an intention for your debt payoff timeframe? I found that having one helped me immensely. I could continue to live with a roommate, etc. as long as I could see the end of the debt.

    1. I *suppose* you’re right that it would probably not be a smart move to ditch the emergency fund. 😉 And that’s a great thought about the massages — once I get switched into my new insurance, I will have to look into that.

      I definitely want to figure out a debt repayment timeline as soon as I have more information. I’m kind of dreading it, because I think it’s going to be a long timeline — my salary simply isn’t high enough to pay such a large amount of money back quickly. But it’ll be better to know the timeline than to not know it. And maybe soon I can also figure out some other ways to make more money and send in higher payments to advance the timeline.

  2. LOL. So familiar with these kinds of things.

    I do have some advice, though. My first six or seven months of debt repayment, I let myself spend (weekly massage for lower back pain, lunches at the coffeeshop basically whenever, work clothing, etc) and then after paying off my credit card at the end of the month, I put what was left over to debt. This was a mistake.

    What I wish I’d done instead was to figure out my debt-free timeline (for me, a year, so twelve payments) and put that amount towards debt every month first. Then massages, etc, with leftovers.

    Another thing you could do, which I do now to an extent, is choose a set amount of what I call slush money. This is what I use for tickets, yoga, buying CDs, meals out, etc. I give myself $100 a month for that kind of thing. So pick a reasonable amount based on your income, then feel no guilt whatever you spend it on — but within that category, you’ll have to prioritize. You may not be able to have everything on your wish list, but you can have *some* of it.

    1. This sounds like very sage advice. It definitely makes sense to put money towards debt first and make decisions about other stuff later. I definitely need to stay away from coffeeshop lunches, that’s for sure. And I’m starting to see how little things like that could really spiral out of control. The slush fund option might work well…I’m so excited to have more information soon so I can actually start figuring these things out!

  3. There are some awesome calculators online that can estimate your take home pay based on your salary and tax info. I used one when I first got my job because I had to move and needed to be able to determine how much rent I could afford before ever getting a pay check. Check this one out:http://www.adp.com/tools-and-resources/calculators-and-tools/payroll-calculators/salary-paycheck-calculator.aspx. It won’t be 100% accurate but mine was within $20. Not too shabby 🙂

    1. Thanks for the link, Melissa, I will take a look! Though I didn’t mention taxes in the post, that is definitely a big component of the mystery of how much money I’ll actually be taking home.

  4. Congrats on the job! These merry-go-round thoughts are VERY similar to my own when it comes to finances! I feel like I end up shifting priorities a few times a year and luckily my husband is a good sport about that. I like our current plan which is 10% of my income to my 403(b) and anything leftover after regular expenses to car loans and student loans. My feeling is that getting rid of debt is worth losing some of the compounding interest potential from saving since it’s a guaranteed return (you’re preventing future interest payments) and it frees up more money each month when you no longer have those monthly payments. I will feel so much more free when we no longer have debt and we can use our money however we want or maybe even no longer work fulltime!

    1. Thanks, Kelsey! That’s a really good point that the returns on loans are guaranteed since they don’t change as the market changes. It’s really a tough call, but I think I’m probably going to contribute relatively little to retirement this year, and mostly focus on paying the loans back. It’s just so hard to decide though, isn’t it?
      And yes, I bet it will feel amazing when you have everything paid off and suddenly have way more money coming in than you were ever used to! I hope that day isn’t too far off for you! 🙂

  5. You sound like me when I started my full time job a couple months ago (sans the student loans but your student loans are me feeling behind on retirement because of my age). It’s had to be patient but you must try it. Things will fall into place. Just my two cents, it’s easy, when getting an increase in salary, to be on the slippery slope of lifestyle inflation. I would hang on, as long as you can to the frugalist lifestyle possible, because once you get a taste of “the good life” it’s hard to go back.

    1. Thanks, Tonya! Yes, I’m going to try to hold on. I’ve gotten some good practice in being frugal over the past year or so, which i think will come in handy! 🙂

  6. Ok, a) I am so glad I’m not the only one who has these kinds of merry-go-rounds (literally everything in BOTH of these lists makes perfect sense to me as things to think) and b) do some people not have these thoughts? Who are they and can they please start a finance blog to teach me?

    Hahaha I love this post so much because I do the exact same thing. I guess my point is that both of the merry-go-rounds might always co-exist, but that I guarantee you can still rock your goals and hit your debt repayment and be awesome at money, even in the presence of that second merry-go-round. (Also, C’s suggestion of a slush fund is awesome and a great idea.)

    1. Oh yes, if you find a blog by someone who is not having these types of weirdo merry-go-round thoughts all the time, then please send it to me too! 🙂

      Yeah, I think it’s possible to ignore the second merry-go-round (or most of it, anyway) — it’ll just take some conscious willpower, I think. I don’t always have as much willpower as I’d like, but luckily what I DO have is a blog where I have to be accountable to people, which I bet will probably make a big difference, haha!

  7. Your thought process is identical to mine haha. I always get so caught up in thinking about every little details I forget to enjoy the actual moment or new journey that’s coming my way! As for paying off your debt, I started to go very hard once I started my full time job. I put more than 50% of my income towards it, and because I had been living frugally prior to that – the adjustment wasn’t too difficult.

    As for the gym membership, I’m the type of person who will tell you that if you make the time to ensure it’s a worthwhile investment, you should go for it! But depending on what your goals are – you may not even need a gym membership. I always encourage people to work out at home or outdoors. Good luck at your new job & congratulations 🙂

    1. Wow, over 50% of your income towards debt repayment — that’s awesome! That’s my goal for sure; I just need to get more information and see how the numbers shake out. And as for the gym, I think one of the complicating factors has to do with the seasons. I definitely like exercising outdoors, but that is tough when it’s -8 degrees Fahrenheit as it was on Saturday, haha. So I just need to make sure the gym would be worth it for the entire year, not just for the coldest months. It might not be worth it. We’ll see.

      1. Absolutely. Making multiple budgets and then deciding which one best suits your lifestyle without having to sacrifice too much is one of the best ways to approach it! I totally know what you mean about the gym. I slowly started purchasing weights from Wal-Mart so that I could workout inside during winter. And from there I learned a lot of high cardio workouts that didn’t require a treadmill, or further machines. But, I would still say go for the gym membership if it means focusing on your health & happiness 🙂

        1. Oh yeah, weights to use at home — that’s a good idea too. It’s a tough one. Fitness/health is super important, so I don’t want to skimp on it. I definitely need to do some careful thinking about this.

  8. Oh the double merry-go-rounds of thought processes, this happens to me quite often. Just remember to breathe in the process. 🙂 You’ve got great motivation, a starting plan, and just know it can always be revisited! Whatever you choose from here on out, will be a positive change because your main plan is to work towards paying off that student loan debt. Once you get acclimated to your position, dig into your benefits because there may be a few employee ones that are unforeseen at surface level! For example, your health insurance/provider may offer discounts at local gyms (in efforts to have employees stay healthy, a lot of employers are turning to this). Are their commuter benefits/bike benefits? It may be another creative way to save some money. I am definitely one for valuing health – so I say if a gym membership/yoga classes make you feel great than the cost aligns with your values. 🙂 You’ve got this, Sarah & congratulations again!!

    1. Yes, I think breathing is key. 🙂 And yes, you’re right, the main thing is that I’m working to pay off the debt, and any progress is good progress. (Although, fast progress is better because: interest.)

      Yeah, that’s a good idea, I should definitely look for hidden benefits. Maybe there’s a flexible spending account or something like that. I will be sure to ask the HR person tomorrow. Thanks!

  9. How familiar! I think I did this three times a year, every year, until the debt was paid off 😀

    Knowing that time is your friend on the retirement front, and needing that great ROI on loans with higher interest rates, I negotiated / found better interest rates for the debt and then split my money four ways in order of priority and amount: Debt repayment – 30%, current expenses (including a tiny allowance for personal spending) -55%, retirement savings – 5%, emergency cash savings – 10%.
    No matter how I sliced the pie, I always came back to that general breakdown.

    You might consider refinancing your loans if you can get a significantly lower rate and good terms. Definitely if you’re working for a larger employer with good benefits, they often have lots of good deals that save you money in other ways. We used to get our movie tickets and other attraction tickets at a cut-rate because they were prenegotiated in large bundles, and we could get a discount on our commuting costs, too.

    Congratulations on the new job!

    1. Ah, interesting breakdown. Yeah, even though I feel like paying the loans back is super high priority, it just feels weird not to contribute anything at all to retirement. Maybe 5% is doable. It think it will depend on my refinancing options, which I’m only just starting to look into. 6.8% (my current rate) is really not great, but my understanding is that I could probably get it at least down to 4 or 5%, and possibly even lower. Let’s hope.

      Yes, I definitely need to look into the other random benefits that my job may offer. I know they will reimburse me for my public transportation costs, so that is good. I’m also in the process of trying to switch onto my brother’s family plan for phone service, which in the long run will save me a lot of money.

      So much stuff to figure out! Thanks for your suggestions. 🙂

  10. “Had” conflicting plans? No. “Had, have and will always have” conflicting plans? Absolutely.

    I want to pay off the mortgage, but I need to focus on ramping up retirement to make up for lost years (inasmuch as that’s possible). Both when we’re doing our best just to avoid *lowering* savings each month.

    I also want to pad savings, start putting more aside for a future car, a little bit more each month into the vacation fund and… Ugh.

    A couple of things strike me:

    1. Retirement account: Put *something* in. I lost out on so many years because we were broke and focused on paying off debt. Even if it’s only $100 a month this year. Something.

    2. Massage: It’s actually something I’d recommend if you have any back or other muscle problems. Once a month isn’t enough to truly hurt your budget. Find someone you like on Groupon (it may take a couple of tries) and see if they have a special return rate for customers. Or if you already have someone you like, see if you can get a discount by buying several massages at once.

    3. Gym: Generally, I hate them. It’s a depressive thing. A) Depression and chronic fatigue can make it tough to leave the house. B) Knowing that I *should* be using it can be stressful make it so I don’t go. Which creates more guilt and stress, which makes it harder.

    But.

    It sounds like you already pay for yoga and find it worth the money. So depending on the difference in price, I say ask for a pass to try out the yoga class there. If you’re happy with the quality, sure pay a little more (depending on how much more) and have access to other classes.

    That said, you might find that you skip the gym class more often because you’re paying for the general service, whereas with a yoga class that you specifically pay for, it’s harder to rationalize missing one.

    My two cents (3 times over).

    1. Thanks for sharing your two cents! 🙂

      Oh gosh, the retirement thing. Such a tough call. I have already lost out on a lot of years myself (I’m 34 and have saved only a minuscule amount thus far), so I hate to lose out on more. I think I’ll try to put a small amount towards retirement at least, as you say.

      The massages may actually be worth it. My new job requires a huge amount of in-town travel throughout the day — which for me will be on foot and via public transportation, while also carrying heavy bags (which my shoulders are not going to be at all happy about). So that is probably first on my list. I do have a therapist who I like, and she’s not cheap, but she’s really really good. Maybe I’ll go in once every couple months.

      Yeah, I actually have been to this swanky gym a bunch of times because my friend who goes there very kindly lets me use her guest passes. So I know I definitely like it. I really need to keep pondering that one though — joining a gym would be no small financial commitment, even if I went all the time. Hmmmm…..

  11. At a rate of 6.8%, I’ve told my friends to split the difference. That interest rate is painful, but not so much that it would override gains in the stock market. I would save a certain amount for retirement each month that you know you will hit, and whatever extra savings there are each month go towards debt repayment.

    My wife has a gym membership. She pays for an 18 month membership at a time. Incredibly, they actually sell this. The cost comes out around $26 a month, and she uses it at least 3 or 4 times a week for the classes.

    1. Oh goodness, 18 months…that is quite a commitment. But $26 per month sounds great, especially if she’s using it a lot!

      Yeah, 6.8% is a weird place to be since it’s sort of in the same neighborhood as long-term stock market gains (a little lower, I guess). I don’t want to totally ignore my retirement accounts, so I’ll probably contribute a small amount at least. And if I can refinance my loans to something lower, then I’ll put a little more into retirement savings. It’s such a tough call. I think I’ll get more immediate psychological payoff from putting the money towards the loans, but on an intellectual level I know retirement is pretty darn important too.

  12. I go the mall-walking, Zumba in my living room, hand weights route for exercise. 🙂 all of our minds are constant merry-go-rounds of those exact same thoughts – both of them! As for what percentage to put toward what, I would mess around with numbers in excel. I would definitely hit any match they have at work (obviously), and make sure you are saving no less than 15% toward retirement. Then, for one full year, I would hammer the debt above that. One year up front of debt repayment can get a long way in the long haul. Then, at the end of that first year, you can evaluate if you want to keep hammering it that hard or split the difference as Norm says.

    1. Oh gosh, 15% is a lot. I mean, it would be great to save that much — and if I didn’t have loans I definitely would plan to do that — but the loans make everything feel different. I think I just need to get more information from the HR person and that will help a lot. I did try to put together an Excel spreadsheet yesterday, but there were so many missing pieces that it didn’t feel worth it (yet).

      I’m impressed that you actually do Zumba and hand weights in your living room! I feel like I would probably flake out. But if I could find some way not to flake out, it would definitely help me pay off those loans faster! 🙂

      1. I get it. Pay off the loans sistah! Do what feels right for you. Obviously. 🙂 We can all tell you what we would do, but you’re not us. And I’ve never had student loans, so don’t listen to me. Isn’t it great that there isn’t one single answer? You get to CHOOSE what to do with all that money from your new job!

        1. Haha, thanks. This reminds me of when you said you told your daughter, “isn’t it great that you get to CHOOSE what you want to be when you grow up?” It’s such good life advice, applicable to lots of different types of situations! 🙂

        2. I’m a big proponent of people making conscious choices. Being a mom has made me realize that no one has THE answers to things like finances, dieting, exercising, parenting. You can have one kid and have ALL the answers. Then you have the second kid and none of those answers work. The kid is different, so everything is different. The same goes for each of us.

  13. Haha, I’m currently debating about getting a massage monthly (mainly because my shoulders are TENSE and if I don’t do something about it they’ll probably find a way to kill me) and whether or not I should join a gym. It all comes down to money, which is ridiculous because I mean, massage therapy and exercise are good for you but, well, again, MONEY. Sigh.

    1. Sigh. Yes, money… It is so interesting how much money we often spend on health. I would put *buying vegetables* into that category as well, in addition to exercise and massage (not to mention medical care…). Health is clearly important, but there’s also a health industry that wants to get us to pay as much as possible, so it can get confusing trying to figure out what’s worth it! 🙂

  14. I can so relate to this thinking! I can definitely tell you that it’s only through force of habit of saving that I don’t look at our saved up balances and think, “Wow, you know what we could buy with that?!” You’ve been living on a student budget for so long that it is only natural you’re craving just a little lifestyle inflation. And geez, it’s not like you’re talking about buying a Tesla or investing in a Gucci wardrobe. You just want your own space and to be able to go to the gym, which are totally reasonable desires. And if you do decide to spend a little bit of money upgrading your quality of life and that slows down your repayment schedule a smidge, I don’t think there’s anything wrong with that. Work has to feel like it’s worth it, after all, and if you need to have one or two indulgent things to make it feel worth the life energy you’re trading for a paycheck, you have my permission to spend that money. (Not that you need anyone’s permission, but just in case it helps.) 🙂

    1. Haha, thanks, now I just need to get my own permission. 🙂 It’s such a tough call, but quality of life is obviously really important, and unfortunately sometimes the things that raise quality of life cost money… I’ll feel much clearer after I get some information from the HR person and I can do some actual calculations in an actual spreadsheet, because at this point it all feels very theoretical. I also might try to price out some apartments — that potential cost is a particularly nebulous one since rents can vary so widely.

  15. Ha ha you are just like me! Tame the monkey mind as your yoga teacher would say.
    My two cents worth: pay the student loan off first. You have heaps of time for retirement. Don’t change your course because you are bored, it is still the right course.
    I used to go to a fancy pants gym (and I did actually did use the membership!) but now I run, or do Pump classes in my garage – much cheaper and no-one cares what you wear.
    Congrats and good luck on the new job.

    1. Tame the monkey mind, love it. 🙂 I actually hadn’t heard that one before, but it’s very fitting.
      I really need to figure out how people do these fitness classes at home. I think I just have so little willpower that I’m likely to flake out after five minutes if there’s no real live human teacher in the room…but that’s not really a good excuse! I should look into one of these services like Daily Burn that I am always seeing advertised.

  16. I’m fighting the merry-go-rounds every day! I find it varies as to where I’m at in the process: The closer I am to paying off a debt, the easier it is to focus on that debt. I changed my mind so many times along my journey to pay off my student loans, and now again as I’m finishing out my car loan!

    When I first started getting serious, I dropped my retirement savings to zero. My company automatically gave me 6%, so I wasn’t losing anything. But I wasn’t really comfortable with that, so I eventually bumped it up to 3%. The following year when I got a small increase, I bumped it to 4%. I’ll probably bump it up again once the car loan is gone. But I’d say if you’re all at worried about it (and it sounds like you are), put at least a little bit in. It will help alleviate some of that concern.

    In my opinion, if you can pay your debt off quickly, say in less than a year, go “balls to the wall” and put as much as you can squeeze into the debt. If it’s going to be much more than that, build some fun into your budget. Decide on an amount you’re comfortable with, and then prioritize your wants according to that. It will change over time: Something that you thought was important won’t be anymore, you’ll get raises, you’ll feel deprived and want more spending… I look at my budget as an ever-changing thing, and adjust accordingly.

    My opinion on emergency funds has been all over the place since I started my debt payoff journey. I’m 100% on the idea of having something, the question is how much. At some points I’ve followed Dave Ramsey, and had $1,000. Other times I’ve felt I needed $5,000. When I paid off my student loan, I raided the emergency fund down to $1,000 to get it gone sooner, and then built it back up. I started this year with $5,000, but have used $1,000 because of my partner’s layoff. Once my car loan drops enough that I can pay it off without my emergency fund dropping below $1,000, I’ll probably raid the fund again, and then build it all up.

    It’s an ever-changing thing. And that’s okay! You’ll make mistakes along the way, and that’s okay too! You just have to keep making adjustments and moving ahead.

    1. Thanks for sharing a little about your experiences with these types of decisions, Cindy! I can totally relate to wanting to just not contribute anything to retirement and just pay back the debt. I went in to see the HR person today and I think I’m going to contribute a small amount to the 403(b), and try to also put $100/month into my Roth IRA, just so I can have a little more peace of mind about the retirement stuff. At least, that’s what I’m thinking right now.

      The emergency fund issue is such an interesting one too…I would prefer to keep mine around $5000 too, but it’s tough letting money just sit there while I have loans to pay off. $1000 is an interesting way to go; I hadn’t heard of that advice from Dave Ramsey before.

      In any case, thanks for the encouragement! 🙂 Hopefully I’ll have more of this figured out soon!

  17. I think you had a very natural reaction to a change in circumstances. Your income is going up, so you do have some new choices opening up to you. At least you are aware and conscious about the trade offs between the savings and spending impulses.
    For what it’s worth, keep an emergency fund. Beats going into more debt if something comes up.

    1. Yes, you’re probably right about keeping the emergency fund. 🙂 And yeah, it feels really weird to suddenly have a bunch of choices that I didn’t have before. And figuring out how to balance saving and spending (and paying back debt) seems to just be part of that process.

  18. I’m all about balance and compromise 🙂 I moved out of my parents suburb home with $35k in student debt and while I wanted a studio apartment in the downtown core, ended up renting a fourplex midtown apartment with a roommate and shared laundry. I had some WEIRD neighbours and our apartment furnishings were less than stellar but I was able to attack my loans more aggressively than if I was living on my own.

    You shouldn’t feel guilty upgrading your life now that you have the funds to do so. When I started making more, I moved into a nicer apartment but increased my debt payments in proportion to my income increase. Again, balance and compromise.

    I’ve been on the fence about joining a gym for forever because it’s just waaay too cold to workout outside. But I’ve been doing online workouts that are just as effective and I don’t have to go outside period! I use fitnessblender.com but there are a ton on YouTube, plus apps you can download too. I hear Seven is a good one.

    1. Balance and compromise sound like sane, logical options. 🙂 It sounds like you were able to do just that. (And hey, honestly you could have weird neighbors anywhere!) My lease isn’t up until the end of August, so I think I’ll start looking into possibilities in the next couple of months and see how much it might actually cost me to move.

      The gym question is so tough!! And the cold is a huge issue here too. I think the truth is that I would use the gym way more in the winter than in the summer, so it might not be worth it to get an ongoing membership. I should look into some of these apps… Thanks for the suggestions!

  19. This sounds extremely familiar as well. There isn’t a day that goes by that I don’t play monetary mental gymnastics. What if I lowered my retirement savings rate to pay off debt faster? Can I cut this, that, etc? In the end I haven’t done anything and I have a gym membership (it is only $20 a month). Good luck. Look forward to hearing the answers.

    1. Wow, a gym membership for $20/month! That’s amazing.
      Monetary mental gymnastics, haha. 🙂 There are just so many variables to consider that it’s hard to keep all the possibilities straight.

  20. That’s a lot going on in your head over there Sarah! 🙂

    I know there’s some people that say you should focus most of your $ towards debt and forget about retirement and others that think the exact opposite if the interest is low. I fall somewhere in the middle. I think especially now that the markets are bad would be a great time to buy some mutual funds at a low cost! So I guess what I’m saying is – do both?

    I think what’s important is to “Treat Yo’ Self”! while you’re paying off your debt. No, I’m not telling you to live like a baller, but putting a little bit of money towards fun would help make the debt repayments a little less of a grind.

    Best of luck to you in your new endeavor! At my new job during orientation I was asking all the nerdy 401k and benefit questions!

    1. Congrats again on your new job! You and I must have gotten jobs around the same time — which means we’re job/unemployment twins. 🙂 Here’s to a long stretch of having jobs!

      Haha, treat yo’self. i wonder if Aziz Ansari and Retta know how much mileage that advice is getting in the personal finance community (usually with a negative spin…). But anyway, thanks, and I think you’re right: i should probably take a little bit of the money and do something fun. 🙂

      1. I bet a lot of people don’t even know where that phrase came from. Like how when people say Vegas, Baby, Vegas no one ever credits the movie Swingers.

        At my job there’s a lot of people that’s been there for years! Some over 25! I’m not sure how I feel about staying at one place for that long, but it does show you that people really enjoy the company. Happy to be a part of it.

        Good luck on your job! Twinsies! I”m a nerd. 🙂

  21. Congratulations on landing a new job! I’m going to chime in a bit on the opposite side of what it seems like most are telling you, and recommend that you avoid the lifestyle inflation as long as possible, or at least keep in mind that you can do some of the things, but not ALL the things. For example, with the gym memberships and massage. One or the other would be ok, but both is probably overkill and will have a significant impact on your future savings goals.

    As a fellow Bostonian, I hear you on the weather issues. I work out at home, as many others have mentioned, and go running/hiking when its NOT -8 (I broke out the thermal underwear to wear around the house last Sunday!). I will not permit myself a gym membership until my passive income can cover all my regular expenses plus that luxury. Of course, right now I do have some pretty lux other expenditures, the main one being my house.

    On the student loans, especially if you can drop the rate, I would recommend prioritizing retirement first. This may sound crazy. I had $130K of loans at one point, and did pay some of it down quickly once I got my first job. But I still have $10k of loans, I’m paying $188 a month, and my retirement account passive income could easily cover this payment for eternity.

    Good luck starting the new job, and let us know how your thinking evolves as you get more numbers!

    1. Thanks for these thoughts! (Ack, the -8 day was too cold for me! I spent the whole day indoors baking things, not because I was hungry but just to have an excuse to turn the oven on.)

      That’s a really interesting perspective. And by the way, I’m super impressed that you paid off $130K of loans — that’s awesome. I think I’m going to see what types of refinancing options are available to me, and go from there. I’m going to try to save 10% for retirement, or at least that’s my current plan. We’ll see how it all works out when I actually get that first paycheck.

  22. $80 for yoga classes? That seems really expensive for my wallet, especially because I borrowed a yoga CD from a friend, learned all the moves then returned the CD, and practice all those moves at home – well, whenever I find the time and whenever I remember (which isn’t very often). Back to your topic though, I think it’ll be a lot easier to find the right answer once you start your job. Good luck on finding one so soon!!!

    1. Thanks, Fehmeen! 🙂 Yeah, I know the yoga classes are expensive. Unfortunately for me, the reality of the situation is that even though I know the poses and could theoretically practice at home, I am going to get a 500% better workout if I go to an actual class with an actual teacher. So I’ve decided that it’s just worth it for me, since it makes a huge difference in my health and quality of life. It would be cool if I could find a way to spend less on it though. :/

  23. One thing I can say from experience is that is it much easier to go forward than backward. To the extent possible, for a few months, keep your student lifestyle. You are used to it. Save the extra money and/or put it toward debt repayment. Make a budget and stick to it; it may take a few months to figure out your new expenses but you can probably get close. How much is your debt? If you scrimped and saved and threw every dollar towards it, could you pay it off anytime soon? If not, I’d take a balanced approach; decide on a debt-free date and plan your budget around that. Save enough in the 403 to get the match and if you don’t do that, start a Roth. Skip the Dental and Vision insurance unless someone else is paying; insurance is to protect you against things you can’t afford. You can afford to see a dentist regularly and to buy glasses every couple of years (or if you can’t, you can’t afford the insurance either). No insurance company stays in business paying out more in claims than they collect in premiums.

    1. Thanks for these thoughts. 🙂 Unfortunately my debt is not anything that I could pay off soon, no matter how much I scrimped and saved (it’s about $57K), so I think I do need to build some balance into my financial decisions. I think it’s a good point that I’m used to living a student lifestyle and so it would be easy to just continue on with that. I’m also excited because my new job is going to pay for my bus/subway pass, and I’m about to switch to a cheaper phone plan, so even those little bits of extra cash will help. I’m definitely in it for the long haul, but I think I’ll feel better once I start working and making a bit of progress!

  24. I definitely think you should still be contributing to retirement accounts – since the compound interest over 30-40 years is probably going to far exceed any amount of interest you’re paying on loan, even if it slightly draws out how long you’ll have to pay them.

    And I’m totally familiar with the two wildly different merry-go-rounds of the mind. I’ve been thinking a lot about going back to school for my PhD, if I could actually get in anywhere, but I’d very likely wind up in debt again. I get just wanting it all. :oP

    1. Yes, wanting it all is definitely a serious and widespread problem. 🙂 I think at this point I’ve definitely decided to contribute to retirement, especially since it turns out that there is a small employer match. You’re right, it’s a long time till retirement so I should probably make the most of it.

  25. Ah! The merry-go-round of thoughts. I’m so glad it’s not just me that thinks like this. Honestly, I exhaust myself with all the questions I present myself with, especially when it comes to personal finance. Well, as someone who chose not to pay into retirement accounts whilst paying off debt, I’m probably not the best person to ask! But my debt was unbearable and I just felt like I had to get rid of that first. Good luck and I hope your take home pay is what you need it to be!

    1. Thanks! And it’s good to hear all perspectives. While I don’t think I’m going to totally abandon the retirement contributions, I can definitely see how you might want to do that. In the end I doubt there’s any one “right” decision that applies to everyone…a lot of this stuff is psychological, and there’s a lot to be said for any decision that will increase one’s peace of mind. 🙂

  26. If there’s no employer match on the 401(k), I’d vote for living as frugally as possible until your loans are paid off, and then putting a huge chunk of your salary toward retirement once the loans are gone. But that’s just my opinion 🙂 Debt has such a huge psychological impact on us. To me, it’s worth sacrificing saving for retirement (assuming you can pay off your debt in a few years) to get rid of that debt as quickly as possible.

    1. So, it turns out there is an employer match! But it’s small — they’ll match 25% of my contribution, up to 1% of my total salary. So, I think I’ll contribute 4% to max out the employer match, maybe send a little of my take-home pay to my Roth IRA, and throw the rest at my loans.
      And yes, definitely, I find that debt has a huge psychological impact — and that’s reason enough to pay it off quickly!

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