Looking for some advice on how to move forward

[Patricia Miller]

Hello,
I'm 47 yrs young and need some advice on what to do in terms of my student loan, investing and savings. I had 62,000 in student loan debt and now only have 30,000 plus $400 in credit card. I have no retirement savings and I make between 2,100-2,400 every two weeks before taxes. Help? There's a program in Maryland that's call Smartbuy that will help someone one like me into a home and pay off the remaining student loan debt. But there's a catch, I have to live in property for 5 yrs. HELP.

[Scott Trench]

Hi @Patricia Miller

Welcome to BP! Great question and I hope my reply will be helpful. 

First, let's start with the basics. Clearly, something is going right. You are earning decent money and have paid down $30,000 in student loans. You also have next to nothing in credit card debt. Great job! I'll assume from the rest of your post that you have no other assets, and no cash.

Now, we need to finish the play in creating a strong financial position. How can you save 50% of that income each month? How can we attack the grocery budget? How can we attack the entertainment categories? Can we get a roommate to defray housing expenses and make that easier? Are there any side hustles or weekend work that can help us accumulate more income after the workweek ends? Are there opportunities at work that would allow you to increase income from ~$50,000 per year to $60-$80K per year? 

With hustle, discipline, and some sacrifice you might be able to accumulate ~$25,000 - $30,000 in cash over the next 12-18 months and perhaps there may be opportunity to bump that income to $60-75K range. This will be a strong position from which to buy a house-hack. And, with a good house-hack, you can snowball that savings rate and start cranking out $40,000-$50,000 per year in accumulation that you can use to invest in RE or other asset classes. 

Right now, this is a personal finance issue. A home or real estate investment is likely to make your position untenable - as you are not in a  financial position to handle the various maintenance and big ticket items that come unexpectedly with buying a home. But, you can be there within a very short period of time if you are willing to hustle and attack your financial situation head-on! 

If I can be helpful with anything else, please let me know!