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"I make $30,000 a year and I have a kid. How do I save for retirement?"

Posted by bell_flower 
"I make $30,000 a year and I have a kid. How do I save for retirement?"
January 21, 2018
This article is about a woman who makes $30,000, has one child, and is asking how she can save for retirement.

She is doing a lot of things right: she's frugal and she owns a house and she says she doesn't have credit card debt. (Although she does owe $12,000 on a car that is worth $2,000.)

Other than the car snafu, she gets props because she's an efficient money manager. Of course, because she has a chyld, and thanks to the U.S. tax system, she is paying zero income taxes. I wandered over to the IRS site and calculated that she gets about $1500 extra from the Government because of the EIC, which is essentially a giveaway. And she's apparently getting chyld support from the dud, about $400 a month. Alimony is taxed, but child support is not.

The tax deductions and the alimony are making a real difference in her ability to feed and clothe said child.

The financial expert in the article recommended she amend her taxes to take advantage of a retirement savings credit, and the refund from that can be the basis for her emergency fund.

The woman asked about discretionary income:

"“I want to be able to live and travel when or if I decide to completely stop working, but I am very worried I may have waited too long to start saving. I also worry that I am not educated enough to teach my daughter about this topic, so that she doesn’t make the same mistakes that I have made.”

Dream on, Honey. The expert essentially tells her: you can't fund your retirement and college at the same time, and she suggests that she hit up relatives for the college expenses. And she pretty much tells her she's going to be working until she's 67.

Look, I'm not going to hate on this woman because she's more industrious than most, but there is no denying that she's one disaster away from financial ruin and losing her house, and having a kid introduces instability into any financial system. What if she loses her job? What if she or her daughter have a serious illness? What if she marries a loser guy who is in an even worse economic situation than she is, and he saddles her with debt? And doG forbid, what if she gets knocked up again? Or what if her daughter does? Even if they do the sensible thing and abort, because nobody should be having a child she can't afford, that's going to be a chunk out of an already slim budget.

It seems to me the best lesson she can give her daughter is: make good grades so you can get a scholarship and don't ever have kids. it's going to take this young woman probably 30 years to dig herself out of the lower class caste in which she was born.

P.S., I also started with nothing, and I also saved 10-20% of my income consistently since I got my first "real job" at age 22. I also increased my salary by moving twice for my job, which was easier to do because no kids. I am now a "childless" 55 year old biddy who is pretty comfortable, thanks to years of saving.

Moral of the story: It is possible to dig yourself out of poverty, but it's damn near impossible when you have kids.
Re: "I make $30,000 a year. How do I save for retirement?"
January 21, 2018
Hitting up the relatives for college isn't always a good idea.

I get that putting money into a fund in lieu of Christmas gifts or birthday gifts sounds like a good idea, but it is fraught with isues. How many relatives will be shamed by others into contributing more than they can afford? Not contributing at all will cause some serious hard feelings. Then there is the whole idea of begging off your relatives for something they might be paying for themselves.

The kid needs to work hard, get a scholarship, or go to state or community schools where the costs are less.
Re: "I make $30,000 a year and I have a kid. How do I save for retirement?"
January 22, 2018
The woman is not going to be able to save a whole lot, if anything at all. The kid is going to have to take on student loans, just like many other people people do.

Moral of the story: don't be born to poor parent(s)
She needed to think about funding her retirement about 9 years ago, before she had her kid. (And did you notice her kid's name is Neveah, which is Heaven spelled backwards? That seems to be a popular name for some strange reason.) She basically wrecked her finances and it will take a long time to dig herself out of that hole, despite her best efforts at being necessarily careful with her finances now that she has the kid.
Like you said, she is doing better than some, but what kinda gets me....she knows she's not in the ideal situation, doing the best she can, I agree, but it kinda never ends. She wants to save for a stable retirement. OK. but then she wants to pay for kid's college, yeah, right. Then she wants to travel and luxuriate in her retirement. Shit chick, you make $30k, you can bootstrap yourself and do your best for a decent life, but you cant have everything like you make $100k or more..........my advice, get a education yourself, or some skill or some job that pays more in the meantime, save your dough for yourself and the retirement fund, and surviving w/ your head above water is the best you're gonna do. They want the so-called American dream but they don't want the work that goes with it.
Quote
cfuter
Like you said, she is doing better than some, but what kinda gets me....she knows she's not in the ideal situation, doing the best she can, I agree, but it kinda never ends. She wants to save for a stable retirement. OK. but then she wants to pay for kid's college, yeah, right. Then she wants to travel and luxuriate in her retirement. Shit chick, you make $30k, you can bootstrap yourself and do your best for a decent life, but you cant have everything like you make $100k or more..........my advice, get a education yourself, or some skill or some job that pays more in the meantime, save your dough for yourself and the retirement fund, and surviving w/ your head above water is the best you're gonna do. They want the so-called American dream but they don't want the work that goes with it.



You're right, some people don't want to work hard. Consequently I believe that to have a decent life, an individual must work hard and make decisions that are in their best interests.

There are plenty of people out there who are working 2-3 low wage jobs just to keep themselves and their kids afloat. And yes, they are working hard. But if they hadn't reproduced they'd have greater autonomy, more time, and more options available to them to better themselves in the long-term.

Such is the ultimate issue with teen motherhood. As the years go by so many of the girls end up working really, really, really hard floating from one dead-end job to the next... and yet making little or no progress toward any significant long-term personal or professional objectives. This Sisyphean approach to life can usually be avoided if you avoid getting knocked up.
"I make $30,000 a year and I have a kid. How do I save for retirement?"

hahahahahahahahahahahahaha
Re: "I make $30,000 a year and I have a kid. How do I save for retirement?"
February 01, 2018
Buckle down and get real:
-Get sterilized
-Put your daughter on birth control as soon as she starts dating, explain to her you don't want her to destroy her life before it begins
-Add as much to 401K now as is affordable
-Only buy your daughter gifts on her birthday or during holidays (this used to be the norm)
-Limit her activities to paying for one at a time, if she wants more she can earn the money
-No junk food
-No eating at restaurants, coffee, etc.
-No cell phone for the daughter, learn to distinguish wants from needs (!!!)
-Let daughter know she will need scholarships and can live at home while in school full-time, otherwise it is on her (if you can afford to continue to support her)
-Once she hits 18 add 18% of your salary pre-taxed to 401K
-Consider moving to an apartment or condo if it is cheaper and makes sense once your daughter is 18
-Aggressively improve job skills to obtain raises and increased responsibility at every opportunity

Work until you're 70, don't support your daughter once she is past 18 (unless she lives with you and is attending school full-time),
don't make or support any baybeez and she might just make it.
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