Every now & then I get quite fired up about this topic, but then I read posts about saving 40-50% of your income, & think to myself I will never be FI.

My situation - I am a single mum with 2 boys - 9 & 12. I have no debt, but the assets I thought were worth a certain amount halved last year when the ex & I separated.

I am 34 years old, an RN with not a lot of hope of my income improving dramatically, & the bills don't go down just because there are 3 of you instead of 4. And with boys, my grocery bills are doubling on a weekly basis (or so it seems!)

So what am I doing about it? Well, firstly, I am appreciating what I have. No debt, a reliable car, and my health. Plus I do have some money (about $32k at the moment, but $12k of that is earmarked for school fees).

My plan is to go back to uni to get a business degree this year. 2 years full time, which I will be able to do because social security here is really good for single parents, so I will not have to work, as I already have the cash to pay my uni fees up front (at a 25% discount). The downside of doing this is that I will not be able to save AT ALL for the next 2 years. But when I graduate, I will be on a starting salary not much less than my current one with 15 years of nursing experience, and the opportunity to increase that far more than my current job allows.

So that's my situation at the moment (sorry it's a bit long). I guess I'm just looking for some reassurance that it is possible to start with nothing, & eventually have enough to be financially independent. And please don't give me the line that both my ex AND my financial advisor friend gave me, the one that goes "but when you meet someone else....."!!

Thanks for listening.

Primm

And please don't give me the line that both my ex AND my financial advisor friend gave me, the one that goes "but when you meet someone else....."!!

I wouldn't dream of it! I believe you can tackle this on your own, especially if you LBYM and maybe let the boys know that there's a good chance they'll need to help out with certain things - like perhaps buying their own clothes when they get a part-time job, and maybe helping pay for their college educations. It's not out of line to ask this of them, because they are the ones who ultimately benefit from these expenditures. I paid my way through college and it didn't scar me for life. <g>

You didn't mention how much you're currently putting away or how much you intend to put away after graduating, so I can't really do any estimating based on that. But you mentioned that you've currently saved $32,000, $12,000 of which will be spent on school fees. That leaves $20,000 to work for you. Through the power of compounding, if you figure an 8% return for the next 20 years, that $20,000 can grow to about $100,000.

If you can manage to set aside $500 each month over the next 20 years, that figure increases from $100,000 to about $400,000.

A trick that has worked well for us in the past that will probably work for you, since your income will be increasing sometime after you graduate, is to take any raises in income that you get and put them into savings/investments instead of raising your standard of living. That way you can increase your savings amount over time.

If you don't start setting aside any new money for 2 years, but then start adding $500 to the $20,000 you already have and increasing that amount by 3% each year, in 20 years you'll have close to $400,000.

The trick with compounding is to get as much invested as you can as early as possible, so that it has more time to work for you. If, instead of $500, you start investing $600 in two years and increase it by 3% each year, you'd have over $450,000 in 20 years. If you start with $1,000 your 20 year figure would be close to $700,000.

If it makes you feel any better, we're in a similar situation - only we have a HELOC to pay off while we do our investing, we're older than you (I'm 37 and DH is 42) and we have 5 mouths to feed rather than 3. In our case, I believe that owning investment property will be our saving grace, but that's not the answer for everyone. It sounds like maybe in your case, the answer will be to significantly increase your earning power, in which case it sounds like you're on the right track.

This may be a stupid question, but I thought that RNs made a decent living. I take it that's not so? What will you be studying? What portion of your sons' expenses is your ex helping with?

Don't lose hope so early in the game. Time is on your side. :)

SS

primm shares,

Every now & then I get quite fired up about this topic, but then I read posts about saving 40-50% of your income, & think to myself I will never be FI.

My situation - I am a single mum with 2 boys - 9 & 12. I have no debt, but the assets I thought were worth a certain amount halved last year when the ex & I separated.

I am 34 years old, an RN with not a lot of hope of my income improving dramatically, & the bills don't go down just because there are 3 of you instead of 4. And with boys, my grocery bills are doubling on a weekly basis (or so it seems!)

So what am I doing about it? Well, firstly, I am appreciating what I have. No debt, a reliable car, and my health. Plus I do have some money (about $32k at the moment, but $12k of that is earmarked for school fees).

My plan is to go back to uni to get a business degree this year. 2 years full time, which I will be able to do because social security here is really good for single parents, so I will not have to work, as I already have the cash to pay my uni fees up front (at a 25% discount). The downside of doing this is that I will not be able to save AT ALL for the next 2 years. But when I graduate, I will be on a starting salary not much less than my current one with 15 years of nursing experience, and the opportunity to increase that far more than my current job allows.

So that's my situation at the moment (sorry it's a bit long). I guess I'm just looking for some reassurance that it is possible to start with nothing, & eventually have enough to be financially independent. And please don't give me the line that both my ex AND my financial advisor friend gave me, the one that goes "but when you meet someone else....."!!


In some ways, I can relate to your situation. At age 36, I had to start all over after divorce. I loss more that half my assets and was left with a lot less money than you have now.

OTOH, I had a good paying job and I don't have kids.

Anyway, I'm in my late 40's now and I am now retired. And I never remarried. I think waiting to meet the right person is bad advice, since a)you can't make that happen and b)it's not necessary.

I defintely think that ER is not out of the question for you.

Here's two suggestions for you:

1) Try to get into a better paying job. The higher your salary, the more you can save. Instead of going for a busines degree, why not condider on based on your nursing backround. One example is nurse anethetist. I know that they earned 75k back in the late '90s so it's probably a lot higher now.

2) You can successfully lower the cost of child rearing. I would encourage you to read the Tightwad Gazette books, which were written by a woman who successfully raised her family of 8 on 18k per year.

HTH

SS & workwayless,

Unfortunately, here in Oz RN's make crap money - the most I can expect without getting into a management role is about $50k. And that's AUD, not USD. Including working weekends & public holidays etc, which doesn't do much for a social life! As for positions like nurse anaesthetist, they don't exist over here.

Plus, I hate my work!! Simple fact at the moment is, I can't see myself doing this for very much longer without going mad. The hours are horrible, the pay isn't much better, & I need to find another vocation. May have something to do with the fact that I've just completed my 2 mandatory nights per month, & the old body clock takes about a week to adjust these days!!

Thanks for the words of encouragement though. I think what I needed was just someone to put the figures into print for me, so I could see it was doable.

At the moment, I am saving $500 per month, but like I said, that is what my income will reduce by when I start studying. However my entertainment bills will also decrease, by virtue of the fact that I won't have time to go out! So I'll gain a little, but won't be able to stash much for 2 years - figuring that by doing this & studying full-time, it will be sooner when I can have a proper income again.

Primm

Thanks for the words of encouragement though. I think what I needed was just someone to put the figures into print for me, so I could see it was doable.

I'm glad you're feeling encouraged.

Nurses are in big demand in the US, and being a typically self-centered American, I tend to expect the rest of the world to be just like it is here. My bad.

So I'll gain a little, but won't be able to stash much for 2 years - figuring that by doing this & studying full-time, it will be sooner when I can have a proper income again.

FYI, most of the figures I gave you were assuming that you took a 2 year investing hiatus, because I figured you were pretty set on your course.

Good luck with your new career!

SS

Unfortunately, here in Oz RN's make crap money - the most I can expect without getting into a management role is about $50k.

Well, look at it this way. 50K is more than my expected 37K that I would get after almost 20 years of being a cop with no promotions.

Well, look at it this way. 50K is more than my expected 37K that I would get after almost 20 years of being a cop with no promotions.

Ah, yes, but I'm talking AU$, and I'm assuming (?) you're in the US, so the two amounts are about equivalent.

So it's agreed - you get crap pay too!!

Why is that? Universally (almost!) emergency services & health care are held up as being one of the backbones of society. We are well trained professionals who work shifts that most people wouldn't, yet we put up with pay & conditions that the average Joe would baulk at.

Primm

So it's agreed - you get crap pay too!!

Why is that? Universally (almost!) emergency services & health care are held up as being one of the backbones of society. We are well trained professionals who work shifts that most people wouldn't, yet we put up with pay & conditions that the average Joe would baulk at.

Primm

Bingo, you hit the nail on the head.

I guess I'm just looking for some reassurance that it is possible to start with nothing, & eventually have enough to be financially independent.

Primm,

I can relate so very much. I am a 32 year old single mother of an almost 13 year old daughter. My ex DH and I split in 1993, after three years of marraige. Ironically differing views on money spending was a very large contributor in the ending of the marraige. I was not working at the time (I had went back to college full time after my DD was born), and child support lasted about 6 months and has been non existant since then.

All I can say is the "appreciating what you have" mentality is what kept me going. Even though I made pittance the first couple of years, I learned to get by and still have our needs met. Thankfully my parents were there to help. They had the room for us and insisted I come home at least until I got on my feet, (it wound up being almost 8 years, but that's another story) But in all that time never did I sponge off of them. I gave them whatever I could towards the house bills. If I made $200 a week I gave them $75. As my means increased so did what I gave them. I *knew* that when I was struggling making 15K - 18K a year, if I lived anywhere else I wouldn't have been able to make the bills, so I wanted to make sure they felt I was contributing as best I could. Five years ago I got my current job and I'm making almost double what I did when I started. Since I was so accustomed to LBMM, I am now able to save about 35% - 40% of my income and still live at a higher standard. I take vacations, eat out every so often, go to football games, and do many of the things I enjoy. But now I have a growing net worth, no debt, and on the track of becoming FI.

It took a long time, but there are times when I still wonder if I'm doing enough. That's when I sit back, think of all that I have accomplished, and realize I'm on the right track and everything will be fine.

Donna

I wouldn't dream of it! I believe you can tackle this on your own, especially if you LBYM and maybe let the boys know that there's a good chance they'll need to help out with certain things - like perhaps buying their own clothes when they get a part-time job, and maybe helping pay for their college educations. It's not out of line to ask this of them, because they are the ones who ultimately benefit from these expenditures. I paid my way through college and it didn't scar me for life. <g>

This is great advice. Because I LBMM my daughter is pretty frugal herself. While I like that, I fear that she may go to the extreme of denying herself something she really wants or can afford just because she is afraid to spend money. I don't want to see that happen. I'd rather see just take the time to evalute each purchase and then impulsively buy all the time. Even if she decides it's worth the money, at least I'll know she gave it some thought.

Donna