I get occasional direct messages or emails from some of you. I currently respond to every one… well except for that Nigerian prince who wants to send me money and the weird Chinglish spam about herbal supplements. Usually I keep these messages to myself but since many of you are stuck at home like me, I thought you might enjoy reading this one and it may help others as well. G agreed to let me share it…
“I know these are trying times for all and I hope you and your family are safe and Healthy. I am paying off my student loans now and a SAHM. I have paid them up until June. With the jobs at my husband’s work not stable should I stop paying them and take that 200.00 extra a month? It seems like I then am failing in my baby steps. I was hoping to take advantage of the % being suspended. I am also wondering how to help my daughter save and invest at her age. Can you recommend some articles? I am still new to your site. I am 48 and not anywhere I want to be right now. It might be too late for me to reach all my goals but I will be able to help her be financially independent. Thank you for your time. Blessings, G.“
Hi G,
thanks for reaching out. First of all good job taking the first step toward financial independence by focusing on your debt and paying off your loans. It is a tough time right now with the uncertainties of Coronavirus and its effects on your husband’s job. Should you stop making loan payments right now to have the extra $200 per month?
My question back to you is what your family emergency fund looks like? 3-6 months of expenses immediately available (in an interest yielding bank account) is generally a good idea for most people. This is for things like loss of a job, health emergency, or unexpected big car / home costs. Currently, I would lean more toward the high end of this range since we are in an uncertain time with some estimates of 20%+ unemployment possible in the coming months. If you do not have this emergency fund, then the federal deferral of student loan payments plan is in place exactly for families like yours. It may be worth considering deferring those payments. If you do have a comfortable emergency fund, the decision becomes more complicated based on your overall financial picture.
As far as your daughter and thoughts on saving and investing I think a good place to start is to motivate her to want to look at this stuff with some examples of compound interest and how mastering it can make her wealthy:
How To Get Rich in One Blogpost
On my site, the other 2 articles I would start with to learn about investing are:
How To Invest and Get Wealthy
Why You Won’t Beat the Market But Still Can
and this page on financial independence includes lots of entertaining and actionable advice on building wealth.
I would also consider this excellent series on investing by JL Collins if your daughter wants to dig a little deeper into investing. JL makes this stuff about as entertaining as can be while also providing some good solid advice.
Now G, I want to talk to you directly. It is awesome that you are thinking of your daughter and also reaching out for feedback with current financial uncertainties. You shared that you are “48 and not anywhere I want to be right now. It might be too late for me to reach all my goals but I will be able to help her be financially independent.” I wrote this: “I’ll Never Be Able To Retire” with those like yourself in mind. Part of why I write is to hopefully inspire and help those like yourself.
You mention being a stay at home mom with a daughter who is 18. The single biggest way to change your financial picture quickly may be supplemental income. Are you healthy and able enough to work outside the home? If so, doing some side gigs or returning to work could change your trajectory entirely. If you have not been working outside of the home in many years this may feel scary and daunting. However, everything that I have ever done at the edge of my comfort zone has always been the most rewarding. Getting help and support from friends in these times can provide a lot of strength. I don’t presume that this is what you should do, however, turning one’s house into a dual income household while watching expenses closely is simply the best way I can think of to quickly increase savings.
I hope this helps G. Also, I think this question and answer could help others as well. If you are open to it, I would love to share your questions (anonymously) and my responses on the site. Let me know if you would be ok with that? Best of luck.
G was awesome enough to agree, and I hope this helps you on the journey as well. Do you have any feedback or questions of your own? Feel free to respectfully join in the comments below. Also, if you want to reach out to me privately, go for it. I know times are tough. Like many of you, I am stranded at home with time on my hands for the next few weeks. I don’t promise to have all the answers but I do promise to get back to you. Be well all.
