Moved cross country alone on short notice - stuck financially - options?

[Schaan]

I'm 26 and relocated from the rural South to the Midwest for a job opportunity in March. I lived with my parents and helped them out financially when needed, but wasn't paying anywhere near the living expenses I do now. I was making $34,500 at home and commuting 100 miles daily, state income tax was 4% (the state I lived in has no state income tax, but I worked in an adjacent state so I had to pay that), sales tax in my area was 9.5%. My base salary here is $41,000 and

I'm getting a 10% shift premium now and there is a potential for an up to 6% bonus of base salary depending on personal and company performance. Should all of these factors be met, the maximum gross cash income is $47,560. State income tax is 4% here, sales tax is 6%, but miscellaneous taxes, like my car plates, are high. Car registration was $210 here and is about $40 back home. Weekly take home pay, excluding any overtime and net of all tax, 401k, and insurance, is around $550. Right now I have virtually no savings, cashed out my 401k at the last job, and used that for moving expenses. I also have the tax bill for that coming up next year.
The new employer contributes 6% of my pay to my 401k plan if I put in 8% of my pay - the old employer only contributed 4%. My 401k is at $1,600 since I started. The new job is easier and the atmosphere isn't nearly as stressful - there also seems to be some room for advancement unlike my previous job. Neither job is in the industry I majored in and I want out of this line of work ideally.

My bills break down as follows. Keep in mind that I only had three weeks from the time I received the offer until I had to be on the job and had to buy furniture, find an apartment, etc., and do everything alone. I also had never been to this city and had only done internet research.

Rent - $835 (lease ends in March, cancellation fee is about $1,700. I need to ask to see if I can get another party to take over this lease.)
Electric/Natural Gas - $80-$90 in the summer, was as low as $40 back in March
Water/Sewer - $25
Car Payment - $340
Internet - $30
Cell Phone - $75-$80 (under a contract until December)
Student loan - $100
Gasoline - $100 (assuming that I don't leave town)
Gym - $40 (under a contract for two years, cancellation fee is about $200)
Discover card minimum payment - $40
Best Buy card minimum payment - $25
Auto insurance - $65 (this is substantially cheaper back home)

I foolishly bought a sports car last year that was impractical for living alone. I traded this car in for a larger SUV and ended up with around $2,000 negative equity just on the act of trading it in. After the dust settled, I did end up reducing my total leverage by about $5,000. The car loan has $18,000 outstanding and I have about $5,300 in student loan debt. Trading cars again is just going to be digging the hole deeper.

I also have $360 on a Best Buy card, $600 at a furniture store, and $470 on a Discover card. All of these are six or twelve months no interest. At this point, I’m essentially insolvent and “walking dead” financially. This whole situation is a damn shame on me being that I was an economics major and was right-side up just ten months ago. I'm considering what options I have.

1) Move to a cheaper place. My rent/associated expenses are way too high. I live in a nice complex in a convenient part of town, but I don't take full advantage of the amenities there. It was one of the few complexes that I saw with vacancies when I moved up here. I arrived in town on Monday and had to be on the job the following Monday, so I had to take what was available and quickly. Many of the apartments I spoke with before the move are income-restricted, and the ones that weren't didn't have anything available on such short notice. Just getting out of this lease is going to cost me about $1,700 if I leave before March. By the time I paid this fee, and then hired help to move to a cheaper place (don't have a truck or anyone to really help), I would have spent most of the savings on rent and utilities, so this doesn't seem to be an option until next year.

2) Cut out my 401k contributions. This will probably get me an extra $100-$150 post tax per month. It's not a lot, but it would give me some breathing room. I hate to stop contributing since it's growing much faster than at my old job.

3) Return home and live with family until I can get back on my feet and, pay off this debt, and cut expenses. I miss my family and friends, but I know I will not get anything close to my current income at home or work at as a good of a company. At the same time, I can cut at least $1,000 monthly post-tax expenses and pay off all the debt in a year or two. I left on good terms with the former employer and could likely hire back in as a W-2 no benefit contractor for $15-$16 an hour, but I really want out of the current line of work (call center environments). I've now started applying for jobs back home. Just the cost of GETTING back home (getting out of lease, moving again) is probably going to take $2,500-$3,000. I don't even have anyone to assist with the act of moving itself. I would probably sell some of my furniture that I wouldn't use back home to help but it would still be tough. Career opportunities are severely limited in my hometown aside from education and health care. I was an economics/finance major in college and there is absolutely nothing in the area in this line of work.

4) Try to find side work. I don't work during core business hours and would have Fri/Sat to work elsewhere.

5) Tough it out until March. At that point I'd have the freedom to not have to pay the early lease termination fee. If I move, then I'm stuck in a lease somewhere else, although hopefully with a shorter term. I may also consider a roommate in a bigger unit. I only have 1BR now, so a roommate isn't an option in my current apartment.
At this point, what would you suggest doing?

[Petunia 100]

I'm 26 and relocated from the rural South to the Midwest for a job opportunity in March. I lived with my parents and helped them out financially when needed, but wasn't paying anywhere near the living expenses I do now. I was making $34,500 at home and commuting 100 miles daily, state income tax was 4% (the state I lived in has no state income tax, but I worked in an adjacent state so I had to pay that), sales tax in my area was 9.5%. My base salary here is $41,000 and

I'm getting a 10% shift premium now and there is a potential for an up to 6% bonus of base salary depending on personal and company performance. Should all of these factors be met, the maximum gross cash income is $47,560. State income tax is 4% here, sales tax is 6%, but miscellaneous taxes, like my car plates, are high. Car registration was $210 here and is about $40 back home. Weekly take home pay, excluding any overtime and net of all tax, 401k, and insurance, is around $550. Right now I have virtually no savings, cashed out my 401k at the last job, and used that for moving expenses. I also have the tax bill for that coming up next year.
The new employer contributes 6% of my pay to my 401k plan if I put in 8% of my pay - the old employer only contributed 4%. My 401k is at $1,600 since I started. The new job is easier and the atmosphere isn't nearly as stressful - there also seems to be some room for advancement unlike my previous job. Neither job is in the industry I majored in and I want out of this line of work ideally.

My bills break down as follows. Keep in mind that I only had three weeks from the time I received the offer until I had to be on the job and had to buy furniture, find an apartment, etc., and do everything alone. I also had never been to this city and had only done internet research.

Rent - $835 (lease ends in March, cancellation fee is about $1,700. I need to ask to see if I can get another party to take over this lease.)
Electric/Natural Gas - $80-$90 in the summer, was as low as $40 back in March
Water/Sewer - $25
Car Payment - $340
Internet - $30
Cell Phone - $75-$80 (under a contract until December)
Student loan - $100
Gasoline - $100 (assuming that I don't leave town)
Gym - $40 (under a contract for two years, cancellation fee is about $200)
Discover card minimum payment - $40
Best Buy card minimum payment - $25
Auto insurance - $65 (this is substantially cheaper back home)

I foolishly bought a sports car last year that was impractical for living alone. I traded this car in for a larger SUV and ended up with around $2,000 negative equity just on the act of trading it in. After the dust settled, I did end up reducing my total leverage by about $5,000. The car loan has $18,000 outstanding and I have about $5,300 in student loan debt. Trading cars again is just going to be digging the hole deeper.

I also have $360 on a Best Buy card, $600 at a furniture store, and $470 on a Discover card. All of these are six or twelve months no interest. At this point, I’m essentially insolvent and “walking dead” financially. This whole situation is a damn shame on me being that I was an economics major and was right-side up just ten months ago. I'm considering what options I have.

1) Move to a cheaper place. My rent/associated expenses are way too high. I live in a nice complex in a convenient part of town, but I don't take full advantage of the amenities there. It was one of the few complexes that I saw with vacancies when I moved up here. I arrived in town on Monday and had to be on the job the following Monday, so I had to take what was available and quickly. Many of the apartments I spoke with before the move are income-restricted, and the ones that weren't didn't have anything available on such short notice. Just getting out of this lease is going to cost me about $1,700 if I leave before March. By the time I paid this fee, and then hired help to move to a cheaper place (don't have a truck or anyone to really help), I would have spent most of the savings on rent and utilities, so this doesn't seem to be an option until next year.

2) Cut out my 401k contributions. This will probably get me an extra $100-$150 post tax per month. It's not a lot, but it would give me some breathing room. I hate to stop contributing since it's growing much faster than at my old job.

3) Return home and live with family until I can get back on my feet and, pay off this debt, and cut expenses. I miss my family and friends, but I know I will not get anything close to my current income at home or work at as a good of a company. At the same time, I can cut at least $1,000 monthly post-tax expenses and pay off all the debt in a year or two. I left on good terms with the former employer and could likely hire back in as a W-2 no benefit contractor for $15-$16 an hour, but I really want out of the current line of work (call center environments). I've now started applying for jobs back home. Just the cost of GETTING back home (getting out of lease, moving again) is probably going to take $2,500-$3,000. I don't even have anyone to assist with the act of moving itself. I would probably sell some of my furniture that I wouldn't use back home to help but it would still be tough. Career opportunities are severely limited in my hometown aside from education and health care. I was an economics/finance major in college and there is absolutely nothing in the area in this line of work.

4) Try to find side work. I don't work during core business hours and would have Fri/Sat to work elsewhere.

5) Tough it out until March. At that point I'd have the freedom to not have to pay the early lease termination fee. If I move, then I'm stuck in a lease somewhere else, although hopefully with a shorter term. I may also consider a roommate in a bigger unit. I only have 1BR now, so a roommate isn't an option in my current apartment.
At this point, what would you suggest doing?

If you found a roommate now, would your apartment complex allow you to move into a 2 bedroom unit with no penalty? If you don't know, ask.

Are you feeling homesick? Give it some time. Why move back to your hometown with little opportunity? That does not seem like a good long-term plan to me.

What is the SUV worth? Perhaps selling it and financing a more reasonably priced used sedan would be a good move.

Cutting out retirement savings should be a last resort. In the future, do not cash out your 401k to pay for anything. The penalties and taxes are the least of it. The real cost is what that money would have grown to 40 years from now.

I count $1680 in monthly. However, you have nothing listed for groceries, car maintenance, personal grooming, clothing, medical expenses, vacations, or gifts. While you can forgo many of those things for awhile, you cannot forgo them forever.

[Schaan]

If you found a roommate now, would your apartment complex allow you to move into a 2 bedroom unit with no penalty? If you don't know, ask.

Are you feeling homesick? Give it some time. Why move back to your hometown with little opportunity? That does not seem like a good long-term plan to me.

What is the SUV worth? Perhaps selling it and financing a more reasonably priced used sedan would be a good move.

Cutting out retirement savings should be a last resort. In the future, do not cash out your 401k to pay for anything. The penalties and taxes are the least of it. The real cost is what that money would have grown to 40 years from now.

I count $1680 in monthly. However, you have nothing listed for groceries, car maintenance, personal grooming, clothing, medical expenses, vacations, or gifts. While you can forgo many of those things for awhile, you cannot forgo them forever.

The SUV is probably worth between $10k-$11k. Selling it is still going to leave me $7,000-$8,000 in debt and then I have to buy another car. I could get an even cheaper car, refinance all this, but how much is this going to save me once you factor in likely additional repairs? I'm skeptical this would be that helpful.

Vacations and gifts aren't necessities are on hold. Right now, my expenses are so high that I can't even get $1000 saved up for an emergency fund, and most of this is contractually obligated. I can't reduce the expenses easily until next year.

Going back home is just a stop-gap measure until I can shed the debt. I'm noticing some improvement in the job market back home. It's not as good as here in the Midwest, but it isn't as bad as it was. I don't intend to stay there forever.

[snafu]

Don't do anything rash or in a rush. Take a deep breath and do some planning. Write out a budget so that every dollar has a 'job.' You have a short term cash flow problem and you need to examine the possibility of a roommate, sub lease, high nutrition/low cost food/menu plan, & delivering extra value to your employer. You are paying gym membership so use it to increase endorphins [feel better] and meet locals.

I suggest finding additional part time work for the short term - dog walking, yardwork, retail, cleaning offices at night if necessary. Entertain yourself by exploring your new city on foot and seeking out no cost/low cost activities. Go to the free dog and pony shows often sponsored by financial institutions to learn more about managing your investment [retirement funds]. Find the location of Goodwill/nicer Charity shops. If you truly need to buy stuff look there. Figure out how to do your own oil changes and minor auto maintenance. Use Gas Buddy & check tire pressure & fluids with every fill-up in hot weather. Limit AC to reduce the power bill low but let you sleep.

Keep watching for your 'ideal' job on LinkedIn or preferred on-line sites, Wishing you success!

[Schaan]

I work second shift, so the traditional moonlighting type jobs really won't work. I don't get off until 10 PM. If I work days, I will lose the 10% bonus. My only times to work are mornings (8-12) or Fri-Sat. Working two eight hour shifts at minimum wage on my days off will gross $464 a month. I will be keeping $250-$300 of that. It's an effective 10%-15% raise and I'll keep it in mind.

I'm going to send my old manager an email this week, but I'm not making any decisions until the end of August. I REALLY don't want to go back to the old position, especially with no benefits at all. There are other jobs at the site I'm interested in. I'm also going to keep applying for jobs outside of call centers back home. I would take a pay cut and move back home to get out of the call centers.

This month has been difficult not only because of the way the paychecks fell, but also because my shift premium hasn't been applying and I also did not get paid for the 4th. This put my monthly gross down $475 before taxes. I am working with HR and my management to get this backpay I'm due. August is also a three paycheck month. I should be able to pay off the Best Buy card and start attacking the furniture store account (it has no interest until January). I have already paid off two credit cards I was using over the last few months.

My Discover account has been open since 2010 and has the best rewards. This is my day to day card and it gets me $30-$50 cash back a month. I'm wanting to pay off the other credit card debt and keep the Discover. I just received a reasonably good Visa card that I'm intending to keep as my backup. I have an AMEX Gold that is going to be canceled after its no annual fee ends in August. My credit score hasn't taken a dent in all this moving - it's still a 730.

I had also been dating someone and the dates were going on the card. There has been some relief since she took a new job about forty miles away. She also has my first-gen iPad and I really need to get that back and sell it. That 64Gb iPad could easily sell for $300 or so. I also have a MacBook Pro I bought while I was back home that I use very rarely. I'm thinking I could get $600-$700 out of that laptop. That's a potential $1000.

The good thing is that I'm not facing an income problem. My income is fairly solid. The majority of this problem were one-off expenses and came about because of the move (spent between $3,000-$4,000 to furnish the place) or the speed of it/new to town (having to get a high-priced apartment because it was the only thing available instead of being able to plan/research). I really have about all I need now. The big challenge is just getting to next year so I can get out of this apartment without a penalty.

If I go home, it solves the short term cash flow problem and allows me to pay down the debt aggressively, but I'm going from $22 with excellent benefits and health care to $15-$16 with nothing at all if I go to my old job. I'm going to keep looking for jobs back home, but I highly doubt I'll find anything making $35k in Tennessee, much less $40k+. Making $15/hr is okay if I'm living with mom and dad and I'm single, but $15/hr isn't so hot at 35 and married. I think my income has a much higher chance to grow substantially here in IA, and will pretty much hold steady in TN.

I'm going to ask a personal friend back home who is a CFP about the situation.

[esb3357]

Take a Deep Breath and realize that this is the worse about to get better.

I have been in your shoes, a lot. My husband is military and we moved 5 times in the past 3 years. Every time we move I have to find a new job and we used a lot of our savings to move. What I personally found is that it takes 6 month to get on your feet. If you move again you will have all of these expenses twice. Give your new job time. It sounds like the numbers work, when you get rid of all of your one time fees.

As for second jobs, do you like kids? When we moved this last time, I picked up alot of one time sitting jobs from care.com and sittercity.com. With your interesting schedule you might be able to find someone that needs help in the morning. Can you pick up up overtime?

I honestly wouldn't go home. Just give it time. Pay off each little by little. In Jan. reevaluate your living situation and see if you want to room with someone.

[riverwed070707]

Of those options, the only one that makes sense to me is to pick up another job. Serving/ bartending jobs are easy to come by, quick money and flexible hours. You can put in to work 1 or 2 days a week and then pick up more hours when you have time/energy. Once those cards are gone, you'll have the flexibility to accelerate the car payment and pick up savings. Seems like you're in a good spot, it's just not going to happen overnight. Patience and discipline are going to be key here. Good luck and keep us posted!

[Gailete]

If nothing else, you could try and get morning shirt work at a McD's or whatever. They don't require 8 hours shifts. Go on free dates by exploring the town. Moving again is only going to cost you more. You are making a great income. By my calculations you have close to $500 that isn't budgeted out. You also seem to be blaming all your financial problems on your move. The cell phone contract wouldn't be, the gym membership isn't (my take on things like that is that was something you wanted not needed at the time you signed up. It hase nothing to do with your move).

I think where you are having problems is not figuring out the cost of things out before you jump. You bought a sports car and then traded it in for an SUV and then realized that wasn't the best move for you either. You apparently are using your Discover card to handle expenses but are only paying the minimum on it each month. What do you do with your rewards? Are you funneling them back to Discover to help pay off the bill or are you allowing them to accumulate or are you taking them as free cash.

You need to take the time to take some deep breaths and try to figure out what you really want in life in the long term. Pick up that 2nd job to help get credit card bills paid or to raise some cash that will give you breathing room and then take the rest of the year to work at figuring out a plan so that when Jan-Feb comes you will know if you want to extend your lease or move to a cheaper place or go back 'home'. How would your parents feel about you coming back home? Just about anything you do NOW will cost more than staying in one place and chipping away at your finances. This sounds like the sports car>>SUV>>all over again.

[Schaan]

Just posted a long reply that went into the nether. Oh well.

I should clarify the Discover card comment. I had been paying the balance in full every month until about two months ago. I have checked the statement on it and I haven't been charged any interest for the life of the card - yet. I have some additional services on it (identity theft protection, credit score monitoring) that autocharge the card $20 a month. I also have a magazine subscription, an iTunes account, and a Netflix account that charge to this card. I may not use the Netflix account once a month and my parents are mostly watching it. There is probably $40/month of "stuff" that autocharges to this card that is going to be canceled. It is very rare for this account to have a balance of "0" simply because it is used so frequently.

The biggest discretionary expense I can cut is my eating out. I like to eat out and go to bars, but really don't have the cash for it at the moment. These next two weeks I'm going to just bring something cheap from the grocery store for my lunch at work instead of going out to eat. I could probably save $100 a month easily in restaurant bills.

My parents want me back home not only because they miss me, but because I was helping them out financially as well. My parents only gross about $60k/combined and my dad drives 100 miles roundtrip to make $15.16/hr, so having me there to help on the bills made their limited money go much further. Their financial situation is far worse than mine at the moment. My grandparents are all up in their mid-late 70s, and while they're reasonably healthy now, they probably don't have many more years left.

Part of me wants to go back home for personal reasons, but most of my family has struggled to make ends meet back in Appalachia. I'm worried that if I do go back, my income ceiling is going to be very low, and that it will take years to get back to my current income, if I ever do. My parents were K-6 teachers and declined several promising jobs outside our hometown to stay with family, and their careers crashed and burned. I don't want the same thing to happen to me because my family made me feel guilty about moving out of the area.

[snafu]

Schaan, you're a quick learner! You've outlined a good plan in a few posts. 1st, you must plan what you will do, when you will do it and how you will spend money. I suggest writing it down since that's the first step to commitment. Spending nearly $ 4,000.00 instantly to outfit an expensive apartment wasn't in your best interest. The sports car and SUV were mistakes. You can't afford that girl friend, eating in restaurants or the bar scene just now.

You need to sell the MacBook, iPhone, take lunch/dinner to work from home/grocery. Immediately change to a non fee AMEX card so that the fee doesn't bill for the August cycle. Cancel all those automatic Discovery card charges, your parents will be ok without Netflix, the libraries have walls full of DVD movies an TV series and iTunes aren't critical to your health. Getting a few early hours at McDs or any breakfast gig could work with your schedule.

Learn from your errors and the choices your parents made which had negative career outcomes. This is a short term adjustment to new surroundings and more mature thinking. You can do this and best of all be in great shape by the next semester.

[Gailete]

My hubby and I live on much less than your parents (about half) with huge medical bills besides. It is tough, but we would be living very well on $60K. But then it sounds like there are things in your lives that you and your parents, both have determined you need that has been sucking your resources. I would be embaraased to have my son paying for a Netflix account for me unless it was a Christmas gift to both hubby and me for the year and even at that, it is an expensive present! It sounds like one of your biggest problems is listening to media about what are so-called 'needs' such as the issuer of credit cards that you need these extras like identity theft, credit score monitoring, etc. Not saying these aren't 'good' things, but if you can't afford them, you can't afford them. Same with things like itunes, magazine subscriptions. You have been living the good life with eating out, drinking, dates, etc. and that also has a been a big drain on your income. I don't think anything, other than the new furniture, could be directly related to your move. The move isn't the reason that you are in financial difficulties, it has been those small choices all along the way, including monthly automatic billing of things that aren't necessary. Those are holes that you need to plug.

Not trying to be harsh on you, but trying to help you see a bit of reality. So you move back home and start pitching in to help your parents financialy...again. What happens in a year when you meet a nice girl and want to marry her? Is she to move in with your folks? Probably not. Is she going to want to have to keep subsidizing your folks when they have double the salary you do? Again proabably not, and for sure if she has a job and is bringing in money will she want part of her earnings to pay for your folks Netflix account? I would say definitely not. It is time for your folks to live on their own resources since you can't plan on helping them out long term, your income just won't support it, but their income should support them nicely. Perhaps they need to learn some frugal tricks as well. This is a good time since financially you really can't afford to move back home, for you to get your financial house in order and for your parents as well to learn to live on their income--which is substantial! Many American families live on far less.

Go through your budget and figure out what things are needs and what are wants. Start slashing all the wants from the things that give you the least pleasure first to those that give you the most. You may find that something that gives you the most pleasure you can afford by getting rid of a lot of useless stuff. Just scratching those automatic charges on the Discover card frees up $40 for savings or a meal out. Find out the free stuff you can do for entertainment. If you like to read, it is impressive how many books you can download for free on line or that you can check out of the library (including reading magazines depending on the size of the library). If you want to eat out check into things like on-line coupons through groups like Groupon that will give you substantial discounts depending on your city. Set some goals for yourself on how much you can save and ways of doing things on the cheap that still provides a high quality of life. Ignore the media and all it is telling you that you need.