My Previous Single Life Retirement Plan

So I was proofing my own blog and had the thought that some people may see my "Retirement Plan' blog and think "Well yeah you are married with two incomes of course you can do it". However, I was on this plan to retire by 55 before I got married. Prior to Jim and I getting married we were both raising teens and or had kids in college living at home. It was tough, really tough. I still had a retirement plan even though my average income with spousal support and child support was less than $45,000 a year and that was with me working two jobs, working about sixty hours a week.

Here is what it looked like.

I had a car, one debt, and owed my lawyer enough to buy a nice used car within 18 months of my divorce. I also had a house payment that was more than about 40% of my income. I wanted to keep the house until all my kids had graduated high school.

What was my plan and how did that feed into where I am now.

Year one as a single parent I was flat broke, we purchased nothing and I simply paid my bills monthly praying for money for the next month. I took every job I could and marketed my business as much and as cheaply as I could.

Year two through four: I grew my business and took a big loss on the way. During this time I paid off my car with the profit from my business, paid off my lawyer and paid off that debt. In total it was over $34,000 in four years. I am not actually sure how I did it to be honest, I just put my head down and paid it and every time I had a surplus I paid on debt. During that time I put $100 a month in my IRA, and was very frugal.

Year 5: I sold my car and made about $10,000 total. *I forgot to mention I was able to help two of my kids buy cars for about $2500. With my $10000, I used $5000 to make some repairs to my house and put $5000 down on a new car with a warranty. I do not recommend buying new cars, my situation was this. My job had put me traveling and I needed a car that was reliable and could get through bad weather and made me feel safe. I often found myself driving through rural country so I decided to get a slightly used Outback. When I got to the dealership the used Outbacks were more than a new Crosstrek. I purchased the Crosstrek and put $5000 down, I've paid extra on it for three years and now only owe $11000. It will be paid off soon with the sell of my house and that is my only debt. I haven't regretted it because it has saved me on some dirt roads and creeks in Arkansas and Mississippi and through some storms and slick roads. The peace of mind has been worth it. My payment is also far less than I could afford and it has never hurt. MPG is almost double my previous car and insurance is the same. Effectively it's cost me $150 a month more to drive the newer car. The peace of mind has been worth it. I always new it would be paid off early.

Year 5 through 7: I stayed debt free besides the car, got another contract job. I'm basically killing myself working right now and trying to get to a point where I don't have to do this.

So...the point was "Retirement Single" where I was and where I would be if I was still single.

I would be at this time, seven years in:
1. Have a house for sale with the plan to move into a much smaller and cheaper house. *I had found one I wanted for $94,000 which would have put my payment after the down less than $500 a month with taxes and insurance.
2. I would have paid off my car with the sell of the house.
3. I would probably continue to work as hard as I am now because my focus has shifted to being with my husband.
4. My expenses are more with my husband because we live on a big farm. I would have had 1/2 of that with my son and I. I'm happy with where I am but this would have been the difference.
5. I would have probably been driven by need and worry to be quite frank to continue to work hard and save more and more so that I could still "Choose" my work by 55. My wants, needs and desires have changed since getting married.

If I was single on $40,000 a year it would look like this after the sale of the house.
After taxes $2900 a month.
1. House payment with taxes and insurance: $500
2. No other debt
3. Continue to contribute to an IRA and maybe even more.
4. Build an Emergency Fund up to thee months, six months and then one year.
5. I'd work on paying extra on the house note to pay it off early.
6. Utilities and wife: $300 (I would not have cable only Roku)
7. Health, auto and life insurance. I was getting free insurance when I was single, I imagine it would stay that way, auto is $80 a month and life was about $18 total less than $100.
8. Food $500 (I am obsessive about eating healthy)
9. Gas is covered and phone with my business expenses, actually so is car insurance.

MY total house payment, utilities and food would be about $1300 at the high end.
My car insurance, health insurance, phone, and wifi would actually come out as a tax deduction and off the top.
I would have approx $1600 left to pay on house and save and would probably use a little extra to help my kids and buy things I need or want.

You don't need a lot when you keep your expenses low and get out of debt. Debt is killing Americans. 50% of Americans cannot come up with $400 for an emergency.

If you are struggling look into a Dave Ramsey plan today. Change your mind set. Google Financial Freedom, watch You Tube videos. There are tons of people out there on $30,000 with no debt getting by comfortably. It's all about patience, mindset and being creative.

Love and Light,
C