Living Paycheck to Paycheck and Figuring Things Out
Laura, 28, works at an entertainment company in the booking division in a position she describes as “essentially an administrative assistant.” She is paid by the hour and earns roughly $30,500 a year before taxes.
Mike: You’re an hourly worker, but you get full-time benefits?
Laura: That’s right, I’m still considered a full-time employee despite not being salary, since I work at least 40 hours a week.
Mike: What are your benefits like?
Laura: I have health insurance that allows for general yearly checkups with my PCP/ob-gyn without a copay, but for everything else I pay about 80 percent of the appointment cost out of pocket, until I meet a deductible. It’s October, and I haven’t met it yet for the year, and that’s really frustrating because I go to a therapist and a psychiatrist, which are not covered. I also have pretty good dental insurance, which again allows for a cleaning every six months for no copay, and I’ve had to get some cavities filled and paid, I think, $90 out of pocket. I feel pretty lucky to even have dental insurance! I also have a 401(k) through the company with a match. I try to put in about three percent of my paycheck into that. I know I should be putting a much larger percentage but it’s tough when you’re going paycheck to paycheck and need the cash.
Mike: Do you put in enough in your 401(k) to get a full match?
Laura: I don’t believe so, no.
Mike: I only ask because the rule of thumb is that if you’re not contributing enough to get a full match, you are putting free money on the table.
Laura: Haha, yup, like every parent figure I know tells me that!
Mike: You’re already aware! So, I’m not going to get on your case about it. Living paycheck to paycheck is another issue. Let’s talk about that. What are your living expenses like?
Laura: I pay $700 a month for rent, and I live in a big house with six other people so utilities are usually pretty manageable. I probably pay less than $100 a month for cable/electric/gas/water. I also have a car, which is around $200 a month for insurance. I hadn’t been in a car accident—even as a passenger—in 28 years, and I’ve been in THREE since May (only one was my fault thank god). But that’s jacked up my insurance by $75 a month which totally sucks. I also pay about $90 to my student loans monthly, plus about $100 to try and pay my credit card off. It’s … not close.
Mike: What does your monthly take-home look like?
Laura: Monthly take-home varies, I’d say anywhere from $2,000 to $2,500? I try to work as much overtime as I possibly can to make extra cash. So depending on what shows I’m working, it varies.
Mike: So with rent, and utilities, therapy, your car and debt payments, and then putting some money away into your 401(k), that money goes pretty fast every month?
Laura: Yeah, it’s pretty much gone. I get paid every two weeks so it comes in and then goes right back out again. I basically hold my breath at the end of every month worrying about paying rent again.
Mike: Talk to me about your job. Is there growth potential there? Are raises available?
Laura: There is definitely growth potential, the company definitely rewards being a motivated self-starter and putting yourself and your ideas out there. They’re also big on loyalty and tend to hire in-house, which is great. I started at a really basic position and moved up within a year and a half to where I am now. I was considering asking for a raise after Christmas because I will have been in this position for a year and think I’ve been successful at it. The tough thing in general though is it’s obviously a desirable job at a desirable industry so the pay isn’t great at a foundational level. I look at my friends in finance and business and am like, holy shit. You make three times as much as I do.
Mike: But then, they work in finance where many workers are there solely to earn big money. You’re interested in things beyond just money?
Laura: Absolutely, I was just going to say that I am definitely the type of person who needs to really enjoy what she’s doing day to day. Part of me wishes, though, that I just “sold out” and was an accountant with a great financial portfolio, maybe a miserable job, but could at least afford to travel, buy a house, etc.—things that are impossible for me to do on my salary level. But obviously I picked my career so, I knew what I was getting in to.
Mike: Right. And comparing yourself to other people will always drive you crazy. The best thing to do for yourself is to figure out what you want in life, and determine whether or not your job will help you achieve that. And if it doesn’t, you find the one that will. Do you think there is enough growth potential for you to be able to make what you want—whether it’s a house or travel—a reality?
Laura: I do think so. There are plenty of colleagues of mine that started in my position—or lower—and worked their way up, and have families, homes, etc. I know that it’s a question of putting in your dues to get where you want, which on one hand is inspiring to see that people have done just that, but just really fucking frustrating for the time being. I know I definitely lucked out though with the nature of my job, its perks and the company culture which is great. No complaints there!
Mike: How much more are you going to ask for your next raise?
Laura: I have no idea? I am planning on asking a coworker that used to have my job and was promoted, which is how I got the position. He’s been here a couple of years longer than I have but would be a good resource since I’ve had the same trajectory so far.
Mike: Do you talk about salaries with your coworkers?
Laura: It’s not generally discussed. I know what some other people in the company roughly make due to my first position here when I helped with payroll, but otherwise no.
Mike: But you’re going to ask this particular coworker?
Laura: Yup, I feel comfortable talking to him. He’s roughly my age and we have a good rapport.
Mike: I think it’s good to have someone at your workplace to talk about these kinds of things.
Laura: Yeah definitely. I think most people in the company are open, approachable, and have a sense of humor. You pretty much have to on this side of the business!
Mike: So in your note to me, you mentioned that you sometimes run out of money and have had to ask for help from your parents. Can you talk a little about that?
Laura: Sure. Since I’ve been out of college, I’ve gotten laid off twice—once was only a year after I started working, and then again from a different job about two years later. That dug a HUGE hole for me to get out of. At my first job I was in pretty great shape actually—I had an IRA, full benefits, was making like $37,000 at a salaried and had $1,500 saved over that year. So being out of work the first time, taking a pay cut at my next job, and then being out of work again just eviscerated any of my savings and got me into about $5,000 of credit card debt.
In retrospect I want to punch myself in the face and be like, LAURA OH MY GOD MOVE BACK HOME EVEN THOUGH MOM AND DAD LIVE IN THE MIDDLE OF NOWHERE AND GET OUT OF THIS. But at the same, I was really confident that I would just be able to find another good job and work out of it. So finances just kept getting worse and worse incrementally. I’ve always been an overachiever, so I think I was just naively convinced that it would work itself out. Sweet move obviously. So over the past five or so years I’ve had to borrow money from my parents here and there to make rent or say, go grocery shopping. This summer was brutal—I got in a car accident and had to ask them for $1,200 to fix my car, which was un-driveable.
Mike: Do you know how much money it’s been?
Laura: Over the course of five years I’d say probably $5,000. I know I’m so, so lucky to have such generous parents. We joke that it’s my “diaper tax”—i.e. that I’ll be taking care of them when they’re in diapers. (We have a sick sense of humor.)
Mike: What were your parents saying during this time? Did they want you to move home? Did they say that the money was a loan?
Laura: As blessed as I am, I still consistently feel like a total failure for needing to ask them for money. They would call it a “loan” because they know I’m humiliated having to do it, for my sake, but it’s unspoken that I can’t pay them back. They’ve offered to help me move back home, but it’s never been insistent or judgmental—they say that they know I’m doing the best I can and wouldn’t be happy with living with them. So basically I have the best parents ever. And I feel like a shithead for it, haha.
Mike: The best way to pay back your parents is to succeed. And also maybe take them out to dinner when you see them.
Laura: Exactly! That’s what my dad always says.
Mike: So what are your immediate financial goals, and how are you going to go about achieving them?
Laura: The most pressing one is probably paying off my credit card debt. I haven’t used my credit card in probably almost a year and I always pay my minimum, but I know that’s not helping eradicate it quickly. I think the techniques you guys talk about to do so on the Billfold are dead on, but I just constantly feel pressed for money on a day to day basis. It’s like do I want to eat, or do I put an extra $10 towards my payment? (Eat, duh.)
Mike: The simple answer to this is to figure out a way to earn more money, which means go get that raise! Or find some side work that fits in your schedule for extra cash. It’s one of the reasons why Logan got a job at a restaurant—the extra infusion of cash has made it possible for her to continue paying down her fred cards and occasionally take herself out to dinner.
Laura: Definitely, that’s what I try to work as much overtime as I can. I’m really reticent to get a second job because I kind of have one and a half jobs already—working 40 hours in the office and then shows at night. I know a lot of people have much longer hours and more demanding, high-stress jobs (I know I’m not saving lives), but for my own mental health working any more than I already do would probably make me go postal.
Mike: How good are you feeling about asking for this raise and getting it?
Laura: Pretty good—my boss is pretty laid back and quiet in general, so feedback on my performance isn’t really constant, but he’s certainly told me when I’ve done a good job over the year. He’s pretty laissez-faire, I pretty much don’t get direction unless I need it. Which I think is good because that means he trusts my work and my judgment, but trickier to navigate when you’re kind of thinking, “Wait am I doing a good job or not?” If I asked him for a raise I think he would be open to discussion, but it would still need to be OK’ed by our president who is much more apt to be like, “Tell me specifically why you think you deserve this raise and explain x,y,z about your performance here with examples etc.” I’m definitely confident in my case for it! Just nerve-wracking to know you’re going to have to convince the head of the company.
Mike: Have you negotiated a raise before?
Laura: I haven’t. I haven’t really negotiated anything. As sad as it is I’m so happy to just have a job that over the years I will agree to anything to get hired.
Mike: I certainly felt that way during the financial crisis. But now that you’re hired, and you’re excelling, you’ll want to push yourself out of living paycheck to paycheck, right?
Laura: For sure. I think personally though, I doubt myself so much that I undermine what I’m doing. I know I just said, “Yeah I’m confident I can get a raise” two seconds ago but a lot of that is me trying to fake it ’til I make it. I was just thinking of Logan’s series with the other writer about money and depression before we started talking. In my professional career, my depression/anxiety makes me doubt my abilities. That coupled with getting laid off a couple of times is a huge obstacle to my success I think. I’m in therapy and on medication that helps, but then of course that’s a sizable expense in my month to month living, which causes more stress, etc. It’s a shitty cycle.
Mike: Have you seen progress by going to therapy?
Laura: I think, “I want to be successful!” but immediately my stupid brain says, “What makes you think you can actually BE a success?” It got really, really bad before it got better, mostly I think figuring out which approaches and medications would work better. I was seriously considering taking a medical leave for a month from work this spring, but ultimately decided that not working and then needing to get back in the swing of things would stress me out even more.
Mike: One day at a time, I suppose. But it sounds like you’re doing what you need to do to deal with your self-defeating thoughts. And it sounds like you enjoy your work and have supportive coworkers, which helps.
Laura: Right, the environment is good for me for sure.
Mike: What is the goal for you career-wise?
Laura: I’m not 100 percent sure. There are a few different avenues you can go down in this business—production, booking, etc.—and I like being in the booking segment of that. I’m not sure if I want to actually book venues though, or work in more of a support role. I guess I’m still figuring that part out, and am happy to stay in this position for now at least, with my immediate goal being to get that raise.
Mike: It sounds like you have some time to figure it out.
Laura: I think on a certain level between the pressure I put on myself and that of society or whatever you want to call it, I’m really disappointed with myself and where I am at 28. I was just talking with my mom recently about how she already had two kids, a house, and was going back to school to get her master’s at my age. I know it’s a different time for sure, but I definitely feel the generational ennui of like, “Jesus I really don’t have my shit together.” And I’m sure none of my friends or family think that! But it feels like it sometimes.
Mike: But the good news is that you know what you have to do to get it together. And you must know that you’re not the only one who feels this way.
Laura: Right, that’s half the battle. And also not comparing yourself to others (which is IMPOSSIBLE).
Mike: It’s a good reminder not to do that! It can put a fire under you to do what you need to succeed, but it often feeds into those feelings of self-defeat.
Laura: Absolutely, it’s so hard in practice but important.
Interested in talking with Mike about your job and your money? Send a note.