Let’s imagine a scenario, we might encounter this in our life:
Sarah and Carlos both hold full-time positions, yet Carlos has decided to head back to school in his pursuit to become a Radiologic Technologist. As an employee at Global Airlines, his salary has seen multiple decreases, making it tough for them to cope with their cumulative income. Their major outgoings include their mortgage and childcare costs, and Carlos is firm on his plan to manage a full-time job while studying five days a week. His academic curriculum operates on a Monday to Friday, 8 a.m. to 5 p.m. schedule, equivalent to a full-time workload.
Sarah has doubts about Carlos’ ability to sustain work, education, household duties, and his contributions to the raising of their young son simultaneously. Nevertheless, Carlos believes they can adapt with merely half of his wages and Sarah has eight weeks to establish the feasibility.
Over the past fortnight, they’ve taken steps to reduce expenditures, reassessing insurance coverage and decreasing their retirement contributions. Despite these efforts, a hard financial crunch is yet to be diffused. With a remaining car loan of about $2,500, credit card debt of $3,000, and around $10,000 saved – $6,000 of which is allocated for Carlos’s tuition—, their money-related predicament persists. They’re keen on preserving their savings primarily for academic costs. Their monthly groceries run approximately $150. The question remains on where to find further achievable reduction.
Identifying Sound Financial Strategies
Sarah and Carlos both hold valid viewpoints. Indeed, Carlos’ combined load of full-time work and study will leave little capacity for familial assistance. Conversely, surviving on one-and-a-half salaries without sizable expenditure slashing may prove challenging.
Let’s consider alternate courses of action available. Firstly, it’s not clear what the duration of Carlos’ course is. Presumptively, it would span two or four years, which will require the couple to maintain their approach over the subsequent years. Irrespective of their choice, some lifestyle modifications will be necessary.
Is subsisting on one full-time salary and one part-time salary a viable option? If their current setup with both working full time is strenuous, they would quite possibly struggle further with reduced income. Further, the looming education costs add to the ordeal.
While curtailing grocery and miscellaneous expenses are a wise start, a dramatic 50 percent reduction in grocery spending will hardly bridge the financial gap. To overcome shortfalls, considerable cuts in areas like housing or transportation may be imperative.
Practical Root Plan for Harsher Cuts
Considering relocation to a less expensive apartment, while leasing or selling their home, presents a possible solution with considerable savings, albeit with a fair deal of sacrifice. A comparative study of apartment expenses and current housing costs can help gauge the potential savings.
Another potential relief instrument could be selling one of their vehicles. Vehicle maintenance constitutes payments, insurance, depreciation, fuels, and routine expenses: elements that make car ownership burdensome. Recent reports from Cars.com breaks down these costs, revealing that ownership of a typical car could run up to $7,162 to $10,528 yearly. Its disposal, therefore, can have a measurable impact on their budget despite the inconvenience it may cause. Alternatives like carpooling, biking, or using a moped are possibilities.
If retaining two cars is a must, trading a newer vehicle for an older, compact car could help minimize costs. They can drop collision insurance, use lesser fuel, evade vehicle payments and potentially make some money from the car sale.
Exploring scholarships should be high on Carlos’ list, if not already done. Paying off credit card debt using part of their savings could bring down monthly interest charges, leaving the card available for unexpected expenses.
Should making ends meet on one and a half salaries prove unfeasible, resorting to student loans or home equity loan to cover the deficit, or having Carlos continue his full-time job while Sarah takes predominant charge at home post work, might be alternatives.
Sarah and Carlos deserve admiration for recognizing their wobbly career trajectory and proactively seeking a remedial course. This shift to a new career path might be strenuous, but promises to bear fruit in the long run. In the light of the U.S. Bureau of Labor Statistics’ prediction of a third of the fastest growing professions being healthcare-related, Carlos’ future holds promise.