Occupation: commercial driver
Money transfer : Recently became a lorry driver after being made redundant from his car rental management job, then worked as a Covid contact tracer
Goal: Create a budget to manage his recent salary increase of over $50,000
For Chicagoan Joshua B., the Covid-19 pandemic opened him up to a new career that more than doubled his salary.
When the virus hit in 2020, Joshua worked as an assistant manager at an affordable car rental company. He stayed there for three years, eventually earning between $45,000 and $50,000 a year, depending on his bonus.
The pandemic has caused a crash in the car rental industry. Joshua was furloughed and then fired. He has earned more than working his corporate job between unemployment and government assistance during the pandemic.
“I was in no rush to get back to work,” said Joshua, 27.
During his layoff, Joshua knew it was time to switch gears. He didn’t really like working at the car rental company and the pay wasn’t good enough. Joshua majored in business management in college because he knew these skills would be valuable and transferable. For “the hell,” he said, he bought a commercial driver’s license study book and got a “class B” license.
When his money started to dry up, Joshua went to a church employment resource center and found work as a Covid-19 contact tracer. He did this job for a year, earning between $25,000 and $30,000.
“When I saw how low the paychecks were, I knew I couldn’t do [it]”Joshua said.
He returned home with his family to save money and reinvent his career. Joshua’s father suggested he visit a college in the city to explore his career. After visiting college, Joshua decided to enroll in his commercial driver’s license program, which is free as long as you work in the industry after completion.
He went to commercial driving school at night. After three months, he got his license and a new career: delivering pet supplies throughout the Midwest.
His trucking routes take him from Windy City to Kansas or Nebraska, requiring him to spend three nights a week away from home.
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“I don’t mind driving,” said Joshua, whose routes include states within a 10-hour drive. “I’m the kind of person who doesn’t need to talk or don’t want to talk to a lot of people when I’m working.”
While Joshua would love a trucking gig where he comes home every day, not sacrificing his salary is most important. He now earns $80,000, the most he has ever earned.
Later this month, Joshua will be moving out of his family home to a one-bedroom lakeside apartment, priced at $1,300 per month. He only bought one bedroom set and needs more furniture for his bachelor pad.
His student loans are between $10,000 and $11,000. They’ve been lenient during the pandemic, so he’s not paying the $125 monthly bill.
His car bill is $490 a month on a Chevy Malibu. He has no credit card debt and he is not enrolled in a retirement savings program.
“It’s happening so fast that I couldn’t do anything with (the money),” he said.
“Even though federal student loan borrowers like Joshua have had their loans on interest-free administrative forbearance during the pandemic,” says Leslie H. Tayne, financial lawyer and founder of the Tayne Law Group. People should take advantage of them and keep paying them during this time if they can. Each payment will go to the main balance.
“It’s a godsend,” Tayne said. “Where do you get zero percent financing?”
Additionally, paying off the loans will show that Joshua is responsible to potential creditors and can manage his debts.
“Twenties is the age to pay them,” Tayne said.
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Tayne says borrowers who are waiting to see if their loans are going to be canceled by the government should stop. Cancellation of student loans is not guaranteed and is a source of revenue for the government.
“You pay off your student loans, and if there is forgiveness, you enjoy it,” Tayne said.[But] you can’t expect that to happen. Before you turn around, you’ll be in your 30s and say, ‘OMG, my debt is even higher because I haven’t paid it.'”
David E. Barfield, founder of Datapoint Financial Planning, says Joshua should first start by saving a month of essential expenses such as rent, utilities, food and insurance. He said apps such as EveryDollar and the Mint could help with that.
If Joshua is ambitious, saving enough to cover his health and auto insurance deductibles may be a good idea “so that a doctor’s visit or a car accident doesn’t cause financial hardship when the bill comes due to the franchise,” Barfield said. .
Next, Barfield says Joshua should enroll in his company’s 401(k) retirement plan. If the employer matches some of the money, they must contribute up to the point where they receive the full matching contribution from the company, Barfield said.
Joshua would then have to build up his emergency fund for six months of essential expenses.
“This is NOT a vacation fund,” Barfield warned. “It’s about emergency savings for things like unexpected unemployment.”
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Next, Joshua would need to max out a Roth IRA, and then he’s given the go-ahead to furnish his bachelor pad. Barber suggested that Joshua read “The Wealthy Barber” book.
“If you get the order back by spending first and saving what’s left, you’ll never save,” Barfield said. “You’re going to spend it all.”
Natalie P. McNeal is the author of The Frugalista Files: How a Woman Got Out of Debt Without Giving Up the Fabulous, Available Life in sound and pocket book.