The Single Professional

Name: Erinn Harris, 32 Location: Alexandria, VA Occupation: High school teacher “I’m a bit of a financial wreck,” says Erinn. “I love socializing and eating out. And when I’m at a restaurant, I’m going to skip the salad and get the thing that looks the best on the menu instead—and wine.” Erinn also recognizes that she doesn’t need the monthly health massage that she splurges on. But what makes Erinn especially nervous is that she’s racked up debt on three credit cards. The total? It's more than three times her monthly income. “It’s something that I know I should think about, but I don’t. I could probably make way bigger credit card payments, but I’m reluctant to give up my lifestyle. I’m probably still paying interest on the time that I bought Chinese food eight years ago!” She also has no savings. “I know that I need an emergency fund—if something were to happen, I’d be screwed,” she admits. That said, Erinn is trying to be more financially savvy in one area of her life: Now that she's planning to go back to school to get her master’s degree, she's putting any extra money that she saves toward tuition. “I don’t want to take out another student loan because I’m already paying off three of those,” she says. She attributes that ability to save for school to her smart living situation. “I'm near D.C., where the cost of living can be sky-high," she says. "I’m glad that my rent and bills are very low because I live with roommates.” She's also been wise to evenly distribute her salary throughout the year, so that she doesn’t have to scrape by come summer when she isn't collecting a paycheck. What Stephany Says: It’s awesome that Erinn is setting aside funds to help her through the summer—so many teachers leave it up to chance, hoping that they’ll have supplemental income. And keeping her rent and utility costs low by living with roommates is a fantastic way to free up cash flow for other priorities. Between retirement, credit card payments and student loans, Erinn is putting 25% of her take-home pay toward financial priorities. This is a great percentage of her income, but I fear that since she doesn’t pay much over the minimum balance on her cards, the accrued interest over time means that she won’t be making much progress. Given that she already knows her splurge areas, I’d recommend a cash-only diet for such things. She'd give herself a weekly cash “allowance” for everything that isn’t a fixed bill by tallying up the monthly figure and then dividing it by four. Once that weekly allowance money runs out, no more fancy dinners! Erinn should also really save up an emergency fund before she starts saving for tuition, which means getting her master’s degree may need to be delayed. In the meantime, she should look into any and all opportunities for tuition reimbursement that might be available to her as a teacher.