I’m 37, recently divorced, and a parent to an 11-year-old, working to plan for the future. I was a stay-at-home parent for nine years and have been rebuilding my life over the past two years. With the money from being bought out of the mortgage, I paid off my car and covered living expenses while finishing school. I now have a degree, a job, and feel like I’m on steady ground but also overwhelmed with figuring out my next steps.
Here’s where I stand:
- Monthly take-home pay is $4,400 (after deductions).
- I contribute 5% to a Roth 401k, 5% to a Traditional 401k (employer matches 5% on the Traditional), and 15% to a HYSA for my emergency fund. These deductions are already accounted for in the take-home pay.
- Remaining debt is $4,500 from a medical procedure on a credit card (I was uninsured for a year).
- Monthly expenses range from $3,000 to $3,500 depending on my child’s needs since my former partner is currently unemployed.
I’d love advice on:
- Should I keep splitting contributions between a Roth and Traditional 401k? Roth feels better, but I’m not certain.
- Should I use my HYSA to pay off the $4,500 debt, then rebuild the emergency fund? The HYSA currently has $7,500.
- Should I adjust to save 10% in the HYSA and max out a Roth IRA? Or maybe add an HSA?
Short-term: I want to buy a house by 2025, but my income feels like a limitation. Credit score is 812. I may need to wait until I earn more.
Long-term: Retiring by 55 is my dream, but that’s less than 20 years away. I know it’ll depend on maximizing my savings and earning potential. Any suggestions are greatly appreciated!