Reader Case Examine: Nursing Pupil by Day, Restaurant Employee by Evening, Needing to Make Ends Meet

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John is in his late twenties and lives in a small southern city in the US along with his cat. He recently made the decision to go back to school to become a nurse. Previously he worked at a nonprofit and, while he was passionate about the mission, the work/life balance wasn’t tenable for the long term. John started his nursing program this month and is also working front-of-house at a restaurant to try and cover his living expenses. He’s excited about school and his future career as a nurse, but no longer having a salaried position has him in a slightly precarious financial position. Let’s help John figure out how to financially survive nursing school so that he can graduate and become the best nurse he can be!

What’s a Reader Case Study?

Case Studies address financial and life dilemmas that readers of Frugalwoods send in requesting advice. Then, we (that’d be me and YOU, dear reader) read through their situation and provide advice, encouragement, insight and feedback in the comments section.

For an example, check out the last case study. Case Studies are updated by participants (at the end of the post) several months after the Case is featured. Visit this page for links to all updated Case Studies.

The Goal Of Reader Case Studies

Reader Case Studies intend to highlight a diverse range of financial situations, ages, ethnicities, locations, goals, careers, incomes, family compositions and more!

The Case Study series began in 2016 and, to date, there’ve been 71 Case Studies. I’ve featured folks with annual incomes ranging from $17k to $200k+ and net worths ranging from -$300k to $2.9M+.

I’ve featured single, married, partnered, divorced, child-filled and child-free households. I’ve featured gay, straight and trans people. I’ve featured men, women and non-binary folks. I’ve had cat people and dog people. I’ve featured folks from the US, Australia, Canada, England, South Africa, Spain, Finland and France.

I’ve featured people with PhDs and people with high school diplomas. I’ve featured people in their early 20’s and people in their late 60’s. I’ve featured folks who live on farms and folks who live in New York City.

The goal is diversity and only YOU can help me achieve that by emailing me your story! If you haven’t seen your circumstances reflected in a Case Study, I encourage you to apply to be a Case Study participant by emailing mrs@frugalwoods.com.

Reader Case Study Guidelines

I probably don’t need to say the following because you folks are the kindest, most polite commenters on the internet, but please note that Frugalwoods is a judgement-free zone where we endeavor to help one another, not condemn.

There’s no room for rudeness here. The goal is to create a supportive environment where we all acknowledge we’re human, we’re flawed, but we choose to be here together, workshopping our money and our lives with positive, proactive suggestions and ideas.

A disclaimer that I am not a trained financial professional and I encourage people not to make serious financial decisions based solely on what one person on the internet advises. 

I encourage everyone to do their own research to determine the best course of action for their finances. I am not a financial advisor and I am not your financial advisor.

With that I’ll let John, today’s Case Study subject, take it from here!

John’s Story

A bird, as seen by John

Hi Frugalwoods! My name is John, I’m in my late twenties and I live in a small southern city with my cat. I’ve lived alone for a few years, which was one of the best decisions I’ve made (although also one of the most expensive).

I’m really happy with my life and spend most of my free time doing things that bring me a lot of joy. I love music and play often with some of my friends. Several days a week I lift weights, and sometimes I run, swim, and hike. I love going to see music, sports, movies, and drag shows with my closest friends. I spend my alone time reading; currently I’m reading the Broken Earth trilogy by N. K. Jemisin (affiliate link). I feel part of a wonderful community and am able to spend time doing things that bring meaning to my life.

I’m submitting a case study because I don’t think I’ve ever seen a case study for a situation like mine, but I think it’s something a lot of people might relate to. I’m in my late twenties and at the beginning of a career change after four years in a salaried job. This month, I started nursing school at my local community college, which will last for the next two years.

John’s Career Change Decision

I was making a $47,000 salary, with benefits, at a nonprofit job I loved but was completely draining. It wasn’t a job designed to be held for more than a couple of years. And after a couple of years there, I started thinking about what I wanted to do with the rest of my life. I was in a very specific field that has almost no job opportunities or opportunities for advancement. So I decided to go in a totally different direction: nursing, a field which has wide-ranging and almost endless job opportunities along with robust opportunities for advancement and higher degrees. Nursing will allow me to continue helping people, which is what I loved most about my previous job. I’m very excited about this career change, but I’m stressed about my finances.

In September 2021 I left my job, and in October, I started working in a restaurant, with no previous service industry experience. It’s the best-paying job I can find that will also work with my school schedule, making about $16/hour (including tips). I’m hoping to make about $15,000 next year at work. I’m getting about $5,000 in student loans this semester, which will help (although of course about half the loans will go to paying tuition). But still, even with the loans it’s looking like my best case scenario is a drop in annual income from $47,000 to $25,000 for the next two years.

This is a huge financial shift, and I’m really struggling to figure out how to balance everything financially. I’m not sure it’s actually even possible for me to make enough to cover my living expenses while I’m in school. I have now accepted that I will definitely be relying on student loans, but I’m beginning to think I will also have to rely on a certain amount of credit card debt until I graduate.

This is my second time in school; the first time (for my undergraduate degree) I had a full ride scholarship and support from my parents. It’s very different going back as an adult! Because it’s my second degree, I’m not eligible for any of the programs that make college free. And as far as I can tell, I’m not eligible for any financial aid except for loans and scholarships.

The Good

I’ve been a Frugalwoods reader for several years. I always read the Case Studies, and at the beginning of COVID, I did the Uber Frugal Month challenge. It changed my life financially. I was able to establish a budget based on my salary at the time and I allocated every dollar from my paycheck to expenses, debt repayment, and eventually savings. This helped me get my spending under control. I implemented the 3-day rule for purchases and began keeping a wish list of things I needed or wanted. I cut my monthly grocery spending from $300-400 down to $150. I go to the grocery store every two weeks now, and I keep a calculator adding up things I pick up, and put things back if I go over $75.

John’s workout spot

There are things I’ve accomplished financially that I’m really proud of. In addition to cutting back my spending on groceries and impulse purchases, while I was at my last job I traded in my old, unreliable, expensive car for a Honda Fit and paid off the $6,000 loan and $4,000 in repairs from an accident in less than a year. I paid off more than $6,000 in medical debt that was on a high interest medical credit card before the interest could kick in, again in less than a year.

I’ve looked for other ways to cut expenses too. I share a gym membership with friends and I trade streaming services with friends so we only have to pay once. A lot of my clothes come from clothing swaps or thrift stores, although you might not be able to tell that from my spending. When I left my last job I paid off $300 on my phone financing and switched from AT&T to Tello (an MVNO, which I learned about from Frugalwoods). While I was at my last job I kept my savings in a CD so I wouldn’t spend them before I needed them for school; now that I need them liquid, my savings are in a high-interest savings account, another Frugalwoods tip.

Overall, I think the best habit I developed in my last job was budgeting money out of every paycheck. My biweekly, regular pay became a limit for me to stay under. I track my spending and bills using Mint. Every paycheck, I subtracted my fixed expenses from and then discretionary spending, and cut discretionary spending and saving to fit into the amount I had. I tried to put 20% of each paycheck toward debt repayment or savings; after I paid off some of my recurring expenses I was putting as much as $380 every two weeks into savings. I also tried to put aside $50-100 from each paycheck toward larger purchases, which helped me control my spending and slow down impulse purchases. It was an idiosyncratic system, but it really worked for me. I split my rent between my two paychecks every month and it’s always the first bill I pay.

The Bad and The Ugly

Like I said, things have been tight since I left my last job. I make good money at the restaurant for an entry-level job, but I’m not making as much as I spend every month. Even if I cut back my discretionary spending drastically, I don’t think I would make enough to cover my rent, utilities, phone and internet, health insurance, food, and gas.

Things will get easier in 2022 in several ways. I’ll receive my first student loan disbursement of $2,500, which will pay my tuition. And my health insurance will drop from $242 to $54 because I switched my plan during open enrollment and adjusted my tax credit to my new income.

But things will also get harder in other ways. Right now I’m working 4-5 days per week. Standing on my feet for 6-8 hours is having a big physical toll on my body after just a couple of months; I’m sore all the time and have aches and pains in my shoulders, hips, and feet. That’s just part of the job. But I don’t know if I’ll be able to keep up the same number of shifts per week and do school full-time (school also includes a weekly 12-hour clinical shift on my feet). School has to be my first priority; there’s no way to get through nursing school otherwise, and besides, I want to learn everything I can to be a good nurse. But this will cut into my earning ability.

Budgeting on a Budget

The other thing that’s been challenging is that it’s been, paradoxically, harder for me to control my spending since my income dropped. For one, my budgeting system has completely broken down. I mentioned before that I had an idiosyncratic but effective system where I budgeted each dollar out of every paycheck and used that to prioritize fixed expenses and cut discretionary expenses. But that was much easier to do when I had a fixed paycheck of exactly $1,421 every two weeks. Now my paycheck varies wildly; in the past month I had $514 one check and $850 the next. Somehow it just doesn’t work with my brain to be able to budget when things change so much.

Meal cooked by John

I am still covering my fixed expenses first. The imperfect system I have right now is that the most critical fixed expenses–rent, utilities, health insurance, and internet–come directly out of my bank account, and my paycheck is basically covering those, with some dipping into my savings at times. Then, I’m using my credit card for all discretionary expenses, including necessities like food and also more impulsive purchases. I’m paying down my credit card in full from my savings each month, but that won’t last forever. I do not want to deplete my savings to below $2,000.

And even worse, because I can’t cover even my necessities with my income, I’ve become more impulsive with purchases that I want or maybe need but aren’t as fundamentally critical.

It’s hard, somehow, for me to distinguish between what is and isn’t fundamentally necessary when it all has to go on my credit card. For example, I’ve bought three pairs of shoes in the last two months, because I hurt my feet at work, and I’m trying to find shoes that will help and that I can wear at either the restaurant or nursing. I’m sure I didn’t need all three pairs, but it’s hard to decide what I do and don’t need. And this is the type of excess spending that maybe isn’t ideal, but wouldn’t have been a big deal under my previous salary. Now, it has a much bigger impact on me financially. The consequences are also higher, because if I pick the wrong shoes I’m likely to exacerbate this injury into a serious one. And somehow it all feels a little fatalistic, because it’s all more than I can afford. Maybe another way to frame this is, a career change comes with some unexpected expenses (like clothes and shoes), and those are a lot more difficult to handle on a limited income.

Despite these difficulties, I still have a lot of hope. This was always going to be a difficult time financially, and I’ve done everything I could to prepare for it by saving and paying down debts; I stayed at my previous job for two years after I was ready to go so that I could prepare financially. In the past I’ve been able to dramatically rein things once I develop a system, so I think that’s what I need right now. I can’t do the impossible, but I think I can settle into a pattern that’s more sustainable and won’t dig me into as deep of a hole. And all of this is in preparation for entering a new profession two years from now that is financially stable and well-paying. I won’t be rich as a nurse, but I think I can expect to make at least what I was making before, with opportunities for advancement above that (median starting pay for nurses in my area is about $50,000); I was perfectly financially comfortable in that pay range in the past.

My goals right now are to develop a budget system that works for a low-income job, and is (more) sustainable; and to hopefully develop some habits for living on a tighter budget, so that when my pay increases again after school I’ll be used to living on less and can save a lot more.

What’s the best part of your current lifestyle/routine?

John at a soccer game

There are a lot of things I like and find fulfilling about my current lifestyle. I have a great and supportive community of friends around me. I like watching movies with friends and playing music. Reading is also a really good outlet for me. I’ve worked out several days a week since I was a teenager. It helps me keep consistency and a kind of rhythm to my week and it’s a good physical outlet.

One thing I like about my job is the ability to come to work, clock in, and clock out when I leave. It’s hard for me to balance deadlines and obligations, and I like that my current job doesn’t require me to think about work when I leave.

A few years ago I made the decision to live alone. This has been really good for my mental health and stability, although I know that right now it’s making things even harder financially. I really enjoy having my own space, and especially having room for family and friends to stay with me when they visit.

I’m excited about starting nursing school and moving forward with this next big step in my life. I’m really proud of how much I’ve grown over the past couple of years. I’m happier with my life and who I am than I’ve ever been. The decision to leave my last job and change careers was a huge one, and it feels like a big step forward for me to be embarking on that. The time I’m in right now feels challenging, but I see that as a sign of growth.

I read the below quote in Alice Walker’s Living by the Word recently and I feel like I’ve just come out of a period of change and am experiencing the amazing results, and also like I’m entering a period like this now (affiliate link):

Some periods of our growth are so confusing that we don’t even recognize that growth is happening. We may feel hostile or angry or weepy and hysterical, or we may feel depressed. It would never occur to us, unless we stumbled on a book or a person who explained to us, that we were in fact in the process of change, of actually becoming larger, spiritually, than we were before. Whenever we grow, we tend to feel it, as a young seed must feel the weight and inertia of the earth as it seeks to break out of its shell on its way to becoming a plant. Often the feeling is anything but pleasant. But what is most unpleasant is the not knowing what is happening. Those long periods when something inside ourselves seems to be waiting, holding its breath, unsure about what the next step should be, eventually become the periods we wait for, for it is in those periods that we realize that we are being prepared for the next phase of our life and that, in all probability, a new level of the personality is about to be revealed.

What’s the worst part of your current lifestyle/routine?

John camping

Work is very physically challenging. I’m tired and sore all the time, and I feel like I’m developing injuries in my feet. But I’m still not making enough to make ends meet.

I’m stressed about money all the time. I’m struggling to decide if I should try to pick up a second job, as most of my coworkers do. But it seems like it would be impossible to work two jobs while in school. My previous employer offered that I could do consulting or even part-time work for them, probably for at least $20/hour or potentially much higher, but I worry about my ability to balance more deadlines and work that’s not easily hour-bound.

I would like to see my family more. It was hard to visit because my last job was so demanding, but I think the upcoming period of my life is going to be even more challenging to find time.

I’m already stressed thinking about what my daily schedule is going to be like once I start nursing school. Balancing school and work seems almost impossible.

Where John Wants to be in 10 Years:

  • Finances:
    • I want to be out of debt, financially stable, and living within my means. There’s a lot contained in that one sentence: I want to be in a place where I’m not living paycheck to paycheck and don’t have to worry about a catastrophe taking me under.
    • I want to be putting a sizable amount in retirement, especially since I haven’t been able to up until now.
    • I don’t know yet if I want to have children, but I’m considering what it would take to be financially prepared for children in the next 10 years.
    • I’m sick of paying increasing rent to landlords every year and would like to be able to buy my home.
  • Lifestyle:
    • I’d like to be partnered and maybe have kids.
    • I want to have a good work-life balance so that I’m not spending all my life at work.
    • I want to be able to take care of my family as my parents grow older and my siblings’ kids grow up.
    • I want to continue to have rich friendships and be rooted in community, providing care to my friends (and potentially their kids!).
  • Career:
    • I want to be solidly established in my nursing career, well-respected and experienced.
    • If it feels right, I might go back to school to become a nurse practitioner, but I want several years of experience as an R.N. first.
    • I want to be excited about my career and feel like I’m making a difference.
    • Like I said above, I want to have work-life balance and not be consumed by work. And I really don’t want to be burned out.

John’s Finances

Income

Item Amount Notes
Paycheck $1,000 Highly variable. I work a restaurant job, and my wages are heavily based on tips. I’m new at this job, so I am still figuring out how much my average paycheck will be; I make about $16/hour counting tips. Right now I am trying to work 4-5 days per week, but I won’t be able to work as much once I start school. I also get a small amount of tips separately in cash (~$10/week) that I use as spending money for bars, restaurants, and shows.
Student Loans $875 I will have $5,250 in student loans for the spring semester. Assuming I get the same amount in the fall, and dividing by 12 months, this comes out to $875/month.
Cash Tips $40 Pretty variable. Most of my tips are on my paycheck, but actual cash is split as cash tips outside my paycheck.
Monthly subtotal: $1,915
Annual total: $22,980

Debts

Item Outstanding loan balance Interest Rate Loan Period/Payoff Terms
Federal Direct Unsubsidized Student Loans $2,729 3.73% Deferred until graduation in December 2023. Balance will increase by roughly this amount for the next 3 semesters, unless I turn it down.
Federal Direct Subsidized Student Loans $2,521 3.73% Deferred until graduation in December 2023. Balance will increase by roughly this amount for the next 3 semesters, unless I turn it down.
Total: $5,250

Assets

Item Amount Notes Interest/type of securities held/Stock ticker Name of bank/brokerage
Savings Account $11,000 This is both my education and emergency fund. When I left my job, it had $16,000, but I’ve been having to use it to pay bills. I want to keep a minimum of $2,000 for emergencies. 0.5% (was higher before interest rates were lowered) Marcus by Goldman Sachs
Checking Account $100 I keep my cash fairly low; any extra funds are moved to my savings account (although right now there aren’t any extra). Local Bank
Total: $11,100

Vehicles

Vehicle make, model, year Valued at Mileage Paid off?
Honda Fit 2011 $8,000 117,000 yes
Total: $8,000

Expenses

Item Amount Notes
Rent $825
Tuition $419
Car Maintenance $153 This year this included a new set of tires and shocks; without those it would have been $68/month
Utilities $150 I have it set to level off each month, so it stays around $140-150.
Car Insurance $133 My car insurance is high because of my driving record. I do not carry collision insurance. I have used a tracker to get discounts in the past and will likely enroll in that again.
Groceries $130 Includes some household supplies like toilet paper, paper towels, etc. Before I left my previous job, I was aiming for $150/month in groceries. Working in the restaurant has since helped cut my grocery bill further since I can eat free meals there.
Gas $123 Highly variable. This includes some cost from travel, so that will likely decrease next year. But my daily commute will increase because of the distance to school. Maybe I could carpool?
Shopping: Clothing $110
School Books $88 This is an estimate; hoping to get it lower by renting books, etc. Also may be lower after my first year.
Restaurants $81 Primarily a social cost; I rarely eat restaurant food or takeout alone.
Personal Care $75
Physical Therapy $58 I had a joint injury this year. Hopefully this won’t be a recurring cost, but I do get injured often.
Doctor $55 I have a couple of doctors I have to see regularly, and I’m not sure how much that will cost on my new insurance
Doctor (injury) $53 Other costs related to my injury; hopefully this won’t happen next year.
Donations $53 Donations to fundraisers and campaigns, mostly not tax deductible
Travel $50 This is lower than I spent last year, but I don’t anticipate having the funds or time to travel as I have this year.
Other shopping $45
Gifts $45 Gifts for birthdays, weddings, holidays
Shopping: Books $43 An indulgence. I’ve been trying to get books through the library more, although I love owning a copy.
Nursing School Supplies and Other Fees $40 Scrubs, lab supplies, liability insurance, drug test and background check, immunizations, etc
Health Insurance $38 $388.81 minus a $351 Advance Premium Tax Credit. After I left my job I switched to an ACA plan in October. I was paying $243/month, but I used the open enrollment period to recalculate my premiums.
Cat Food and Supplies $37 Food, litter, medicines
Fast Food $37 Feel like this cost could rise unless I’m really careful because of how busy I am. Maybe I could offset some of this by keeping some microwave meals on hand?
Home Furnishings and Repair $36
Streaming Subscriptions $34
Internet $30
Sporting Goods $28 This includes some work shoes.
Pharmacy $24 Hopefully this will drop to ~$10/month once I start my new insurance in January, which has a $3 copay on all prescriptions. One of my prescriptions is very expensive, and if for some reason my insurance failed, my prescriptions could easily be more than $500/month. But I have access to programs to be able to get it for free if that happens.
Contacts $21 $252 purchased once; hopefully will be mostly covered under new vision insurance
News $20 Two local newspapers and three national magazines
Gym $18 Discounted from $32 by splitting an account with friends.
Dental Insurance $17
Health Supplies $17 Including masks, supplies to treat injuries, etc
Bars $17 I don’t drink much alcohol, so this includes is primarily cover charges.
Vet Exam and Shots $16
Renter’s Insurance $14
Phone Service $14 Paid off my phone and switched from AT&T to Tello when I left my job.
Vision Exam $14 $165 split over 12 months; considering getting vision insurance to cover this and contacts.
Organizational Dues $13
Dentist and Dental Supplies $12
Vision Supplies $11 contact cases and solution
Music Streaming $11
Movies $11 This does not include movies I watched during vacation at a film festival (that’s under travel)
Social Media $11
Live Music $10
Parking $9 Wish this was $0.
Coffee Shops $8
Sports Events $5
Cloud Storage $3
Bike Maintenance and Supplies $3
Phone Supplies $3 Screen protectors, chargers, etc
Bus $2 Have taken the bus and biked more in the past to offset costs, but my city has slow buses and poor bike infrastructure. With work and school doesn’t feel like I have the time to do this :/
Therapy $0 I was in therapy for $60/month, but I discontinued both due to needs and funds.
Monthly subtotal: $3,274 Wow, that’s a lot higher than I thought it was going to be.
Annual total: $39,288

Credit Card Strategy

Card Name Rewards Type? Bank/card company
Bank of America Travel Rewards Travel Bank of America

John’s Questions for You:

  1. How can I budget? Can you give me tips on developing a budget system that could work for me?
    • How much should I put toward things that are discretionary (but improve quality of life)?
    • In the past I’ve found that I do better if I allocate a certain amount of money to these sorts of expenses and push myself to choose things that I really like and want, rather than trying to cut them out altogether.
    • I can tell my spending has gotten out of hand over the past few months *because* I don’t have a stable income and therefore don’t have a budget. On the one hand I’m spending less on regular expenses like groceries and gas and trying to keep those in check, but on the other hand, I’m making a lot more impulse purchases. It’s like I know I won’t be able to afford things for a really long time, so I might as well just go ahead and buy them. Any amount of regulation would help me rein things in and keep my spending lower and more consistent.
  2. Skyline by John

    Are there any clear ways I could cut money? Even just mapping out my monthly expenses like this I see a lot of things I could cut back on.

    • Any strategies on getting things like clothes, shoes, books, tools for cheaper would be much appreciated. I cut back my groceries a lot by switching to a cheaper grocery store, but it would be good for me to do the same in other areas.
    • One idea I have is to try and use only my cash tips at work for going out. I do already limit how much I spend when I go out by drinking water instead of alcohol and eating at home.
  3. Would it be worth it for me to get vision insurance? Or would this just add another monthly expense that I can’t afford?
  4. How much debt is acceptable, assuming in two years I start a decent paying job as a nurse (median starting pay around $50,000/year)?
    • How much safety net do I need to keep in case something goes horribly wrong and I *don’t* start a decent paying job when I graduate?
    • How much do I *need* to make after graduation to cover debts and begin saving?
  5. Tax credits and other assistance: Can I get tuition back in taxes? Are there any other tax credits or assistance programs I should be looking into?
    • I’m already getting a huge tax credit that pays for most of my health insurance.
    • I won’t be eligible for food stamps in my state unless my liquid finances are depleted below $2,000, which I hope doesn’t happen.
    • Are there other lending sources I should consider?
  6. What’s a reasonable number for monthly expenses to shoot for? Ballpark high and low numbers?
    • Based on my fixed and discretionary expenses
    • Based on my income
  7. Should I get another job? Any suggestions on what kind of job? Should I reach back out to my previous job about part-time work/consulting on the side? If I did, is there a certain hourly amount I should ask them for?
  8. Do I need to get a roommate? I really don’t want to. It would be a huge change in my lifestyle, and I would lose the ability to have my family stay at my house, which really means a lot to me. I also worry about someone keeping me awake or making it difficult for me to focus on nursing homework. But I recognize that it would cut my expenses significantly, and could also add positive benefits too. I’d say my past experiences with roommates have been about 50/50, but that could also be better with someone older and more mature (although it might be worse, too).
  9. Anything else I’m missing here that I should be looking at?

Liz Frugalwoods’ Recommendations

What John is doing takes courage and I commend him for that! It’s not easy to leave a stable career and pursue an entirely different one, but John is doing it! I really admire that he took the time to inventory his life, identify the things that weren’t working for him and then make bold changes. Very well done. ALSO, huge congrats to him on paying off his debt!!!

Two Years: Both Long and Short

I really appreciate the quote John included above and I want to emphasize for him that this is only two years. Although I know two years feels like a lifetime when you’re at the outset. But in the grand scheme of what I hope will be a long, productive and fulfilling life for John, two years is a blip.

My hope is that, in ten years, when John is working as a nurse, he’ll occasionally pause while doing some very important nurse-thing and remember these two years, then shrug and smile, realizing how happy he is in his career, how stable his life is and how thankful he is to himself for making the sacrifices to get there. EASY FOR ME TO SAY, right?! I’m not the one doing it! Not this time, anyway. But I’ve been there in the past, many of us have been there, and it’s easy with hindsight to brush off the briefness of two years without acknowledging the challenges.

Today we will confront those challenges, but my hope is to do so with the insight and mindset that it is, after all, only two years. I come from a line of nurses–both my mother and mother-in-law were RNs–so it warms my heart to see John pursuing this career path. 

Spending Must = Income

My top line concern is that John’s spending outstrips his income. Since living on credit card debt is a VERY BAD idea, I want to focus my efforts on helping John sort out how he’s going to live for the next two years. This is an equation with two variables: income and expenses–and we’ve got to tackle both.

First Up: John’s Job

I am so impressed that John took on a service job the minute he left his salaried position. That was the smart, responsible thing to do and it speaks volumes about John’s character. I am wondering, however, if that might not be the best fit for the duration of nursing school. As John noted:

  1. It’s exhausting because he’s on his feet
  2. It doesn’t pay enough to cover his expenses

I agree with John that his highest priority should be school and so, exhausting himself at a job that doesn’t pay enough doesn’t seem like the ideal solution. Since John has a BA, and work experience, I encourage him to explore part-time office jobs. In particular, I wonder if he’s browsed the job postings for his community college? If he were able to find a part-time office job at the college, he very well might kill quite a few birds with one stone:

  1. John at the river

    His commute would be truncated and he could potentially work longer hours since he’d just need to walk across campus to attend class.

  2. He could probably find a “sitting down” desk job so that he could conserve energy for his nursing classes.
  3. The college *might* offer tuition remission for employees and retirement benefits (although this is less likely for a part-time position, it is worth exploring!!!!!).
  4. I imagine he could find something rote that wouldn’t require too much mental exertion. I very much understand his comments about appreciating the fact that he can leave his restaurant job at the restaurant–this is an important element enabling him to put his mental faculties towards school.
  5. He’d get a set work schedule and regular paychecks. I have to imagine that, at some point, the variable schedule of restaurant work is going to be at odds with the fixed schedule of nursing school. Having regular hours would likely alleviate a lot of stress for John and avoid last-minute scrambles. Additionally, John noted the challenge of having irregular pay and so the predictability of a paycheck would be another helpful factor to his budgeting process and would cut down on the amount of time he has to spend budgeting.
  6. Even if this job pays the same as his restaurant job, it’s probably still worth making the change for the above five reasons.

All that to say, if I were John, I’d be hopping onto the college job posting website ASAP to see what administrative/desk positions are available. Data entry, anyone? Again, John, you have a BA and work experience, so this seems like a slam dunk option. 

John on the road

If there’s nothing available at the college, I still think it’d make sense for John to seek out a part-time administrative position. Less stress, less physical pressure, higher pay. Again, I 100% commend John for getting a front-of-house job, but it really sounds like that’s not going to be the ideal solution while he’s in school. If he can’t get a job at the college, I suggest he try to find something nearby that would enable him to compress the commute.

John mentioned he might be able to work hourly part-time for his former employer, but it also sounds like that might bring a lot of stress into his life. I completely understand his desire to not be sucked back into a work environment he chose to leave, so let’s assume that’s not his top choice right now, but one that can be kept in the proverbial back pocket.

Second Up: Expenses

To be honest, I think what John should focus on right now is finding a better paying, more comfortable job. But, until that happens, John does need to dramatically cut back his spending. He’s frugal and his spending is super low; the issue is that his income is even lower.

John’s biggest expense–his rent–would obviously be decreased if he got a roommate, but I also hear that he loves living alone and really doesn’t want a roommate. If that is indeed John’s highest priority right now, he’s going to have to work on eliminating a lot of other smaller expenses, which can totally be done.

I went through John’s expenses and did the Uber Frugal Month exercise of fixed vs. discretionary identification, which I know is something John’s done in the past: 

Item Current Amount John’s Notes Liz’s Notes Proposed New Amount
Rent $825 Fixed $825
Tuition $419 Fixed $419
Car Maintenance $153 This year this included a new set of tires and shocks; without those it would have been $68/month Fixed $153
Utilities $150 I have it set to level off each month, so it stays around $140-150. Fixed $150
Car Insurance $133 My car insurance is high because of my driving record. I do not carry collision insurance. I have used a tracker to get discounts in the past and will likely enroll in that again. Fixed; although this is super high and I encourage John to shop around. $133
Groceries $130 Includes some household supplies like toilet paper, paper towels, etc. Before I left my previous job, I was aiming for $150/month in groceries. Working in the restaurant has since helped cut my grocery bill further since I can eat free meals there. Fixed $130
Gas $123 Highly variable. This includes some cost from travel, so that will likely decrease next year. But my daily commute will increase because of the distance to school. Maybe I could carpool? Fixed; can this be decreased with carpooling? Biking more? $123
Shopping: Clothing $110 Eliminate for now $0
School Books $88 This is an estimate; hoping to get it lower by renting books, etc. Also may be lower after my first year. Fixed $88
Restaurants $81 Primarily a social cost; I rarely eat restaurant food or takeout alone. Eliminate for now $0
Personal Care $75 What’s included in this? Can this be reduced/eliminated? $25
Physical Therapy $58 I had a joint injury this year. Hopefully this won’t be a recurring cost, but I do get injured often. Fixed $58
Doctor $55 I have a couple of doctors I have to see regularly, and I’m not sure how much that will cost on my new insurance Fixed $55
Doctor (injury) $53 Other costs related to my injury; hopefully this won’t happen next year. Fixed $53
Donations $53 Donations to fundraisers and campaigns, mostly not tax deductible Eliminate for now $0
Travel $50 This is lower than I spent last year, but I don’t anticipate having the funds or time to travel as I have this year. Eliminate for now $0
Other shopping $45 Eliminate for now $0
Gifts $45 Gifts for birthdays, weddings, holidays Eliminate for now $0
Shopping: Books $43 An indulgence. I’ve been trying to get books through the library more, although I love owning a copy. Eliminate for now $0
Nursing School Supplies and Other Fees $40 Scrubs, lab supplies, liability insurance, drug test and background check, immunizations, etc Fixed $40
Health Insurance $38 $388.81 minus a $351 Advance Premium Tax Credit. After I left my job I switched to an ACA plan in October. I was paying $243/month, but I used the open enrollment period to recalculate my premiums. Fixed $38
Cat Food and Supplies $37 Food, litter, medicines Fixed $37
Fast Food $37 Feel like this cost could rise unless I’m really careful because of how busy I am. Maybe I could offset some of this by keeping some microwave meals on hand? Eliminate for now $0
Home Furnishings and Repair $36 Eliminate for now $0
Streaming Subscriptions $34 Eliminate for now $0
Internet $30 Fixed $30
Sporting Goods $28 This includes some work shoes. Eliminate for now $0
Pharmacy $24 Hopefully this will drop to ~$10/month once I start my new insurance in January, which has a $3 copay on all prescriptions. One of my prescriptions is very expensive, and if for some reason my insurance failed, my prescriptions could easily be more than $500/month. But I have access to programs to be able to get it for free if that happens. Fixed $10
Contacts $21 $252 purchased once; hopefully will be mostly covered under new vision insurance Fixed $21
News $20 Two local newspapers and three national magazines Eliminate for now $0
Gym $18 Discounted from $32 by splitting an account with friends. Fixed; I’m hesitant to drop this expense since John noted that working out is a key part of his life. I’d keep it if it were me and find other areas to cut back on. $18
Dental Insurance $17 Fixed $17
Health Supplies $17 Including masks, supplies to treat injuries, etc Fixed $17
Bars $17 I don’t drink much alcohol, so this includes is primarily cover charges. Eliminate for now $0
Vet Exam and Shots $16 Fixed $16
Renter’s Insurance $14 Fixed $14
Phone Service $14 Paid off my phone and switched from AT&T to Tello when I left my job. Fixed $14
Vision Exam $14 $165 split over 12 months; considering getting vision insurance to cover this and contacts. Fixed $14
Organizational Dues $13 What is this for? Is there a student discount? $13
Dentist and Dental Supplies $12 Fixed $12
Vision Supplies $11 contact cases and solution Fixed $11
Music Streaming $11 Eliminate for now $0
Movies $11 This does not include movies I watched during vacation at a film festival (that’s under travel) Eliminate for now $0
Social Media $11 Eliminate for now $0
Live Music $10 Eliminate for now $0
Parking $9 Wish this was $0. Fixed $9
Coffee Shops $8 Eliminate for now $0
Sports Events $5 Eliminate for now $0
Cloud Storage $3 Fixed $3
Bike Maintenance and Supplies $3 Fixed $3
Phone Supplies $3 Screen protectors, chargers, etc Fixed $3
Bus $2 Have taken the bus and biked more in the past to offset costs, but my city has slow buses and poor bike infrastructure. With work and school doesn’t feel like I have the time to do this :/ Fixed $2
Therapy $0 I was in therapy for $60/month, but I discontinued both due to needs and funds. Are there any on-campus therapists offered for students at a discounted rate? Or does John’s new insurance cover this? Hate to see therapy be eliminated. $0
Monthly subtotal: $3,274 Wow, that’s a lot higher than I thought it was going to be. Proposed New Monthly Subtotal: $2,554
Annual total: $39,288 Proposed New Annual Total: $30,648

The challenge is that, even after stripping out every single discretionary thing, John’s basic needs still total more than his income. This is not John’s fault–it’s not that his basic needs are super expensive; again, it’s that his income is too low. In addition to finding a higher-paying job, I think John might need to consider taking out more student loans.

Student Loans

John the reader

If the option is between going into credit card debt and taking out more student loans, I would choose student loans every single time. John’s situation is what student loans are designed for. It is unlikely that nursing won’t be in demand when John graduates and so his career prospects are good.

The caveat is that if John makes the decision to take out more student loans for living expenses, he needs to be 100% certain he’s going to work as a nurse after graduation in order to pay them off.

Taking out student loans is a speculative investment in your future and you need to make sure it’s going to pay off. However, John selected a practical major with fantastic job prospects and he’s going to a very affordable community college. John’s made all the right choices here, he just might need more in loans. It’s not a failure or a bad thing, it’s literally what student loans are for. Once again, let me reiterate that credit card debt is BAD IDEA because the interest rates on credit cards are sky-high, while the interest rates on student loans are reasonable AND the loans are deferred until John graduates.

Plus, John’s only in a two-year program, which means he should be employed as an RN very soon and able to pay off the loans quickly after that. If possible, federal student loans are usually the best way to go.

Post-Graduation Plans

John on the road

John is spot on that salaries for nurses–even first-year nurses–are typically excellent. Something John may also want to consider in the future (particularly before he has children, if applicable) is travel nursing. I believe you need several years of experience before becoming a travel nurse, but it could be a great future option.

We hosted travel nurse Amy as a Case Study subject back in October and she’s currently making circa $100k a year as a travel nurse. This could be a fabulous option for John to right his financial ship after graduation.

With a high salary, he could:

  1. Pay off his student loans ASAP.
  2. Beef up his emergency fund.
  3. Invest for retirement.
    • This should be a top priority for John since he’s close to 30 and doesn’t have anything invested for retirement. But not to worry–it is highly likely his future employer will offer a retirement plan, to which he should likely begin contributing as soon as he’s hired.
  4. Consider his next long-term goals.
    • Does he want to pursue home ownership? Become a parent? So many wonderful options!

Credit Card Consideration

On the road again

One other thought I had is that John may want to get a cash-back credit card. As long as John continues his responsible usage of credit cards–and pays them off in full every single month–a cash back card could be an ideal way for him to help make ends meet.

He currently has a travel rewards card, which is great and he can keep that open. But he likely won’t be traveling all that much while he’s in school and so a cash back card could make a lot of sense during this time period. And in the long run, he may find it’s advantageous to have both a cash back card and a travel rewards card (that’s what I do!).

Here are a couple straightforward, no-fee cash back credits cards he could consider:

1) Blue Cash Everyday® Card from American Express offers a hierarchy of cash back percentages:

  • 3% Cash Back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%)
  • 2% Cash Back at U.S. gas stations and at select U.S. department stores
  • 1% Cash Back on other purchases
  • Earn a $200 statement credit if you spend $2,000 within the first 6 months of card membership

2) Capital One Quicksilver Cash Rewards Credit Card:

  • Unlimited 1.5% cash back on all purchases
  • Earn $200 if you spend $500 or more in purchases within the first three months of card membership

3) Capital One SavorOne Cash Rewards Credit Card:

  • 3% cash back on dining, entertainment, popular streaming services and grocery stores.
  • 1% cash back on all other purchases.
  • Plus, earn 8% cash back on tickets at Vivid Seats through January 2023.
  • Get $200 if you spend $500 on purchases within the first three months from account opening.

4) Chase Freedom Unlimited:

  • 5% cash back on grocery store purchases (not including Target or Walmart) on up to $12,000 spent in the first year.
  • 5% cash back on Chase travel purchased through Ultimate Rewards.
  • 3% cash back on dining and drugstores.
  • 1.5% cash back on all other purchases.
  • No minimum to redeem for cash back, rewards do not expire as long as your account is open.
  • Earn $200 if you spend $500 in your first 3 months from account opening.

Note: the credit card links are affiliate links.

Summary:

  1. Look for a higher-paying (or at the very least, lower physical toll and regular hours/paycheck) part-time office job, ideally on campus.
  2. Reduce spending as needed to eliminate the need to deplete savings or go into credit card debt.
  3. Look into taking out more in student loans in order to avoid credit card debt.
  4. Map out a post-graduation financial plan.
  5. Consider getting a cash back credit card to help make ends meet.
  6. Feel confident that you’ve made good decisions and that yes, this two-year period will likely be tough, but it will be worth it in the end!

Ok Frugalwoods nation, what advice would you give to John? We’ll both reply to comments, so please feel free to ask questions!

Would you like your own case study to appear here on Frugalwoods? Email me (mrs@frugalwoods.com) your brief story and we’ll talk.

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