Mind Your Money: How Getting Laid Off Led This Chicago Native To Make $80,000 Yearly
Name: Joshua B.
Occupation: Commercial Driver
Age: 27
Location: Chicago
Income: $80,000
Money Shift: Recently became a truck driver after getting laid off from his car rental management job and then working as a Covid-contact tracer
Goal: Create a budget to manage his recent more than $50,000 salary increase
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 rental car company. He was there for three years, eventually earning $45,000 to $50,000 per year, depending on his bonus.
The pandemic caused a crash in the car rental industry. Joshua was furloughed and then laid off. He earned more than working his corporate gig between unemployment and government assistance during the pandemic.
"I wasn't in a rush to get back to work," said Joshua, 27.
During his layoff, Joshua knew it was time to shift gears. He didn't really like working at the rental car company, and the salary wasn't enough. Joshua majored in business management in college because he knew those skills would be valuable and transferable. For the "hell of it," he said, he bought a commercial drivers license study book and got a "Class B" permit.
When his money started drying up, Joshua went to a church employment resource center and found work as a Covid-19 contact tracer. He did that job for a year, earning $25,000 to $30,000.
"When I saw how little the paychecks were, I knew that I couldn't do [it]," Joshua said.
He moved back home with his family to save money and re-invent his career. Joshua's father suggested that he check out a city college for career exploration. After visiting the college, Joshua decided to enroll in its commercial drivers' 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 the Windy City to Kansas or Nebraska, requiring him to spend three nights a week away from home.
"I don't mind driving, "said Joshua, whose routes include states that are 10 hours away. "I'm the type of person who doesn't need to talk or have the desire to talk to many people when I'm working."
Driving Finances Home
While Joshua would like a trucking gig where he returns home daily, not sacrificing his income salary is most important. He now earns $80,000— the most he's ever earned.
Later this month, Joshua will move from his family home to a one-bedroom apartment on the lakefront, costing $1,300 per month. He has only bought a bedroom set and needs more furniture for his bachelor pad.
His student loans are between $10,000 and $11,000. They have been in forbearance during the pandemic, so he doesn't pay the $125 monthly bill.
His car note is $490 per month on a Chevy Malibu. He has no credit card debt, and he isn't enrolled in a retirement savings program.
"It's kind of happening so fast that I haven't been able to do anything with the (money)," he said.
Unloading Loans
"Even though federal student loan borrowers such as Joshua have had their loans in administrative forbearance with zero interest during the pandemic," says Leslie H. Tayne, financial attorney and founder of the Tayne Law Group. People should take advantage and still pay them during this time if they can. Every payment will go to the principal balance.
"It's a windfall," Tayne said. "Where do you get zero-percent financing anywhere?"
Also, paying the loans down will show that Joshua is responsible to potential creditors and that he can manage his debts.
"The twenties are the age to pay them off," Tayne said.
Tayne says that borrowers who are waiting to see if their loans are going to be forgiven by the government should stop. Student loan forgiveness isn't guaranteed, and they're a stream of income for the government.
"You pay your student loans, and if there is forgiveness, you take advantage of it," Tayne said. "[But] you can't rely on it happening. Before you turn around, you'll be in your 30s and say, 'OMG, my debt is even higher because I didn't pay it.'"
Money Moves
David E. Barfield, founder of Datapoint Financial Planning, says that Joshua should first start by saving one month's worth of essential living expenses such as rent, utilities, food, and insurance. He said that 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 trip to the doctor or a car accident doesn't cause financial hardship when the bill comes due to meet the deductible," Barfield said.
Next, Barfield says that Joshua should enroll in his company's 401(k) retirement plan. If the employer matches a portion of the money, he should contribute up to the point where he receives the full-matching contribution from the company, Barfield said.
Joshua should then build his emergency fund to six months of essential living expenses.
"This is NOT a vacation fund," Barfield warned. "This Is emergency savings for things like unexpectedly being out of work."
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Afterward, Joshua should max out a Roth IRA, and then he has the green light to furnish his bachelor pad. Barber suggested that Joshua read "The Wealthy Barber" book.
"If you get the order backward by spending first and saving what's left, you will never save," Barfield said. "You will spend it all."
Natalie P. McNeal is the author of The Frugalista Files: How One Woman Got Out of Debt Without Giving Up the Fabulous Life, available in audio and paperback.
