5 Questions: Minimum Wage, Lending Money, Debt

   We haven’t done a Five Questions for awhile! We’re back to answer your questions about minimum wage, lending money and debt.  We get a lot of questions and if one of you is wondering, more of you are wondering.  How can you get by on minimum wage? Well, first of all, you have to live in a place like Iowa where the cost of living is very low. You also need to take advantage of any social programs you might be eligible for, low income housing, food assistance, reduced cost utilities.  Work as many extra hours as you can to save up enough for a $1000 emergency fund. Next, try to build a marketable skill using all the free resources you can find, the library, the internet, Coursera, Khan Academy. A minimum wage job should be something you have while you build additional skills toward getting a better paying job. Apply to jobs you’re not qualified for. It may not always work but it only has to work once. At the very least you may get some interview experience. How do you know what tax bracket you’ll be in when you retire so you can choose the best IRA? When you retire, you won’t be earning money, or earning less, so the money withdrawn will be taxed at a lower rate. Unless, you have a separate revenue stream, like rental income. In that case, you might be earning more than when you worked. So it depends on your idea of retirement. Golfing all day or running a small property empire. If you’re going to relax, go traditional. If you’re going to earn, go Roth. Should we wipe out our savings to pay off student loans and then focus on retirement savings? Take the money in the savings account that isn’t earning interest, except for 3-6 months of expenses, and put that towards the loans. As for your investment money, the interest rate on your loans is low so leave that money where it is. What should we do with retirement plans from old jobs? Roll them over to avoid administration fees. How can you help manage parent and sibling debt? Just handing over a chunk of money is usually not a good idea. Agree to help with th