[USER]

I am needing guidance.
Very new to FI journey. I am 29 years old, spent 6 years working towards my current career and own my private midwifery practice now.

I am a little over a year in and am making between 168-200k/yr. Expenses for the business are approx 25k.

Only debt I have is vehicle debt, 40k. Living expenses are 7k/month.

I have a savings account with 25k in it now. I do have some slower months and busier months.

I do not have a retirement or health insurance currently. I am renting but hope to buy a home next year.

What steps should I take next? ROTH IRA? Pay off car and lower monthly expenses?

I also have 3 children I homeschool and am a single mother.

I do not receive any financial support from their dad.

Thanks!

[Cari]

Please get you and your children health insurance. ONE trip to the hospital for any of you…and you will ruin yourself.

ONE expensive monthly prescription will ruin you.

That’s first. Do that first.

Run don’t walk – except you might trip and get a complicated fracture.

[Meagan]

Focus on everything but buying a house to be honest. Why don’t you wanna continue renting?

In my city it is now cheaper to rent that it is to purchase a home and that’s after the interest rates have dropped.

[Rick]

Midwifery. New term to me. Love it. It sounds great to say.
Do you have an accountant for your business or are you savvy and willing to do it yourself?

I ask only as you share your vehicle expense like it’s solely personal.

Is there an opportunity to have your business cover some of that expense, in a pretax way?

It may not be a huge win but little wins are often good enough.

I am normally opposed to big massive cash balances but you have one of the main situations that I would deviate from that, for now.

Bulk up your emergency fund given the impact risk you have as single parent entrepreneur.

You don’t have health insurance? You don’t or neither you nor kids do? That jumped out as big risk to me.

Is an ACA based plan an option?

Roth IRA sounds like a very good start for your retirement planning. You may find a solo 401k is better in the future but…..

a Roth IRA and its ability for contribution withdrawals can help act as a quasi extra emergency fund for you which you need more of as I said above.

Now this doesn’t mean sit in cash inside the Roth.

Definitely invest it. But the contribution withdrawal feature can be a nice thing for now.

Then maybe the solo 401k or similar in the future wins out given its pretax advantage as your income scales up and with it your tax rate.

Good luck on your journey!

[Author]

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