Sold my condo, worried about money/investing

I recently sold my condo and moved into an apartment. I was told by a financial planner that rent increases (my salary will not) therefore, I should have bought something else or gotten a roommate. The upkeep of owning my own place was a burden and hard to keep up but he’s right I may eventually be forced to buy something. Meanwhile I have $60,000 sitting in the bank. What should I do with this money if I stay in my apartment for two years? What can I do so that it increases but yet is not locked in and is having my bank invest it a bad idea. From your previous discussions I would say yes. I’m 58 yrs. old my company 401K is with Fidelity but I contribute a minimal amount to that because I need the money to live on. I know it “free” money if your company contributes but I bet a lot of divorced single women are living pay check to pay check.. I know there are several issues here but currently what should I do with the money in the bank?

Terry Says:  OK, take a deep breath — and let’s take this step by step.  First, just LEAVE THE MONEY IN THE BANK.  You won’t earn much interest, but you won’t lose a penny.  So stop worry about that for now.  You don’t need to “invest” it.  It can sit right there for two years, and that’s ok.  Cash will give you flexibility.  Investments incur risk of loss — and it doesn’t sound like you want to lose anything!

Second, you’re very right — many women — and men, too — are living paycheck to paycheck.  And there are ways to handle that.  I don’t think you were wrong to sell your condo, since it was aggravating you so much.  Condo owners will experience increases too — in utilities, property taxes, and assessments.  Owning a condo is no guarantee that your living costs won’t rise.

As well,  you are indeed making a big mistake at your age in not contributing more to your 40l(k) plan to get the match — free money that can work for you.  Look, they take a hunk of FICA out of your paycheck and you don’t complain that you “need” it — because there’s nothing you can do about it.  Have more money taken out for your 40l(k). It will be automatic and you won’t miss it.

Yes, you’re going to have to change some things if you do that.  Basically, you have two choices:  spend less or earn more. It’s tough to spend less —  but do call the National Foundation for Credit Counseling at 800-388-2227.  They will go over your budget with you and make suggestions.  They are very helpful,, non-profit — trustworthy.  And you don’t have to be buried in debt to get their help.

Second, and actually easier than cutting back, is figuring out how you can EARN MORE MONEY!  No, don’t ask the boss for a raise.  BUT there are plenty of people in your neighborhood who could pay you to  do something on weekends (and it would probably be cash!).  So could you walk dogs, babysit, drive someone elderly to the grocery store?   Or take a sales job, or work in a grocery store, for some weekend hours.  Or a restaurant, where you might get free meals.

Or how about something even more radical:  I have heard from women who are alone in a house, typically because of divorce,  and  would welcome a renter (at less than you’re paying).  Some would gladly give even free rent to have a companion, someone to live there so they could take a bath without worrying about falling and being alone! And I’m serious about this!  If you didn’t have to pay all that rent, you could save more for the future.  Your church or community group might be a good place to meet someone in this position.

All of this is in addition to doing your full-time job — but the additional money could make a big difference.  Think about it.  I know you’re rolling your eyes — probably because you never expected to be in this position.  But at least you have time enough to do something about it if you start now.