An aspiring comic trades security for a shot at stardom and an erratic income. By Jane Bennett Clark, Senior Editor April 30, 2009 Our Readers Who: Nora Nolan, 26 Where: New York City Question: How should she finance her bid to become a stand-up comic? Nora likes to be prepared when she takes the stage at a comedy club, and on open-mike nights, the planning shows. She delivers her riffs on life's minor absurdities impeccably. "My stage persona requires me to be confident," Nora says. "I have trouble doing that if my set isn't memorized and every joke isn't fully developed and funny." RELATED LINKS Profiles on Surviving the Recession QUIZ: Test Your Recession Survival Skills COVERCAST: Survivng the Recession Nora will need both planning and confidence as she prepares to resign from her job at a Washington consulting firm and pursue her stand-up career in New York City. She's trading a good salary, generous benefits and a Georgetown apartment for temporary work and a spot, for now, on the couch in Mom and Dad's Manhattan apartment. Spend sparingly. Nora knows she will have to watch her pennies -- a tough task for someone who likes to travel and eat out. "I'm dangerous with money," she admits. To offset her spending habits, she has squirreled away $3,000 in a savings account and $8,000 in a certificate of deposit. She has also accumulated $6,700 in a 401(k) retirement plan. Advertisement Nora may be tempted to extract cash from the 401(k), perhaps for a deposit on a place to live. But Tom Billet, of Watson Wyatt, a benefits-consulting firm, advises her to keep the account or roll it into an IRA. Otherwise, Nora will owe income tax on the amount, plus a 10% penalty. Getting her own place is a nonstarter anyway, says Peg Downey, a financial planner in Silver Spring, Md. "When Nora gets established, she can figure out if she has enough to pay rent." Until then, Mom and Dad's couch will have to suffice. Borrow strategically. Nora recently retired a hefty balance on her two credit cards and considered closing one of the accounts. Nice thought, but a bad idea. Credit continuity and extra borrowing capacity help one's credit score. Instead, Nora should lock up the cards, which charge interest rates of 10% and 8%, and apply for another that charges 0% (or only slightly more), if she can find one. Later, if she gets in a bind, she can tap that card for business expenses. Advertisement Get insured. Nora knows she cannot do without health insurance. "My dad's hair is gray enough," she says. But the market for coverage for individuals in New York is brutal, says James Schutzer, an insurance agent in Manhattan. He says a healthy 26-year-old can get stuck with monthly premiums of at least $870 for comprehensive coverage. Nora could take advantage of COBRA, the federal law that lets anyone who leaves a job extend employee coverage at least 18 months at 100% of the cost plus a 2% fee. But her employer's network does not extend to New York. Advice: Enroll in Healthy New York, a program for low-income state residents. Nora clearly falls below the $2,257-a-month income ceiling for singles. Premiums start at $248 a month for comprehensive care and a drug benefit. As for Nora's dream, nobody's laughing at this young talent's bid for the big time. Says Downey: "She's 26. She should go for it."