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Harry posted:1400 for a one-bedroom? Where do you live? That's absurd for even NE and California prices. I live in Boston. It was a shock getting used to the rents here. Most also do not include utilities so you get to add that in! http://boston.craigslist.org/gbs/aap/ for examples. The point wasn't to measure rent prices though. The point was that you should make sure your big purchases/emergency fund can actually do what you need it to do.
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Mar 31, 2013 02:52
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Harry posted:1400 for a one-bedroom? Where do you live? That's absurd for even NE and California prices. It's what I paid in Chicago.
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Mar 31, 2013 03:01
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I also recommend paying off your credit card first. The reason being that loan payments are not optional - at least not without significant consequences. In a financial emergency, you can cut back living expenses, i.e. taking the bus instead of driving, eating ramen noodles for a month, cancelling internet and living in the library/coffee shops, etc. but loan payments represent the fixed part of your budget that cannot be reduced. Edit: Yes your credit card is currently 0% APR, but you can't be sure your financial emergency won't happen before your balance is paid off. Maybe your office building topples over tomorrow morning, what then? At least keep a sufficient amount in your emergency fund to pay off your outstanding debts as well as adequate money for whatever level of quality of life you desire while you get back onto your feet. INTJ Mastermind fucked around with this message at 03:59 on Mar 31, 2013 |
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Mar 31, 2013 03:55
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I pay $2100 for a 1BR... Including utilities and the Internet brings it closer to $2400.
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Mar 31, 2013 18:56
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I also pay $1400 (granted with garage parking, laundry, and w/s/g included) for a near-downtown 1-bed apartment in Seattle, and that's on the cheaper end of 'nice' here. Can easily spend a lot more if you want. There some cheaper places but it usually means its a very old building with a lot of "character" or it's in the outskirts of the city. But even the outskirts and suburbs are rapidly increasing rents. Rents are getting sillier by the day here. With a $1400 rent payment and other ordinary living expenses I keep my emergency cash savings fund around $7500-10,000, which is about 4-6 months worth of rent and essential spending. I personally would not be comfortable only having $2500 cash on hand. I would really rather not have to liquidate non-cash savings in a bad/expensive situation. Guinness fucked around with this message at 21:06 on Mar 31, 2013 |
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Mar 31, 2013 21:02
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Based on all the replies, I will stick with my original plan and keep at least $5K in the bank, and get the CC paid off ASAP 
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Apr 1, 2013 03:18
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I need some help figuring out how much I should reasonably be paying in rent. I live in DC, the land of insanely expensive rent. This will be my 3rd move while living in the city but the first time I'm looking for a place just for me and I want to make sure I make a good decision since in the past I was constrained based on my what my roommate(s) could afford. My car is currently paid off and insurance is something ridiculous like $600 a year because I never drive, have never had a ticket and only had one accident when I was 17. My car is also 14 years old. I'm looking for something fairly close to public transportation. This obviously includes a price premium so I want to make sure I'm not paying too much of a premium or over-extending myself. I currently make net around $3100/month after taxes, my 401k contributions and other deductions. Assuming the same percentage of my pay is available after deductions I'll be making around $3,500 a month at my new job. I've set up an account on Mint and here are my current monthly expenses: Rent: $950* Utilities: ~$150 a month split 4 ways for power, and another $160 split 4 ways for internet, giving ~$80 total. USAA Credit Card (paid off in full every month to avoid interest): $800-$1200 a month, depending on expenses.** Savings: $500*** Student Loan Payment: $200 Monthly Donation to my Fraternity: $20 Excess Savings/Remainder (assuming the high side on expenses): $150 *It sucks leaving a place so cheap ($3800 for a 4 bedroom/2 bathroom) but I can't find 3 roommates and the house is a complete dump. I nearly froze to death all winter because of how poorly insulated the bedrooms are. The paint was also peeling off the walls when we moved in and we've had a number of issues with the generally poor level of maintenance of the place. Also giant centipedes everywhere. **The main expense on the credit card is eating out and I hope to cook more when I live alone. Sharing a kitchen with 3 other people (and one roommate's girlfriend) makes it impossible for me to cook unless I eat right before I go to bed. Mint auto-budgeted around $500 for restaurants which seems like a lot but I managed to come in under that for March. April was auto-budgeted at $410. **My goal with savings is to get my emergency fund to 6 months of net income, which is about $18,000. I've got around $11,000 now and I will be getting over 100 hours of paid leave paid out upon leaving my current job so that should allow me to put another $3000+ in. I'll also be getting some money back from the security deposit at my current place. I'm wondering how much more I can afford to pay in rent. At the second place I lived at in DC I paid about 50% of my monthly net pay in rent so I figure something no more than $1,800 a month makes sense. I've seen listings for apartments anywhere from $1400-$1800 that seem acceptable. I assume that no matter what apartment I choose the contributions to savings will go down. I'm okay with that if I'm getting good value out of the money, i.e. a nicer apartment. Am I on the right track or am I totally nuts?
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Apr 2, 2013 21:12
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axeil posted:I'm wondering how much more I can afford to pay in rent. At the second place I lived at in DC I paid about 50% of my monthly net pay in rent so I figure something no more than $1,800 a month makes sense. I've seen listings for apartments anywhere from $1400-$1800 that seem acceptable. I assume that no matter what apartment I choose the contributions to savings will go down. I'm okay with that if I'm getting good value out of the money, i.e. a nicer apartment. You're way on the high side. $1000/mo would be on the high side, $1400/mo is dangerous, and $1800/mo is insanity.
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Apr 2, 2013 21:38
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baquerd posted:You're way on the high side. $1000/mo would be on the high side, $1400/mo is dangerous, and $1800/mo is insanity. Agreed, there's no reasonable way you can live alone in D.C. on your salary. It sucks that your roommates bailed, but that isn't a reason to throw yourself into a dire financial situation, just go be someone else's roommate. edit: The rule of thumb going around seems to be 33% of gross income as a cap on your housing expenditure, but in practice, I've seen that as a literal cap, as in you will likely break even and go negative monthly occasionally if you're spending that much. I try to use 33% of net as the rule of thumb instead to be conservative and actually have some savings and retirement, which as baquerd says, puts you right around $1K a month. DukAmok fucked around with this message at 22:02 on Apr 2, 2013 |
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Apr 2, 2013 22:00
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axeil posted:I need some help figuring out how much I should reasonably be paying in rent. I live in DC, the land of insanely expensive rent. This will be my 3rd move while living in the city but the first time I'm looking for a place just for me and I want to make sure I make a good decision since in the past I was constrained based on my what my roommate(s) could afford. My car is currently paid off and insurance is something ridiculous like $600 a year because I never drive, have never had a ticket and only had one accident when I was 17. My car is also 14 years old. I'm looking for something fairly close to public transportation. This obviously includes a price premium so I want to make sure I'm not paying too much of a premium or over-extending myself. Rule of thumb for financial planner is that your housing costs should be less than 28% of your income when taken alone (Housing ratio 1) or 35% when combined with debt payments (housing ratio 2). At $950 you are slightly over 28%, which would be $868, and 35% would be $1085. right now, you're over on both, but not terribly so. As DukAmok said, you really aren't in a position to spend more. How long would it take you to retire the student loan debt and free that $200/month up for housing?
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Apr 2, 2013 22:49
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And/or what's a more reasonable level of expenditure for your area? 800-1200 for a single person per month seems insane for "disposable" income including food.
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Apr 2, 2013 22:57
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I appreciate everyone's replies, thank you. I have some comments, questions and clarifications. I wanted to clarify the income numbers I posted as the 33% rule I've read referred to gross income. The numbers I posted above are my net income after I've already contributed to my 401K, paid taxes and what not. If I take 33% of my gross income it implies I can spend around $1,800/month on rent. Right now my net income is about 62% of what my gross income is and my rent is about 19% of my gross income. I didn't post gross income numbers because I didn't think they were relevant but I guess for rent calculations it is? Have I misread the stuff about spending 33% of your income on housing?  zharmad posted:Rule of thumb for financial planner is that your housing costs should be less than 28% of your income when taken alone (Housing ratio 1) or 35% when combined with debt payments (housing ratio 2). At $950 you are slightly over 28%, which would be $868, and 35% would be $1085. right now, you're over on both, but not terribly so. As DukAmok said, you really aren't in a position to spend more. How long would it take you to retire the student loan debt and free that $200/month up for housing? The loan is actually to my parents at 0% interest (they gave me a personal loan for my tuiton) so I'm not concerned about paying off early as there's no savings on the interest. Also, the money is going directly to support my sister who is currently in college. I've already paid off all my other student loans and I have no debt other than this obligation to my parents. I'll be seeing them this weekend and they're sympathetic to my situation, however I'd prefer to not alter the loan terms as a bank wouldn't allow that and changing terms would be taking advantage of their generosity and potentially screwing over my sister. Additionally, the fact that I'm technically over that 28% limit now seems kind of nuts to me. I already feel like I'm swimming in money and I'm spending money on lots of dumb things that aren't needed (bars, restaurants, etc). Ideally I'd like to start an IRA but I'm not about to sacrifice my own personal comfort just to get some tax advantaged savings. I'm contributing 5% to my 401k and getting a 1:1 match from work. My new job will only match 25% up to a 5% contribution (but they have a generous pension) so I intend to keep contributions as high as possible without living like a pauper. I suppose I could cut my contribution to bring in more money but that seems incredibly foolish. I don't want to live like a pauper when I'm 70 either. totalnewbie posted:And/or what's a more reasonable level of expenditure for your area? 800-1200 for a single person per month seems insane for "disposable" income including food. I agree it probably is. Before I moved to this place my disposable income was probably more in the 600-800 range. Never being able to use the kitchen has pushed up my restaurant/eating out costs. I was looking on Padmapper and the cheapest place that met my criteria was about $1250 or so and all the reviews I read said it was filled with rats and had a ton of other maintenance issues. I'd rather spend an extra $200/month to live in a place that isn't so disgusting. I found a few places at about $1400-$1600 (depends on the special deals they have) that seem very reasonable. Again, last year I was spending about 50% of my net income on rent/utilities and I didn't notice much of an issue with my finances. The only difference I remember is that I saved probably $200 a month instead of $500 and ate out a lot less. Did I just get lucky? I did have some large emergency costs in there (car repair) and I didn't notice any financial pain from that. Well other than the pain of having to repair your alternator while out of the state. 
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Apr 3, 2013 07:00
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axeil posted:I appreciate everyone's replies, thank you. I have some comments, questions and clarifications. I understood that, but wanted to chime in that I think that rule of thumb is awful, and you should use net after 401k and everything else for the 33% calculation. Really it's just a rule of thumb for a reason, I wouldn't apply it hard and fast to anyone's financial situation and expect exact numbers, it just gives you a ballpark of what other people have been able to do. I like net calculations psychologically, because if I set up my withholdings and retirement contributions right, I'm effectively double saving on good months, and still saving even when I'm in an even or net negative month according to my bank balances. You can technically afford to pay a little more in rent. You have $11K in a safety net, which you want to build to $18K, but it's not the end of the world if you get there in 18 months instead of 12. You clearly have enough discretionary floating around that you can cut back and make the numbers work. From my own experience though, rent is the sort of thing that ratchets up but not down. You're up on discretionary at the moment, but given the right pressure, like unexpected layoffs, you can probably trim the fat and still coast. An expensive apartment and living alone, though, is a lifestyle upgrade. It's not as easy to downgrade when you're used to nicer stuff, and it's not as easy to sell a couch as it is to cut back on eating out. You make decent money, so I understand the urge, but if you can slum it a little longer, it will probably pay off in better security in the long term. I know $65K seems like a lot of money, but you're in DC. If you were living in Columbus, you'd be making about $40K. Just be glad you're not living in SF, you'd have to be making $75K, and still be in the unfortunate spot of needing roommates. axeil posted:Again, last year I was spending about 50% of my net income on rent/utilities and I didn't notice much of an issue with my finances. The only difference I remember is that I saved probably $200 a month instead of $500 and ate out a lot less. Did I just get lucky? I did have some large emergency costs in there (car repair) and I didn't notice any financial pain from that. Well other than the pain of having to repair your alternator while out of the state. It's not that you were unreasonably lucky, it's just that you didn't grow your net savings much. At saving $200 a month, your alternator set you back a few months. Imagine if you had that extra $1K a month heading to savings instead of rent, you'd already be way past your savings goal and on to your next one! It's not a question of surviving at this point, you'll clearly be fine, but a question of getting the money in while you're still young and don't have as many actual financial responsibilities. DukAmok fucked around with this message at 07:52 on Apr 3, 2013 |
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Apr 3, 2013 07:48
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DukAmok posted:I understood that, but wanted to chime in that I think that rule of thumb is awful, and you should use net after 401k and everything else for the 33% calculation. Really it's just a rule of thumb for a reason, I wouldn't apply it hard and fast to anyone's financial situation and expect exact numbers, it just gives you a ballpark of what other people have been able to do. I like net calculations psychologically, because if I set up my withholdings and retirement contributions right, I'm effectively double saving on good months, and still saving even when I'm in an even or net negative month according to my bank balances. Ah okay thank you that makes a lot of sense. I agree if I can hit the numbers on net income instead of gross it makes life a lot easier. I'm still trying to see if any of my friends know of anyone who needs a roommate as I think having a roommate for another year would let me hit my financial goals and minimize my financial risk. But if I can't find anyone I think I'm going to try for one of the cheaper efficiency units I saw. I guess the one good thing is that I own most of the furniture in my house now, I've got an entire living room and dining room plus my bedroom furniture, so at least buying a bunch of tables and chairs won't set me back right when I move. 
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Apr 3, 2013 13:26
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This conversation above is very relevant to me as I make a very similar amount of money and I live alone in DC. I want to help shine some light on my experience, though I should warn ahead of time that my lifestyle is in stark contrast to what a lot of folks here would say is smart financial thinking. Also a fair warning that I've lived in DC and NYC for the past four or five years, so my idea about what is reasonable to pay for rent is all hosed up. I live alone in a 1br in Logan Circle (downtown DC) and pay $1,250/mo. I am relatively young (mid twenties) and my income over the last few years has fluctuated between $50k-$80k. I should also note that I have not owned a car in the last few years. That all being said, I've always been able to pay my rent comfortably, save a bit of money (I now have a four month emergency fund, still working on it), and even splurge a bit on food and a vacation now and then. This is all possible because I made the decision a few years ago that I was willing to pay more to live downtown in a fun city rather than save more money or have the luxury of a car. Again, this is in contrast to the 33% standard or whatever, but it's completely possible.
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Apr 4, 2013 03:56
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Not owning a car gives you a lot of leeway on the 33% figure. Cars are pretty loving expensive.
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Apr 4, 2013 04:26
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INTJ Mastermind posted:I also recommend paying off your credit card first. The reason being that loan payments are not optional - at least not without significant consequences. This guy has it worked out, Really what you are looking to do is minimize as many fixed costs as possible. Which is interesting, because budgeting really is around setting ceilings for types of expenses. I do think though that it is important to look at the quality of the items you are buying on a budget, and the incremental cost of getting a higher quality item that may well last longer than the "cheaper" option.
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Apr 6, 2013 00:54
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I currently have an excel sheet that tracks my budget. It's very crude. I have a page for my idealized monthly budget, a page for a "yearly" overview so I know where my money is going with savings and so on, and then a new page for each month where I track every single cent I spend. For the spending tracking, what I do currently is just make a quick note on my iPhone with how much I spent and what it is for and then when I have spare time I put it into my spreadsheet. I'm looking for a new/better way to do this and maybe I'll check out YNAB because they have an iPhone app too. Do they do Dropbox syncing? I also would like to do something like this: - budget say $300 for a general "Entertainment" budget; - from this Entertainment budget, have sub-budgets of say $150 bars and $150 restaurants. Then when I go to a restaurant with friends I can mark down that I spent $30 and then it should show that I have $270 left in entertainment, with $150 being in bars and $120 in restaurants. If I somehow spent $200 in bars for the month then it should automatically take out the extra $50 from restaurants. Can YNAB do that? e: Mint wont work because it doesn't work with my bank. e2: The example I give doesn't seem to work. If I make it overspend in Entertainment -> Restaurants, it can only subtract the remainder from next month's Entertainment -> Restaurants or from next month's total cash availability, instead of from the current month's Entertainment -> Bars. Boris Galerkin fucked around with this message at 16:47 on Apr 6, 2013 |
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Apr 6, 2013 11:49
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Boris Galerkin posted:I'm looking for a new/better way to do this and maybe I'll check out YNAB because they have an iPhone app too. Do they do Dropbox syncing? I use YNAB for my budgeting and I'm a big fan. Entering in everything manually sounds like a chore, but I have a much clearer picture of my finances than I ever have in my life, and I feel like I make better financial choices now. YNAB uses Dropbox, so your iPhone app and YNAB on your computer will always be synced. Boris Galerkin posted:- budget say $300 for a general "Entertainment" budget; Not automatically, no. For your scenario, in YNAB you would have a master category "Entertainment" and two sub-categories "Bars" and "Restaurants", each with $150 budgeted. If you spend $200 in Bars, then that budget will show -$50. You would then manually subtract $50 from Restaurants and add $50 to Bars to fix the overspending. This is one of YNAB's four "rules" (roll with the punches).
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Apr 6, 2013 23:46
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Maybe I just missed it but (in YNAB) is there a way to say "I need $1000 by December so automatically divide it up and tell me how much I should save every month to get this?" Also what am I suppose to do with future paychecks? I set up a recurring transaction but since it hasn't occurred yet my next months budgets show negative balances/overbudgets.
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Apr 7, 2013 11:20
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Boris Galerkin posted:Maybe I just missed it but (in YNAB) is there a way to say "I need $1000 by December so automatically divide it up and tell me how much I should save every month to get this?" Not automatically as far as I can tell. I do this by doing the math myself, and then adding a note to that category that says something like "Budget $100/mo until December". Boris Galerkin posted:Also what am I suppose to do with future paychecks? I set up a recurring transaction but since it hasn't occurred yet my next months budgets show negative balances/overbudgets. I just update my budget each pay day and don't budget beyond the present. The software doesn't handle forecast budgeting gracefully. The devs state that this is intentional because you should only be budgeting dollars that you have. Some people agree with this, some people don't. The official YNAB way is to live off of last months income and budget for next month using this month's paychecks. Some users on the YNAB forums say they use a second dummy budget to play with forecasting.
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Apr 7, 2013 13:14
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Re: YNAB: I use an on-budget "Pre-Budget" fake bank account with a couple months of paychecks sitting in it. When they actually hit my bank account, I move them to the real account.
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Apr 7, 2013 14:40
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Finally decided to get a handle on my finances ahead of graduating in a few months time. Current situation is as follows: - Postgraduate student until the end of June; - Make £200/mo net from Saturday job, which is enough to cover basic expenses (train fares, gym fees, phone bill); - Live with family so no bills; - After basic expenses, I waste a lot of money on eating out when I'm in class and at work (not lavish meals, mostly Subway meal deals); - This has left me spinning my wheels at the bottom of my (interest free) student overdraft, owing the bank £1,250. This doesn't have to be repaid for 3 years; - Early September I start working as a trainee lawyer and will be making ~£1,500/mo net for the first 12 months and £1,600/mo net for the second 12 months; - Will be working and living in a city with a relatively low cost of living; - No savings; - No significant anticipated expenses before September (i.e. car fully taxed, insured and tested); - No debts other than the aforementioned interest free overdraft and my student loan. My student loan is tied to the rate of inflation and deducted at source so it's effectively a tax, and I've taken my future repayments into account in setting out the above lawyer earnings. So, with all of this in mind, I've two large financial concerns that I can't figure out on my own: - First, I'm going to be moving into the city into my own place before I start working. How do I prepare for this? I've been planning on selling my car (which I won't need), which should raise around £900 to go towards a deposit and bills until my first paycheque. I'll be renting with a flatmate, and so my paycheques will be more than enough to cover my bills, expenses and allow me to work my way out of my overdraft/build up some savings ahead of qualifying in 2015. What else do I need to be thinking about? - Second, I've got all of this July and August to myself. I'd really like to travel and make the most of being young and unattached before I start full-time work in an industry in which I'll be putting in long hours and likely never get as much free time to myself again. But I don't see how I can afford this without some combination of: (i) saving more of my current income, (ii) selling some other things I own, (iii) trying to get some full-time hours at work in the summer, and (iv) borrowing money. With this second concern in mind, I've downloaded YNAB and will start budgeting and preparing my own meals to take to class and work so that I can save some of my income. I'm going to sell my electric guitar which should raise ~£200 or so, but don't really have anything else worth selling. Working more hours isn't an option right now, though I will speak with HR to see if I can work full-time for 2 or 3 weeks after graduating. So really my question is, given all of the above and in particular my primary objective of moving into my own place, would borrowing money to travel be stupid? Say £1,000-1,500 on a cheap credit card 'loan' (i.e. interest free for the first 12-18 months)? I think I can afford it, and I'd hate to lose such a great opportunity, but I don't know if it's a sensible or viable option. Besides this, I'd greatly appreciate any objective thoughts on my situation and proposals. e: Having thought about it some more, I don't think the travelling is a reasonable proposal. I've made a budget for city life which includes putting money aside to pay off my overdraft/build up 6 months of savings in 24 months. If I have debt repayments on top of that I'll have to live less comfortably than I want. I also failed to take into account that I don't have a complete professional wardrobe. It would be more sensible to work full-time this summer to buy clothes and pay off some of the overdraft. It's a bummer, but c'est la vie. Maybe I can talk my managing partner/HR into giving me a month off unpaid when I qualify. Umbriago fucked around with this message at 20:03 on Apr 7, 2013 |
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Apr 7, 2013 15:31
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zZzzZzzZz
AKP fucked around with this message at 15:51 on Mar 24, 2014 |
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Apr 8, 2013 02:35
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You already know what you should do. If you just pay it off asap, you'll have more money by the end of the year in total anyway.
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Apr 8, 2013 02:38
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ZZZ
AKP fucked around with this message at 15:51 on Mar 24, 2014 |
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Apr 8, 2013 02:41
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AKP posted:Is my credit butchered now though? I want to be able to recover and still have pretty good line. Its capped at 2k. I don't understand what this means. Paying off your credit card will not harm your credit rating. In any case, it's not a video game high score, pay the drat debt already.
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Apr 8, 2013 03:21
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The most effective way to increase your credit score, especially if your limit is 2000, is to pay off what you owe. Do that first. Then don't put anything else on credit.
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Apr 8, 2013 03:48
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The only thing that you should possibly do while paying off the card is setting up an emergency fund. It's not clear to me if not paying for any additional monthly expenses means that you aren't paying rent or buying food, but if that's the case then you can also pass on the emergency fund for now. If you're on your own, though, making sure you have some sort of cushion is important. To be clear, an emergency fund does not double as a school fund or a instrument fund. Pay off the card, then start saving for your other goals. Assuming you have been making payments on the card and you are not delinquent, your credit is fine. Don't worry about it. Even if you haven't been making payments, the answer is the same - pay off the card. It can only help your credit.
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Apr 8, 2013 14:29
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drat IT posted:Not automatically, no. For your scenario, in YNAB you would have a master category "Entertainment" and two sub-categories "Bars" and "Restaurants", each with $150 budgeted. If you spend $200 in Bars, then that budget will show -$50. You would then manually subtract $50 from Restaurants and add $50 to Bars to fix the overspending. This is one of YNAB's four "rules" (roll with the punches). This isn't really so elegant, but what can you do. I guess the point of budgeting is that you stick to it and not shift money around, but for example in this case going out to a bar and to a restaurant with friends is still "fun" money and I really don't care how it's split as long as I stay under the overall $200 budgeted. For tracking purposes though, I want these two split so I can see how much I ate out vs drank for example. Also, I wish there was an option to have YNAB take money from the current month web overspending instead of taking money from the next month. Again, if I budget $100 to restaurants and end up spending $120, I've not actually overspent because it's all fun money, so when I click on the overspending I don't want my next months restaurant budget to reduce by $20.
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Apr 8, 2013 15:41
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Boris Galerkin posted:This isn't really so elegant, but what can you do. I guess the point of budgeting is that you stick to it and not shift money around, but for example in this case going out to a bar and to a restaurant with friends is still "fun" money and I really don't care how it's split as long as I stay under the overall $200 budgeted. For tracking purposes though, I want these two split so I can see how much I ate out vs drank for example. Mint actually handles that nicely -- you can budget for the Parent category and the Children categories track individually but deduct from the Parent.
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Apr 8, 2013 16:26
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So I have about $8,200 left on a 32,200 loan I took upon graduation, the interest is only 0.5% and monthly payments are 550, estimated payoff date is July 2014. I have an emergency fund of about 10 months accumulated which will maintain my current life style. Would it be wise to eat into this emergency fund to pay off the remainder of this loan so that I can put more money towards investing in a 401k? If I were to do this, I'd still have a 7 month fund. I'm 26, very healthy, employed with full benefits and even if I am laid off I'm 80% sure I can find work within a month or two. I'm currently putting 500/month into a USAA mutual fund and maxing out my Roth IRA, but not making any contributions to a Roth 401k since I only became eligible with this company a couple months ago. I have about 7000 in a Roth 401k from my last employer which I need to rollover too.
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Apr 9, 2013 10:02
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I would pay the debt down ASAP. You're young and presumably without a lot of responsibility (read: kids/dependent spouse). Ten months of funding is a lot for anyone, and seven would still be fantastic. I'd get rid of the debt so that's not weighing on you anymore, and then you can reap the benefits of the 401k program will remaining in a very desirable position financially.
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Apr 9, 2013 12:09
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I don't see the point of paying off a .5% loan early. Either finish off your roth contribution for the year or buy some ibonds.
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Apr 9, 2013 14:22
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That's easy, the point of paying off a debt early is to not have it anymore. Basically it sounds like you're fine either way, so do what makes you feel good. What's going on with that USAA $500/month though? If that's taxable and risky like stocks or bonds, make sure you're clear on why you're doing it. If it's money market or something, never mind.
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Apr 9, 2013 16:13
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Um how can I go about getting a $32,000 loan @ .5%? I'll never work again. edit: For a minute I was being serious and not being facetious or mean. Obviously he meant 5%, which is definitely worth knocking out. Sephiroth_IRA fucked around with this message at 16:59 on Apr 9, 2013 |
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Apr 9, 2013 16:53
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Orange_Lazarus posted:Um how can I go about getting a $32,000 loan @ .5%? I'll never work again. Seriously, loans below inflation?  And I thought I got a good deal when I financed my car at 1.8%...But yeah, he probably meant 5%. 5%'s worth paying, if it were 0.5% it'd be in your best interest to stretch it out as long as possible.
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Apr 9, 2013 16:59
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Orange_Lazarus posted:Um how can I go about getting a $32,000 loan @ .5%? I'll never work again. Nope it is actually 0.5% Career starter loan from USAA, offered to cadets/midshipmen from Service Academies when I graduated. Navy Federal Credit Union offered the same and some people took both. Not a bad deal at all. Why is it a good idea to stretch it out, to increase my credit score? I have one credit card that I make automatic monthly payments on and have never missed, so I don't think my credit is all that bad anyways. slap me silly posted:That's easy, the point of paying off a debt early is to not have it anymore. It's a "moderately aggressive fund". USAA describes it as: The fund's investment objective is capital appreciation with a secondary focus on current income. The Fund will invest in stocks, bonds, money market instruments, and other instruments. The fund may invest in foreign securities, junk bonds, ETFs, REITs, futures and options and other types of derivatives. The Fund will have a target asset class allocation of approximately 60% equity securities and 40% fixed-income securities." My monthly expenses right now leave me with about $500 fun money to spend on what ever (not including bars/eating out) assuming I stick to my budgets, not sure if I want to use this towards a 401k because then I won't have any fun.
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Apr 10, 2013 05:51
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Fish Shalami posted:Nope it is actually 0.5% If it's truly at 0.5%, then after you account for inflation they're essentially giving you free money. Even with the current low rates you can get almost double that rate in an online savings account. It literally becomes cheaper to payoff that loan in real dollar terms the longer you wait.
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Apr 10, 2013 06:18
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I've heard people describe a 5% long term real return in the stock market as lackluster so imagine tossing that $35,000 into an index fund that returns a real 5% long term return.code:Sephiroth_IRA fucked around with this message at 06:54 on Apr 10, 2013 |
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Apr 10, 2013 06:48
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