- oRenj9
- Aug 3, 2004
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Who loves oRenj soda?!?
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College Slice
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Monthly Income
Gross income: $5400
401k: $324 (6% of gross pay)
HSA: $83.34
Net income after tax and deductions: $3600
Girlfriend’s contribution: $550
Total net deposits per month: $4150
Monthly Expenses
Rent: $1100
Utilities: $200
Groceries and Hygiene (Walmart): $450
Cell Phone: $100
Car insurance: $75
Internet: $35
DirecTV: $75
Gym: $25
Discover Student Loan (14000, 3.25%): $50
Citibank Student Loan (4030, 3.5%): $20
ACS Student Loan (2450, 5.0%): $50
Wells Fargo Sudent Loan (4000, 2.5%): $75
Federal Student Loans (68600, 5.4%-6.8%): $250
Parent Student Loan (12600, 0%): $200
Additional toward Student Loan Principal: $250
Emergency Savings ($8000 saved so far): $500
Engagement Ring Savings: $250
Miscellaneous: $400
Total: $4105
You are living an exceedingly lavish lifestyle for somebody who is buried under permanent and unsecured debt. The good news is that you can quickly dispatch with this debt and get on with your life, but doing so will require sacrifices on your part. You have a very solid income and you should be able to knock these out in four years, max.
- Reduce 401k contributions to your employee match. If they don't match; don't contribute, you can get better returns by eliminating debt.
- You're healthy, only contribute enough to your HSA to cover known expenses, like glasses.
- Throw your $8k in savings at your $68.6k loan. Get a CC for emergencies.
- Stop contributing to your emergency savings ($500/mo)
- Get a pre-paid cell phone (+$80/mo)
- Ditch DirectTV, get Netflix. (+65/mo)
- You spend way more than necessary on groceries and food. Learn to stretch meats by eating more salads, fruit, and cheese. Find a discount store and buy generics. (+$75/mo)
- Your miscellaneous section is a joke.
- You need line items for all of your car related expenses. Cars are expensive as gently caress, but you don't realize how big of a money sink they are until you really examine their costs. Move closer to work when your lease is up.
- How often are you eating out?
- Nix the engagement ring savings, what you have currently saved is way more than enough. ($250/mo)
Total Savings of unnecessary items: $970
Potential Savings from "Misc": $200
HSA Excess savings: $40
That's $1210 MORE per month that you can be putting towards your debts. With your existing $895/mo, you'll can apply $2105 or $25,260 per YEAR towards those debts. Knocking them out in right about four years.
HOLY poo poo, YOU COULD BE DEBT FREE IN ONLY FOUR YEARS!
Once you're debt free, you can start focusing on saving for retirement. You'll be so flush with excess income by then that you'll have an easy time building up an extremely solid nest egg. Assuming you can stick to this plan, and you don't get any raises (unlikely), in 10 years, you'll be debt free with almost $200k banked towards retirement; 23 years with a 7% annual return puts you over the million dollar mark.
I was in your same situation. I graduated at 28 with an engineering degree and a good amount of debt. But I made all of the cuts mentioned in this post and it really did improve my life dramatically.
Edit:
These numbers assume no contributions from your girlfriend or future wife. Mainly because you need to get on the same page financially before you two should consider getting married.
oRenj9 fucked around with this message at 04:33 on Apr 28, 2014
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Apr 28, 2014 04:26
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