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I'm 25, unmarried and living with my partner (who also works), and have no children (and don't intend to have children any time soon). I just got myself out of a lovely dead end job and am now going to be making 15.50 an hour (full-time) to start, with room for raises and promotions (the job is with a large Credit Union and is very stable). I recently paid off the last of my educational debt, and aside from $100 dollars on my Line of Credit that I used for groceries that I will pay back on Friday when I get my paycheck, I am completely debt free. However, I know basically nothing about investment or personal finance beyond avoiding debt as much as possible. My short term goals at present, in order of importance: 1) Get my savings account from the current balance of $50 up to five times my out-of-pocket monthly costs, so roughly $3000. 2) Buy a new bicycle. So, not much. As for my long term goals: 1) Marry my partner and buy a house together. 2) Quit smoking 3) Maybe go back to school at some point and get some sort of Associate's Degree or Vocational Certification, especially if I can salvage some credits from my orphaned attempt at a Bachelor's Degree and/or get tuition assistance through my job. Additional information: I live in the Pacific Northwest in a College Town that is experiencing a tech boom. My partner makes roughly as much money as I do. We have very little in the way of expenses. My parents and grandparents (comfortably middle class) have offered to help with a down payment on a house in a few years, though exactly how much they plan to help hasn't been hammered out yet. Basically, I came here to ask what I should be doing. There's a wealth of information out there, but I have no idea where to start beyond building up my savings. I am open to pretty much any suggestions or ideas that are solid and involve comfortable amounts of risk. Help?
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Jul 5, 2017 00:59
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| # ? Apr 30, 2024 23:01 |
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The usual - you should be contributing money to your tax-advantaged retirement accounts. Check out this thread: https://forums.somethingawful.com/showthread.php?threadid=2892928
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Jul 5, 2017 08:09
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KYOON GRIFFEY JR posted:The usual - you should be contributing money to your tax-advantaged retirement accounts. Check out this thread: Well, I already opted in to my employer's 401(k) program at 4% (since that's what they'll match). I suppose I can start working on an IRA too once my emergency savings and home down payment savings start looking good. Thanks for the advice, definitely something I should be considering!
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Jul 5, 2017 08:18
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You're not giving out any hard numbers out so it's hard to give any specific advice. Your household is up to $30/hr (or will be if the new unknown job works out?) and you seem super excited about this and want a bike and house but it's not clear what your saving rate is or what your debts are like. If you can save half your paycheck it's still going to take like six months to build up that minimal emergency fund, focus on that first before the bike and house.
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Jul 9, 2017 15:43
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Pryor on Fire posted:You're not giving out any hard numbers out so it's hard to give any specific advice. Your household is up to $30/hr (or will be if the new unknown job works out?) and you seem super excited about this and want a bike and house but it's not clear what your saving rate is or what your debts are like. If you can save half your paycheck it's still going to take like six months to build up that minimal emergency fund, focus on that first before the bike and house. He said he has zero debts and $3000 is 5x his monthly expenses so his expenses are only $600, monthly income is $15.50 x ~173 x ~0.75 = right around $2000. OP, you top out in the 15% federal tax bracket so you should definitely do a Roth IRA / Roth 401K while you are still at 15%. Getting your emergency fund up to $3000 before you buy a bike is a good idea and should only take you a couple months - maybe you can watch for a used bike that you want on Craigslist and see if the perfect one shows up over the next couple months. I would stay away from school unless it specifically helps you with your job - instead focus on building a career given your current opportunity, and take their professional training/etc when you get the opportunity to do so. Don't go back to school with no specific purpose though, especially if it didn't go so well the first time you tried.
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Jul 9, 2017 16:20
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So he lives with his parents and spends $600 between two people on cigarettes and food and everything else? drat that's something else. And he is banking on this new job being rock solid even though he hasn't started yet and should invest in career training? And literally the first thing he wants to buy is a bike after he quits smoking, followed by the second thing being a house? These are the financial literacy questions that have been thrown before you. Yes worrying about marginal tax rates and 401ks is, I guess technically correct default advice, but it's a bit cart before horse, just focus on the emergency fund.
Pryor on Fire fucked around with this message at 19:25 on Jul 9, 2017 |
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Jul 9, 2017 19:22
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Further information: I live with my girlfriend in a one bedroom apartment, my share of rent (half) is $295, add another $150 for my share of groceries for the month and about $75 - 100 for bills depending on the month. I don't smoke that much, maybe 2 packs a week at most, so another $40 a month give or take. Add in coffee and eating out a few times a month ends up at $650-$750 a month. I don't have a car since my city is very bike-able. I was already planning on craigslist for the new bike. My saving habits have previously been $100 off each paycheck when I was making $10 an hour, though my hours were highly variable and I had to liquidate my savings a couple times during the dry months. My only other expenses are either food for my snake (which averages out to $10 a month) or luxuries and indulgences like vacations, video games and books. Emergency fund is my top priority, followed by bike since that's literally how I get to work and my current bike is starting to fall apart. House won't be for another few years, I've just been wondering what to do in the interim since my income will be going up by a significant amount and I'll have more consistent hours. Edit: I said partner, not parents. Not sure if that was just a typo on your part or if you misunderstood. Eleven Eleven fucked around with this message at 21:07 on Jul 9, 2017 |
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Jul 9, 2017 20:57
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He probably misunderstood and didn't realize because $295/mo rent just seems really, really low for housing in a city experiencing a tech boom. Emergency fund first, Roth IRA second, definitely keep an eye out for a good deal on a bike but if you don't see any good deals, prioritize the emergency fund instead -- you can always use it to buy a replacement bike if your current one breaks.
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Jul 12, 2017 04:34
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Quit smoking. BAM! That's a $500/year raise you just gave yourself, along with decreasing your health costs.
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Aug 2, 2017 19:47
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Yeah honestly there's nothing super special about your situation sounds like. Just start putting money away into retirement accounts, read the standard beginner resources on investing, quit smoking, etc. edit: nvm Cicero fucked around with this message at 19:55 on Aug 2, 2017 |
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Aug 2, 2017 19:50
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Don't let the bikeshop people talk you into a 10,000 carbon fiber bike. Don't even let them talk you into something over $600 and they WILL try to upsell you stupid accessories you don't need. However, a slightly more expensive, $500-ish bike IS nice and they are easier to ride because they're usually lighter than cheap/free ones. Or just get one off craigslist because whatever, you don't need a fancy bike to get to work. Eventually healthcare costs will start to mount for your smoking habit, I'd honestly prioritize quitting that first because it'll cost you (both now and in the future). Nothing like lung cancer to eat into the money you started saving up now. Shayl fucked around with this message at 21:32 on Aug 10, 2017 |
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Aug 10, 2017 21:27
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Shayl posted:Don't let the bikeshop people talk you into a 10,000 carbon fiber bike. Don't even let them talk you into something over $600 and they WILL try to upsell you stupid accessories you don't need. Ended up getting a really nice, lightly used commuter bike for $350 from a friend who recently upgraded (he originally got it for ~$600).
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Aug 11, 2017 06:17
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| # ? Apr 30, 2024 23:01 |
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You're in a good place here. Your expenses are extremely low, and your income is good enough. Where you go from here depends on what you want, really. The first thing I'd consider is a budget. You have to ask yourself if your expenses have been low because you had no money, or if your expenses are low because you don't really want to buy anything. If you think you can avoid lifestyle creep without a budget (you have cheap/free hobbies, don't go out much, and don't see that changing), you might be able to do without. But be careful with that approach, plenty of people have gone that way and found themselves spending more as their income goes up. If you need help with a budget, feel free to ask here, or there's a budget thread in BFC also. Next, your emergency fund. You had a good intuition to do this, so good on you. You should be able to finish that off in a few months (if not, maybe reconsider having a budget). After you're done with that, I'd still contribute some smaller amount (say, $100/mo or so) to deal with inflation of expenses and such. Even if you're the cheapest person on the planet, $600/mo isn't going to cover your expenses forever. After that, it's time to think about retirement. A great place to start is "If You Can" which was linked in that long term thread posted earlier. Here's a direct link to the PDF: https://www.etf.com/docs/IfYouCan.pdf . It's short, and gives a good overview of some set it and forget it retirement strategies. If you find yourself interested in learning more, there are also some really good books linked there. After that, you're in a good place, and you'll also probably know more about where you want to go next. A house fund would happen here (don't stop contributing to retirement!), or whatever priorities your life brings you. Good luck! Sounds like you have a decent head on your shoulders. The easier/more automatic you can make doing the right thing, the more likely it is going to happen. EDIT: oops, didn't realize this thread hadn't been posted in in 2 weeks.. Grumpwagon fucked around with this message at 13:42 on Aug 26, 2017 |
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Aug 26, 2017 13:40
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