How am I doing?

[gf1723]

Well I moved out of my parents house in January. I moved back in to their house when I graduated college because I found a job that was about 5 miles away, so it would have been stupid of me to rent an apartment. I am currently a single 26 year old male.

I tried to save up some money, but I was only making about 25K, before I got a new job and moved out. I invested the max in my Roth IRA last year and want to do the same again this year. The 401K from my old job got rolled into my Roth this year. Here is what my account situation looks like:

Checking: $1,000
Savings: $8,000
EF: $800
Roth IRA: $1,000

I also have about $800 in stocks, and $900 in my new 401k (contributing 10%). I also have approximately $43,000 in my Roth IRA. I can thank my wonderful father for that one. he started it for me as soon as he could and I have been contributing the past year or so. I make about $42K a year and pay $about $900 a month in your basic expenses like rent and utilities. I don't have any car payments. I really think I need to open a new account for a car replacement fund. My car only has 92K miles on it, but it seems like every 3-4 months, I have to get it fixed for something.

My main problem is trying to save money every paycheck. Today I started to have my bank automatically transfer $100 from my checking to my saving, this way I never see it. I always end up not bringing my lunch to work, so that is taking like $5-7 out of my pocket every day. I also drive to work, but just recently got a city bus pass for $60/year. Once the weather gets warmer I will commute to work and not even drive. This should save me a lot of money on gas and wear/tear on my vehicle.

Any advice/comments/opinions?


EDIT: I also forgot to mention that my car is paid off and I don't have any debt.

[TutoMoneta]

What you want?
What is the criterion? If you are alone, why not live with parents unitl you can buy your own premises or they die?
Live and take as much as possible (Fukushima can take place in any part of the world at any time)

[bjl584]

Originally Posted by gf1723

Well I moved out of my parents house in January. I moved back in to their house when I graduated college because I found a job that was about 5 miles away, so it would have been stupid of me to rent an apartment. I am currently a single 26 year old male.

I tried to save up some money, but I was only making about 25K, before I got a new job and moved out. I invested the max in my Roth IRA last year and want to do the same again this year. The 401K from my old job got rolled into my Roth this year. Here is what my account situation looks like:

Checking: $1,000
Savings: $8,000
EF: $800
Roth IRA: $1,000

I also have about $800 in stocks, and $900 in my new 401k (contributing 10%). I also have approximately $43,000 in my Roth IRA. I can thank my wonderful father for that one. he started it for me as soon as he could and I have been contributing the past year or so. I make about $42K a year and pay $about $900 a month in your basic expenses like rent and utilities. I don't have any car payments. I really think I need to open a new account for a car replacement fund. My car only has 92K miles on it, but it seems like every 3-4 months, I have to get it fixed for something.

My main problem is trying to save money every paycheck. Today I started to have my bank automatically transfer $100 from my checking to my saving, this way I never see it. I always end up not bringing my lunch to work, so that is taking like $5-7 out of my pocket every day. I also drive to work, but just recently got a city bus pass for $60/year. Once the weather gets warmer I will commute to work and not even drive. This should save me a lot of money on gas and wear/tear on my vehicle.

Any advice/comments/opinions?


EDIT: I also forgot to mention that my car is paid off and I don't have any debt.

You need to build up your EF. You stated that you have around $900 in expenses per month. That would work out to an EF representing 3 to 6 months worth of expenses of $1800 to $5400. After that, starting a car fund is a good idea, especially if your current car is starting to turn into a money pit. At 26, I would suggest that you think about getting your own place.

[Andrew Jackson]

I'm slightly confused. Are you currently living with your parents? How much do they charge you for rent? If your expenses are $900 a month I would guess your rent is somewhere between $400-$500? Do you have student loans? You're very fortunate to have so much saved up in your Roth at only 26.

[gf1723]

Sorry, I forgot to mention that when I got my new job, I moved out and now live away from my hometown. I'm in a higher populated area and now paying about $700 in rent. I live by myself because none of my friends live in the same area.

[clintdavis]

Hey gf,

I've gotta tell you...you're doing a lot better than I was at 26. So here's a pat on the back...'ata boy....keep it up. With your Roth already at $43,000, you should be able to retire a very wealthy man if you do the right things.

I agree with Brian that you need to beef up your Emergency Fund so that you don't have to whip out a credit card to cover life's little surprises. I would plan to build it up to about $5,400 and park it in a money market account with check-writing privileges. This needs to stay easily accessible in the event of an emergency, but not so accessible that you blow it on pizzas and vacations.

You are out of debt, so keep it that way! You are right that you need to be saving up to purchase a car for cash. If you'll take care of your car, it should last at least a couple more years. That would give you enough time to save up to buy a decent used car.

You should be investing at least 15% into retirement accounts. Max out your 401k and Roth contributions. Beyond that, you will want to start saving to purchase a home. The larger the down payment you are able to make when the time comes, the lower your total interest will be on your mortgage. Then you would want to take out a 15 yr fixed-rate mortgage with a payment of no more than 25% of your net income. Or you could be really radical and just save up and buy your first home in cash.

You're on track to be very wealthy if you continue to work hard, get your income up, and make wise financial decisions...like staying debt free, paying cash for purchases, investing in your retirement accounts. Keep it up!

Thanks for sharing!

[jpg7n16]

Originally Posted by gf1723

my new 401k (contributing 10%)...

I make about $42K a year and pay $about $900 a month in your basic expenses like rent and utilities. I don't have any car payments...

My main problem is trying to save money every paycheck.

...Any advice/comments/opinions?

But you are saving some money each paycheck. You're saving 10% to your 401k. Obv you can't save as much as when you lived at home with your parents, but how much are you hoping to save?

Would you mind posting your budget?


At $42k, you're making $3500/month before tax. Contribute 10% to 401k ($350) leaves $3150. Times 80% (quick estimate for SSI and income taxes) leaves about $2500/month, so on average you probably have $2300-2500/month to work with. You said $900 of that goes to rent/utilities - where does the other $1400-1600 go?

[Frugal]

Sounds like you are trying to save money. I also had to move home after college, but not because I had a job, rather because my degree (BA) was not the most employable...lol. Wish it had not cost me total 100k plus to figure that one out. One heck of an expensive LIFE LESSON. lol

Regardless of my situation, the fact that you are 26, gainfully employed, and still able to set aside money each month says you are doing something right. It's also good that your car is paid off. One thing I noticed, is that you might want to consider building up your emergency fund. Think of it as necessary, should you be laid off or face other trouble. I built one up, and I lived off it when I was laid off.

Checking: $1,000
Savings: $8,000
EF: $800 - ** SHOULD PROBABLY BE HIGHER BY AT LEAST A FACTOR OF THREE OR FOUR, IN MY OPINION**
Roth IRA: $1,000 - That's good you could save that much so far! I could not!

You asked about ways to save money. I do this by using the following:

1) Coupons. I am personally not quite as pro yet as those on the popular show "Extreme Couponing", but I do lower our grocery bills each month.
2) Try reducing your bills in any way possible, including shopping around. This way, if your income is stagnant, you can begin to save more each month. SHop around for optional expenses like cell phone companies, telecom for cable and internet, and other non-utility bills.
3) You might try to start some kind of business of your own, like for example, a website, in your spare time. Or you could sell things on E-Bay. Some people do this. Even if you walk dogs or follow a passion of yours on weekends, it might help your bottom line.
4) You might want to start budgeting WEEKLY food costs. Unless you are an expert, planning a month's worth of meals might be difficult at best. I tried it, and won't go there again. It just leads to frustration if you try to plan out anything over about a week, maybe two. You can then shop sale ads like I did yesterday, and find things like pineapple on sale for only 99 cents at Safeway, one day only. I spend about three hours a week shopping and comparing sales ads at grocery stores, Target, Walmart, Walgreen's, etc., and then make detailed lists at each store, and sometimes make charts comparing prices at each store side by side. IF you had a lot of time, you could input this information into Excel and make up a spreadsheet to use periodically to track prices at stores.

These suggestions may or may not work for your individual situation. Overall, just try to cut costs, and build up that critical savings.

Hope that helps! Have a nice Easter weekend, all of you!

[gf1723]

Thank you all for the responses. I agree with every one of you that said I need to get my EF up a bit. I will probably just take it all at a slow/steady pace. Put a little in savings, EF, Roth, and a replacement car fund every two weeks.

On another note, my electric bill went down almost $100 this month, thanks to the warmer weather!