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Please critique a new college graduate's financial situation

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    Please critique a new college graduate's financial situation

    Background: working as an accountant/financial analyst in an accelerated management program and will be studying for my CPA beginning in January (covered by my company). I live with my girlfriend of 4 years (we lived together in college and I anticipate a long future with her). She’s relocated with me as part of my rotational program, a huge sacrifice. We both worked full-time and went to school and both come from impoverished backgrounds so have already had to support our families. We’re both incredibly frugal and I’ve recently become infatuated with “minimalist” lifestyle so am trying to convince her to embrace that. I don’t have any desire to acquire new material things as I’d rather spend my money on travel, experiences, etc.
    Age: we’re both 22, graduated college in May 2012
    My gross base pay: $67,000 with a $6K relo bonus every year. (Used 100% of my $13K signing bonus earlier this year to pay down debt). Take-home pay ~$3900 a month after contributing 5% to 401k, insurance, etc. (I get a 7% match for the 401K).I also get a $2,000 HSA contribution each year.
    Health & dental Insurance: $60/month for me, $230/month for my girlfriend’s policy (wish she was on mine!)

    My job also has a very generous relocations benefit package as I’m in a rotational program, I’m trying to figure out how to maximize these benefits.
    Girlfriend’s salary: working as an Asst. Manager in retail as she relocated with me to a rural area with limited job prospects (she graduated Magna Cum Laude with a B.S. in Bio), take-home pay ~$1,550 after insurance, taxes, etc.
    Side gig income (Ebay, book scouting, rebates, etc.) ~$300/month; also recently hired part-time as an Internet Assessor at Lionbridge ($13.50/hr x max 20 hrs/week, not sure how many we’ll be able to put in)
    Total monthly take-home pay: $5,750/month - $6,500/month
    Direct subsidized: $3,500 @ 6%
    Direct subsidized: $5,500 @ 4%
    Direct subsidized $4,500 @ 5.6%
    Direct subsidized: $5,500 @ 3.4%
    Direct unsubsidized: $2,400 @ 6.8%
    Direct unsubsidized: $2,300 @ 6.8%
    Direct unsubsidized: $2,100 @ 6.8%
    Her Total = ~$26,000
    (We’ve already paid off $48K in the past three years much which consisted of private loans from her Freshmen/Sophomore years at our very expensive private college AND some semesters were able to pay her tuition bill in direct payments)

    Direct subsidized: $5,500 @ 5.6%
    Direct subsidized: $4,500 @ 4.5%
    Direct unsubsidized: $2,200 @ 6.8%
    Direct unsubsidized: $6,900 @ 6.8%
    Direct unsubsidized: $2,400 @ 6.8%
    Car Loan: $4,700 @ 4.99%

    My Total: $26,200
    We just paid off her private loans (totaling $48K), and will now be starting on my loans as she’s taking CC classes that will keep her subsidized loans in deferment.
    Keep a $5K emergency fund, very little volatility in my job and I can always move back home with my family. I’d rather keep a small emergency fund then stomach paying high interest.

    Joint monthly budget:
    Rent: $965 a month, all utilities, laundry, etc. included for a 2 bedroom townhome (we use one bedroom as an office and it was only ~$45 more a month for the 2nd room.
    Internet: $55/month, tried to find cheaper to no avail – suggestions?
    Cell phone: $22/month total, we both have barebone Page Plus pre-paid plans
    Car payment: $178/month, hoping to have this paid off by Christmas ($4700 balance left)
    Car insurance: ~$75 month
    Food budget: ~$250-$300 a month (use a Sam’s Club membership)
    Entertainment: ~$100-$150 a month (low-key)
    Accelerated debt payment: we’ve been consistently paying off $2,800/month minimum for past 6 months; not sure how sustainable this will be after we move for my next rotation, have to buy another car, she has to find another job and go back to school, etc.

    We spend little/nothing on clothes due to thrift stores and accumulated wardrobes, she is an extreme couponer and so we get our toiletries, etc. for practically nothing/free, very little spending outside of these categories.
    1) I would like to be as debt free as we can before my girlfriend goes back to Physician’s Assistant school in 1-2 years. I’d like to be debt free so that I can pay her tuition in payments without borrowing. Otherwise we will have even more student loans.
    2) I want to propose within the next year and will be looking for a ring.
    3) Should I focus so much on debt repayment or start putting more into a Roth IRA, etc.? I’m already getting 12%/year in my 401K.
    4) I want to figure out how to moonlight in accounting/finance/anything related for extra income. In addition to studying for my CPA, my work will be paying for my MBA in the next ~2 years. Suggestions?

    Advice: how to prioritize the debt payments, how to make more money or advance our skill sets, how to plan for her return back to school, how to save money off our expenses, etc. Anything you can think of.

    Seems like you know what you are doing already. I presume you prioritise the highest interest loans already.

    Why is her insurance so high compared to yours? Have you looked for alternative insurers?

    Do you know where you will be moving next? Are there job opportunities that she can pursue in the new location?


      In general, pay the highest rate loans first. If you keep spending low, it appears you have a decent amount of excess income, and can pay down that debt quickly. If you can keep that pace, you'll pay it off before very long, so IMO can can afford to delay repayment a bit so that you have some to put some into a Roth.


        Marry her and get her on your insurance? You sound like you are doing great already.


          Would there be a way to get her on your insurance before marriage- often there's a partner, domestic partner, something clause. I know teachers who do this with their significant others & it's just a piece of paperwork- if so, it could save you hundreds/maybe a thousand or so...


            Originally posted by richlifefrugalhabits View Post
            Car payment: $178/month, hoping to have this paid off by Christmas ($4700 balance left)
            What is the interest rate of the car loan? And where are you going to come up with the $4700 in a month?

            If the rate is less than the 6.8% on your college loans then I'd knock them out first.
            The easiest thing of all is to deceive one's self; for what a man wishes, he generally believes to be true.
            - Demosthenes