24, new to financial world, need advice

[MaverickSB]

Yes, you're making enough. I'm at the 50k mark in the chicago suburbs in software (testing) and I'm 23.

How are you budgeting entertainment? You may have $1800 in bills, but that means that the extra money is either being saved or spent. I give myself an allowance of $50 a week that includes entertainment and clothes. It seems to work for me. Every dollar I make goes somewhere. If I make more, it automatically goes to a house down payment fund rather than being spent.

I put most of the extra to savings, or to pay off the student loan. I have recently started a weekly budget of cash only, so this helps. I think soon I'll contribute more to the Roth.

[MaverickSB]

Something else I noticed is your auto insurance. When is the last time you shopped around for better rates? It's a good idea to take a look at that every couple years or so. You'd be surprised how much rates can vary between insurance providers. Another thing is your car. What kind of car do you currently have? Year, make, mileage? Is it truely on its last leg, or could you squeeze some more life out of it? If you have even a basic understanding of cars you can do your own maintenance and upkeep saving you tons of money and extending the life of your vehicle. One last thing, you have a loan of $135 a month listed in your expenses. What is that for?

I contacted my buddy who works at Liberty Mutual, he was able to get me this rate, my old one with Geico was $288/month, which was $100 cheaper than State Farm! I think I just need to wait till Im 25 and get rid of the 1995 5.0 V8 mustang, which is in fact on its last limbs. I worked at an auto shop through school, doing basic tire/oil change/batt test stuff. I can't rebuild and engine, but I know when a car's time has come. At 140k miles, and 13 years old, I need to sell it. Plus MPG is just freaking terrible!

The loan is for a personal/student loan I took out. I just transferred over to a lower interest rate so the payments are down to $108.

Thanks for your advice!!!

[MaverickSB]

from one 24 year old to another.. ..i think you're doing great! you can probably look forward to a nice dip in car insurance rates when you hit 25 too. I would suggest increasing your roth as well. i would also suggest to buy a car strait out if you can - or at least dont go for a 15k car if all you want is a decent commute. last year my husband (who's also 24) got a new 2006 chevy aveo 4 door sedan for his 30 minute commute each day. its cute, gets about 40 mpg and our loan was only $9200 after a 2k cash downpayment. we'll have that loan paid off within the next year..hopefully sooner.. - and the car makes for an awesome sporty commute.

are you also budgeting for car taxes and gifts? whatabout entertainment? do you have a handle on where all of your spending money is going?

right now i see you only have an emergency fund and retirement accounts. you may also want to look into opening another savings account devoted to "future" wants - such as for a that new car, or a downpayment on a house..or for a honeymoon.

Thats a good idea, the separate savings account for a house/car. I'll get on that. I budget $100/week for entertainment/meals out/clothes. I can't buy a car straight out, the loan is really my only option at this point, my gf has an aveo. Good gas mileage, always a plus. Thank you for the advice, from one 24 year old to another!

[MaverickSB]

I think everything looks good. You are making great money for just being out of college (IMHO).
One thing I see is $600 (at the least) unaccounted for. Make sure you know where every dollar is going (for the most part). That extra money you get for commissions could be saved up to buy a good used car (because new cars are a waste of money). You'd be amazed at what you can have saved up in 6 months!
We also have an allowance- which keeps cash in our wallets and then we don't use the debit card.

Keep up the good work!

Thats a good point. I dont track my leftover cash after all the investments are squared away. I recently started budgeting cash $100/week. This has proven helpful. The car loan has to happen, because my car is no longer properly working and needs to be bought now. I might use my tax refund to pay off a lot of the loan and use my current car for a bit of a down. Thanks for the tips!! You've been very helpful!!!

[Exile]

MaverickSB, it looks as though you've got your act together and at a fairly early age to boot.

As a senior, my advice would be to live modestly, spend moderately. That worked pretty well for me and DW.

Don't feel pressured into buying a home. If renting suits your lifestyle, stick with it. But if you do decide to buy, make sure that you can pay at least 20% down and stay away from adjustable rate mortgages.
.

On the other hand, if you decide to continue renting indefinitely, there's nothing wrong with that. Just make sure that your rental is affordable.

Best of luck.

[project15]

Car fuel is expensive. This is the reason I am selling the car. Its runs me close to $60/week. It takes on 91 fuel type, and in santa barbara that runs about 3.75/gal. right now. Its a V8. Bleh.

Just guessing, but it's probably a mid-90's domestic v8? If that's the case, I don't think you NEED to use 91 octane unless it's turbo'd or supercharged.

Also, with a new car, you'll still be paying at least $40 a week in gas, so is a $300 monthly car payment really worth it to save maybe $80 in gas?

Another thing...if you can take off comprehensive and collision insurance on your old car, do it! You should NOT be paying the extra money to fully insure a $2800 car. With a new(er) car that is financed, you have to pay for comp and collision insurance, so keep that in mind too.