Recent College Grad Finances

[Christian321]

I'm a recent college graduate that started a new job and looking for some financial help. Here are few stats so far:

Gross salary: $64k
Net salary: $3,800/month

Checking: $600
Savings: $7,750

Student loan: $32k @ 4.2-6.8% (w/additional $7k to parents at 0%)
No car payment (driving a '94 with 185k miles).
No CC debt (don't even have a CC).

Kept a budget over the last month and this is about what I spent:
Food: $250/month
Gas: $300/month (30-40 min commute).
Entertainment: $250/month
Utilities: $100/month
Rent: $400/month
Other expenses: $300/month (insurance, birthdays, holidays, etc.)

I was hoping to pay back student loans in 18 months. I think I have a good EF set up so far and now looking where to put my money right now. I was thinking paying my unsubsidized loans first and then the rest all at about $1,500/month.

I'm just wondering if I should being putting money towards my employer's 401k because they match 5% at 80 cents on the dollar. However, to keep that employer contribution I have to stay here for at least 3 years. However, I am in the process of applying for Air Force OTS and hope to be selected and leave in the next year.

Am I better of to just save money for a new car, put as much money towards my loan, and if I have any left over than open up a Roth IRA that I will put towards once I'm in the military (so not even bother with employer 401k).

My dad thinks I should pay as fast as possible and save $500-600 a month for a new car when my current car dies. With the way the market is, the target date fund (2050) through my employer is only averaging 6% YTD, -.6% for the last year. Therefore, I actually make out better by putting towards my loans at 6.8% I think.

My opinion is to save and pay off as much as your debt as possible. Keep your current car until you see it is actually dying while putting some money aside on a good used car down the road (don't buy new).

you should put all your extra money into paying off your debt prior to leaving for OTS. By the way, I firmly believe you are making a great decision joining the Military as an Officer. I am an 8 year Navy Officer and it was the best decision I ever made. Once you are in, you will have the ability to contribute to a TSP plan (our version of 401k), so I wold not worry so much about your current 401k/Roth options). The military affords you the ability to save alot of yoru money and the pay is very competitive to the civilian world (plus practically free health care). You will not regret your decision. If for some reason you are not selected for AF OTS, you might want to also look into NAVY OCS.

If you want to talk details (i.e. 4 year salary projection, quality of life, etc, send me a PM.

[keelerjr12]

Trying to send you guys a PM but not finding the link to do it. Do you have to add someone to your buddy list first?

[kork13]

Trying to send you guys a PM but not finding the link to do it. Do you have to add someone to your buddy list first?

That might work... But I think you've just got your options set up to disable PM use.

Try this:
- Click "Control Panel" link, near top-left of the page
- Click "Edit Options" link, along the left side
- Under the "Messaging and Notification" section (in the main window), check the box that says "Enable Private Messaging"
- Also make sure to un-check the box that says "Receive Private Messages only from Buddies and Moderators" (unless you want to use the buddy list thing... honestly, I never even realized that option was there)

That should work for you... From then on, you should be able to just click anybody's name on one of their forum posts, and in the pulldown menu, click the "Send a private message to (whoever)" link.

[keelerjr12]

That might work... But I think you've just got your options set up to disable PM use.

Try this:
- Click "Control Panel" link, near top-left of the page
- Click "Edit Options" link, along the left side
- Under the "Messaging and Notification" section (in the main window), check the box that says "Enable Private Messaging"
- Also make sure to un-check the box that says "Receive Private Messages only from Buddies and Moderators" (unless you want to use the buddy list thing... honestly, I never even realized that option was there)

That should work for you... From then on, you should be able to just click anybody's name on one of their forum posts, and in the pulldown menu, click the "Send a private message to (whoever)" link.

I don't even have that option. Maybe since I recently joined?

[kork13]

I don't even have that option. Maybe since I recently joined?

Weird. Yea, I guess it may be a feature that is only enabled after you've been here for a while. I know to post links, you need something like 15 or 20 posts. Using PM's might be limited in a similar fashion. We can try the 'buddy list' to see if that works as well...

[LivingAlmostLarge]

How do you know you won't stay put for 3 years? The best laid plans...I don't know if I would pass up the free money. If it takes a couple of years to get into OTS? Or other things come up. I'd at least do that and a Roth IRA.

[keelerjr12]

How do you know you won't stay put for 3 years? The best laid plans...I don't know if I would pass up the free money. If it takes a couple of years to get into OTS? Or other things come up. I'd at least do that and a Roth IRA.

My only concern about that is taking the "free" money and losing it. And as I apply to OTS, I am applying to other civilian jobs also. So right now I have a much better chance of being elsewhere than I do being on my current job 3 years from now.

[Christian321]

I don't even have that option. Maybe since I recently joined?

Are you seeing the Control Panel tab at the top left? Note: You have to be logged in to see it.

[keelerjr12]

Are you seeing the Control Panel tab at the top left? Note: You have to be logged in to see it.

Control Panel > Edit Options > Messaging & Notification

There's no option for selecting to enable PMs.

[Christian321]

Control Panel > Edit Options > Messaging & Notification

There's no option for selecting to enable PMs.

not sure what is going on? Maybe you are right in that you need a certain post count in order to PM. If truely interested, post a new thread on the matter, I am sure a moderator will respond with an answer for you.

[humandraydel]

My only concern about that is taking the "free" money and losing it.

Wait a minute - this makes NO sense at all. You wouldn't lose your OWN money - only the "free" company match. So if you DO lose it...do you care? You're basically in the same situation with 5k in a Roth or 5k in a 401k. But since the 401k has a "chance" of additional payoff, that's the winning choice, statistically speaking. In other words, if I said I'd give you $500 but you HAVE to bet it on black, would you do it? Of course, you might win!

[snafu]

1st, kudos for being aware of the importance of looking after your money at age 22 and exploring various options. I too suggest you open an account with a Credit Union as the banks have a long list of charges and fees for services [currently free] that they will be rolling out one-by-one.

I'd take advantage of the employer match [bird in hand/bird in bush theory] thinking that any increase in NAV value would be retained even if the actual sum contributed by employer were returned. I suggest you check if there would be any negative tax consequences.

Wish you well in getting the military program acceptance you seek.

[keelerjr12]

I have belonged to a credit union since I was young (I have both a savings and a checking account). I ended up just opening up a Roth IRA with Vanguard in a Target Date 2055 fund. Once I have the $3k minimum, I plan to transfer my money to another fund.

[kork13]

I have belonged to a credit union since I was young (I have both a savings and a checking account). I ended up just opening up a Roth IRA with Vanguard in a Target Date 2055 fund. Once I have the $3k minimum, I plan to transfer my money to another fund.

Excellent. In the meantime, since you plan to change out of the target-date fund, you should start reading and figure out the general asset allocation plan you want to work toward for your retirement account. Vanguard's got a pretty good selection of funds, so with some research, you should be able to match your preferred asset mix with just a few mutual funds and/or ETF's. Obviously it'll take time to build up enough money to invest in each of them, but it shouldn't be too bad. Most likely, just 2-4 MF's/ETF's can probably meet your present needs.