I just turned 25 and bought my first used car - very excited. However, it destroyed my savings (I still have $1,500 cash) but I really want to save a significant amount before I move out. Yes, I still live at home because it makes the most sense for me to save money and I am waiting for my girlfriend to finish nursing school next year so that we can move in together (she also lives at home).
I have been recording every single purchase I made in an excel sheet since sometime in 2017 to collect data on my spending habits. I did this knowing I would eventually make a budget, but didn't limit myself to see my "worst" spending habits. And boy did I...Since it's the start of a new year (and the big purchase) I figure now is the right time.
I make ~$2,000 a month after taxes and after my 401k contribution. I contribute 22% of my salary to my 401k with a 3% company match so essentially a quarter of my paycheck. I know this is high but I read everywhere that you should put in as much as you can, especially when I am living at home where I don't pay rent, utilities, or food. I am debating if I could bring this down to 12% of my paycheck and still get the company match for a total of 15%.
Here are my AVERAGE monthly expenses from 2018 plus the new car expenses:
| Expense | Amount |
|---|---|
| Car Payment | $200 |
| Car Insurance | $90 |
| Roth IRA Contribution | $500 |
| Student Loan Payment1 | $300 |
| Gas2 | $80 |
| Restaurants | $300 |
| Bar/Alcohol | $200 |
- I only need to pay about $90 on student loans a month, but I am trying to pay them off quickly. My highest interest rate is 4%, which is what I am targeting.
- This was the gas I was putting in for my 20 year old car so I am hoping my newer one, which is much more fuel efficient will reduce this cost.
Before anyone starts laying in on me for the restaurants/bar expenses...I KNOW. Honestly, I couldn't believe I spent that much and hate myself for it. Again, I had no limits on myself to see how bad it would be. I will of course dramatically decrease these numbers, but I wanted to put my most expensive things out there. I do want to note that these numbers include friend-group dinners that I will pay for the credit card points and then they will Venmo me. I consider Venmo spent-money that I can use at later dates when I owe friends money. It basically saves me from inputting another record in my excel sheet.
My main question is: where is the best place to decrease spending IN INVESTMENTS including my 401k, Roth IRA, and my student loans to increase my cash savings?
Submitted January 21, 2019 at 10:16AM by leonardtownsend http://bit.ly/2RXF4gg
