This is a slightly edited crosspost from /r/personalfinance
Hi FinancialPlanning,
I've been reading through the /r/personalfinance guides all day, spoken with a few financial companies but wanted to post my budget breakdown and see what you think.
I'm self-employed, single, 26 years old, living in California. In 2016, I made $85,000. In 2015 I made $39,000 and the year before that I made $29,000 so this year was a big step up for me financially. My only debt is car debt which will be paid off by the end of 2017.
My monthly budget:
$1150 - rent/utilities
$750 - food (I could definitely be spending less)
$450 ($5500/year) - Roth IRA (through Lincoln Financial Advisors, considering switching to Vanguard)
$250 - health insurance and renter's insurance
$375 - car payment, car insurance, cell phone bill (paid to my parents)
$200 - gas
$750 - entertainment/spending (I could definitely be spending less)
Overall about $4000/month before accounting for taxes and saving.
Over the course of 2016, I've built up an emergency fund of $7500, paid about $6500 in 2015 taxes last April and currently have $12,500 set aside for 2016 taxes although I may need a little more. It was first year putting money into a Roth IRA and it'll have $5500 in it for $2016.
Here's how my $85,000 was spent in 2016:
Annual Budget (the above monthly budget x 12) - $48,000
2015 Taxes - $6500
Emergency Fund - $7500
2016 Taxes - $12,500
Current Checking Account Balance: $6500
Moving Expenses - $4000
Total: $85,000
I also have 2 credit cards which I use for larger expenses and pay off every month before accumulating interest. They currently only have $1000 limits so they're easy to keep in check.
Next year, I don't anticipate making $85k but I would be happy to make $60k. My first paycheck will come in January for $7500, so I'm off to a decent start. If I trim on my food and entertainment spending to bring my annual budget down to $42,000, put aside $10,000 for taxes, $5500 for my Roth IRA and add $2500 to my emergency fund to bring it to $10,000, those seems like pretty realistic goals.
I don't have an HSA and don't have any additional money leftover for index fund investing. Do you think that's a problem at this stage?
How does the above breakdown look to you? Is there anything you recommend that I should be thinking about for 2017? Do I have enough set aside for taxes based on my income? Would you recommend switching from my Lincoln Financial Group Roth IRA to a Vanguard Roth IRA?
Thanks in advance!
Submitted January 04, 2017 at 02:00AM by financethrowaway1990 http://ift.tt/2hOLCHS
