Hello to all you wonderful personal finance wizards. This is really a great community and I've taken a lot away from it in the short time I've been subscribed. First time poster, warning that this may get lengthy but I will try to stick to the details. Apologies in advance if formatting is wack as I am typing this from my phone. Anyways, I'm a 24 yo college grad, I work in IT Risk Consulting in NYC making ~$64k a year (before taxes). I've worked at my current company for about a year now. My take home is around ~$3200 a month before expenses. I have a large student loan balance from undergrad between federal and private loans (north of $80k). The huge balance is mainly due to me being foolish as an 18 year old like many and choosing to go to a rather expensive out of state school, losing what little scholarship money I had due to excessive partying, and having to spend an extra semester finishing my degree as a result. Not ideal, but it's reality and I'm doing my best to make the most of the situation.
I live at home in NJ with my parents currently, great people but unfortunately not the best when it comes to money or personal finance.
My monthly expenses are as follows:
- minimum payments to student loans are around $900 a month total, I try to pay more (close to $1200) in an attempt to beat down the accumulating interest while I don't have to pay rent or anything. The loans are refinanced into one payment for private, one for federal, albeit at less than ideal interest rates. ~6.2% for private and 4.5% for federal
- car insurance ~$150
- gas: ~$80-100 (older jeep, super thirsty on gas)
- cell phone $50
- grocery money I pay my parents: $100 (I try to stay on the healthier, thereby pricier side of things, and my mother and I came to an agreement this was a reasonable amount for food as a result)
- gym membership: $35
- restaurants/eating out: $100
- clothing: ~$75
- "fun" money: $200
- entertainment (e.g. Spotify, netflix etc.): $50
I am sure there's a couple more I'm missing but thats a close approximation.
I have about $2500 in savings right now, and am actively trying to build on that. I am looking to put about $400 a paycheck ($800 a month) into my savings, with some wiggle room for when unexpected expenses pop up. I currently put no money towards a retirement account or 401k with my company (they match up to 6%, but I have been very anxious about even thinking of saving for retirement when I have such a large student loan debt hanging over me). I realize this is foolish, but I haven't been compelled to change it yet for some reason. Please convince me otherwise if you are able.
Now for my issue. I drive an 04 Jeep Liberty with over 120k miles on it. It's a gas guzzler, but gets he job done. I don't have to drive all the way to manhattan for work, but just to a train station about ~20 miles from my house round trip. The car runs fine all things considered, but I'm not sure for how much longer that will be the case. I take trips down to the Philadelphia area once in a while to visit friends, but nothing much further than that. My parents insist I need a new car immediately, however I explained to them I would rather build up my savings a bit more first before blowing it all in a down payment on a new car.
In addition to that, I am aiming to move out of my parents house within the next year and with rent prices in the NYC area being sky high I will need a pretty hefty goose egg in my savings for that to be a reality. If that happens, I also doubt I would need a new car as living and working closer or in New York I would be able to rely solely on public transportation.
My question is: what should I do? Are my parents correct in that a new car should be my primary focus? Should I focus more on saving/paying down debt while I can? And is it realistic to save enough to move out within a year or so while still having enough to pay down debt and live at least decently comfortably? Apologies again for the novel, I appreciate any input.
Submitted April 06, 2017 at 09:25AM by Fuzzy_Dunlop34 http://ift.tt/2o6v4Bz
