Hi everyone. I am a long time reader, first time poster.
I just finished grad school (debt free) and have accepted my first full-time job in Texas. I am a male in my mid-20s. My salary is $57k, which comes to $46.8k after taxes ($3.9k/month). I need your help in deciding how to manage my money. Basically, I need to know what to do with the $1000 I have left each month from my paycheck after taking care of monthly expenses.
Current financial situation:
-debt free
-753 credit score
-$80k in savings account that I earned through summer work over the last 6 years
-I have no investments in stock or anything
Below are my projected monthly expenses. Just a heads up that the cost of living in this city is ridiculously high.
• Rent/utilities/internet/rental insurance: $1615
• Living expenses (food, gas, hobbies): $1100
• Cell phone: $80
• Health benefits (deducted from paycheck): $98
This comes to ~$2900/month in expenses, leaving a net income of $1000/month.
My company offers a 401(k), which I don't know enough about in general to understand how to efficiently use it. Basically, I know it is used for retirement and the sooner I start adding to it, the better. But what if I want to continue adding to my existing savings account? One day I want to buy a house, or buy a wedding ring. I want to take a nice vacation every couple of years. From what I understand, taking money out of a 401(k) early has penalties. So, I want to have liquid assets - like I do now, but continue to add to them.
Here is what was outlined in my offer letter regarding the 401(k):
• The company match is dollar for dollar on the first 3% of your eligible pay and 50 cents on the dollar on the next 2% of your eligible pay that you contribute to your account each plan year, for a maximum match of 4% on a 5% employee contribution. In general, the match is contributed on a biweekly basis.
• Employee and employer contributions are immediately 100% vested.
• Employees may contribute (pretax and Roth) up to 90% of pay.
Bottom line: I want to start my 401(k) now, but I also want to add to my $80k in savings. What is a reasonable way to divide my $1000 in net monthly income?
Thank you for any advice!!
Submitted September 29, 2018 at 01:40AM by newmoney76 https://ift.tt/2R8Ty9J
