I just got my first job out of college. And trying to figure out how exactly to split up my paycheck.
DEBTS:
Chase - $5000 @17.99% (currently paying ~$1000/mo)
Wells Fargo - $4000 @0% (currently paying $100/mo)
ACCOUNTS
Savings $2500
Roth IRA $11400
The job is contract to hire. So initially I’ll be making $43/hr ($86k annualized) and between 90 days and 2 years I’ll be hired and switch to salary (somewhere between $65-80k)
My goals right now are:
- save for a house (goal: $80-100k downpayment)
- adequately save for retirement
Because I’m starting as a contractor, the consulting company does offer a 401k:
The Contract Employee 401(k) Retirement Savings Plan allows eligible employees to set aside up to 75% of pre-tax earnings up to the IRS limit (2018: $18,500 or $24,500 if age 50+) annually for investment in retirement funds. Eligibility begins immediately, however you will be given an opportunity to enroll within your first thirty (30) days of employment. After you have worked one year, you will be eligible for the company match of 50% of the first 1% and an additional 25% of the next 5% you contribute. The maximum match is $1,000. The match will be deposited in January of the year following the calendar year in which you are eligible for a match, provided you are employed on December 31st of the year in which you are eligible. You will receive enrollment information from Fidelity via regular mail.
So my question is: is there worth in even contributing to this 401k in the contract to hire period if I likely wont get a match with them? (I know the people I’ll be working with and they’re likely to hire me full time)
My second question: once I’m a full time employee, how much should I be putting towards the 401k? Or should I just ignore my 401k for saving for a house?
So for example, during a month during the contract to hire period:
Monthly earnings - $6800 pre tax, ~$4500 post tax. $500 goes to my Roth IRA $2000 goes to my expenses $1000 goes to paying my debts
That leaves $1000 left in the budget. Should i put all of it towards my down payment, or put some of it into my 401k?
I’m just having a lot of anxiety about my first job and it’s manifesting in the form of freaking out about my finances.
Thanks for your help ♥️
Submitted December 08, 2018 at 01:45PM by sharpse-2 https://ift.tt/2ElOknL
