My current lease will be ending soon and I am looking for a new residence as close to my new workplace as possible. I currently split rent, but will no longer be splitting when I move (unless I find a roommate in the next month, but assuming that I won't for the time being). My dilemma is that any worthwhile place to rent will be more expensive (some are $200-$300 more per month) that what I'm paying now. But, if I suck it up and pay the increase in rent, I could bike 1-1.5 miles to work every day rather than commute 25 miles each way by car.
I'm 27 and have been working for 2 years. Discovered MMM early this year and have been working to alter my life and expenses to maximize savings. With my new job (and raise), I will be able to max my 401(k) contributions (up from 5% of salary at my current job) while taking home roughly the same amount of pay.
Here are my current monthly living expenses plus assumed $1,100 for rent in the new location. I'm in the Houston area.
Take-home pay $4,200.00
Rent $1,100.00
Electric $75.00
Water $40.00
Verizon Phone $- (company-paid phone)
Car Insurance $100.00
Renter's Insurance $29.50
Internet $44.00
Car Min Payment $175.00
Student Loan Min Payment $240.76
Health Insurance $34.00
Food $350.00
Fuel $50.00 (because I'll be biking! Yay!)
Pets $50.00
Left-over $2,336.74
And my debts:
Private Loan: $4,000 @ 0%
Student Loans: $17,500 @ 6.5%
Car Loan: $4,500 @ 3.9% (although paying early does not affect interest paid)
Investments:
401(k): $12,500 (Fidelity Spartan 500 Index Fund)
IRA: $3,300 (Vanguard 500 Index Fund)
So question 1: Should I worry about dumping $1,100 per month to live in a nice, safe place 1 mile from work? There are others in the area, but no where near as nice and will cost $900-$1,000. The apartments for $1,100 seem to provide the best value and bang-for-the-buck. There are also a few homes for rent in the area that run about $1,200-$1,400. They are obviously much bigger and would require the additional costs associated with renting a house rather than an apartment. My thought was to nail down one of these and search for a roommate. It may take me a few months to find one, but it could also save me money in the long run once someone starts splitting all of the expenses.
And question 2: Should I be maxing my 401(k) at this point, or just putting enough in for the company matching and attack my debt with the rest?