Author Topic: 23 and need advice  (Read 4879 times)

JCGreen

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23 and need advice
« on: December 22, 2017, 04:41:21 PM »
About Me:
Age 23, Female, 1 bedroom apartment, lives with cat,
Still looking to make friends, 4 months dating current boyfriend
Goal: Travel before retiring, Mexico, Costa Rica, Ecudaor, Argentina
Goal: FI and/or retirement around age 35 comfortably,
Goal: Higher income job
Note: The cat is not negotiable.  She is the one thing I bought that has brought me the most happiness                                                                                                                                                                                                                                           
Note: Most of the data below was generated from mint.
Note: I have a B.S. in Bio-engineering, really love the computer/Data Analysis side, currently work in pharmaceuticals, I dont feel like I have a stable job.
Note: After I pay down my student loan, I would like to save for a car, as my current ride (title in parents name, but I paid for it) has 260k miles and a blown head gasket. I think I want something in the 5-8k range. (I know, face punch.)
Note: I will probably have to switch careers around age 35 due to a prior accident that resulted in wrist surgery. My dominant hand is becoming more arthritic/stiff and harder to use.
Note: Still learning highly technical skills at work that could later lead to a higher paying job, could move to a LCOL area in a year or so.

Finances   

Assests:   
HSA           $2,112.56
Roth    $2,249.78
401K (not including emplyr. match +$2000)   $3,545.23
Savings Account   $1,000.00
Total Assests:           $8,907.57
Note: I have about $1500 in rental Deposit that is not included in this anaylsis, because I can get some of it back.     
Note: Retirement account in index fund(80%), blue chip fund (10%) and international fund(10%) through work.    
Note: I upped my Roth savings in July of this year. I feel my contributions are sustainable.   
Note: Would Like to increase Emergency Fund to 5kish in near future.   

Debts:   
Student Loan   $1,161.44
Total Debt:   $1,161.44
Note: Paying off student loan is a high priority for me.   
Net Worth:   $7,746.13

Pay Check:   Biweekly   Monthly (approx.)   Yearly
Gross Pay:   $1,688.13    $3,376.26   $43,891.38
Take Home Pay   $948.07    $1,896.14   $24,649.82
Note: My take home pay will be slightly less than this due to this figure being based off a 8% raise in June. That being said, I do get the  overtime (5 -10 hours per month).          
Note: I will likely get an 8% raise middle of next year for a promotion, each year a cost of living raise (2-3%), I plan to add most of this to the 401K         
Take home break down         
Taxes                 Biweekly   Monthly (approx.)   Yearly
Federal Income Tax   -$171.82   -$343.64   -$4,467.32
Social Security Tax   -$99.90   -$199.80   -$2,597.40
Medicare Tax           -$23.36   -$46.72   -$607.36
State Income Tax   -$96.10   -$192.20   -$2,498.60
Total Taxes          -$391.18   -$782.36   -$10,170.68
         
Benefits   Biweekly   Monthly (approx.)   Yearly
HSA           -$46.51         -$93.02              -$1,209.26
Medical   -$22.15       -$44.30              -$575.90
Roth $    -$168.81       -$337.62      -$4,389.06
401K           -$101.29       -$202.58      -$2,633.54
Dental   -$9.25        -$18.50      -$240.50
Note: I would like to hear other peoples oppion on dental insurance, and if its worth it as work pays for part of it, but dental cleanings are not too expensive.         
Note: Work also pays for Term Life Insurance, I pay nothing into this, and probably wouldn't have it if work did not provide, as I have no dependents, a positive net-worth, and my parents have a paid up whole life insurance policy on me somewhere.

Yearly One Time Expensives      
Renters Insurance                   $115.00   
Vet                                           $450.00   
Hunting Tags/liscence/Supplies   $100.00   
Gifts ($600 for Bro College)   $854.53   
Total Yearly Expensive           $1,519.53   
Note: Vet bills should be less next year, cat just got all shots, spayed, bandaged.   Currently looking for less expensive vet.   
Note: I would also like to get a couch and TV for my apartment, so I would feel more comfortable having friends over.      
Note: Unexpected Winfalls (gifts/tax returns/3paychecks a month) generally go towards bigger ticket items, such as rental deposit, a bike, fixing the car (its needed a reasonable amount of work).      
Note: The gift to my brother for college money was a one time thing, as he needed the money and my parents couldn't help him at the time. I might do this again in the future if I feel comfortable.       

Re-occuring Expenses                  Monthly:   Yearly
Rent (Water+Sewer+Trash)   $895.00   $10,740.00
Transportation                      $120.00   $1,440.00
Internet                                   $34.00   $408.00
Groceries                                   $285.00   $3,420.00
Clothing (still building Wardrobe)   $50.00   $600.00
Electric ($30-$90)                   $60.00   $720.00
Entertainment with (boy) Friends   $50   $600
Total Re-occuring expensives   $1,494.00   $17,928.00
Note: Would prefer not to have roommates, but would be willing to do so if I could find someone I clicked with. This is the least expensive apartment I could find, I expect the rent will go up in February, as I will have been there for a year. I would also like to move to a lower cost of living area in about two years, once I get more on the job training. So I am not sure how much i should apartment hop, and will be very picky of any roommates I can get.       
Note: Part of Grocieries pays for cat items(food litter Toys) alcohol, and personal care items.      
Note: Clothing is a yearly average, I am still building Wardrobe and winter clothes.This year, I got a new coat, some jeans, a pair of hiking boots, two pairs of shoes (i wear though them quickly for work), and a few work shirts. I would still like to get a few more professional pieces, as I only have about 7 work shirts, and 5 work pants, they seem to wear out fast.      
Note: My phone bill and car insurance is paid for by my parents who I work for in the summer on weekends (farmers) and why I use the car for this. They live about 150 miles away. I do not have to do this, but I enjoy spending time with my family.        
      
Average Monthly Cash Flow:   $402.14   
Estimated Yearly Expensives from take home   $19,447.53   
Take Home Pay (yearly)   $24,649.82   
Yearly Cash Flows   $5,202.29   
Student Loan Payment (Year to Date)   $5,168.45   
Note: I dont consider my Student Loan a monthly payment, as I have paid enough that the next payment is not due until 2022. I do pay monthly on it though through my cashflow money.      
      

         
« Last Edit: December 22, 2017, 05:15:32 PM by JCGreen »

marty998

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Re: 23 and need advice
« Reply #1 on: December 22, 2017, 09:02:05 PM »
Amazes me how much you have to pay in tax as a lowish income earner. Hardly seems fair the large gap between your gross and net pay.

Dental insurance will depend on how bad your teeth are. If you need a lot of work done then yes. If your teeth are pretty good and only need a clean and scale every year then no.

wordnerd

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Re: 23 and need advice
« Reply #2 on: December 22, 2017, 09:16:33 PM »
If you're already having issues with your wrist, I wouldn't wait 12 years to change into a career that's better for it. If you can't (or don't want to) make a career change now, can you make accommodations in your current position? If you haven't already, talk to your supervisor about your options.

RWD

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Re: 23 and need advice
« Reply #3 on: December 22, 2017, 09:35:49 PM »
I can address some of the math. It looks like you're saving about 47% of your income right now if my math is correct. That will get you to financial independence in about 19 years. If you want to get there in 12 years you'll need to increase your savings rate to over 60%. This would require increasing your income to roughly $65k (gross) or reducing your expenses to about $13.4k/year. Or some combination in between.

JCGreen

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Re: 23 and need advice
« Reply #4 on: December 23, 2017, 09:19:14 AM »
Amazes me how much you have to pay in tax as a lowish income earner. Hardly seems fair the large gap between your gross and net pay.

Dental insurance will depend on how bad your teeth are. If you need a lot of work done then yes. If your teeth are pretty good and only need a clean and scale every year then no.

I live in Oregon, a high income tax state (but no sales tax). I assume I will be getting a federal tax refund but not a state. I might change my exemptions next year, but I did not know how much the government was going to take and did not want to be under too much.  I will probably use any tax refund to pay off debt, add to Roth and/or furnish my apartment a little more. I will change this when I know how much I get back.

I think I might keep the dental insurance for another year (I had a cavity last year) and see how it goes. I am taking better care of my teeth now than I did in college and have hopes for no more cavities.

If you're already having issues with your wrist, I wouldn't wait 12 years to change into a career that's better for it. If you can't (or don't want to) make a career change now, can you make accommodations in your current position? If you haven't already, talk to your supervisor about your options.

My wrist only hunts when I ride the bike or drive for long periods of time (1 hour or more) It generally doesn't hunt at work.  I only live 3 miles from work, so walking is a little to far, but the biking is painful, so I just might sell the bike, and know I am not burning a ton of fuel to get to work. I could try to more closer, but I would pay about $150 more per month in rent, to get within 1 mile, and my housing costs are already high. If I found a good roommate I would do it.

My current career goals are to get more experience. At my current job, I could probably work my way up to $60k a year rather quickly, I would than need to switch to management or leave the area (I do want to live closer to family). That being said, a lot of people in my field leave and do something completely different. I did love my math and programming classes, but would probably need more education to go into accounting or data science. Anyone have any suggestions on this?

I can address some of the math. It looks like you're saving about 47% of your income right now if my math is correct. That will get you to financial independence in about 19 years. If you want to get there in 12 years you'll need to increase your savings rate to over 60%. This would require increasing your income to roughly $65k (gross) or reducing your expenses to about $13.4k/year. Or some combination in between.


Thank you for this, I know everyone calculates it differently. I had it pegged at about 35%. I am working on increasing my income and am open to idea's if anyone has a great career move. I could cut back on spending a little, but not enough to get my to over 60%.




Engineer93

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Re: 23 and need advice
« Reply #5 on: December 23, 2017, 11:43:29 AM »
The biggest thing that stands out to me is your salary.  An engineering major, especially in a HCOL area, should be making close to 50% more than you are.  If you can increase the salary but keep your expenses the same you’ll be set.

ysette9

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Re: 23 and need advice
« Reply #6 on: December 23, 2017, 11:46:19 AM »
What kind of bike do you have? Can you switch to something like a cruiser where you are more upright and not putting pressure on your wrists? If work is three miles away it would be a shame not to bike that distance.

I think for things like couches, televisions, and bikes, Craigslist is going to be the way to go. You may be able to get that stuff for almost nothing.

ysette9

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Re: 23 and need advice
« Reply #7 on: December 23, 2017, 11:47:43 AM »
I also agree that as an engineer your salary is way too low. My first engineering job paid $58k/year and that was in 2005.

JCGreen

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Re: 23 and need advice
« Reply #8 on: December 23, 2017, 12:39:32 PM »
The biggest thing that stands out to me is your salary.  An engineering major, especially in a HCOL area, should be making close to 50% more than you are.  If you can increase the salary but keep your expenses the same you’ll be set.

I agree, I should be making more money. Bio-engineering is not like other engineering majors, in that most of what I trained to do was in research with a little bit of pharma. As such, our salaries are lower than other typical engineers. I could start looking for a higher paying job in a different area, but I want to gain one more skill in particular (HPLC use) before I do that if I am going to stay in the Pharmaceutical Industry as it will make it much easier for me to get a pharmaceutical job. That being said, I wouldn't mind switching careers, as the pharmaceutical business (at least where I am) is not very stable. This might be different elsewhere. If anyone has any suggestions, I would be glad to hear them.

What kind of bike do you have? Can you switch to something like a cruiser where you are more upright and not putting pressure on your wrists? If work is three miles away it would be a shame not to bike that distance.

I think for things like couches, televisions, and bikes, Craigslist is going to be the way to go. You may be able to get that stuff for almost nothing.

Thank You for this, I currently have a road bike, but switching to a mountain bike (or similar) might be much easier on my arm. I will probably have to save some money to get a decent bike.  I do buy most of my furniture on craigslist, but I am having a hard time finding a decent couch. The TV will be easy once I decide to pull the trigger.  I just don't see the point in getting one if I might move soon.

ysette9

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Re: 23 and need advice
« Reply #9 on: December 23, 2017, 12:43:03 PM »
Personally I don’t see the point in getting a television at all. :-) If you want to have your friends over then talk to them instead.

I got my bike used and it was on the order of $200 I think. There were cheaper ones out there but I went to a store to have section rather than try out random Craigslist bikes. I did that because at the time I was pregnant and had a toddler and didn’t have the time or energy to hunt down a better deal. You aren’t encumbered by that at this point in your life.

Finances_With_Purpose

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Re: 23 and need advice
« Reply #10 on: December 23, 2017, 09:58:27 PM »
First off: great start!  You're off to a good start. 

I would say save for the car while paying off the student loan - and I hate student loans too(!!!) - but since yours is only 1k, then go for it first.  It'll feel good, for sure. 

You asked for input, so here's what I would suggest:
1.  Build up your emergency fund.  Get enough in there to be able to live for six months.  You say your job doesn't feel stable.  You're young and new, so you're cheap labor, but you're also right to want more security.  So, until you have it (and after you think you have it): save up a six-month emergency fund.  That way, you can go through life without worrying that one bad event will throw you into significant debt or insolvency.  Instead, you'll have time to adjust.  You can take bumps.  You can self-insure some things, too, eventually, once you have enough savings, which will further lower your costs.

2.  As for dental insurance, since you asked, you'll have to just price it out and see what you may need.  If you're young and healthy, it probably costs more than it's worth.  Those policies usually aren't great anyway - many have low max limits and huge co-pays (50%+), so you don't get much more than you pay out of it unless you really spend a lot one year. 

3.  Strongly consider taking on roommates.  It's one of the most finanically savvy things a single person can do.  It's a huge cost savings.  I'm right there with you: I strongly preferred living alone.  But I found it so much cheaper to take on roommates that I finally did it and it was a great financial move.  Plus, it prepares you for being married anyway. 

Of the above, numbers 1 and 3 are the keys to really moving forward.  You're already doing the basic things right.  You need more than $1k in the bank - for car issues/car purchase, for potential job problems, etc. - just in case.  $1k is awesome for a start, so good job - just keep going.  And you have a huge opportunity to lower monthly expenses - roommates.

Bicycle_B

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Re: 23 and need advice
« Reply #11 on: December 24, 2017, 09:38:55 AM »
Hi, JCGreen.  You're doing great!  I think you will build on the base you have, increase your income over time, refine your already healthy thrift skills, and meet or come close to your 12 year target while enjoying your cat-inclusive lifestyle.

Tweaks (what I wish I'd realized at your age... kind of pleasantly retired now, but took too long):

IRA - Does Oregon allow income tax deductions for traditional retirement accounts, such as 401k or traditional IRA?  If so, using traditional IRA instead of Roth could save you a lot.  Roth is only beneficial relative to traditional if your income tax rate now is lower than in the future.  If you retire at 35, you should have lots of low-tax years ahead; consider using traditional IRA instead of Roth now.

Job search - learn job searching skills, network, contact friends, etc.  Practice interviewing, all of us introverts avoid this, but it's a learnable skill where practice helps.  Interview for jobs you don't want, so that you're relaxed by the time you interview for jobs you want.  Find practice interviewers online, or at professional groups, or publicly funded job search centers, or by getting friends to practice with you, or making friends online with people who have HR and recruiter job titles in your field.  Read some articles and maybe a book or two about interview techniques.  Practice standard answers and remarks.  A few hours of this will materially help you.  An hour a week will transform your career - it will sharpen your eye for value during the week as well as improve your own presentation in numerous situations.  I knew a crappy employee who practiced interviewing and just by practice, was so good he was considered a star supervisor candidate as soon as interviews were held.

Even better:  Read What Color Is Your Parachute, do all of the exercises, and it will put YOU in charge of your career development.  Over time, these proactive methods will ensure that you increase your income and have control, rather than suffering interruptions and being at the mercy of others.  Kudos on already having and implementing your skill development plans.  And on having developed sophisticated education/ professional skills during your first five years out of college.  Maximize these advantages by taking charge of your presentation and outreach/ job research, not just on-the-job skills. 

Re your resume and LinkedIn profile, quantify all of your accomplishments on the job, no matter how mundane.  You don't have to be innovative at this early stage, just describe and quantify the things you actually do on the job.  Include tools, responsibilities, timeliness/completion percentages, quality measurements.  You can use detail to demonstrate proficiency - you don't have to be doing something better than other people, the mere fact that you quantify fully and effectively will set you apart from most competitors at your level.  Start now so you when the right job comes up, the writing part is done ahead of time, you can focus on job-specific research and interview practice.  Again, a few hours to get started and 15 minutes per week to make one update will transform your results level from ordinary to extraordinary - make yourself a high flier.  Knowing your strengths is a strength.  And of course, what you measure is what you improve.  Also, by quantifying successfully online and periodically updating, you will attract recruiter attention and maybe find jobs you didn't anticipate.  Finally, scan the profiles of recruiters and HR people for job types and firms you are interested in - this often creates interest in your profile.  They contact you!  Suddenly you get interview practice, market feedback, maybe a new job with a pay raise.

Earnings are kind of multiplicative:  income = skill x marketing, so take action on the self marketing side as well as the technical skill side.  That's how you get to maintain or beat the 65k income, thus hitting your 12 year target with cat and autonomy intact.
« Last Edit: December 24, 2017, 10:02:35 AM by Bicycle_B »

JCGreen

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Re: 23 and need advice
« Reply #12 on: December 24, 2017, 12:58:28 PM »


You asked for input, so here's what I would suggest:
1.  Build up your emergency fund.  Get enough in there to be able to live for six months.  You say your job doesn't feel stable.  You're young and new, so you're cheap labor, but you're also right to want more security.  So, until you have it (and after you think you have it): save up a six-month emergency fund.  That way, you can go through life without worrying that one bad event will throw you into significant debt or insolvency.  Instead, you'll have time to adjust.  You can take bumps.  You can self-insure some things, too, eventually, once you have enough savings, which will further lower your costs.

2.  As for dental insurance, since you asked, you'll have to just price it out and see what you may need.  If you're young and healthy, it probably costs more than it's worth.  Those policies usually aren't great anyway - many have low max limits and huge co-pays (50%+), so you don't get much more than you pay out of it unless you really spend a lot one year. 

3.  Strongly consider taking on roommates.  It's one of the most financially savvy things a single person can do.  It's a huge cost savings.  I'm right there with you: I strongly preferred living alone.  But I found it so much cheaper to take on roommates that I finally did it and it was a great financial move.  Plus, it prepares you for being married anyway. 


Thank you for your response.  I like the idea of building up a savings account. Do you think it would be a good idea to have that emergency savings account double up as a car fund (for the next year or so?), in case I need the car soon?  It doesn't make sense to me to separate them, but I could be convinced otherwise.

As for the dental insurance, I feel I don't have enough data to make an educated decision in how much I use it, so I might need to wait and find out. The enrollment period for my company has already passed, so i will keep it another year and see if I want it the year after as well.

I am convinced that if I find a good situation I will get a roommate. I looked on craigslist this morning and did not see anything promising. If I don't see anything promising for a while, I may just create a roommate situation for myself by saving money and getting a 2 bedroom apartment, then finding my own roommate, I just might be stuck with a large down payment and higher rent for a month or two.

JCGreen

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Re: 23 and need advice
« Reply #13 on: December 24, 2017, 01:13:25 PM »

IRA - Does Oregon allow income tax deductions for traditional retirement accounts, such as 401k or traditional IRA?  If so, using traditional IRA instead of Roth could save you a lot.  Roth is only beneficial relative to traditional if your income tax rate now is lower than in the future.  If you retire at 35, you should have lots of low-tax years ahead; consider using traditional IRA instead of Roth now.

Job search - learn job searching skills, network, contact friends, etc.  Practice interviewing, all of us introverts avoid this, but it's a learnable skill where practice helps.  Interview for jobs you don't want, so that you're relaxed by the time you interview for jobs you want.  Find practice interviewers online, or at professional groups, or publicly funded job search centers, or by getting friends to practice with you, or making friends online with people who have HR and recruiter job titles in your field.  Read some articles and maybe a book or two about interview techniques.  Practice standard answers and remarks.  A few hours of this will materially help you.  An hour a week will transform your career - it will sharpen your eye for value during the week as well as improve your own presentation in numerous situations.  I knew a crappy employee who practiced interviewing and just by practice, was so good he was considered a star supervisor candidate as soon as interviews were held.

Even better:  Read What Color Is Your Parachute, do all of the exercises, and it will put YOU in charge of your career development.  Over time, these proactive methods will ensure that you increase your income and have control, rather than suffering interruptions and being at the mercy of others.  Kudos on already having and implementing your skill development plans.  And on having developed sophisticated education/ professional skills during your first five years out of college.  Maximize these advantages by taking charge of your presentation and outreach/ job research, not just on-the-job skills. 

Re your resume and LinkedIn profile, quantify all of your accomplishments on the job, no matter how mundane.  You don't have to be innovative at this early stage, just describe and quantify the things you actually do on the job.  Include tools, responsibilities, timeliness/completion percentages, quality measurements.  You can use detail to demonstrate proficiency - you don't have to be doing something better than other people, the mere fact that you quantify fully and effectively will set you apart from most competitors at your level.  Start now so you when the right job comes up, the writing part is done ahead of time, you can focus on job-specific research and interview practice.  Again, a few hours to get started and 15 minutes per week to make one update will transform your results level from ordinary to extraordinary - make yourself a high flier.  Knowing your strengths is a strength.  And of course, what you measure is what you improve.  Also, by quantifying successfully online and periodically updating, you will attract recruiter attention and maybe find jobs you didn't anticipate.  Finally, scan the profiles of recruiters and HR people for job types and firms you are interested in - this often creates interest in your profile.  They contact you!  Suddenly you get interview practice, market feedback, maybe a new job with a pay raise.

Earnings are kind of multiplicative:  income = skill x marketing, so take action on the self marketing side as well as the technical skill side.  That's how you get to maintain or beat the 65k income, thus hitting your 12 year target with cat and autonomy intact.


Thank you for your response.

I think you are right about the traditional IRA being better than a Roth in my situation as Oregon does allow tax deductions. madfientist.com had a article about that I read recently. I guess I always wonder if something is going to change where I will regret not putting it into a Roth, but going forward it would be a smarter money move to put wage increases into Traditional 401K/Traditional IRA.

Thank you for the job search advise. I will try to use as much of it as I can. Who is the author for What Color Is Your Parachute? Also, do you think writing work accomplishments in a journal/notebook/Daily schedule would be a useful way to keep track?

Finances_With_Purpose

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Re: 23 and need advice
« Reply #14 on: December 26, 2017, 11:43:22 PM »


You asked for input, so here's what I would suggest:
1.  Build up your emergency fund.  Get enough in there to be able to live for six months.  You say your job doesn't feel stable.  You're young and new, so you're cheap labor, but you're also right to want more security.  So, until you have it (and after you think you have it): save up a six-month emergency fund.  That way, you can go through life without worrying that one bad event will throw you into significant debt or insolvency.  Instead, you'll have time to adjust.  You can take bumps.  You can self-insure some things, too, eventually, once you have enough savings, which will further lower your costs.

2.  As for dental insurance, since you asked, you'll have to just price it out and see what you may need.  If you're young and healthy, it probably costs more than it's worth.  Those policies usually aren't great anyway - many have low max limits and huge co-pays (50%+), so you don't get much more than you pay out of it unless you really spend a lot one year. 

3.  Strongly consider taking on roommates.  It's one of the most financially savvy things a single person can do.  It's a huge cost savings.  I'm right there with you: I strongly preferred living alone.  But I found it so much cheaper to take on roommates that I finally did it and it was a great financial move.  Plus, it prepares you for being married anyway. 


Thank you for your response.  I like the idea of building up a savings account. Do you think it would be a good idea to have that emergency savings account double up as a car fund (for the next year or so?), in case I need the car soon?  It doesn't make sense to me to separate them, but I could be convinced otherwise.

As for the dental insurance, I feel I don't have enough data to make an educated decision in how much I use it, so I might need to wait and find out. The enrollment period for my company has already passed, so i will keep it another year and see if I want it the year after as well.

I am convinced that if I find a good situation I will get a roommate. I looked on craigslist this morning and did not see anything promising. If I don't see anything promising for a while, I may just create a roommate situation for myself by saving money and getting a 2 bedroom apartment, then finding my own roommate, I just might be stuck with a large down payment and higher rent for a month or two.

Let people know you're wanting a roommate and that may help - always worked for me.

As for savings, I account for them separately.  You may find it's an emergency if your car breaks down and you need one suddenly, especially as you're young and starting out. But once you buy a car outright, you should be able to think of car cost as more routine. It's a predictable expense. If your car dies too soon, you just buy a less nice car. Eventually, you'll probably be able to save more than enough well before you need the next car.

As for savings v investing, I recommend you keep enough in savings for your emergency fund + anything you plan to spend the next couple of years as far as big purchases. Farther than that, you can perhaps invest it; that's more of a judgment call. But I always remind myself that the market could drop 50% in any year, so my short-term savings are funds I may actually need to be there for me.

Sorry for any typos; I'm on my phone.

JCGreen

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Re: 23 and need advice
« Reply #15 on: December 27, 2017, 12:42:12 PM »
Hi Finances_With_Purpose

Thank you for the response!  I can let people know that I am looking for a roommate, but I am still new(ish) in town and don't have many friends (working on this), but it can't hurt, and it could work.

I was thinking of just keeping my Emergency fund/Car Fund in a savings or money market account. I think long term, I am going to need separate accounts for emergency and car, I am just not sure if I should get one today.


Bicycle_B

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Re: 23 and need advice
« Reply #16 on: December 28, 2017, 01:07:53 PM »

Who is the author for What Color Is Your Parachute? Also, do you think writing work accomplishments in a journal/notebook/Daily schedule would be a useful way to keep track?

Richard Bolles; yes

Finances_With_Purpose

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Re: 23 and need advice
« Reply #17 on: December 29, 2017, 12:16:47 AM »
Hi Finances_With_Purpose

Thank you for the response!  I can let people know that I am looking for a roommate, but I am still new(ish) in town and don't have many friends (working on this), but it can't hurt, and it could work.

I was thinking of just keeping my Emergency fund/Car Fund in a savings or money market account. I think long term, I am going to need separate accounts for emergency and car, I am just not sure if I should get one today.

Any time.  Good luck with the roommate.  And I hope you do whatever works best for you - no matter what, you're already ahead. 

JCGreen

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Re: 23 and need advice
« Reply #18 on: January 27, 2018, 11:23:14 AM »
Hi Everyone. Thanks for the helpful advice!. Its been about a month since my first post and I wanted to make an update.

I have finished paying off my student loan. This was done with help from a merit based bonus and a generous Christmas gift from family. This might not have been the most financially savvy thing to do (because of the low interest rate), but it has given me a sense of freedom.

This sense of freedom has helped me realize that I am just not happy in my job, partly due to location, and because I would like to be doing more data analysis. I have been reading "what color is your parachute" as recommended by Bicycle_B and have found it to be most helpful. I will be applying for a jobs in a lower cost of living area in the near future.  I am going to try to wait a little longer to hit the 2 year mark at my job and have my 401k more vested, but now that I've made the decision to leave, its hard not to want to pursue it right now.

I tried out a mountain bike the other day and do not think it would work for me long term, I will stick with the car for now. With my student loan paid off, I will increase my Emergency fund and have it sort of double as a car fund until I buy a used car, or have 5k in it, at which point, I would set up a separate car fund. I might try some bank account churning for this, if I can find some good deals.

I have mentioned to a few people that I am looking for a new living situation, but so far nothing has come of it. I am not too motivated in this realm as I want to leave the area.  I will probably hold off on getting a couch and TV in the mean time unless I can find a good deal.

While I can't possibly follow every single piece of advice on here, I read it and consider it all the same. Thank You!

Clara Smith

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Re: 23 and need advice
« Reply #19 on: February 03, 2018, 01:18:00 AM »
Hi, ill recommend the same that Finances_With_Purpose did :

1.  Build up your emergency fund.  Get enough in there to be able to live for six months.  You say your job doesn't feel stable.  You're young and new, so you're cheap labor, but you're also right to want more security.  So, until you have it (and after you think you have it): save up a six-month emergency fund.  That way, you can go through life without worrying that one bad event will throw you into significant debt or insolvency.  Instead, you'll have time to adjust.  You can take bumps.  You can self-insure some things, too, eventually, once you have enough savings, which will further lower your costs.

2.  As for dental insurance, since you asked, you'll have to just price it out and see what you may need.  If you're young and healthy, it probably costs more than it's worth.  Those policies usually aren't great anyway - many have low max limits and huge co-pays (50%+), so you don't get much more than you pay out of it unless you really spend a lot one year. 

3.  Strongly consider taking on roommates.  It's one of the most financially savvy things a single person can do.  It's a huge cost savings.  I'm right there with you: I strongly preferred living alone.  But I found it so much cheaper to take on roommates that I finally did it and it was a great financial move.  Plus, it prepares you for being married anyway. 

KungfuRabbit

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Re: 23 and need advice
« Reply #20 on: February 03, 2018, 04:53:40 AM »
This is a pretty small note, but every detail helps, right?  You said you buy shoes twice per year

Most jobs that work in a lab or factory (I'm assuming based on bioengineering) there are ways to have the company buy you shoes. I get Keen safety shoes that are super comfortable, and free. I generally get the ones that look like hiking shoes (most comfortable) but I also got a brown leather and black leather pair for more formal / fashion purposes.

The last pair of shoes I actually paid for was my hiking boots about 8 years ago.

JCGreen

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Re: 23 and need advice
« Reply #21 on: March 09, 2018, 02:35:48 PM »
Thank you for the advice, I will look into the Keen shoes next time I need a pair. Right now I am seeing if more expensive tennis shoe will last longer ($80) so far they have been holding up well at the 4 month mark, but I have also been switching up what shoes I wear every once in a while.

At 3 months since first post, I thought I would give another minor update.

Spending:
With my Student Loans paid off, I decided to spend a month blowing money. I bought a TV and cat tree (but no couch), I went to several events and concerts with friends, I had a massage, and I had my hair professionally cut (I had been doing it myself). I had a great time, but am unfortunately feeling the effects of life-style inflation, so I will see how long this lasts.

Saving:
My emergency fund savings have increased to $2100, and I plan on them continuing to grow in the coming months. I got a 3% raise at work and have increased my 401k contributes up to 13% from 10%. My Roth contributions have stayed at 10%.

Job:
I have been applying for a few other positions as they come along, but haven't had a job interview yet. I would like to move closer to family, but am happier at my job now than I was two months ago. My Job duties have changed significantly so I am doing more data analysis. I found out my manager was trying to get me a promotion, but was turned down which, while not ideal, makes me feel better. My understanding is they will try to promote me later this year, but no guarantees. I may choose to stay depending on whether I get this promotion.

Housing:
No change, I am still in the same housing, I have only emailed two places with lower rent about moving, but haven't heard back from either of them. This is one of my bigger expenses, but with my looking for jobs in other locations, I am hesitant to change it too much or get a new lease.

Transportation:
I am still driving the same car, and am planning on buying a used one in the future. Now that I've had my month of fun, I hope to buckle down on this much more.

Thank you everyone for the advice!

CSuzette

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Re: 23 and need advice
« Reply #22 on: March 20, 2018, 10:55:25 AM »
The advantage of dental insurance is that you get the contracted rate. Even if you have to pay out of pocket.

Tass

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Re: 23 and need advice
« Reply #23 on: March 20, 2018, 11:14:34 AM »
That being said, I wouldn't mind switching careers, as the pharmaceutical business (at least where I am) is not very stable. This might be different elsewhere. If anyone has any suggestions, I would be glad to hear them.

San Diego is huge in biotech, although incredibly expensive. I am sure there are other hubs of your industry if you are willing to move to them.

Thank You for this, I currently have a road bike, but switching to a mountain bike (or similar) might be much easier on my arm. I will probably have to save some money to get a decent bike.

You probably don't want an actual mountain bike for a commute, but a hybrid would probably serve you well. I bought this one off craigslist for $200: http://archive.trekbikes.com/us/en/2016/Trek/7_0_fx#/us/en/2016/Trek/7_0_fx/details

It's lightweight and doesn't have a suspension (universal on mountain bikes but heavy and pointless on a road) but doesn't have the fancy road bike handlebars that force you to lean forward onto them. I bet if you stopped in at a bike shop and asked for recommendations for something that would serve you on a road commute but allow you to sit upright and spare your wrist, they could offer some advice.

I'm just a year older than you and you are in better shape now than I was a year ago. :)
« Last Edit: July 13, 2018, 11:22:59 AM by Tass »

Ben Kurtz

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Re: 23 and need advice
« Reply #24 on: March 20, 2018, 12:33:19 PM »
Regarding choice of bicycle -- I would suggest looking into a "Dutch" style or comfort bike with a U shaped handlebar/stem set. Very upright riding posture that takes virtually all the strain off your wrists. Bonus: you usually get a handy cargo basket slung up front. Perfect for packing lunch or a gym bag.

Regarding taxes -- you are clearly over-withholding. Probably by several thousand dollars a year, which is a lot given your income. Do your 2017 taxes now so you can get that refund and use it to eliminate your student debt and enlarge your cash savings fund. Then adjust your withholding so you don't end up with quite so large a refund next year.

Oregon state income taxes are punitively high, especially at lower incomes (9% bracket starting at a mere $8,401 of yearly income -- what the heck!?!), so I would lean towards more 401k contributions and fewer Roth IRA contributions. If you lived in Texas and your marginal income tax rate was 12% instead of 21% I'd probably lean the other way.

Everyone pays their dues in their 20s, so don't stress too much. You're just at the beginning of your journey, so setting up the right habits and attitudes is the key thing these first few years. Save what you can now, but the real power-lifting starts in 2-3 years when you've had a couple of raises or a career moves and can spend a solid 5 years advancing yourself and putting away a nest egg.

Looking back at my younger days, my recollection is that roommate situations can really run the gamut. I'll be a bit old fashioned and peddle in stereotypes for a moment, but my recollection is that for myself and my guy friends, it wasn't too hard to find a workable group of folks who could share a house or apartment and enjoy themselves while doing it, low stress. I had some great times, and very few bad ones. But among my girlfriends and female acquaintances the frequency of roommate drama was far higher. So don't be penny-wise and pound-foolish -- trying to save $300 a month at the expense of falling in with the wrong crowd or a situation that makes you unhappy at home. Only do it if you really think it will work out.

Finally, you haven't really touched on this and you might still think yourself too young, but you should ask yourself about marriage and children. It's almost impossible to really plan out early retirement or financial independence without solving for that one way or the other. Having children and raising them does not get easier with age (once you've passed your early 20s, which you just about have), so now is the time to really start thinking about things. No necessarily acting precipitously (marrying the wrong fellow and then ending up in divorce court is devastating emotionally and financially), but thinking and planning. It's a difficult spot if you wake up in your mid-30s and finally realize you want a family, having not laid the groundwork for it over the preceding 10 years.

JCGreen

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Re: 23 and need advice
« Reply #25 on: March 31, 2018, 01:35:41 PM »
Thank All, I really appreciate you advice. I wanted to wait to post until I had gotten my tax refund.

"Regarding taxes -- you are clearly over-withholding. Probably by several thousand dollars a year, which is a lot given your income. Do your 2017 taxes now so you can get that refund and use it to eliminate your student debt and enlarge your cash savings fund. Then adjust your withholding so you don't end up with quite so large a refund next year." -Ben Kurtz
I got back about $900 in taxes.  Most of this money went into building my emergency fund. It is a large amount, but the company I work for (recently got bought out) is giving a talk about withholding, and I will probably wait until then to change my numbers.  I plan on raising my 401K deductions when I get raises, but leaving my Roth deductions the same for now. I like being a little more diversified in case I need to pull the money out for something.  Thank you for the advice Ben Kurtz, I intend to follow it.

The bicycle situation- I have not bought another bicycle yet, but I will probably try out a few models at a used bike shop when I feel I am ready. I will probably be a fair weather biker anyway and refuse to bike in the snow. Right now I just have different priorities for my money.

Roommate situation- Still no roommates, I have asked around a little, and there are a few potential opportunities in the future, but nothing has solidified yet, and since I am looking for a new job anyway, It might not be worth it. In my experience, any time I live with three people or less I am fine. Once I hit living with 4 people, shit hits the fan. I don't know why that is, it just seems to be a common theme with me.

As for family planning, I have thought about it a little, and I like the idea of having a nuclear family in the future, its just not what I want now.

 "San Diego (where I live) is huge in biotech, although incredibly expensive. I am sure there are other hubs of your industry if you are willing to move to them."- Tass  Thank you for this information, I may look into moving to California for a few years, if it means a more successful career path. Right now the major hub in Oregon is Portland. I have been looking there (and all other places), but haven't found much I am interested in yet.


MDM

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Re: 23 and need advice
« Reply #26 on: March 31, 2018, 02:06:05 PM »
I got back about $900 in taxes.  Most of this money went into building my emergency fund. It is a large amount, but the company I work for (recently got bought out) is giving a talk about withholding, and I will probably wait until then to change my numbers.
See tables below for one estimate of 2018 taxes.  Download the case study spreadsheet if you would like to use more accurate numbers.  If your only significant income is from W-2 wages, using "single with 2 allowances" on your W-4 should be accurate.


Paycheck frequency:AnnualAnnual
Paycheck ItemsEarner #1Earner #2Annual
Gross Salary/Wages
$44,000$0$44,000
W-2 Box 1
$44,000$0$44,000
1040 AGI
$44,000
Payroll TaxesAnnualAnnualAnnual
Social Security$2,728$0$2,728
Medicare$638$0$638
Income Taxes
Federal tax$3,6502018, S, std.$3,650
State+local tax$3,513OR state calc'n$3,513
Total income taxes$10,529$10,529



Filing Status11=S, 2=MFJ, 3=HOH
Adult #1
Age23
Full-time student?00
AGI$44,000
Std. Deduct.$12,000
Act. Deduct.$12,000
Exemption$0
Taxable$32,000
1040 Tax$3,650
VersionV11.05

JCGreen

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Re: 23 and need advice
« Reply #27 on: April 07, 2018, 01:13:37 PM »
Thanks MDM for the tax information. I changed my federal deduction this week. Because I didn't want to have too much take home pay, I also maxed out my HSA contributions in hopes of lowering my tax bracket. I should still have money to meet all my bills, but my emergency fund and car savings will probably be slower.

Right now my emergency fund is up to $2400, so I could get a beater car or pay for most minor emergencies as needed.

Socially, I finally got my couch and TV off craigslist. I paid more than I wanted to, but still less than new. I expect my entertainment expenses will go down, but my food bill will go up slightly. It really helps with not wanted to spend money going out.  That being said, I am starting to feel the effects of life-style inflation. Does anyone have any advice on that?

Thank you everyone for the advice!