Life Situation: Female age 27, Colorado. Started 2 new jobs in mid-April. One is 8:30-5:30, the other is an online teaching gig I work from 4:30-7:30am.
Some of you may remember
my post from a few months ago. Now I've been working, moved, and received a windfall, so my situation has changed. I decided not to buy a new car, but I did move to a more expensive apartment (that's 30 minutes closer to work). I was able to base my budget numbers here off of my actual spending instead of anticipated spending.
Gross Salary/Wages: $3,200/mo (Job #1)- started both in April, so it makes more sense to do monthly here.
401K Contribution: 10%
401K Employer Match: 4%
Insurance Deduction: $92/mo* (Anthem Silver + HSA, employer pays bulk of premium)
HSA Contribution: $141.66* per pay period (max contribution based on 24 pay periods) I'm trying to find out if there's a way I can still maximize it for 2017, as I only started contributing in June.
Profit-Sharing: I'm ignoring it for now as I won't be vested at all until 2 years of service, and it does not require any contribution from me.
Term Life Insurance: Paid by the employer $50,000. I don't have any dependents so my 3 nieces are currently listed as my beneficiaries.
Year-End Bonus: Not guaranteed, but very likely. Probably a few thousand dollars. They pay it in increments per quarter over the next year. I'm not exactly budgeting for this, but plan on using it to top off my Roth IRA for the year.
**I'm actually on a bi-weekly pay schedule. Health Insurance and HSA are only withheld the first 2 pay periods of every month. I know that twice a year I will get a "bonus" paycheck. I plan on using the one in August to pay for my trip to Paris (plane tickets are paid for, and my friend's points are paying for our hotel), and stashing the next one after that into my emergency fund.
Other Ordinary Income: ~$1300/mo (Side Hustle)
Taxes are not withheld for my second job as I am an independent contractor, so I have my first job withhold the maximum with 0 deductions. Next year I might have them withhold more, depending on what my tax bill looks like this year.
Qualified Dividends & Long Term Capital Gains: I have some gains in my taxable investment portfolio. Total balance is around ~13K. I was working abroad for the past 3 years without access to tax-deferred vehicles. I recently switched the majority of my monthly contributions to go towards a Roth IRA ($105/week or $420/month). I still contribute $15/week to my taxable account. I may owe some gains on the non-qualified annuity I recently received (see below under assets).
Rental Income, Actual Expenses, and Depreciation: N/A
Adjusted Gross Income: $3958/month (not sure I'm calculating this correctly)
Taxes:Federal: $185.43 bi-weekly, $370.86 monthly
FICA: $99.20 bi-weekly
Medicare: $23.20 bi-weekly
State: $63.00 bi-weekly
(Calculated here:
https://www.adp.com/tools-and-resources/calculators-and-tools/payroll-calculators/401k-planner.aspx)
(I will double check these against my pay stub when I'm at work.)
Estimated Net Pay After Taxes, 401K and Insurance: ~$3,100-$3,200/month
Current expenses: (45%) Housing & Utilities: $1250/month + ~$100/month Utilities + $50/mo Internet (necessary for my 2nd job)
I realize now this is face-punch worthy. However, I'm in a lease until next June. 5 miles to work. It's the first nice place I've lived in 10 years.
Renter's Insurance: $20/mo? I paid for a year up front so it's not a recurring expense, in reality.
(5%) Transport: $75/month. Currently driving a paid off 2003 Buick Rendezvous. Spending $75/month on gas. I'm currently still on my mom's car insurance but will be switching to my own soon, which will increase this. Any tips for negotiating? I don't have any moving violations in the past ~5+ years and it's an old car. I was looking at getting a new car but my brothers (both mechanics) said I should be able to get another 100k miles out of this one, so I'm sticking with it. My commute is about 5 miles each way, so I'm trying to work up the nerve to bike. I'm perpetually late, so we'll see...
(15%) Food: $500 (I need to cut back here)
Groceries: $300/mo, including household goods and toiletries
Restaurants: $150/mo, mostly going out at lunch with coworkers (I need to work on this. I just moved here and am trying to make friends at work.)
Alcohol: $50/month
Other Expenses ($265)
Entertainment: $25/mo (includes audible subscription, occasional entrance fee or movie). - Trying to go to museums on free days (thanks Bank of America!) and using library passes. My friend lets me mooch her Netflix account in exchange for mooching my recycling bin.
Shopping: $190/mo (mostly books, household goods) - Also facepunch worthy. I'm hoping now that I'm more settled in my new apartment this will go down. I've also replaced most of the clothes that were lost during my move (United lost a bag). Trying to cut this down by using library ebooks and shopping at Goodwill.
Gifts: $25/mo - I try to buy things when I see them on sale and hold them until holidays/birthdays.
Personal Care: $25/mo (haircuts, nail polish, epsom salt for bubble baths, etc). I'm working on self-care.
Short Term Savings: ($610)
Emergency Fund: $230/pay period (~$460/mo). This got decimated when my life was turned upside down and I unexpectedly gave up a job abroad to come home this year (due to family medical emergencies) and was out of work for 9 months. Once this is rebuilt, I plan to re-direct this savings amount towards a "down payment" fund. Current balance ~$1500 (see "assets"), goal: $10,000.
Car Fund: $50/mo - Repairs, maintenence, etc.
Travel: $100/mo - Currently have over 60K United miles and 75K miles with Chase Sapphire. Currently planning a one week trip to Paris in October.
Long-Term Savings:401K: 10% + 4% match
HSA: $3,400 ($141.66/pay period; ~$282/mo)
WiseBanyan: $15/week taxable, $105/week Roth IRA
Whole Life Insurance: $100/mo I bought a policy through Northwestern Mutual in 2013. I was talked into it for the "safe" growth and tax benefits. I had originally planned on keeping it as a part of my retirement portfolio, but now I feel like that was a bad decision. I hung onto it while I was abroad because it covered repatriation of my body in the case that something happened, and would have provided my mom the money to pay off my student loans (she co-signed). Now that I'm back in the US and I have paid off my student loans, I'm not sure what to do about it. It is paid through July. Not sure what to do after that... Should I cancel it and take out the minimal accrued cash value? Should I keep it until the 8 year mark when I'm supposedly in the black on it? I've got about $2300 in "cash value" in it.
Assets: WiseBanyan (Taxable): $13,446.68 (balance as of today). 75% stocks, 25% bonds, invested in diversified ETF index funds through Vanguard and Schwab. I was investing $100/week into this while I was abroad, as I was ineligible for 401K or IRAs. Now I'm contributing $15/week.
WiseBanyan (Roth IRA): $1,397.68 (balance as of today). 80% stocks, 20% bonds, invested in diversified ETF funds, mostly Vanguard. Currently contributing $105/week ($420/month). Plan on using my year-end bonus to max this out for the 2017 year. In future years my weekly contribution will max it out.
Emergency Fund: $1500, adding ~$230 (25% of my take-home pay from my first job) per pay period. In a Capital One 360 account earning ~0.75% APR. I'm currently looking into credit unions with higher returns to stash this savings.
Other: Recently received $20,000 as a beneficiary to a non-qualified annuity. I don't know what to do with my share so I'm letting it sit (I have 5 years to get it out?). It was earning 5% with all earnings reinvested, but I don't think I have the option to keep that deal. I think I should get the funds out this year as I am in a lower tax bracket (having only worked since April) than I will be in next year. I do have the option to keep the funds in a "high interest" earning checking account with the original company (Jackson). I would like to have the money earning some interest, but somewhat accessible. I would like to use it towards the down payment on a duplex/triplex/quad in the next 2-3 years.
I will likely be receiving another large windfall in the next few years. My family has a jointly owned piece of property that is worth a good bit of money. The rest of my family wants to sell, but it will be a complicated process and will likely take a few years. Once it is sold, I will receive a large amount of money (Maybe $250K?) I really have no idea how to prepare for this, so my strategy thus far has been to pretend it doesn't exist and continue to live my life as if I weren't going to receive anything.
I don't really count my road bike (Giant TCR) or Buick as assets, but I guess they could go here.
Liabilities: - I technically owe my mom $6,000. She doesn't want it back right now, though. She's not charging me any interest. For now I've mentally earmarked that much in my investment account as "her" money. She's ok with this.
[/s] Worked this out with mom.
- I paid off my student loans while working abroad.
- I pay off my credit cards every month in full and have no other debt
Specific Question(s): - What should I do about my whole life insurance plan? It seemed like a good "safe" investment at the time, but a lot of what I read is that they're stupid investments unless you're "wealthy." I've already had it for 4 years, so I don't know if I should just keep it or cut my losses and cancel the plan. I'm definitely falling victim to the "sunk cost" fallacy with this one.
- What should I do with the annuity I received? Part of me wants to invest it, but I have the goal of buying a multiplex in a few years, so I would like to have it accessible for a down payment. I don't want it earning next to nothing during the intervening years, however.
- Should I hire a fee-only financial advisor? How do I find one? Or can I handle this all on my own? I'm a bit intimidated because of the complex nature of my assets (stocks, annuities, land...)
- Tips for negotiating car insurance when I switch? I'm a USAA member so I plan on sticking with them.
- I would like to buy a house or better yet a multiplex in 2-3 years. What next steps do I need to take? I have great credit (high 780s to low 800s depending on how much I put on my credit card that month). I won't qualify for a mortgage until 2018 due to changing careers this year. Should I cut back some of my other savings to save more towards a down payment? Where do I stash it?