Current financial standings at 22. Yay or NAy?

[emily1994]

Hey all, I was wondering if you more financially knowledgeable people could give me an idea of where my financial standings are resting. I'm a recent college grad and am now working full time making a very, very low entry level salary of 30k (at least low compared to a lot of my recent graduate friends  - although most of them are teaching which is an automatic high starting salary). I've always been good with money and in my combined checking and savings account I have 23K currently of money I can touch- slowly paying off 15k of debt, one month (140 each month) at a time. I also have a few thousand put away in CDs and credit union and I just started an IRA for 2,500k. I'm moving home for 6-12 months to save on rent and utilities and groceries (my parents are generous enough to not make me pay).

How would you say my standing is in comparison to the average 22 year old? I'm paranoid and give myself so much anxiety over not having enough with my salary. When I was six my parents made me see someone about money anxiety because I would refuse to let anyone buy me anything for the fear that my family would 'go broke'. Thank you all!!

[tawyer]

Yay. Ultimately, your ability to live within your means is more important than making more money.

[overwhelmed]

Hey all, I was wondering if you more financially knowledgeable people could give me an idea of where my financial standings are resting. I'm a recent college grad and am now working full time making a very, very low entry level salary of 30k (at least low compared to a lot of my recent graduate friends  - although most of them are teaching which is an automatic high starting salary). I've always been good with money and in my combined checking and savings account I have 23K currently of money I can touch- slowly paying off 15k of debt, one month (140 each month) at a time. I also have a few thousand put away in CDs and credit union and I just started an IRA for 2,500k. I'm moving home for 6-12 months to save on rent and utilities and groceries (my parents are generous enough to not make me pay).

Comment & a question

Please don't compare yourself to others, just make the best choices you can for your life. 'Comparison is the thief of Joy' - is true. You will either look for people 'better' than yourself and it will make you feel bad or you will look for people you think are 'worse' - neither helps you at all.

The 15k in debt is that student loan debt? You mention paying $140 per month so I am guessing it is not a credit card?

How would you say my standing is in comparison to the average 22 year old? I'm paranoid and give myself so much anxiety over not having enough with my salary. When I was six my parents made me see someone about money anxiety because I would refuse to let anyone buy me anything for the fear that my family would 'go broke'. Thank you all!!

Having 23k in the bank shows that you know how to save well. That is something that many people at any age have difficulty with. If you have a lot of anxiety about money, it probably would be helpful to try to work through your feelings. Money certainly can provide a sense of security but if you feel paranoid and have anxiety over it, it probably is something you should think about working on.

Perhaps as you read these boards, you can create a plan for yourself to create the financial security you are looking for. It is possible that if you map out your personal financial plan, it may minimize the anxiety you feel about money.

[ltt]

At 22, I think you are doing very good.  I'm also assuming the $15k is student debt?

[RentSeeking]

Umm. At 30k/yr, assuming ~10% effective tax, you should be netting around $2,250 per month before any payroll deductions, right? Which, unless you are living beyond those means, is a maximum monthly expenses value. That would imply you are holding 10x monthly expenses in cash, while you are paying interest on 15k of debt.

Depending on the interest rate on the debt, it's not necessarily a bad thing to delay paying it off... that is, if you are getting a higher rate of return by investing that money. Having it sit in a checking/savings account is costing you ~$500 per year. Write a check and kill the debt, or alternatively put at least 8k into tax advantaged accounts (max a Roth IRA for $5,500 and set 401k/403b contributions to 100% for the rest of the year while paying expenses out of savings).

Other than that, you're in great shape!

[FireLane]

Hey all, I was wondering if you more financially knowledgeable people could give me an idea of where my financial standings are resting. I'm a recent college grad and am now working full time making a very, very low entry level salary of 30k (at least low compared to a lot of my recent graduate friends  - although most of them are teaching which is an automatic high starting salary). I've always been good with money and in my combined checking and savings account I have 23K currently of money I can touch- slowly paying off 15k of debt, one month (140 each month) at a time.

Considering your age and low salary*, you're doing fantastic! Having almost a year's pay saved up at 22, when you're new to the workforce, is a huge achievement.

My only suggestion is that you shouldn't hold so much in cash when you have debts to pay off. Unless your savings account is paying an abnormally high interest rate compared to what most places will give you nowadays, or your debt has an abnormally low interest rate, you should consider withdrawing some or all of that money from savings and using it to pay off your debts faster. Mathematically, you'll come out ahead that way in the long run.

* not a criticism - your career is just starting, you've got lots of time to increase your salary

[Greenway52]

You're doing great Emily!

But I do echo RentSeeking and others who say that you should look at utilizing your savings better. Specially considering you live at home, you don't need a large emergency fund. So you should look to invest it or to pay down your debt.

[Metric Mouse]

I'm sure you're doing fine.

For a useless comparison of others there is this thread: http://forum.mrmoneymustache.com/welcome-to-the-forum/what-was-is-your-net-worth-at-25/msg1319945/#msg1319945

[Brokefuturedoctor]

How would you say my standing is in comparison to the average 22 year old? I'm paranoid and give myself so much anxiety over not having enough with my salary. When I was six my parents made me see someone about money anxiety because I would refuse to let anyone buy me anything for the fear that my family would 'go broke'. Thank you all!!

TLDR; I'm 22, and I think we are both ahead of most of our generation who are spending too much and saving too little. Keep up the great work!

As a fellow 22 year old, I would say you are doing great. I can't speak much about what I actually do with money since I am in the hole currently while I am still in school, but I have managed to do a lot of reading about it. As everyone else has said, every situation is different, but your savings could be in better accounts with higher return potential and better tax sheltering. I feel like I am very debt averse, and I would probably get rid of the 15k debt with the savings. However, that also depends on your interest rate. If it is low, then I would echo what others have said and funnel my income toward a Roth or 401k and use savings for my expenses. I understand that using savings for expenses and watching your bank account drop every month can be stressful especially because you said you have anxiety over not having enough money.

[Cwadda]

22 here, similar case. I make roughly $35k/year but have another job paying $9k/year to increase my income. I'm also buying an investment property (yes, even with a lower income, it's still very much possible) that I hope will bring in at least another $5k/year. Many of my peers make in the area of $55-60k/year. But I live much more simply than them and probably save more than they do.

I think you're doing fine.

[thisisjames]

Focus on your trajectory.  You are entry level, but are you on a path that will get you where you want to be in 1, 5, 10 years?

I'd take that pile of savings and pay off my student loans yesterday.

[Giro]

You will find people who are doing significantly better.  You will also find people who are doing significantly worse.

What are YOUR goals?  Where do you want to be and when do you want to be there?