Hello, all! I'm Migs ... and I just need to know if I'm at least going in the right direction.
The finances:
Paycheck (Every 2 weeks)
Gross Pay: $2165.51
457 Plan Contribution: $50.00
Pension/Annuity Contribution: $151.59 (7% mandatory, employer 2:1 match, as far as I know, we can't contribute more)
Monthly Net Pay: $2,931.96
Explenses (Monthly)
Car Loan*: $1,200.00 ($14,655.00 left on loan, 1.9% apr, monthly payment $450.00 + $750.00 extra payment)
Phone*: $115.00
Groceries: $150.00
Dining: $200.00
Entertainment: $50.00
Cigarettes: $50.00
Emergency Savings*: $100.00
House Down payment Savings*: $100.00
Short-Term Savings*: $100.00
Vanguard Roth IRA*: $379.00
Total Expenses $2,926.00
*Static monthly expenses
Asssets
Emergency Savings: $6,028.00
These are just my finances, so my boyfriends finances aren't included. ... I'm still working on getting him to open up about his finances.
1. Should I focus more on saving money for a down payment on a house?
2. Should I find a way to contribute more to paying off my car loan
Hi Migs, and welcome to the forum. I've highlighted some of the things that I think are worth commenting on.
First: Yes you are headed in the right direction because you are saving more than you earn. You certainly could be going faster than you currently are
a) increase your 457 payments. As Cheddarstacker said, it's a great vehicle for FI
b) your car expenses are eating you alive. STOP paying the extra $750/month on your car loan and inject that into the 457 and tIRA accounts; you have a really nice 1.9% apr. Also, you will be in MUCH better shape if you sell your car and buy something used that costs <$10k and gets 35+mpg highway. Your call.
c) Dining is a bit high around these parts. I'd chop it in half but (again) up to you.
d) Cigs are costing you $600/year plus a lot more in long term health. 'nuff said
e) Your emergency fund is big enough right now given your expenses and living situation. Divert that money into a tIRA and 457.
f) Max out your IRA - contribute $458.33/month. Also, with your income you are almost certainly better served to be using a tIRA vs a ROTH. Read more about that here:
http://www.gocurrycracker.com/roth-sucks/to answer your specific questions:
1) Saving more money on a downpayment assumes that you defintieyl want to buy a house. I'd first tell you to question this assumption. In many cases renting winds up being financially superior to owning. Plenty of threads on that topic. If you decide you really do want to buy a house in the next few years, I'd continue saving until you have 20% of your expected down payment, but only AFTER taking better advantage of your 457 and IRA accoutns.
2) No. your best bet is to sell off that car and buy something cheaper. Beyond that, you are paying 1.9% interest, so reallocate those $750/month 'bonus' payments towards your tax advantaged accounts. You will get far more back from paying less taxes than you will paying down the loan early.
Finally, I can't stress enough how much your car is hurting you financially. You have a new car (bad), you are paying a lot for it in insurance, you have to commute long distances for work and pay tolls whenever you do. Quick calculation has you paying almost $12k/year for your car (not including your 'bonus' payments), plus hours and hours of your life every week. When it comes time to move on from Grannies, realize that moving close enough to work could allow you to afford a house
several $100k more. See
http://lifehacker.com/5855550/the-true-cost-of-commuting-you-could-buy-a-house-priced-15900-more-for-each-mile-you-move-closer-to-work