Hey Mr. money mustache readers! It's Laser Cat here, and I wanted to write a case study in the hopes that, putting it down on paper, and sharing it with others, will help me to figure some things out, and draw some new ideas from more finance minded folks. So feel free to share any ideas that you would like!
I found Mr. money mustache a few years back, along with "Your Money or Your Life", and armed with a decent job, but a mountain of student loan debt, (I started with 65k in debt) I've been doing my best to get back on track, and end up with more flexibility in my life that I had before.
So I feel like I have my finances pretty much handled, but I just moved to Southern California (New job!) and unfortunately, Southern California is a nightmare for cost-of-living. I lived on the East Coast before this, and there I did not need a car, rent was cheaper and I was able to put a lot more towards my student loan debt. So I'm making progress, it just feels so slow! Below are my expenses on an average month. I tend to move to a different state every few years for my career, although this is the most stable company I've ever worked at, unfortunately it's here in expensive SoCal. =(
Income: (35 single, no kids, no pets)
Monthly Net Income after taxes: $3920
Bonuses: Varies year to year but is a few thousand a year which I normally throw into my emergency fund.
Savings:
Emergency Fund $3928 (savings account)
Money invested in Betterment $2000 (90% stocks , 10% Bonds)
Traditional IRA + 401k - $46,112 (89% stocks , 11% Bonds)
Monthly Expenses:
401k contribution -$250
Auto withdrawal for betterment investments - $120
Rent -$1400 (My apartment isn't really set up for a roommate unfortunately, it's kind of just 2 big rooms)
Groceries - $100
Eating out (or work cafe) - $100
Gas - $185
Auto Insurance -$97
Car Loan -$220
Electric - $100
Physical therapy -$240
Random -$118
Minimum Student Loan Payments $440 (2/3 of these are now paid out years in advance) -This should drop down to $320 once the year is over.
Car Maintenance fund $40
Holiday Travel fund $50 (I use the YNAB method of breaking up yearly goals into monthly expenses)
Amount Left over $460, which right now I'm throwing at my student loans
Monthly Debt Payments:
Student Loans:
1. $2423 - 3.75% Fixed (should be paid off within the year)
2. $10528 -2.875% Fixed (paid out 2 months in advance)
3. $20934 -3.690% Variable (paid out 2 years in advance)
Car Loan:
1. $8743 - 2.74% Fixed (should be paid off in 3.3 years if I make minimum payments)
No CC Debt.
When I do the calculations I just don't see any way to FIRE before 65 but I wouldn't mind living by teaching adjunct / doing freelance /and having partial income from investments. (maybe there just isn't something I'm seeing here?) I also wouldn't mind doing the tiny house thing! I think they are so awesome!
So the questions I have are...
1. Is there anything here I'm not seeing / are my pants on fire for anything?
2. Are my allocations correct?
3. Should I put my emergency fund into investments?
Any insight people can offer would be much appreciated!!