-To start out with, I have a 6.5 month emergency fund in a CD. And an “irregular expenses” account of $1500. My only debt is a car loan, which I owe $12,000 on for four more years (interest is at 1.99%)
-At my current job, I make $33,000/year. I’m getting a raise soon that will bump me up to $37,000. After taxes, that’s about $2,000 per month.
-I contribute to the employer match in my roth 401(k) (total I invest 9%) and get health/dental insurance through my employer, too. After this, I am left with $1,800
-I budget $1500 for living expenses:
550 rent
250 car loan payment (this is my only debt)
100 utilities (usually less than this)
125 car and renters insurance
60 gas
41 gym membership
10 hulu subscription
200 food
165 free spending (clothes, going out etc)
-I am left with around $300 a month, which is a cushion if I have additional expenses. I am thinking when I don’t use it; I will put it into a money market account as I would like to save up for a down payment on a house in about 5 years.
-When I get my raise, it will be around $200 extra per month. I was thinking about contributing $100 into the money market account (for a house) mentioned about. Then, $50 into starting a Roth IRA. Then the final $50 to save up for a medium term goal like going a vacation.
I think sometimes it helps to see the proportion of your money that's going to various expenses so you can look at which things are taking priority. I broke down your spending into percentages to illustrate that.
So if your monthly income is roughly $2,000 a month you're spending:
27.5% on rent
5% utilities
12.5% on car payments
6% insurance
3% gas
2% gym membership
0.5% hulu
10% food
8.25% "free" money
So that's almost 75% of your money going towards monthly spending, right? If you put all of the rest towards savings for house and retirement, that's a 25% savings rate for those long-term goals.
A few things stand out to me here. 25% savings rate isn't terrible, but it isn't great. That's why you feel like you're living on the edge. Also, you have about 21% of your post-tax income going towards your really nice car and "free" money. That's a ton, to sink into A) a quickly depreciating asset, and B) money you don't need to be spending. I'm a girl too, there's a thread here specifically for women and the primary point is that women don't NEED to spend money on makeup, hair, clothes, etc. every month. Many choose to, but that's not a need. You could easily reduce that spending money by half and still have money to go out with your friends, bringing your savings rate closer to 30%.
You've defended the choice of a really nice car, and that's up to you. But hear us out- you're spending more on that car than you need to be. If you could sell it and get rid of the loan, buy an older but still reliable car in cash, and that'd free up 12.5% of your money, which would increase your savings rate to over 42%. Keep in mind that every dollar you spend on that car could be making interest for you in an investment. PLUS your insurance rate looks pretty high, and I'll bet it's because you have to have full insurance on a new car with a loan hanging over it. You could save another $50-60 a month on the insurance if you didn't have a car loan, by getting liability only.
That brings your saving rate up to roughly 45%, just by changing your car, your insurance, and your random spending. That's money that could be making interest for you, instead of going into assets that won't be worth anything in a few years. Part of the cost of a nice car is not only the interest and insurance, it's the "opportunity cost" that you lose by not putting your money somewhere where it could grow.
The roadside assistance and the warranty are a non-issue. Most factory warranties and roadside assistance packages are crap anyway. AAA offers better and cheaper roadside assistance, and your emergency savings is your warranty. If you can pay for any car issues in cash, then paying extra for a warranty is a waste of money. You don't have to purchase peace of mind, that whole idea is just something car dealers exploit to make more money.
The way I generally think about it, and the reason I look at percentages of income, is that your spending says something about your priorities. Right now your priorities say you care about your car and your spending money as much as you care about savings and investments (for your home, retirement, and midrange goals combined). You have the right to make your money do whatever you want, but I would really consider whether those are your actual priorities. Adjust accordingly.
(For all you math nerds out there, I know my numbers might not be perfect. Feel free to correct, but I was trying to get at large trends rather than specific numbers.)