Author Topic: How can I become a higher level mustachian- or what to do with a raise?  (Read 2965 times)

feistygg

  • 5 O'Clock Shadow
  • *
  • Posts: 13
  • Location: Vancouver, WA
Hello fellow Mustachians!

I'd consider myself a "small" mustache as I'm still learning to be a badass...

Here's my (delightful) dilemma:

Just received a raise at work that netted me a 4.55% raise (oh corporate America), so I rolled it into my 401k and Roth to bring the totals to 17% and 2%. I left myself the 0.55% for increased debt and investing.

Today however, I got a promotion with a 15% pay increase bringing me to $65000. I promptly went and increased my 401k to 20% and Roth to 5% which at my calculations will put me at  $13,000 and $3,250 for the 401k and Roth.

My question is what to do with the unallocated 9%?????

My bill breakdown is as follows: (Please go easy, as I'm still learning to rock the 'stache.) I keep all of this information in a spreadsheet since I read Your money or your life. I've got 3 years of data, but started getting serious about debt elimination in 2012.

Rent: $825
Gas: $35
Electric:$25
Netflix: $13
Interwebs: $50
Groceries:$400 (mostly organic, includes 1 box of wine and 1 6 pack of microbrews per week)

The numbers change a little, but have been holding constant for a year at about $750/month for each of us.

My portion breaks out to half that, although I'll be paying the whole grocery bill from now on to help out the starving school-enrolled  boyfriend who makes a 1/2 of what I do.

Credit Cards: (Paid off in late 2012)
Amex: $0
Discover: $0
HSBC: $0
Macy's: $0
Car Loan: $0 just paid off my 2006 Ford Focus Hatchback (Feb 2013, 2 years early because of MMM)
Cell: $54.10 Tmobile

I keep them open not to trash my credit, and use the AMEX for groceries and gas 'cause the mileage points add to my work-funded platinum Delta status.

School Loans:
Undergrad 1 (2.2%): 5067
Undergrad 2 (2.2%): 656
Undergrad 3 (5%):  2409
Grad 1 (6.8%): 8020
Grad 2 (6.8%): 5600
Money sent to Loans: $155 for undergrad, $255 for grad (all in deferment because I'm still in school)


MISC Savings:
ING: $600 month for Investment ($4000 balance)
Travel Fund: $100 month for future adventures ($600 balance)
Clothes: $47.00 month for replacement ($150 balance)
Misc: $50 month (the shit happens fund, $50 balance)
Car: $200 month (gas, insurance, future repairs/replacement) $1100 balance

I'd like to think I'm a 'stache in training, but could use some help. My focus has been eradicating the student loans and trying to be in a "good" financial situation before I turn 30 this year. Ideally I'd like to retire in the next 10-15 years.

Thanks in advance for any help!

jpo

  • Pencil Stache
  • ****
  • Posts: 518
  • Age: 32
  • Location: North Carolina
Re: How can I become a higher level mustachian- or what to do with a raise?
« Reply #1 on: February 08, 2013, 10:19:10 AM »
I would pay down those higher-rate loans (G1, G2, UG3) with the 9%.

shelfins

  • 5 O'Clock Shadow
  • *
  • Posts: 47
Re: How can I become a higher level mustachian- or what to do with a raise?
« Reply #2 on: February 08, 2013, 11:30:42 AM »
Definitely don't pay down your loans while they're still deferred! Save up that money somewhere where you can earn money with it (e.g., a mutual fund), then as soon as you finish school, you can pay off the high-interest loans all in one lump sum & never pay a penny of interest on them, plus you'll be able to keep the interest your money earned in the meantime for yourself. You don't mention if you live (or plan to live) in an area where buying a house is cheaper than renting, but, if so, it seems like this would be a perfect opportunity to save up for a down payment.

shelfins

  • 5 O'Clock Shadow
  • *
  • Posts: 47
Re: How can I become a higher level mustachian- or what to do with a raise?
« Reply #3 on: February 08, 2013, 11:33:45 AM »
(I'm assuming you have the sorts of student loans where interest does not accrue while you're in deferment. If you do have interest accruing for some reason, then poster #1 is right...pay off the high-interest loans ASAP.)