Hey everybody,
I've been reading MMM for a while and learned quite a bit, he's definitely made a positive impact on my life.
Anyway I have a few questions specific to my situation.
Background
Profession: Graduated college in May of 2011, I'm a Mechanical Engineer. Currently work in a large international "Medical Device Manufacturing" company.
Compensation: ~67k/year, 401k with a 6% match AND pension (apparently that's a big deal as most non-government companies don't have both?)
Special Note: For the first 3 years of my employment I'm in a rotational program, so I move 3x in 3 years. I started out in Baltimore MD back in June 2011. Going to be moving to Northern NJ in June of this year.
Car: 1999 Honda Prelude with 70k miles on it (bought it from a family friend who's sister passed away in 2008 with 38k miles on it $7,000 paid in cash)
Low mileage and for the most part has been great, except I just put about $1500 of work into it, wheel bearing, tie rods, seized rear brake calipers, yada yada yada lot of things went bad at once. Also back in September I got T-boned on the passengers side. Huge dent which would require a new door / rear quarterpanel and about $2500 dollars worth of work. No claim on the insurance since the collision was deemed 'shared fault' so I chose not to fix it and live with the ugly dent because the door still works and the power window still even works somehow.
Student Loans: When I graduated I had about 35k of purely federal direct sub/unsub loans varying from 4.5% - 6.5%
I've been paying them off aggressively and just knocked out the last of my 6.5% loan, bringing me down to 18.5k remaining debt.
Currently putting 15% of my paycheck into my 401k (I'm a firm believer in 'pay myself first' if I don't see the money in my checking account I can't possibly be tempted to spend it and I know it's going to a good place)
Also a few weeks ago I got LASIK surgery. I've been wearing glasses for 15 years, and went from 20/600 to 20/20. Cost me $5400 though. Ouch. And that was AFTER my vision insurance took 15% off of it.
Worth every penny though. Paid in full.
Main expenses / finances:
Rent: $985/mo - currently live in a pretty nice 800sq/ft one bedroom that is less than a mile from where I work. I walk to work in the morning (drive if I'm late =P) and I walk home to cook / eat lunch for myself.
Student Loan: Automated $500 a month payment, occasionally throwing in heaps of money when I get near a goal, (I just paid $3600 to kill the last 6.5% loan)
Utilities: Electricity + Internet (don't have cable TV, video games are my vice of choice): ~100 or so added together during spring/fall 150-180 or so during winter/summer months.
I have a $2500 emergency fund in a ING savings account. About $7000 in my 401k. No credit card debt.
I feel like I'm "strapped for cash" because I'm saving aggressively into my 401k and paying down my student loans as fast as possible.
In short. I know I've been doing things a lot better than most people my age. (Not even kidding, right after graduation, 4 of my Engineer buddies from school went out and financed a new: Chevy Camaro SS, a Subaru WRX STI, a Ford Mustang GT, and a (2009) BMW 328xi) ON TOP of their debt which is about mine if not more.
In June I'm going to be gritting my teeth and making another smart (but painful) financial move: Moving back in with my parents. Since "cheap" rent in the area of New Jersey where I'll be moving is ~1500/mo I decided to move back in with my parents and pay them ~300/mo just to help out, + 100/mo I'll end up paying to store my furniture that won't fit in my parents house, but I'll be needing when I move again in another year.
Taking out that $400, I should still free up at least another $900 or so per month. Since I will be using my parents electricity and internet, and eating out a lot less. I can cook, but my monthly grocery expense is about $50-70 while my monthly "cheap" eating out expense (pizza, fast food, etc) is ~$80 shamefully.
Sorry for the long history, now my QUESTION!
I'm trying to think which would be the best course of action, should I:
Finish paying down my student loans: Increasing my payments to ~1600 a month (what I'd be paying in rent if I didn't live with my parents) would mean I'd be entirely debt free by June of 2013, not bad for only 2 years out of school haha.
Max out my 401k / Start a Roth with any overflow: To get to $16,500/year of my contribution I'd have to contribute roughly 10% more of my income.
(Probably the least mustachian) Begin putting money aside to eventually get a new(used) car in the next couple of years. I want to buy it in full if at all possible, or at least put enough down to where I can secure a 0 interest loan and pay the remainder off before the 0 interest promotional rate wears off. (Can you even get a 0 interest rate on a used car???)
I don't think I'd get much for my Honda at that point, especially with the $2,500 dent in a car that blue books at 5k.
Anyway, I'll shut up now and I can't wait to hear your analysis of my situation / advice.
Thanks!