Where do I start?

[Nannooskeeska]

Hello Mustachians!

I am a relatively new member of the Mustachian lifestyle, and I'm a bit lost as to where and how I should begin. There are so many spreadsheets and techniques and stuff that I get overwhelmed when I think about all that.

So, my stats.

I am 21 years old. I have $918.85 to my name right now. My monthly expenses are:

Pandora One:      $5.26
Spotify Premium:  $5.26
Rent:                    $325
Gas/Electricity:   ~$35 (I have three roommates)
Internet:              $10.50
Groceries:          ~$100 (But I just turned 21 and I've been buying more alcohol... it's so expensive!)
Betterment:          $100 (with other deposits if I have extra money)
Gas for car:        ~$50 (Depending on how much highway driving I end up with)
TOTAL:               ~$581

I have $400 invested into Betterment right now, which I did not include in the above number. My return so far in the one week I've had the money there is -$0.86, so that's been going swimmingly :P

I have student loans that amount to $14,558.79, but payments aren't due until January 18th, 2017, six months or so after I graduate. I have one more year of college left, and will end up with ~$25,000 or $30,000 in student loans by the time I am done.

I have an internship for the summer that pays $15.75/hr, working 40 or more hours per week. I have not done overtime as of yet, because by the end of each day I'm just ready to gtfo of here, but it is an option.

I use my car to commute to my internship, which is six miles from my house. I would have started biking, but I had knee surgery on June 5th and have not yet recovered to the point where I can ride a bike (it was a torn meniscus, if you're curious). I fully own my car, a 2000 Buick LeSabre. It gets about 17 mpg (I KNOW IT'S AWFUL UGH) in the city and about 24 mpg on the highway or freeway. It has ~175,000 miles on it.

Now tomorrow I'll be getting my first paycheck for this internship, and I'm not entirely sure what to do with it. I would invest in Vanguard but I don't have the minimum amount of $3000 to pay yet. Should I put as much as I can into Betterment? Right now I'm using Simple Bank for my checking account and I have a savings account at the credit union in my hometown. My paycheck deposits into my Simple account, from which it can be transferred to wherever I need it.

Also, I do not have the option of starting a 401(k) here. I had one at my last job, but my only options where to transfer it (which I couldn't do because I don't have one anymore) or cash it out, and I cashed it out (~$250).

SO. After that long-winded explanation of my finances... what do now? My thoughts are: emergency fund, then start saving for/paying off student loans. I also need to save for next year's tuition. Should I prioritize saving for that over paying off the loans I already have? Should I continue to invest in Betterment?

If there's anything at all that I left out, please let me know! Thanks!

[ShoulderThingThatGoesUp]

Are you still in school - I assume so because you have an internship and not a full-time position?

[Nannooskeeska]

Are you still in school - I assume so because you have an internship and not a full-time position?

School is done for the summer, so I'm working for about three months then going back.

[clifford4970]

My honest opinion is to start saving for tuition so you dont have to take out more student loans.... but I am all about anti-student loans.... to the point my wife and I moved back in with my parents to avoid having to take any out in our final year of college.

[Nannooskeeska]

My honest opinion is to start saving for tuition so you dont have to take out more student loans.... but I am all about anti-student loans.... to the point my wife and I moved back in with my parents to avoid having to take any out in our final year of college.

That makes sense cause I avoid paying for more interest if I save for tuition. That's a good way to look at it, thank you!

[OttoVonBisquick]

First off, welcome! I'm also 21, and I'm about $100k deep in student debt, about to graduate. I have the rare extreme fortune of parents who both successfully have played the real estate game in the last 10 years, so they will pay down about $70k, leaving me $30k, still quite a bit.

I literally *just* started posting within the last few days, so I'm just regurgitating advice I've learned from the wise forum members and trusted sources. Place my advice at a lower priority than those who are older and more experienced in literally all financial and personal matters than I am.

I pay more than you a month (quite a bit), and have had the fortune of a summer job that pays $28 an hour, but car expenses, rent, food, and looming financial debt payments within a year are making me quite frugal.

First thing's first: That 2000 Buick Lesabre might be costing you quite a bit in terms of gas (Automatic, V6, yuck). I'm not sure how much you could sell it for, but consider selling it and getting a 4-cylinder manual (I bought a 2002 Hyundai Accent GL for $1500 + a ton of repairs, causing me to officially begin my quest for DIY car maintenance, but that's another story).

Your other expenses are incredibly low. Being a 21 year old and realizing how it feels to have alcohol, it quickly wore off on me when I saw the price tags, the calories in a shot (typically 90+!!), and learning about how it can sabotage metabolism and your ability to stay lean and fit. Try to cut out as much drinking as you can, and split the price with roommates and friends. That's just me, though.

I would pad your bank account to have at least 3 months of expenses in it, then probably save for tuition. Loans are yucky, and we have no idea what your future income will be.

[ROY2007]

Welcome to the forum and hello from Hudson, WI.

I agree with the previous advice about saving up so you don't have to take out any more student loans. If it were me I wouldn't invest any more until you have enough to pay off your student loans.

That's great that you have the opportunity for overtime! I assume that's 1.5x pay?

You haven't mentioned your goals. What are your goals regarding financial independence and early retirement?

[Nannooskeeska]

First off, welcome! I'm also 21, and I'm about $100k deep in student debt, about to graduate. I have the rare extreme fortune of parents who both successfully have played the real estate game in the last 10 years, so they will pay down about $70k, leaving me $30k, still quite a bit.

I literally *just* started posting within the last few days, so I'm just regurgitating advice I've learned from the wise forum members and trusted sources. Place my advice at a lower priority than those who are older and more experienced in literally all financial and personal matters than I am.

I pay more than you a month (quite a bit), and have had the fortune of a summer job that pays $28 an hour, but car expenses, rent, food, and looming financial debt payments within a year are making me quite frugal.

First thing's first: That 2000 Buick Lesabre might be costing you quite a bit in terms of gas (Automatic, V6, yuck). I'm not sure how much you could sell it for, but consider selling it and getting a 4-cylinder manual (I bought a 2002 Hyundai Accent GL for $1500 + a ton of repairs, causing me to officially begin my quest for DIY car maintenance, but that's another story).

Your other expenses are incredibly low. Being a 21 year old and realizing how it feels to have alcohol, it quickly wore off on me when I saw the price tags, the calories in a shot (typically 90+!!), and learning about how it can sabotage metabolism and your ability to stay lean and fit. Try to cut out as much drinking as you can, and split the price with roommates and friends. That's just me, though.

I would pad your bank account to have at least 3 months of expenses in it, then probably save for tuition. Loans are yucky, and we have no idea what your future income will be.

Yes, the Buick is one of the main things that costs me money, I think. I'm thinking about selling it and getting a manual but I need to at least wait until my knee is better so I can drive it. I also need to canvas CL and other places to look for one... I'm thinking in a couple weeks or so I'll most likely begin that whole process.

I'm already starting to see my alcohol expenses lowering more and more. I only really buy a couple of different cheap rums and Coke Zero to go with it, and I don't drink that much; I probably actually get drunk twice a month. The rest is just apple ale or a beer with my roommates on the porch. I'm planning on cutting that down too.

Thanks for the advice, I appreciate it!

Welcome to the forum and hello from Hudson, WI.

I agree with the previous advice about saving up so you don't have to take out any more student loans. If it were me I wouldn't invest any more until you have enough to pay off your student loans.

That's great that you have the opportunity for overtime! I assume that's 1.5x pay?

You haven't mentioned your goals. What are your goals regarding financial independence and early retirement?

Ah, hello fellow Wisconsite! I'm just down I94 from you :)

That makes sense! I just keep thinking of lost returns if I don't invest now... and since my payments aren't due for a year and a half, should I invest until then? My current loans are accruing interest, but I don't know how much. I should probably find that out...

Yep, 1.5x pay at $15.75/hr = $23.63/hr! If I worked 9 hours a day instead of 8 I would end up with an extra $100 every week, which would be pretty huge! I honestly didn't even do that math until just now haha

I guess my goals right now are to reach FIRE as soon as possible. But since I'm still a student, I don't know how much I'm going to be making when I graduate and I don't have a set plan. I guess that's part of my question too: how do I plan as a student with no full-time job for about another year?

Thank you so much for your advice!

[clifford4970]

[/quote]

That makes sense! I just keep thinking of lost returns if I don't invest now... and since my payments aren't due for a year and a half, should I invest until then? My current loans are accruing interest, but I don't know how much. I should probably find that out...
[/quote]

I think the same thing!
Right now I only contribute 7% to my 401k and 5% to my Roth (I make 36k a year, my wife 19k).  I have a Betterment account I just recently started as well (200 in there with 50 being auto deposited every week).  We have a few thousand in savings, but I don't know what to do there..... Keep saving towards a Down Payment on a house.... Or start investing now in Vanguard since you can get in to some with only 3k.

So I know exactly what you are thinking with missing out on returns.

[thedayisbrave]

Discovering MMM as a student is kind of a double edged sword.  One on hand, you want to work toward FI as soon as you can.  On the other hand, you're not making much, if anything, to stash away.

At this point, the best thing to do is focus on your studies and work.  Your expenses are pretty bare bones as it is, so you want to work on growing your other types of capital (that will eventually lead you to growing financial capital).  Work hard.  Always be the first one to volunteer for something.  Be vigilant and think about how you can maximize your utility at work.  Work that extra hour a day and start putting away money for tuition.  I wouldn't worry too much about investing now.

One of my only regrets in college was not going to more social/networking events.  I got schoolwork done during the week so I could go home and work weekends.  I'm not talking about frat parties, but special interest events... such as seminars, lectures, job fairs, young professional groups, etc.  Do yourself a favor and read about all the other types of capital out there - social and human capital are what I'm referring to here.  Later on it has the possibility of turning to financial capital, but just make sure when you do network, it is intentional AND well-intentioned... i.e. don't be fake.  I've had a lotttt of good come my way because I learned about this early on as a Sociology major and put it into practice.

If your car is running well and not requiring costly repairs, keep driving it.  6 miles each way is not that bad. 

[Nannooskeeska]

Discovering MMM as a student is kind of a double edged sword.  One on hand, you want to work toward FI as soon as you can.  On the other hand, you're not making much, if anything, to stash away.

At this point, the best thing to do is focus on your studies and work.  Your expenses are pretty bare bones as it is, so you want to work on growing your other types of capital (that will eventually lead you to growing financial capital).  Work hard.  Always be the first one to volunteer for something.  Be vigilant and think about how you can maximize your utility at work.  Work that extra hour a day and start putting away money for tuition.  I wouldn't worry too much about investing now.

One of my only regrets in college was not going to more social/networking events.  I got schoolwork done during the week so I could go home and work weekends.  I'm not talking about frat parties, but special interest events... such as seminars, lectures, job fairs, young professional groups, etc.  Do yourself a favor and read about all the other types of capital out there - social and human capital are what I'm referring to here.  Later on it has the possibility of turning to financial capital, but just make sure when you do network, it is intentional AND well-intentioned... i.e. don't be fake.  I've had a lotttt of good come my way because I learned about this early on as a Sociology major and put it into practice.

If your car is running well and not requiring costly repairs, keep driving it.  6 miles each way is not that bad.

Haha yes it's definitely got its good and bad sides. I'll be more prepared in the future but I feel like I just can't do anything right now!

I've done fairly well when it comes to gaining "social utility" (I had never heard that term until now!), but I know I can do better. Better late than never I suppose! I will plan on going to career breakfasts and the like this year for sure, especially since I need to start thinking about actually finding a full-time job.

Thanks for your advice!