Author Topic: I have no idea where to start.  (Read 3536 times)

Falloficarus

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I have no idea where to start.
« on: April 15, 2015, 06:07:26 PM »
I'm sincerely hoping that someone can give me some advice.

Here is my money situation.

My 401k has 3,700$ in it. I can not add anymore to it, though as that was how it was set up at my old job. It is expected to double every 8 years, however.
My savings has 4,800$
I get 660$ biweekly from paychecks.

Debt:
Credit Card- $2,500
Phone- $300

Monthly Spending-
Car Insurance- $100
Phone- $80
Credit Card- $200
Food- $150
Gas- $60
Misc - $100

I know I'm lucky in that I pay no rent or utilities at the moment. I don't think I could afford it, regardless. I have been looking lately at homes to move into, ones around the 100k mark. But really, I need to figure out how to save more. It's a little disheartening to think that when I do move out in a few months (no set date), that all my savings will have gone towards it and I will be at zero again. How in the world can I ever hope to retire early? I doubt it matters, but I should add that I'm 26.
« Last Edit: April 15, 2015, 06:20:02 PM by Falloficarus »

MDM

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Re: I have no idea where to start.
« Reply #1 on: April 15, 2015, 06:15:12 PM »
Probably paying off the entire balance on the CC is a good start, followed by paying off the phone loan.

At the same time, finding a way to earn more than $17K/yr should be very high on your list.  What options do you see?

Falloficarus

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Re: I have no idea where to start.
« Reply #2 on: April 15, 2015, 06:22:09 PM »
Well, technically, I do. Without any taxes/health insurance being taken out, I earn about 26k a year. It just drops down exponentially after everything gets taken out. I didn't get a degree in anything, and my only real background work is office. Everything I've looked at recently,  just pays less than I what I already get or equal to.

math-ya

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Re: I have no idea where to start.
« Reply #3 on: April 15, 2015, 06:24:22 PM »
Go to trade school and learn a skill. Or get another couple of jobs and start hustling to save some cash.

kpd905

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Re: I have no idea where to start.
« Reply #4 on: April 15, 2015, 06:27:06 PM »

My 401k has 3,700$ in it. I can not add anymore to it, though as that was how it was set up at my old job. It is expected to double every 8 years, however.


What funds are you invested in?

MDM

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Re: I have no idea where to start.
« Reply #5 on: April 15, 2015, 06:28:18 PM »
Well, technically, I do. Without any taxes/health insurance being taken out, I earn about 26k a year. It just drops down exponentially after everything gets taken out. I didn't get a degree in anything, and my only real background work is office. Everything I've looked at recently,  just pays less than I what I already get or equal to.

Ok, I thought the $660 was gross.  See http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/.

dividendman

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Re: I have no idea where to start.
« Reply #6 on: April 15, 2015, 08:27:55 PM »
Don't focus on retiring early. Goals that are too far away make everything seem hopeless. Set up some first goals and make a chart for your progress. Here are some goals: 1) eliminate debt by X date, 2) reducing your expenses by $Y/mo by Z, 3) brainstorm 5 ways of increasing your income by some date.

You can reach goal 1) fast by applying your savings against your credit card debt and phone debt (whatever that is). When you do this look at your current credit card statement and see how much interest they are accruing to your account, because this will help with goal 2) as that interest is an expense you'll no longer have!

Ditch the car and insurance and gas. If you're going to find a place find it close enough to work that you can do that.

I agree on increasing income by learning trade skills or other skills.

What are you spending $200 on your credit car that isn't already covered under food or misc? Or is that just the minimum credit card payment? If it's the payment then anything over the interest being accrued IS saving... actually it's better than saving because it's costing you less interest also.

$80/mo on a phone is ridiculous. I pay $25 using puretalkusa.

I also don't understand the $300 of debt labelled "phone". Isn't that on your credit card or am I missing something? If you recently got it I'd try to find a way to sell it and recoup the most of the expense and then get a dirt cheap used phone.

At 26 you have a long horizon to right your financial situation and then let time work for you instead of against you!

mozar

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Re: I have no idea where to start.
« Reply #7 on: April 15, 2015, 08:49:32 PM »
There are lots of jobs that fall under office. Instead of buying a house think of getting your bachelor's degree at night. There are lots of options like marketing, accounting. teaching microsoft office, computer science, paralegal, utility worker... But make sure you go to an accredited non- profit. You can take some core classes at a community college and then transfer. No for-profit colleges. In the mean time you might qualify for food stamps.

southern granny

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Re: I have no idea where to start.
« Reply #8 on: April 15, 2015, 09:11:07 PM »
I wouldn't be in too big of a hurry to give up free rent and utilities.  Get out of debt first and drop the cell phone plan as quickly as you can.  When you do get a house, consider a duplex where you can rent out one side to cover most of your payment.    If you haven't shopped around for car insurance do it to make sure you are getting the best rate.  I agree with others that it would be good to either get  a degree or go to a trade school.  If you aren't willing to do that, then pick up a part-time or weekend job.  The main thing is to start making regular contributions to your savings and investing accounts. Good luck to you.

frugalnacho

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Re: I have no idea where to start.
« Reply #9 on: April 15, 2015, 09:15:33 PM »
I don't understand.  You list $690/mo in expenses, and that looks like it includes your minimum (at least) credit card payment. And you say you bring home $660 every 2 weeks, and have $4,800 in savings.  If that's accurate this is what I would do:

1. Take $2,800 out of your savings and crush your debt right now.    That leaves you with $2k still.  And your monthly expenses drop to $490.  That leaves $830+/mo to save

2. Roll your 401k into an IRA at vanguard.  Add that  $830/mo to your IRA.  You'll be maxed out by thanksgiving.  You'll probably end up getting a nice tax return too since your income will be $5500 lower and you will qualify for the tax savers credit (though not the max, but it will help).  You could do the math and figure out what your tax liability will be and adjust your withholding accordingly so you don't get a refund, and you will have a higher monthly cash flow.

3. Change your phone to a lower plan.  I pay about $12/mo with republic wireless.  Plenty of other options out there that are cheap.

4. Look for a better paying job.


If you must move out and find your own place, consider renting.  Do the math obviously, and do whatever makes the most financial sense.  You can also get roommates or rent spare rooms out if you purchase.  But I would say stay at home and milk that situation as long as you can.  You could get your retirement accounts fattened up, and your savings account fattened up by taking advantage of the free rent and utilities.