Finances confuse me but I still want to retire in 10-12!!

[tamarinss]

Me:  32yo, employed fulltime, no kids, no plans for kids

My Plans: 
What I keep getting confused by is how much exactly I should be saving post tax, since most of my savings are taken out pre-tax right now.   I have just gotten to a place where I have a positive net worth and a large surplus of money after all of my expenses are taken care of. 

I am looking into purchasing a bike since I live very close to work, 2 miles, and only 1-2 miles from grocery stores. Which will lower my $200 a month on gas, which I don’t even use all of right now.

I would like to save up a chunk of money so that I can start saving with Vanguard in one of their index funds but don’t know if I should do that and delay making larger payments on my student loan or throw all my extra money to the student loan first and then open the Vanguard account.

My goal is to be able to retire in 10-13 years when my boyfriend does since he is 11 years older than me and can retire at 52. 

Income:  $1939 before taxes( can be more if I work overtime) a paycheck.  I get paid biweekly

Pre-tax deductions:
Deferred Comp: -$150 (just increased my deferred comp deduction to $300, I do not know how this changes my take home yet)
Dental and Health Insurance:  -$50
Pension Plan: -$200(varies based on earnings)

Taxes: $475(varies with overtime worked) 

Take home on a check like this with no overtime is around $1100 for about $2200 a month

Expenses per month: $1080.84
Cable: $150
Utilities: $150(budget Plan)
Cell: $55
Student Loan: $165
Car insurance: $40
Renters Insurance: $15.84
Food: $200
Gas: $200
Savings: $105 into 3 different online savings accounts bearing .85% interest


Income: $2200
Expenses: $1080.84
Left over:  $1119.16

I do not pay rent as I live with my boyfriend in his home.  He pays his mortgage and I cover the full utilities and cable bill.  No, he will not get rid of cable.  If/When we get married I will be taking on half of everything , but for now he wants me to get debt free.  He is not a mustachian, but his only debt is his car and his home. 

Debt:
Student Loan: $21,000 @ 3.25% fixed interest
Personal loan with mom: $1100 @ 0% interest

Assets:
2006 VW Rabbit with 97,000 miles valued around $5,000
Deferred Comp: $15,614
Savings: $426
Pension: ?? I can’t figure it out


Everytime I try to figure all this out I just get more confused about where exactly my money should be going.  Help!!

[SwordGuy]

Month 1: Pay back 1/2 the loan from your mom.  Put the rest of the surplus in an emergency fund.
Month 2: Pay back the test of the loan from your mom.  Put the rest of the surplus in an emergency fund.

You can afford to pay back your mom asap.  It's the right thing to do.

Not sure what/how your "deferred compensation" works.  What is it?

As for your pension info, pension plans vary.  You'll need to talk to the hr folks or the pension folks and get them to explain what you can expect to get as a pension (based on your current salary working for the next 5, 10, 15, 20, 25 and 30 years. (No need to advertise to HR that you might be retiring early!)  If your job is one that you can expect significant salary advancement in, ask them to factor that in to their answer. 

I'm guessing you're American?  And that a 401k isn't an option with your current employer? 
In that case, I would maximize a Roth IRA or an IRA (or both if you can).  (I have a 401k and make to much to use an IRA or Roth IRA, so I don't keep up on the rules as much.)

After that's maxed out, pop the surplus into Vanguard total market fund.  Lather, rinse, and repeat until FI and retirement.

[SwordGuy]

You'll have plenty of time to read up on investing and learn more about it over the next two years, and settle on the strategy you want to follow long term.  But the above plan's a workable start.

[phred]

While IRAs are important, they are for later on in life.  You need to invest in a current account to have money for early retirement.  If you wait until the student loan is all paid you will miss a lot of growth.  With your extra $1000 a month I would put $500 into an investment, $50 to $100 to your Mom (plus take her to lunch), $50 to a savings account at local credit union and rest to student loan (this would be in addition to the $165 already).

[nereo]

I would like to save up a chunk of money so that I can start saving with Vanguard in one of their index funds but don’t know if I should do that and delay making larger payments on my student loan or throw all my extra money to the student loan first and then open the Vanguard account.

My goal is to be able to retire in 10-13 years when my boyfriend does since he is 11 years older than me and can retire at 52. 

Pension Plan: -$200(varies based on earnings)

Taxes: $475(varies with overtime worked) 


Savings: $105 into 3 different online savings accounts bearing .85% interest


... but for now he wants me to get debt free.  He is not a mustachian, but his only debt is his car and his home. 

Debt:
Student Loan: $21,000 @ 3.25% interest
Personal loan with mom: $1100 @ 0% interest

Everytime I try to figure all this out I just get more confused about where exactly my money should be going.  Help!!

First, congrats and already being on a good path towards FI.  You're doing well so far
As for your pension, talk to your HR department and have them outline the benefits under different scenerios.  Don't be surprised if its less than you think - often you need to work 20+ years with a company to get full pension.  Plan accordingly.

As for paying off your debt, do what's right for you (with all respect to your BF, it might not be plowing all your money toward debt reduction *right now*).  Talk with your mom and determine whether she'd like to be paid back early.  There's no economic reason to pay her early with a 0% interest rate, but if she would like you to pay her faster, by all means do so.  But, it's a family matter only you and her can answer.
Is your 3.25% student loan a fixed rate?  If so, I'd recommend paying only the monthly rate instead of paying it off early.  Instead plow all the money into your other savings.

You have enough money to fully fund an IRA ($5500/yr), and save in other taxable accounts.  The IRA will reduce your overall tax rate and provide for income in your later years.  You mentioned you were contributing $105/month into accounts charging 0.85%.  What are you invested in?

that's my take on it.

[tamarinss]

While IRAs are important, they are for later on in life.  You need to invest in a current account to have money for early retirement.  If you wait until the student loan is all paid you will miss a lot of growth.  With your extra $1000 a month I would put $500 into an investment, $50 to $100 to your Mom (plus take her to lunch), $50 to a savings account at local credit union and rest to student loan (this would be in addition to the $165 already).

What would be a current account?  Any suggestions?

[Prairie Stash]

Pay your mom ASAP!!! If you do anything else first you suck. She loaned you money because she's awesome, maybe she can retire earlier if you pay her back.

I gathered $5000 for investments, then went back to massive prepayments on my student loans.  After loans were done my net value was increased by $30K, for life. No market crash can take it away.  Then I started piling money into investments (including the money previously going to loans).

The point of the $5k is to get you to learn ASAP.  Think of it as tuition for retirement.  With the new knowledge I gained it took all the uncertainty away (and honestly $5k isn't much money). I'm cautious though, feel free to be more aggressive.

[tamarinss]

First, congrats and already being on a good path towards FI.  You're doing well so far
As for your pension, talk to your HR department and have them outline the benefits under different scenerios.  Don't be surprised if its less than you think - often you need to work 20+ years with a company to get full pension.  Plan accordingly.

As for paying off your debt, do what's right for you (with all respect to your BF, it might not be plowing all your money toward debt reduction *right now*).  Talk with your mom and determine whether she'd like to be paid back early.  There's no economic reason to pay her early with a 0% interest rate, but if she would like you to pay her faster, by all means do so.  But, it's a family matter only you and her can answer.
Is your 3.25% student loan a fixed rate?  If so, I'd recommend paying only the monthly rate instead of paying it off early.  Instead plow all the money into your other savings.

You have enough money to fully fund an IRA ($5500/yr), and save in other taxable accounts.  The IRA will reduce your overall tax rate and provide for income in your later years.  You mentioned you were contributing $105/month into accounts charging 0.85%.  What are you invested in?

that's my take on it.

My student loan is a fixed rate thankfully.  The $105 a month goes into two differnt online savings accounts.  I funnel money there to set aside for my insurance payments since I pay them in full when they come due every 6 mo/1yr.  I also use one to save for xmas presents every year.  I am not sure if it makes the most sense, but to have them serperated like that and at least earnign a little interest I find it easier to set money aside.  I still have a hard time seeing any available balance in my checking account without finding a way to spend it :(  That is why I need to figure out my investing plan before my next check!! I still have weak frugality muscles!

[MrsPete]

I suspect you  have a disconnect of some type on the bike-gas thing.  You say you live two miles from work and close to grocery stores.  So how could you be spending $200/month on gas now?  Either you're driving a gas-guzzler, or you're driving more than just to work. 

If I were you, I'd put my priorities in this order:
- Pay off mom
- Pay off all other debts
- Begin saving aggressively.  The vehicle through which you save is less important than the fact that you save.

Is the "deferred compensation" what you're paying into your pension?  You say your pension confuses you.  Here it is in a nutshell:  Few jobs offer pensions anymore, but the idea is that you work for the company for X number of years, and then you receive a paycheck for the rest of your life.  Details vary widely, but typically pensions are available to people in jobs that're relatively low-paying; the deal is that you agree to work for a small paycheck, but you have the promise of security in retirement -- and you have to put in the years to get that lifetime benefit.  What you need to do now, however, is to talk to your HR folks about exactly what your pension will pay and how many years you need to put in to draw a benefit. 

Since you're not clear on just where your money is going, I suggest you start writing down every penny you spend every day.  Pretty soon patterns will start to emerge, and you'll figure out your weak points -- it might be buying lunch every day, or it might be excessive clothes.  Whatever your weak points, keeping records will help you figure it out.