Author Topic: What's next for this 25 year old wannabe moustachian?  (Read 6144 times)

apoclater

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What's next for this 25 year old wannabe moustachian?
« on: September 18, 2013, 09:49:18 PM »
I just discovered MMM a month ago, and I've immediately started to make some changes.  For now, here's what you need to know about my finances:

25 year old male, no student loans and no debt besides credit cards I pay off monthly.
Location: Tampa Bay area
Salary: $70k in Software Development (Project Management)
Current Saved:
 
  • Company-sponsored 401k--15k
  • Roth IRA--5k
  • Individual index fund--7k

Expenses:
  • 850/month for rent (ouch, I know)
  • 55/month for cable+internet
  • 63/month car insurance
  • 200/month for gas (30-45 min commute)
  • 50/month for cat
  • 500/month for groceries (I know, incredibly high and I need to cut down)

There are other expenses in this mix that need to go (stupid stuff like Amazon prime, excessive eating out, etc), but after ~10k after-tax (roth) contribution and 2k company match, I end up with about 10k left.  I have only have a sample size of last year and it took awhile to put this together for me (again, 1 month of reading MMM) so I don't have a great handle on my finances yet.

So here's what I've done to change things:

1. Start cutting dumb expenses.  Got a library card to stop the dumb $20-40 I spend on Kindle books a month.  Got a clippers to stop spending $20 on haircuts monthly.  Stopping spending stupid amounts on groceries and starting to mix in ground beef rather than steak, fattier cuts of meat over lean cuts that are more expensive (I eat primal).

2. Incorporate YNAB.  I love the software and I now have a view of where my money is going.  Never had a budget before.

3. Started to work from home one day a week.  My manager will probably bend to 2 days if need be, but I don't want to push it more until I get a bit more seniority and experience. 

4. Stop paying for travel.  I absolutely love to travel and I know it's expensive, so I've started maximizing credit card reward points to get free flights via miles.

5. Concentrate overall on savings and investing.  If it's not clear, I just started this so I know I need to cut some of the fat.  Decrease spending, increase investing.

So I guess what I'm asking is: What's next?  Some things I'm considering are:

1. Move to a cheaper place with a roommate (I currently have a roommate as well).  I live in an expensive area full of people my age and I love it, but I could live closer to work if I wanted and it might be $100-200 cheaper per month.  I would hate myself socially and I am not warm to this idea.  At 30 with a significant other? Maybe.

2. Cut down my grocery bill further.  I'd like to get this down to $250/month (remember paleo is a lot of meat, it's more expensive).

3. Get rid of the cat.  I really dig having him, but he costs me $600/year for food and vet visits.  I am not warm to this idea, but I'll consider it.

4. Find ways to increase income on the side.  I could take a soccer reffing job on weekends and I'd probably make $60/weekend for 3 games, plus bonuses.  I'm really open to this idea.

What do you guys think?  What other opportunities do you see?  I would like to ultimately save $25-30k next year without blinking, my goal would be $35k if possible.

kkbmustang

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #1 on: September 18, 2013, 10:05:37 PM »
NOT WEARING MY MOD HAT:

Get rid of the cat to save $600? I'm sorry, but that's just horrible.

CU Tiger

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #2 on: September 18, 2013, 10:37:06 PM »
Before I start with the face punches, I just want to say "GO YOU" for wanting to start young and save a lot of cash. You will never regret having saved early.
"I have too much money saved," said No One, EVER.

Okay, now, a little gentle facepunch. Go read this post on the blog, and then sit down and think about where you live and your commute:
www.mrmoneymustache.com/2012/09/15/reader-case-study-the-long-road-to-mustachianism/

Because you can find good places to live where you are near work and a social life almost anywhere. It's not like there is only one area to live with fun stuff to do and nice people.

Yes, the library is full of free books, music, videos, etc. It is the frugal person's friend. Just make sure you then save the money you have been spending on the kindle.

Your food budget is...well, it's insane for a single person. I mean, cut it back from 500 to 300 and it's still going to give you enough good to eat, but you can funnel an extra $2400 into savings a year. Instead of only eating meat, learn to eat beans, lentils, and grains like quinoa (super high protein).  There are lots of good posts about eating a healthy diet on this site. Check some of them out.

I say keep the cat. I spend money on my dogs (currently two Cocker Spaniels) and wouldn't get rid of them for anything. They are family.

ejk

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #3 on: September 19, 2013, 12:53:07 AM »
Keep the kitty. You'll probably never forgive yourself for the $600/yr in savings. Pets are forever.

If you're amenable to moving around, coming to Seattle could get you a 20-30k salary bump. And no state income tax. I know kids two years younger than you who started at Microsoft as program managers @ 105/year with signing bonus and stock. Lunacy. And the living situation can be good too, in terms of commute hacking.

That's probably all the advice I'm qualified to give, since we're working on our student debt and trying to cut spending back to reasonable amounts.

chasesfish

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #4 on: September 19, 2013, 04:54:33 AM »
I don't think #1 is that unreasonable, $800/mo to live with people around your age and assuming you're single.  This coming from someone who's 31 and made the mistake of not living in that kind of area early on in my career.  I don't regret the money saved though. 

The 2x/week working from home is a good idea. 

Two questions:  Why is your job in Tampa, and why do you live so far away?  I looked at moving there once and the income to housing cost didn't work, and I thought most of the jobs were in the same areas that a lot of young people live.    Have you ever given thought to moving?

Someone mentioned Seattle, there are a number of other places.  Do you see your income going up as you approach 30 at your company?

seattlecyclone

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #5 on: September 19, 2013, 12:57:13 PM »
ejk speaks the truth about tech salaries in the Seattle area. You might pay an extra $500/month for an equivalent apartment, but I would be surprised if the salary difference wasn't more than enough to cover that cost.

Another piece of advice regardless of where you live is to consider making traditional 401(k) contributions rather than Roth contributions. Everyone's situation is different, but I think the math generally tilts in favor of deferring that income to retirement for most early retirees.

StarryC

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #6 on: September 19, 2013, 01:22:58 PM »
$55/mo for cable and internet seems like a lot if you have roommates to share the expenses. Roomie and I are able to get internet only for $25 a month and split it, so it is only $12.50 per person. 

I justify Amazon prime by 1) Not having cable and streaming shows from Amazon instead  2) Kindle lending library books 3) Cheaper prices than stores after "free" shipping  If you could spend $15/mo on internet with no cable you'd save $480 a year, which after Prime would still put you up $401 a year, along with 12 free books to read and a lot of movies and TV.  Even if you wanted Hulu, too, you'd be up $305 a year. 

Mega

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #7 on: September 19, 2013, 01:58:07 PM »
If you want to eat meat, buy a cow, and then pay a butcher to cut it up for you. There are massive savings by buying in "bulk".

If you like the socializing, where are those costs in your budget?

You said you like travel, where are those costs in your budget?

And keep the cat, but switch to the Costco brand dry food. One cat shouldn't need hundreds of dollars in food for the year.

Jamesqf

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #8 on: September 19, 2013, 02:44:01 PM »
Again, keep the cat.  It's an obligation.

I don't see your rent as being all that bad.  The biggies are, as others have pointed out, what you spend on groceries, and the amount you spend on gas.  Though you don't give details on your commute & other driving, I'd say you could cut that at least in half (plus save on insurance) if you traded your current vehicle for something with good mpg.

Crash87

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #9 on: September 19, 2013, 04:49:13 PM »
I would try to find a home for the cat, but I'm not a fan of pets at all. If I want to play with a cat/dog I can visit one of my many pet-laden friends.

plantingourpennies

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #10 on: September 20, 2013, 05:02:14 AM »
Dude, keep the cat =/

We spend between 250 and 350 per year on ours. Pets are an obligation, you can't just give them away when you get bored.

Best,
Mr. PoP

MsSindy

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #11 on: September 20, 2013, 10:34:51 AM »
At 25, you're doing effing amazing!!   I'll jump on the keep the cat band-wagon.  You took on the responsibility, so you really should see it through, plus you seem to gain enjoyment.  However, not sure why it costs $600 per year.  We had 2 completely indoor cats and after about year 3, we stopped getting their shots - they both lived to be 20 years old and had happy lives - although we did feed them good quality food in their later years.  If your cat goes outside, then def continue the shots.  I know I'll get scolded for this advice, but it worked for us - YMMV.

Also, your rent isn't that bad esp if you're in a hot social area - at 25 that's important.  I agree, if you had a SO, it might not be as important, and you could always look at moving later.

Def keep tracking your budget.  You say you have 10k "left", but I don't see that you have any in a regular savings account?  So where did it all go?  I suspect that it goes to "things" (we were all guilty of this!).  Your well-tracked budget will be the eye-opener for you.  And only you can decided what things you value and what things are worth pushing out FI for.

apoclater

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #12 on: September 20, 2013, 01:24:10 PM »
Thanks for the advice everyone.  You all make great points--this is all really helpful.  And I wasn't very warm on the idea of finding a new home for the little cat anyways, not to worry.  Just need to find some cheaper food.

As far as the questions asked:

Why I live in Tampa:  I work as an IT Project Manager.  I recently went finished up one of those corporate development programs for college grads (and they happen to pay pretty solid cash). 

Why I live so far away from my job: While I live in one of the neighborhoods in Tampa, I actually work in a suburb about 16 miles away, which nets my commute at 30 min each way, so 1 hour a day.  It really sucks, but only having to do it 3-4 times a week makes it more manageable.  Tampa is about as anti-moustachian as transportation goes, by the way.  That being said, I do live right next to a grocery store which I walk to, and rarely ever take cabs on weekends after nights at the bar (and when I do go out, I'm sneaky with the flask).  My vehicle is a 2001 Buick Regal--doesn't get great MPG but I'd like to move in the next year or two back to Chicago or Milwaukee so I hardly see the need to buy a new car.

Why cable is so pricey: I've looked into other options for internet in the area, it's all bundled.  I'll look again (as I really don't need the cable) but I'm essentially paying $5 more for having cable.  The internet-only option was $85 while cable included was $90.

Where the rest of my money goes (travel, savings, socializing, etc):  I really don't know.  I had 3 weeks off recently that we were given when we finished off our last gig before transitioning to our new one and I blew through somewhere between 3.5-5.5k in Europe with a few friends (including flight, hostels, food, drink, etc).  That was honestly the #1 thing that sparked the "I need a budget" exploratory exercise--the fact that I had really no idea (besides a range) of what I spent.

I'm definitely going to take the following advice, some of which I've started previously and some of which I will start a result of this thread:

-Cut groceries from $600 down to at least $300.  90 meals a month--that leaves me with $3.33 each meal, and considering breakfast each day is a very paleo 2 eggs and 3 pieces of bacon ($1.50 max), that leaves me with $4.25 for the subsequent two meals, which is more than enough.  My problem is that I have been buying steaks, crab, scallops, etc.  I need to incorporate more ground beef, pork chops, etc from Costco.  I will also look into splitting a cow with someone.

-Cut gas from $200 to $125.  I have a 30 mile commute there and back daily and a 17 gallon tank which gets 20 mpg.  From quick calculations I believe that should get me ~340 miles per tank.  Let's assume some driving on the weekends and say 150 miles per week, I should only be filling up 2 times per month, putting me at $80.  I'm going to be conservative and say $125 for now and monitor to see if I can budget a bit lower.

-Find cheaper cat food for my cat.  Right now he eats the Science minced 5.5 oz cans of wet food which cost ~$1 per can on Amazon ship and save.  Do you guys have any suggestions?  I do NOT want to be dealing with poor quality foods for my cat--he gains weight on any grain-heavy food out there, so no Friskies for him.

-Anything else you guys can suggest?  As I said MsSindy said, I think keeping the budget will be eye-opening and will restrict my spending at the same due to the psychological factor of having to put in each transaction to YNAB.

Again, thanks all for the advice, if you have anymore I will definitely take it!



lifejoy

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #13 on: September 20, 2013, 01:39:38 PM »
A vet friend of mine said that a normal healthy cat will be fine on a 1/4 cup of dry cat food, twice daily. And the dry is good for their teeth because it helps scrape off tartar.

Look at the cat from a perspective of health - the $600/year is paying for all the cuddles and mood boosts you get from having a pet in your life :) There are studies! People with pets get perks. Probably worth it.

And since you're into contemplating sacrifices - if you ate vegetarian one day a week, you'd be saving lots of monies. A vege meal will often be way way cheaper than a meat meal.

Good luck!

starbuck

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #14 on: September 22, 2013, 07:48:46 AM »
-Find cheaper cat food for my cat.  Right now he eats the Science minced 5.5 oz cans of wet food which cost ~$1 per can on Amazon ship and save.  Do you guys have any suggestions?  I do NOT want to be dealing with poor quality foods for my cat--he gains weight on any grain-heavy food out there, so no Friskies for him.

Up until recently I was buying the 13 oz can's of grain-free Felidae on Amazon. $24 for twelve 13 oz cans is slightly better than what you're paying, but it's nothing earth shattering. I've contemplated making his food, but haven't looked into it too much. Our cat is fed primarily wet food so I prefer the large cans. He decided after I ordered the newest case that he didn't want that anymore, so now I'm buying the large cans of Wellness which is, of course, more expensive. Cats, man. Cats. PITA sometimes, but so fluffy and soft!!

I wouldn't sweat the cost of quality cat food. Saves you money in the long run if you're keeping him.

I'd definitely trade your low MPG beater for a high MPG beater. Two years is a long time. And the sooner you do it, the higher your ROI.

chasesfish

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Re: What's next for this 25 year old wannabe moustachian?
« Reply #15 on: September 22, 2013, 08:25:14 AM »
A vet friend of mine said that a normal healthy cat will be fine on a 1/4 cup of dry cat food, twice daily. And the dry is good for their teeth because it helps scrape off tartar.

Look at the cat from a perspective of health - the $600/year is paying for all the cuddles and mood boosts you get from having a pet in your life :) There are studies! People with pets get perks. Probably worth it.

And since you're into contemplating sacrifices - if you ate vegetarian one day a week, you'd be saving lots of monies. A vege meal will often be way way cheaper than a meat meal.

Good luck!

I'm married to a vet and can second that recommendation.  1/4 to 1/3 of a cup of quality dry food is all they need.  It'll also save on veterinary dental care later in life because wet food can cost a cat their teeth (it doesn't scrape plaque off like dry food).  Any of the mass-market brands are good (Purina's top two tiers, IAMS, Royal Canin). 

You can also quickly save $200-$300/mo on food.

You're in a quandary on your living because if you need a new job in Tampa, you probably live real close to where they are.  I wouldn't recommend changing the car either, too many expenses with a new car.