Need some financial help

Ok so I just became full time as an engineer and I am trying to plan out a budget now as a full time engineer. I am trying to figure out how to budget. I am looking at the month by month breakdown. I have food, rent, utilities, internet, gas, cell phone and car maintenance. I am trying to figure out if I forgot anything. I also have one time expenses like car insurance (well once this year) and car registration (switching from KY to AL). Then I have $7k of student debt to pay off. So any advice of where to go would help.

are you looking for a technical tool, like mint?

or are you looking for guidance?

madmallard wrote: are you looking for a technical tool, like mint? or are you looking for guidance?

Both. It would be great if I had something just to record spending and keeping track of my spending.

Edit: I meant something basically like a spreadsheet on my iPHone.

93EXCivic wrote:

madmallard wrote: are you looking for a technical tool, like mint? or are you looking for guidance?

Both. It would be great if I had something just to record spending and keeping track of my spending.

I use Mint. I wish it had the ability to budget future months, though.

You've got a good start with the big stuff on your budget, but you probably want to monitor what you spend money on every day for a couple of months. Get a receipt for everything you buy (even coffee at Starbucks, or a drinks at the bar - or just record it yourself so you don't make the bartender hate you) and when you get home enter all of the receipts into a computer program like Money or Mint. They'll let you organize all of your purchases by category or specific store. After a couple of months you'll have a much better idea of where your money is going, how much you've got to play with etc. It takes a lot of work, but you'll be surprised how much you blow on things you never even think about.

Bob

First- open a second bank account. Deposit $50 per cheque into that account. Forget that it is there until you want to buy a house or retire.

Streetwiseguy wrote: First- open a second bank account. Deposit $50 per cheque into that account. Forget that it is there until you want to buy a house or retire.

Considering interest rates in even savings accounts these days, not a great ROI.

Does your employer have a 401k plan with a match? If they do ,put in whatever amount they'll match as a minimum. Maximize it,if you can and then do the budgeting on the remaining income. Pay yourself first. Read "The Wealthy Barber".My wife has written down every expense we've had for years (like Schmidlap advised)and it's really useful info. It came into real use when I was trying to figure out if I could afford to retire. My financial adviser had a field day with the info my wife had. It makes all your planning so much easier if you really know where it all goes, even when you're just starting out.

First, if they match retirement to some degree at the company, DO THAT FIRST. It's free money. Second, I like to turn 1 time payments into monthly payments, then utilize one of the fancy online banking accounts to specifically divide the 1 time payments into a separate category. Something like PNC virtual wallet allows you to create any amount of different savings categories that exist within your checking account, but will shield it from appearing as available balance when you hit ATM's and such.

Definitely put money in 401K or other company-based SIP (savings and investment plan) if they match contributions. Put away at least 10% of your income (15% if you can possibly manage it). If your company has a Credit Union, see if they offer payroll deduction savings. The key is to get the money safely tucked away before you even see it. I guarantee if you can have that taken out before they cut your check, you'll adjust to living within the net amount and you will never miss it.

93EXCivic wrote: Ok so I just became full time as an engineer and I am trying to plan out a budget now as a full time engineer. I am trying to figure out how to budget. I am looking at the month by month breakdown. I have food, rent, utilities, internet, gas, cell phone and car maintenance. I am trying to figure out if I forgot anything. I also have one time expenses like car insurance (well once this year) and car registration (switching from KY to AL). Then I have $7k of student debt to pay off. So any advice of where to go would help.

Emergency fund, retirement fund, health care.

Budget for less than you make, then squirrel the extra away. You won't regret it.

Duke wrote: Definitely put money in 401K or other company-based SIP (savings and investment plan) if they match contributions. Put away at least 10% of your income (15% if you can possibly manage it).

YES!! Not putting away the maximum they match is literally giving a pass to free money.

JoeyM wrote:

Duke wrote: Definitely put money in 401K or other company-based SIP (savings and investment plan) if they match contributions. Put away at least 10% of your income (15% if you can possibly manage it).

YES!! Not putting away the maximum they match is literally giving a pass to free money.

My new employer has a 401K match program. My old employer didn't even pay for office supplies or trash bags.

JoeyM wrote:

Duke wrote: Definitely put money in 401K or other company-based SIP (savings and investment plan) if they match contributions. Put away at least 10% of your income (15% if you can possibly manage it).

YES!! Not putting away the maximum they match is literally giving a pass to free money.

Depends a bit on the vesting schedule and the stability of the job. My previous company had a 4 year vesting schedule, so when I left after a year and a half I tool a big hit (on paper) since most of my matching funds went back to the company. My current job (which I plan on giving my 2 weeks notice this week) has an even longer vesting schedule. In both cases I contributed enough to get the maximum match even knowing the chances of being with them for the full time to be vested was slim to none. I guess my advice would be to contribute enough to get the full matching contributions, but unless you are 100% vested from the get go, try to ignore the 401k statements because a lot of the money in there will not really be yours.

Currently I have budgeted using my current food and gas budget. Shouldn't I pay back my student loan as quick as possible then begin retirement saving? I really hate owning any money and I just want to get rid of that.

I'll check out mint. I just use an old fashioned spreadsheet to keep track of things. The other thing we've done for 6 or 7 years now is to buy everything with our Discover card, rack up the cash back, and pay the account in full every month. They will generate a break down of expenses in various categories for you. If this method seems like it will lead to you being in debt and carrying a balance on the credit card then I would not recommend it. Works for us though.

Time is the biggest key when it comes to retirement investing. It's the power of compounding interest. I would contribute to the 401k and get the match and not really hurry to get the student loans paid off. $7k is not really all that much in the big scheme of things. The best thing would depend on the interest rate of the loan and the rate of return of the 401k investment.

Osterkraut wrote:

Streetwiseguy wrote: First- open a second bank account. Deposit $50 per cheque into that account. Forget that it is there until you want to buy a house or retire.

Considering interest rates in even savings accounts these days, not a great ROI.

Doesn't really matter for an emergency fund, though and possible a house downpayment as you'd most likely want those liquid and with capital preservation.

Student loans are good debt, interest is tax deductible, so save for retirement first, then pay your student loans at whatever rate you are doing it now.

T.J. wrote: Time is the biggest key when it comes to retirement investing. It's the power of compounding interest. I would contribute to the 401k and get the match and not really hurry to get the student loans paid off. $7k is not really all that much in the big scheme of things.

This. Get in the habit early of putting the money away in savings, and pay the student loan on the regular schedule unless it has a usurious interest rate. Making on-time term payments on a loan like that will do wonders for your credit score; paying it off early won't do much for you (other than save you a few bucks in interest.

Ditto on the cash back credit card, too. It's like a 1% discount on everything. Not much, but it adds up to a little bonus - but only if you never carry a balance month to month.

Ok so the term of my loan comes up in February. I should have a decent amount saved by the end of the year depending on how good I am at budgeting. The loan isn't really a student loan part of it did go towards living and college and part went towards a replacement car. Should I put half of that towards paying off loan when that comes due in February and half towards retirement?

Also is there basically a spreadsheet app for the iPhone? I want somewhere were I can put I spent $x for food or gas or etc.

I was surprised to hear a 40 year old coworker comment that he should start looking into putting money away into a 401K and get started on the retirement savings thing. He hasn't started yet.

Young and in your 20's is a great time to start saving.

We had good luck getting through our lean years with YNAB. They have 4 basic premises: Live off the the money you made last month.
Assign every dollar a job.
Save for a rainy day. Failure is not the end of the world.

$60 up front is a little spendy but they do let you try it for a week free.

http://www.youneedabudget.com/

T.J. wrote: Time is the biggest key when it comes to retirement investing. It's the power of compounding interest. I would contribute to the 401k and get the match and not really hurry to get the student loans paid off. $7k is not really all that much in the big scheme of things. The best thing would depend on the interest rate of the loan and the rate of return of the 401k investment.

This, I've still got a decent chunk of student loans, but I was able to consolidate just as I graduated and have a 2% interest rate. I've still got 10+ years to go, and last year I only paid $375 in interest.

Like the others have said, start saving now, so you don't get used to spending that extra money.

I'd do the match on the 401k (say it's 4% like at my new job), then put more in an after-tax contribution like a Roth IRA, then put some in savings.

In a couple more years once all my debt besides the mortgage is paid off my goal is: 5% 401k at company (so I'll be getting 9%) 10% Roth IRA 5% in savings