Need some financial help

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.

first things first: CONGRATULATIONS!!!!

now, like some others have said, you need to track your current spending so you can determine how to allocate your income in the future.

every dollar has a name / every dollar has a job. yes, some of those names are "video games", "beer", "race tires", etc. budget does not necessarily equal suffering. in fact, once you're on a budget and seeing progress toward your goals, you will recognize the budget as the most valuable tool in your box.

go to the library, get a copy of dave ramsey's "Financial Peace". his system is an excellent starting point.

pay yourself first. open that 401k now.

when you get done with Financial Peace, get a copy of "The Millionaire Next Door". I forget the names of the authors. it's a very interesting look at the financial habits of people who have built wealth versus people who have built a facade of wealth.

good luck, kid!

Whatever your budget, add a $50 monthly "ah crap" line item. This will pay for the water heater when it explodes, the car tire when it blows, the dental procedure you weren't expecting. You know, the stuff that makes you say "ah crap!"

Budgetting doesn't work. Being frugal does. Saving does.

The only way you can budget is if you are making more money than you need to live, and have a little fun. And in that case saving is the end result.

The only real budgeting I see people doing are designated savings plans such as a 401k, etc., or the aforementioned $60 a paycheck in a savings account.

Investing is another whole story altogether.

If you don't have a car payment, try paying the same amount into a savings account each month. Then, when you do need a car, you'll be better off because a) you are used to not having that money, and b) you can spend what you have saved on the car to keep the payments low.

I have budgeted some money towards fun activities going to movies, small trips and stuff like that as well as some towards my Triumph each month and basically a $100 a month oh crap budget.

JoeyM wrote: If you don't have a car payment, try paying the same amount into a savings account each month. Then, when you do need a car, you'll be better off because a) you are used to not having that money, and b) you can spend what you have saved on the car to keep the payments low.

I am going to be saving towards getting a cheap backup vehicle to the Civic since I am in no hurry to get out of that but I am going to need to some transmission work at some time down the line.

If you get a mortgage or kids, start building a serious emergency fund quickly. Six months of vital expenses is a good start.

^Probably best to do that before he gets either! But good advice.

7) A 401k – Safe Harbor Plan which offers a match of 100% of the first 3% deferred plus 50% on the next 3% deferred. This plan is available after 12 months of employment AND 1000 hours. Effective date is the first of the month after receipt of paperwork and the conditions have been met. Beginning January 1, 2011 employees will be able to defer into the 401k plan – with no company match until the above criteria has been met.

Ok so this is what I get as far as retirement befits for my job. Am I correct in understanding that after working here for 12 months, they will match the 3% of my paycheck I put towards retirement and 50% of the next 3%?

Yep, so I'd put in the 6%, with their match you'll end up 10.5% going in.

Not too shabby!

I always tell folks to do the 401k. Remember, that money is taken out before taxes, so it has a little less impact on your paycheck than you might first think. And if they offer a match, that's free money. It's really important to start early. No replacement for time.

I started in my 20s, most of the time putting in as much as was allowed, and according to some articles I've read, at age 44 I have about twice what the average Boomer has saved for retirement.

And start deferring 10% right now, then let them add their part after you've met the employment terms.

I've just recently come out of divorce and the financial wreck that led up to it (and stuck with me...and her, too).

First I made a realistic budget. On that list is, Food, Mortgage, Gasoline, Insurance, Utilities, Phone, home repair, household goods/auto/haircut/misc/etc, and some other categories.

I've got two checking accounts, a money market account, and a savings account which are easily accessible and linked via online banking on the bank's website.

Paychecks get deposited into the money market account (4 accounts total). At the end of the month (today) I transfer money to the two checking accounts and the savings account. One checking account is nicknamed "Fixed Expenses". These are level payments every month...mortgage, child support, and other "fixed" monthly payments. The other checking account is nicknamed "variable expenses." It catches groceries, utilities, gas, and childcare costs and stuff like that. Anything that isn't exactly the same from month to month.

The savings account is my emergency fund. A set amount goes in there every month.

What is remaining in the Money market account is my "periodic" (not monthly, but stuff you need to be ready for) expense fund. It's also the buffer for when I don't use as much electricity this month as last month...or childcare, etc.

That is all AFTER the retirement and health savings account comes out of the check before I even see it.

Also...I use CASH ONLY for groceries and Gasoline. When I look in my wallet and see $XX to get me to the end of the week, I know exactly how much I can spend and will eat Macaroni and Cheese if that's what it takes...or I'll buy fancy beer if I have the funds.

For me...I have to treat financial success as a project (just like a car project) and over time, it becomes very satisfying to see the positive results.

Clem

ive always followed the rule that all bills and neccasary expenses should be covered by half a months pay. rest goes into savings (note i followed it till 3 years then we got stupid. now we are broke. stick to it tho. we at one point had close to 300k in savings and investments that was when we were 25. so it can be done.

Mr. Macawber: 'Twenty shillings in each week, twenty shillings and sixpence out: misery. Twenty shillings in, nineteen shillings fourpence out: peace.'

In short, don't live beyond your means. Your housing should not cost more than 40% of your take home pay. Everything else will seem easier if you follow that one main rule. It makes no sense to live in a huge fancy house and eat peanut butter and jelly because that is all you can afford.

Oh my dog yes start a 401. Even if you can only put $20 a week in it and there is no employer match. You can roll it into an IRA later if need be, there's other options as well. But start EARLY. My dad used to say 'the most powerful force in the universe is compound interest' and he was right. I was offered a 401 way back when and didn't start it, much to my current chagrin.

'The Millionaire Next Door' that AC mentioned is a very good book, it will open your eyes concerning the difference between the appearance and reality of wealth.

Budgets work! First they get you to look at how you currently spend your money..can be VERY eyeopening.

I started by saving $1.90 per day on my daily DP and Snickers by bringing it from home rather than the vending machine at work. $40 a month was my cable bill and I examined all my purchases for frugality and struck gold.

Ditto on Dave Ramseys Financial Peace stuff!

I've often thought that if I could give advise to myself at age 20 it would be....

Don't smoke.....take better care of my teeth and save a little money every week.
Do a budget well and you will be amazed!

Datsun1500 wrote:

pete240z wrote: 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.

I have heard people in their late 50s say the same...

They have a LOT of catching up to do. Dont rely on your Uncle Sam to pay your retirement. I doubt it will be there when you are of age. I doubt it will be there when I am of age and Im mid 40s.

So right now my budget has me saving about 18% of my money I make between now and the end of the year after taxes. My budget does however include a certain piece of bling for the long suffering lady friend in my life (though when that happens will be highly dependent on our plans for the next couple years) and a backup vehicle/ tow vehicle.

Also a number of people at work have told me they are very generous with their christmas bonuses so in all likelyhood that tow vehicle (aka cheap truck or Elky) will wait until then.

Man, my bling does not require a backup/tow vehicle. I need to re-think my priorities.

18% sounds like a decent amount to save. Good idea to leave some money in there for fun and extras like bling. Another easy way to save is when you get a raise, take half of it and put into savings and use the other half to spend on something. It's a painless way to add to your savings over time. Sounds like you are on the right track to me.

So I think I am going to start deferring the 6% now and that leaves around 12% of my budget left with nothing particular assigned to it. Do I just stick that 12% in savings?

I was told the maximum that you can put in a 401k is $3000 a year. Any truth to that. And if that is true is that including the contribution from the employer?

I don't believe that is true. The maximum amount you can put in an IRA is $5000 per year per individual, but IRA != 401k. But I have 15% of my salary put into my company's 401k, plus employer matching, and that's more than $3000 per year.

93EXCivic wrote: I was told the maximum that you can put in a 401k is $3000 a year. Any truth to that. And if that is true is that including the contribution from the employer?

no, that's not even close. i believe the annual 401k max for an individual is $15,500 for 2011. google that E36 M3, yo.

roth limit is $5,000.

Yeah I did after I asked because I use logic like that. I saw slightly different numbers though. $16.5 for 401k and $3 for Roth