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Graduating College - What do I spend my money on?

Posted on 4/12/22 at 5:42 pm
Posted by ElDiablo
America
Member since May 2016
7 posts
Posted on 4/12/22 at 5:42 pm
Graduating school this coming May. Had a scholarship, so no student loans or debt. Have a job that is paying me enough to make me not eligible for a Roth IRA. Moving to a large southern city that is decently expensive but nothing like the costals. How do I budget and what do I spend money on? I really have no idea.
Posted by tigerbacon
Arkansas
Member since Aug 2010
4483 posts
Posted on 4/12/22 at 5:57 pm to
Keep same budget you had in college and save for a large down payment on property
Posted by deltafarmer
Member since Dec 2019
906 posts
Posted on 4/12/22 at 6:02 pm to
Buy stock. This Tigerdroppings money board has generated a 60% return for me in 3-4 months this year. This is a good place to start. Open an account online and trade on your own. Brokers will steer you into the things most profitable to them.
This post was edited on 4/12/22 at 6:05 pm
Posted by Dale Gribble
Member since Aug 2014
295 posts
Posted on 4/12/22 at 6:06 pm to
Very impressive if you are starting a job out of college that income limits you out of a Roth IRA. I would follow these steps:

1. 401K (both traditional and Roth contributions in your case) to max employer match
2. 3 months living expenses in savings
3. Max out HSA contributions if enrolled in eligible health insurance plan
4. One year living expenses in savings
5. $10K in I bonds per year
6. 15% of your income (regardless of employer match) into 401K
7. Brokerage account invested in VTI or similar for the rest.

Assuming you are in your early 20s, I would try to participate in every trip you can (sporting events, concerts, hunting/fishing, etc) with your friends before you get too old. Before you know it, everyone “grows up” and it gets tougher and tougher to get the gang back together
Posted by Ric Flair
Charlotte
Member since Oct 2005
13868 posts
Posted on 4/12/22 at 6:26 pm to
Have fun.

Don’t listen to the investor gurus. Max 401k and eat pussy.
Posted by BottomlandBrew
Member since Aug 2010
29241 posts
Posted on 4/12/22 at 6:33 pm to
My advice is a little different. Yeah, listen to smart people in this thread and put money away for rainy days, property down-payments, retirement, and all that other fun stuff. I see advice from time to time where people say you need to live like a pauper while you squirrel away money, and that's okay if youre that type of person, but you also need to spend money on yourself. Have fun. You're young, dumb, and full of you know what. Take care of your shite, but make sure to enjoy life. Plan for tomorrow, but also realize tomorrow isn't a given.
Posted by LSUShock
Kansas
Member since Jun 2014
5546 posts
Posted on 4/12/22 at 6:37 pm to
Good stuff!

quote:

Had a scholarship, so no student loans or debt.


This alone puts you ahead of the vast majority of your peers.

quote:

Have a job that is paying me enough to make me not eligible for a Roth IRA


This makes you a complete outlier. Well done.

Some good advice already presented. Max out all of your avenues. Definitely travel and spend time doing shite you want. Most people have the time and not the money. You will have a mix of both.

May not pertain, but if so, take risks on something. If you're entrepreneurial, you will never be in a better place to slum it to make it. That may not be your thing, but this gets way harder with a family. At about the 2 year window career wise, a lot of recent grads get burnt out from that first job, that may be a good time to start too.

Save up for a house. If you can, find some buddies to chip in and pay the mortgage. My biggest regret is not doing this. Took my first job out of college in my hometown. Was dead set on moving and passed on a starter home for $110k. Could have lived in it for 2 years and rented to buddies when I eventually moved. I ended up moving back to my hometown 5 years after graduation and that house is worth $200k. Would have been good equity to get into a new place with a young family or to make work with a young family.

This piece is random, but I have been consigning 5th wheels and camper trailers for older people lately. Amazed at some of the quality campers in the market for <$50k. I lived in overpriced apartment and rented a duplex out of college. If I did it over again, I'd buy a legit camper for $30k, live in that thing, and invest every dollar I made.

This post was edited on 4/12/22 at 6:39 pm
Posted by JohnnyKilroy
Cajun Navy Vice Admiral
Member since Oct 2012
40258 posts
Posted on 4/12/22 at 7:00 pm to
quote:

My advice is a little different. Yeah, listen to smart people in this thread and put money away for rainy days, property down-payments, retirement, and all that other fun stuff. I see advice from time to time where people say you need to live like a pauper while you squirrel away money, and that's okay if youre that type of person, but you also need to spend money on yourself. Have fun. You're young, dumb, and full of you know what. Take care of your shite, but make sure to enjoy life. Plan for tomorrow, but also realize tomorrow isn't a given.



All of this is great advice.

It pays to grow up (financially, at least) but you will only be a young, single guy with virtual zero real responsibilities for a relatively short period of time. Make the most of it.



But I will always say, if you take care of your shite on the front end (maxing 401k/IRA/HSA/post tax/etc as soon as you can) your raises and promotions are that much more rewarding knowing your savings are already taken care of. You can basically spend every dime of your pay bump with little guilt or worry.
Posted by KillTheGophers
Member since Jan 2016
6747 posts
Posted on 4/12/22 at 8:04 pm to
Don’t get married
Max 401k
Max Roth
Have 6 months cash stashed
Put 250 a month in VOO non tax deferred account and don’t look at the statement for 30 years
Date many women
Don’t have kids
When you meet the right woman, you will know - treat her like a queen but make sure her spending habits are not outbid wack
Get a rock solid prenup
Posted by oneg8rh8r
Port Ludlow, WA
Member since Dec 2003
2934 posts
Posted on 4/13/22 at 1:04 am to
Learn the true definition of asset and liability.

One puts value / money into your pot, one takes it out. Surround yourself with smart, good people and assets and make sure that anybody you bring into your circle is onboard and understands your plan.

Enjoy life while you have good health.

I'm all in for the buy a nice 3 BR home and have 2 buddies move in and pay your mortgage for a while. I just set my daughter up with this program, owned her first home in a country club at 21 and lived all but mortgage free on a home that has risen in value by 200K in 3 yrs.

Posted by Turf Taint
New Orleans
Member since Jun 2021
6010 posts
Posted on 4/13/22 at 1:58 pm to
Lots of good advice here. Rid Flair included.

For investments side of your plan, see Vanguard 3 fund strategy. Simple, effective, and your future self will thank you.

Especially if Ric Flair causes penicillin shortage.
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