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Started By
Message
Another just starting out thread.... 24 year old
Posted on 6/5/19 at 10:23 am
Posted on 6/5/19 at 10:23 am
I graduated college in December, got a job and bought a new truck when I had a perfectly good older truck. Note is about $500 and pay off is $28,000 currently. I recently found the money board and started thinking about and researching how to set up my financial success. I am a single guy and currently I make about $57,000 a year before taxes. I recently moved and I am collecting $500 a week for living expenses from my company (non-taxed), this will end at the new year. I am renting cheap for $600 dollars a month and plan to stay mobile for work so I am not looking into buying a house anytime soon, but would like to start saving for a down payment. I also have a good chunk in checking/savings of $12,000.
Basically I want to start putting in my 401k, start a roth, boost my savings, and start investing in some stocks as well. I have come up with a few different options.
1. Just enjoy my new truck with the lesson that expensive vehicles are dumb and just pay the minimum monthly note while I save/invest slowly.
2. Attack my car payments aggressively to pay off truck sooner and invest later.
3. Sell my truck and buy an older reliable vehicle with cash to get rid of monthly note and free up cash now. (Truck is worth 38-40k private seller.)
Thanks in advance.
Basically I want to start putting in my 401k, start a roth, boost my savings, and start investing in some stocks as well. I have come up with a few different options.
1. Just enjoy my new truck with the lesson that expensive vehicles are dumb and just pay the minimum monthly note while I save/invest slowly.
2. Attack my car payments aggressively to pay off truck sooner and invest later.
3. Sell my truck and buy an older reliable vehicle with cash to get rid of monthly note and free up cash now. (Truck is worth 38-40k private seller.)
Thanks in advance.
18
Posted on 6/5/19 at 10:29 am to JohnDoe00
quote:
I make about $57,000 a year before taxes
quote:
Truck is worth 38-40k
Yikes. . .
quote:
Sell my truck and buy an older reliable vehicle with cash to get rid of monthly note and free up cash now.
This is what I would suggest. Vehicles don't help build wealth. As much as I would love a nice truck, I drive a four year old car that I bought from a lease turn-in.
At your age, the decisions you make now will have a big impact on your financial life going forward. Start investing NOW as much as you can and don't back off.
Posted on 6/5/19 at 10:33 am to JohnDoe00
nm
This post was edited on 5/21/20 at 2:04 pm
Posted on 6/5/19 at 10:38 am to JohnDoe00
if your job is pretty stable, i would keep the truck and learn the lesson. if you sell now, you take all of the financial hit now. you can easily swing a $500 note given your minimal other expenses. the interest is basically insignificant.
you've got a great start on saving. it's too bad you didn't start a month or so ago when you could still max out your 2018 roth. i would start making monthly contributions of whatever is needed to max it by end of year. if your company has a 401k match, meet that first before roth if you cannot afford both. then excess cash goes to your emergency/house fund. then 401k if there's any room left.
as much as you can, automate these contributions to savings/retirement. you miss it less if it doesn't touch your checking account.
you've got a great start on saving. it's too bad you didn't start a month or so ago when you could still max out your 2018 roth. i would start making monthly contributions of whatever is needed to max it by end of year. if your company has a 401k match, meet that first before roth if you cannot afford both. then excess cash goes to your emergency/house fund. then 401k if there's any room left.
as much as you can, automate these contributions to savings/retirement. you miss it less if it doesn't touch your checking account.
Posted on 6/5/19 at 10:42 am to JohnDoe00
HEALTH SAVINGS ACCOUNT
Posted on 6/5/19 at 10:47 am to JohnDoe00
nm
This post was edited on 5/21/20 at 2:04 pm
Posted on 6/5/19 at 10:55 am to sacrathetic
That flow chart is awesome. I would only move up the HSA but that’s just me.
Posted on 6/5/19 at 11:04 am to sacrathetic
quote:
sacrathetic
Post of the year so far. This workflow answers most of the 'need to get my financial house in order...what should I do' questions.
My only slight push is I might move max HSA up one process flow up given the tax advantages, still have access to use those funds medically, and how it basically functions as a retirement vehicle over the long-term.
Posted on 6/5/19 at 11:07 am to sacrathetic
Flowchart is very helpful I saved it. I really appreciate the responses.
Posted on 6/5/19 at 11:11 am to JohnDoe00
quote:
Basically I want to start putting in my 401k, start a roth, boost my savings, and start investing in some stocks as well. I have come up with a few different options.
1. Just enjoy my new truck with the lesson that expensive vehicles are dumb and just pay the minimum monthly note while I save/invest slowly.
I recommend this. You'll just eat your losses if you sell it. This board is overly conservative on autos...basically a viewpoint of it only takes you A to B and drive the cheapest thing possible it until the wheels fall off.
You've learned the lesson, now just don't repeat it in the future. But also, enjoy yourself since you are young and clearly like having a nice truck.
Posted on 6/5/19 at 11:30 am to lynxcat
quote:
Post of the year so far.
You must have missed my "Sharp elbows. WNH." post on the OT. I'll forgive you.
Posted on 6/5/19 at 1:48 pm to JohnDoe00
Lots of good advice already, but missing a key part: earmark some percentage of your funds as travel/life experience money. Your truck purchase taught you about the fleeting value of things to improve your life, now you can go out and learn its opposite about experiences. Travel will broaden your mind, expose you to many different POVs and ways of living, and also enhance your life in ways you can't yet imagine.
So get out there and start living, rather than just working & saving & dreaming of some magical distant future where you do interesting things. You're only 24 once: go climb a mountain, or learn SCUBA, or whatever it is that intrigues you. Hike to Machu Picchu, or go drink pastis in a cafe in Marseilles. Don't just settle for an easy, cheap cruise....buy a backpack, spend a week bumming around Spain, or go drive a camper van around New Zealand. Your employer probably has PTO, don't just pile it up, use it.
So get out there and start living, rather than just working & saving & dreaming of some magical distant future where you do interesting things. You're only 24 once: go climb a mountain, or learn SCUBA, or whatever it is that intrigues you. Hike to Machu Picchu, or go drink pastis in a cafe in Marseilles. Don't just settle for an easy, cheap cruise....buy a backpack, spend a week bumming around Spain, or go drive a camper van around New Zealand. Your employer probably has PTO, don't just pile it up, use it.
Posted on 6/5/19 at 2:40 pm to JohnDoe00
quote:
1. Just enjoy my new truck with the lesson that expensive vehicles are dumb and just pay the minimum monthly note while I save/invest slowly.
The damage is done and for a single person making 57,000 a year it won't kill you.
Posted on 6/5/19 at 7:00 pm to barry
Get the book The Total Money Makeover by Dave Ramsey. Easy read. Great advice. Get on board early. Nothing like being debt free. Book covers every angle.
Posted on 6/5/19 at 7:06 pm to JohnDoe00
quote:
2. Attack my car payments aggressively to pay off truck sooner and invest later.
Posted on 6/5/19 at 8:00 pm to Popths
quote:That flow chart beats any Dave Ramsey advice.
Get the book The Total Money Makeover by Dave Ramsey. Easy read. Great advice. Get on board early. Nothing like being debt free. Book covers every angle
Posted on 6/5/19 at 8:26 pm to saderade
Dave Ramsey caters to the ignorant. He was destroyed here the other day with some
Stupid arse advice somebody brought up. Wish I could recall what the exact argument was. Regardless Ramsey looked like a moron with his advice on the subject.
Stupid arse advice somebody brought up. Wish I could recall what the exact argument was. Regardless Ramsey looked like a moron with his advice on the subject.
Posted on 6/5/19 at 8:39 pm to JohnDoe00
quote:
JohnDoe00
Screw Dave Ramsey.
Read "I will teach you to be rich" by Ramit Sethi and set yourself on the right path. I highly recommend this book. The second edition came out a few weeks ago and I sent a bunch of them to family and friends. I believe it is the best personal financial planning book out there.
This post was edited on 6/5/19 at 8:56 pm
Posted on 6/5/19 at 8:43 pm to Azazello
Totally agree
Posted on 6/5/19 at 9:12 pm to JohnDoe00
What is the rate on the truck?
I would not have bought the truck but you did. 57k is plenty of money for you as a single guy with little debt, assuming truck note is it.
If the rate on the truck is low, leave it be and take advantage of the Roth and 401k.
I would not have bought the truck but you did. 57k is plenty of money for you as a single guy with little debt, assuming truck note is it.
If the rate on the truck is low, leave it be and take advantage of the Roth and 401k.
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