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Started By
Message
How is my financial state at 26? Thanks for the input.
Posted on 2/14/14 at 2:28 pm
Posted on 2/14/14 at 2:28 pm
Hello,
So I am wanting to know what the Money Rant thinks of my current financial state. I want to get a feel for where I stand at this point in my life. I'm 26, single and my salary is 51K. Thank you for all the input. Much appreciated!
-No credit card debt at all. I pay it off monthly.
-$219 a month in student loan payments
-$293 car payment
-Typical cell phone, cable, car ins, elec. bills
-The current balance in my 401K is $12,151. I just increased my contribution to 9% and my employer matches 5% and I started my contribution exactly two years ago.
-Apartment Rent is $850 (includes water bill)
-My savings account balance is currently $5,800.
How do I look?
Thanks.
So I am wanting to know what the Money Rant thinks of my current financial state. I want to get a feel for where I stand at this point in my life. I'm 26, single and my salary is 51K. Thank you for all the input. Much appreciated!
-No credit card debt at all. I pay it off monthly.
-$219 a month in student loan payments
-$293 car payment
-Typical cell phone, cable, car ins, elec. bills
-The current balance in my 401K is $12,151. I just increased my contribution to 9% and my employer matches 5% and I started my contribution exactly two years ago.
-Apartment Rent is $850 (includes water bill)
-My savings account balance is currently $5,800.
How do I look?
Thanks.
13
Posted on 2/14/14 at 2:32 pm to Herb484
You could be saving more. Get your savings account up to 10 large.
Posted on 2/14/14 at 2:34 pm to Herb484
Start a Roth IRA & contribute regularly.
Keep slaving away, paying down those debts. Doesn't seem like you have too much excess debt.
See if you can contribute a minimum 15% of your own money to retirement savings accounts (whether all 401k or the 401k/IRA blend).
Relative to other young bucks like us who didn't get daddy's trust fund money, I'd say you are a B+.
Keep slaving away, paying down those debts. Doesn't seem like you have too much excess debt.
See if you can contribute a minimum 15% of your own money to retirement savings accounts (whether all 401k or the 401k/IRA blend).
Relative to other young bucks like us who didn't get daddy's trust fund money, I'd say you are a B+.
This post was edited on 2/14/14 at 2:36 pm
Posted on 2/14/14 at 2:35 pm to Broke
Yeah, I'm working on saving more. Thank you for the input.
Posted on 2/14/14 at 2:40 pm to Cmlsu5618
@Cmlsu5618- yup, I too had to pay for my college education. No hard feelings to the ones who were able to have theirs paid for. I have the balance down to 12500Kish thank goodness. Thank you for the input.
Posted on 2/14/14 at 2:41 pm to Herb484
Yeah, what they said sounds like solid advice. You're much better off than 26 yr old me was doing. My 26 yr old self wasn't near as smart. 
Posted on 2/14/14 at 2:47 pm to Herb484
work towards purchasing a house before 30
Posted on 2/14/14 at 2:50 pm to LSUregit
Thanks!
@LSUregit; working on that. haha
@LSUregit; working on that. haha
Posted on 2/14/14 at 2:53 pm to Herb484
You needed to start contributing to a ROTH IRA yesterday...get on it!
Posted on 2/14/14 at 2:55 pm to Herb484
I would stop contributing the extra 4% on your 401k and first increase your emergency fund to at least $10,000 then pay your car off. After those are covered, I would contribute the $5500 a year. If you can do that, then I'd go back to the 401k.
I'm no expert, just my opinion.
I'm no expert, just my opinion.
Posted on 2/14/14 at 3:11 pm to LSUregit
quote:
work towards purchasing a house before 30
While I agree with this, just my two cents. Hold off as long as you can until you get married. You may meet someone who has their own house, likes their house better and would rather live in it, and you are stuck with a new house and no equity. Ask me how I know.
If you don't see yourself getting married soon, go for it. Solid advice!
This post was edited on 2/14/14 at 3:12 pm
Posted on 2/14/14 at 3:17 pm to CQQ
It's good to be dumping into retirement accounts like you suggest but that leaves him less liquid.
Not sure if OP listed his city, but rental properties are an excellent way to increase your income.
Time in the market is very important but so are the advantages of homeownership.
Not sure if OP listed his city, but rental properties are an excellent way to increase your income.
Time in the market is very important but so are the advantages of homeownership.
Posted on 2/14/14 at 3:21 pm to OnTheBrink
quote:
While I agree with this, just my two cents. Hold off as long as you can until you get married. You may meet someone who has their own house, likes their house better and would rather live in it, and you are stuck with a new house and no equity. Ask me how I know.
If the OP's prospects for moving to a different town are likely I'd hold off the house buying. But if he plans on staying in the area I wouldn't wait for a spouse. I'd buy a house to get rid of rent and start building equity.
My experience is the opposite of yours. I was single with a nice house. My girlfriend lived in a POS bungalow. We've been married 18 years now.
Posted on 2/14/14 at 3:23 pm to Herb484
Compared to the typical, single 26 year old, you're probably doing way above average, maybe even EXCELLENT!
Like Broke said, you probably need to work towards getting your emergency liquid savings up a bit, to at least 6 months of your after-tax income.
Other than that, keep on, keeping on.
Like Broke said, you probably need to work towards getting your emergency liquid savings up a bit, to at least 6 months of your after-tax income.
Other than that, keep on, keeping on.
Posted on 2/14/14 at 3:26 pm to Zach
quote:
I'd buy a house to get rid of rent and start building equity.
While I agree, just wanted to let the OP know of some things to keep an eye on. If he is dating someone now, get her advice on the place, seeing as it could become hers one day.
quote:
My experience is the opposite of yours.
And it isn't that my experience is bad, we both had starter homes and have since moved to a larger house. Been married 6 years now and doing better than ever!
Posted on 2/14/14 at 3:31 pm to OnTheBrink
quote:
And it isn't that my experience is bad, we both had starter homes and have since moved to a larger house. Been married 6 years now and doing better than ever!
Glad to hear it. Hope you got your wife something nice for V day. I was going to listen to my headphone radio while washing my wife's car today. But the batteries went out and amazingly we were out of AAA batteries. For the 4th time this year someone didn't write down 'new batteries' on the shopping list while using the last one.
So, when she wakes up she's gonna get a good spanking for V day.
Posted on 2/14/14 at 3:35 pm to LSUregit
Posted on 2/14/14 at 3:47 pm to Cmlsu5618
That article is hard to take serious. The author(looks like he's 28) says he's never owned a home because a few studies feel that home ownership leads to unemployment?
He then goes on to say how on the micro scale things aren't always that way.
Well no shite.
Like any investment, you need to do your homework. The OP appears to be diligent and interested in his financial future. I think the positives of home ownership are worth exploring. Especially with a look at multi-unit rentals.
quote:
Now, owning a home makes sense for a lot of people. But to me, the study has two obvious takeaways. One is that while many of us focus relentlessly on the costs of renting -- you're throwing your money down the toilet! -- the costs of owning a home can be far greater. Worse, those costs are largely hidden, since it's hard to calculate the price of not being able to easily move for a new job.
Two, there are hidden costs to subsidizing home ownership. The highly popular mortgage interest deduction is one of the largest tax deductions in existence. The FHA is now a major player in the mortgage market. Both seek to promote home ownership without much thought about the knock-on costs, like lower job mobility.
He then goes on to say how on the micro scale things aren't always that way.
Well no shite.
Like any investment, you need to do your homework. The OP appears to be diligent and interested in his financial future. I think the positives of home ownership are worth exploring. Especially with a look at multi-unit rentals.
Posted on 2/14/14 at 3:57 pm to Cmlsu5618
I've owned 3 homes. Each time I made a lot of money in the sale. Renting is fine if you want to stay mobile. But if you know you're gonna stay in the same town forever, it's stupid to rent.
Posted on 2/14/14 at 4:05 pm to Herb484
Thank you for all the advice/input everyone! The more I can learn the better.
Also, to answer one of the questions, my current city is Dallas.
Also, to answer one of the questions, my current city is Dallas.
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