Overall, how am I doing for 1 year out of college?

**TBH** · 05-05-2013, 04:19 PM

I think you are doing great, but I would really reconsider financing a car. It just seems like a bad habit to get into. You should not buy more car than you can afford to pay cash for. So I'd hang onto the Toyota, and keep reigning in the spending for a little longer until you've saved $8-$10K for a nice used car (I don't think you need the $12-$15K car you were talking about.)

After you've bought a nice-ish used car with cash, then yes, I would relax a little, move to a nicer apartment, keep maxing your Roth and funding your 401k enough to get a match. I would also probably try to keep a steady trickle of money going into your EF/cash accounts, but you can afford to slow down and save a little less and have a little more fun so you don't burn out on saving.

**snafu** · 05-05-2013, 09:29 PM

Kudos for thinking through financial choices. I understand your desire for a newer car and suggest that you negotiate your price so that you are not paying for it for more than 3 years. I'd counsel remaining in the current rental until you've made a few car payments to avoid being financially pinched by having two new major out-goes bashing into each other. If you and GF decide that apartment location is the more important, set aside funds for possible car repairs

I'm guessing you are contributing to get the full 401K match. What is your specific allocation for those sums?

**cougs4bcs** · 05-05-2013, 10:49 PM

Originally posted by snafu View Post

Kudos for thinking through financial choices. I understand your desire for a newer car and suggest that you negotiate your price so that you are not paying for it for more than 3 years. I'd counsel remaining in the current rental until you've made a few car payments to avoid being financially pinched by having two new major out-goes bashing into each other. If you and GF decide that apartment location is the more important, set aside funds for possible car repairs

I'm guessing you are contributing to get the full 401K match. What is your specific allocation for those sums?

That was what I was mainly worried about as these two things are going to possibly hit at the same time and I've been concerned about that. And I am still (albeit a little slower) contributing to building a bigger emergency fund to reflect the increased potential monthly expenses I may take on.

In regards to the car, my main issue is that the max term I'd go is 42 months and I want to make 100% sure I can easily afford the payments + insurance and repair. But I am still thinking about the exact amount I want to spend, and I will definitely negotiate as hard as I can when the time comes.

The day I was eligible to contribute my gross pay to my 401k I began doing 6% of gross. I figured that I might as well get used to the lowered net income early on, plus I was just excited to start contributing. But I am invested in an "aggressive fund." Essentially I wanted a growth-type fund that had the lowest expense ratio.

**JoeP** · 05-06-2013, 06:41 AM

Originally posted by cougs4bcs View Post

In regards to the car, my main issue is that the max term I'd go is 42 months and I want to make 100% sure I can easily afford the payments + insurance and repair. But I am still thinking about the exact amount I want to spend, and I will definitely negotiate as hard as I can when the time comes.

Why not starting making "car payments" to yourself, and then when you have evidence that repairs to your Toyota will become frequent and high, use that money plus any residual value to make your next purchase? You can usually set up an automatic payroll deposit so that the money gets deposited every pay period, which helps with discipline.

You're enjoying life now without a car payment. Why would you want to shackle yourself for 3+ years of monthly payments? You're in a good position to take measures to prevent that from happening!

**dunnrobert700** · 05-07-2013, 03:29 PM

You could save more, but frankly "Debt $0" automatically gets you a passing grade at this age.

**bjl584** · 05-08-2013, 05:07 AM

Overall you are doing great.

If you must finance a car, just make sure to not take out a loan that is more than 3 years with a payment that isn't more than 10% of your monthly take home pay.

If you live in a bad neighborhood, then by all means move. If the place is just small, then you may want to try to just deal with it until you can save up for a house.

**Gailete** · 05-10-2013, 05:59 PM

Great income for one so young.

I would skip the moving bit completely. What a hassle to move just for a bit more space and a way to pay out $100-150 more a month. Remember the cost of moving and turning utilities on at new places, new shower curtains, blah, blah, blah. Moving always costs more than you expect. That could be half of a car payment if not more. We were forced by a dead 13 y/o car last year to get a new (used) one and our payments are less than $100 a month, so depending on what you buy for a car by not moving you may not have to pay out anymore extra than just the car payment while a move and a car are both going to increase your monthly budget $200-300/month.

Not sure what kind of job you have, but in our economy I would continue putting more into your EF so you could sustain at least 6 months of layoff. Guess I don't have much faith in our economy any more.

I agree about starting to make car payments to yourself for right now with will give you a nice down payment at least.

As long as you have your savings each month on automatic pilot, and you are handling your regular expenses easily, subtract what is left and know you can spend it with ease and how you like. Not forgetting to save for gifts, possible engagement rings and weddings that might be on the horizon. Wouldn't you feel great if those things can be handled with cash

Overall, how am I doing for 1 year out of college?