Looking for advice on my budget and progress so far. Background: I started to take better control of my finances about 6 months ago. I had about $40,000 in consumer debt (student loans, credit cards, etc.) that I paid off completely. I could go into more details about how I had accumulated that much debt (student loans, bad money management, etc etc) but it seems kind of pointless as I have moved on and am not the same person, financially speaking.
I’m looking for any advice you might have. I am open to any suggestions!
Income after taxes and retirement savings: $4,700/month
Recurring monthly expenses. This list is complete, nothing has been left out.
- Rent: $1,495
- Electricity: $87
- Tenant Insurance: $28 (required by my lease)
- Life Insurance: $121 ($85 of which is for whole life, the rest term)
- Critical Illness Insurance: $33
- Car Insurance: $8
- Student loan payment: $96 (Outstanding balance $584 in student loans at 3.50%. I have tried repeatedly over the past 6 months to pay off this small balance in full but the bank does not return my calls. Not the end of the world as the interest I pay on this student loan is tax deductible. Will disappear around the end of this year.)
- XM Radio: $19
- Internet: $50
- Cell phone: $40
- Netflix and Hulu: $13
- Spending allowance: $1,000 (any other expenses, such as food, clothes, gas, haircuts, etc. comes out of a this allowance that I give myself. Any surplus left at the end of month goes to savings rather than carrying forward to next month)
Total: $2,990/month
Savings
- Retirement savings: 18.3% of gross pay (works out to about $1,250/month, this amount is netted out of the income presented above)
- Emergency savings: $1,500/month (Goal: 6 months in living expenses. Once goal reached, the $1,500/month will be allocated to retirement savings, tax sheltered, allowing me to reinvest the ~$500/month tax savings )
- Other savings (planned upcoming expenses such as wedding gifts, Christmas, etc.): $200/month
Lifestyle choices
30 years old, in a relationship, no kids (none in the planning). I walk to work. Car is used only for weekend runs to the grocery store or to visit friends and family who aren’t within walking or transit distance. Car is fully paid off. Health and dental is provided through our employers. I have a 2% cashback credit card that I use for most of my spending.
Assets All investments are in 100% equities, except for the emergency savings which earns 1.1% in a savings account
- Retirement savings 1: $20,600 (cannot touch until age 55)
- Retirement savings 2: $1,600 (taxable if cashed in)
- Retirement savings 3: $12,500 (cannot touch until age 55)
- Emergency savings: $3,300
Debts
- $584 in an outstanding student loan (see above), no other debt.
switch2richnow 