Hi Money Minder,
So, I’ve been cruising along making around 2k a month, doing my thing. But then, I landed this awesome gig as a software engineer pulling in 75k a year (that’s about 4400 bucks a month after all the deductions and 401k jazz).
I’m sticking to my usual 2k budget and using the rest to crush my debts, starting with the gnarliest interest rates. My student loans are in limbo for another 7 months, thanks to graduating in May.
I’m keen to hear your thoughts on my spending game and where I should stash the extra dough. Oh, my GF handles the groceries while I handle the household stuff, in case you’re wondering about the missing food costs. Hit me up with any questions you’ve got – I’m all ears.
Just so you know, my household figures are based on averages, and I own my house outright (yaass, no rent/mortgage!). Oh, and yeah, I’m 36, if that info helps you crack the retirement planning code.
Let me know what you think!
Catch you later,
Finances Prodigy
Response from THE MONEY MINDER:
Hello There,
Congratulations on landing your new role as a full-time software engineer! It’s great that you’re looking to make the most out of this opportunity by being proactive with your finances. It’s impressive that you’ve calculated and planned your budget so meticulously. Living below your means and allocating the extra income towards paying off debts is a smart financial move.
Given your plan to pay off debts starting with the highest interest rate first, it sounds like you have a solid strategy in place. It’s important to tackle high-interest debt first as it can potentially save you a significant amount of money in the long run. Since your student loans aren’t due for payments for another 7 months, you can use this time to focus on paying off other high-interest debts while also setting aside funds for when those payments kick in.
In terms of where to allocate your remaining funds, continue focusing on debt repayment while also building up your emergency savings fund. Having an emergency fund equivalent to 3-6 months’ worth of expenses can provide you with financial security and peace of mind in case unexpected expenses arise.
As you mentioned being 36, it’s essential to also start thinking about retirement planning. Consider maximizing your contributions to your 401k and explore other retirement savings options like a Roth IRA. Starting to save for retirement early can significantly benefit you in the future.
Overall, it seems like you have a solid plan in place. Keep monitoring your expenses, adjusting your budget as needed, and staying on track with your debt repayment and savings goals. If you have any further questions or need additional guidance, don’t hesitate to ask. Best of luck on your financial journey!
Best Regards,
THE MONEY MINDER
