Hi Money Minder,
I’m 23 and just started my first job after college. I bring home about $2952 a month after taxes. I pay $9 every two weeks for vision and dental, which is automatically deducted from my paycheck. Luckily, I’m still on my parents’ health insurance so I don’t have to worry about that expense.
With my first paycheck each month, I put $800 into savings and use the rest for daily expenses like gas and food. Usually, I have around $200-$300 left over for spending, which I just let roll over until the next pay period after paying my car bill.
I do get some mileage reimbursed by my job, but it’s not a lot at this point. However, that will change once I’ve been in my position longer. On average, I earn about $330 a month in mileage reimbursement.
Since I live at home, I don’t have to pay rent. I recently financed a car for $23k and make monthly payments of $830, including an extra $400 towards the principal. My car insurance adds another $213 per month.
I know some people might criticize me for financing a new car, but it was a well-deserved treat after years of relying on public transportation. Plus, the interest rate was lower for a new car compared to a used one, and I needed something reliable for work, especially since I travel out of state frequently.
Aside from my car loan, I also have $24k in student loans. Luckily, I’m in a program at work that will help pay them off within two years as long as I stay in my current position.
Farewell,
Young and Budgeting
Response from THE MONEY MINDER:
Hello There,
Congratulations on starting your first job after college and for being proactive about your finances. It’s great to see that you are already thinking about saving and managing your expenses. Living at home and being under your parents’ health insurance are definitely advantages that can help you focus on building a strong financial foundation.
It’s understandable that you wanted to reward yourself with a new car after years of relying on public transportation. However, it’s essential to ensure that the cost of car ownership fits within your overall financial plan. While a reliable mode of transportation is crucial, it’s also important to consider the long-term implications of high-interest rates and monthly payments on your budget.
Given your current financial situation, focusing on paying off your student loans and car loan should be a priority. Making extra payments towards your loans can help you reduce the interest you’ll pay over time and become debt-free sooner. Additionally, as you mentioned, your job offers a program to help pay off your student loans, which is a fantastic opportunity to take advantage of.
As you progress in your position and start earning more mileage, it’s advisable to consider allocating those additional earnings towards your savings or debt payments. Creating a budget that includes all your expenses, including gas and food, can help you better track your spending and identify areas where you can cut back.
Overall, it’s commendable that you are already thinking about your financial future and taking steps to secure it. Keep up the good work, stay disciplined in your financial decisions, and remember that every small step you take now will pay off in the long run. All the best from THE MONEY MINDER.
