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Saidin3693
New Poster
Cash: $ 0.45
Posts: 2
Joined: 03 Jan 2014
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| Personal Finance Question |
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Hey everyone,
I'm having some difficulties figuring out if my finances are in order. I just got out of the Army where I was making 30k a year and now I'm making 90k. Here is the breakdown of my income and my bills... Would you guys mind letting me know if I'm making mistakes somewhere ?
New Job:
90k a year before taxes
25% added in addition to salary into IRA, no matching required.
$4000 a year electronics fund. Handed back tax free at the end of the year.
I also receive $450 a month from the VA from Iraq injuries
I make roughly $5200 a month that hits my pockets, not including VA
Bills:
Mortgage: $1815 -- 315k home @ 4% interest, VA Loan
Car: $300
Water/Electricity: $300
Insurance: 150
Cellphone/Cable : $275
Healthcare: No idea yet. Who knows what they'll charge for my wife and I at 22 years old.
My main concern is, my wife and I will be needing new cars soon and I'm not sure I can afford new ones. I haven't bought the home yet, as it is currently under contract until Feb 13th. I'm living rent free right now with relatives.
Edit- I also have about $30k in cash. Some will be going towards furnishing our new home.
I owe 10k on my car and I have no credit cards. Only debit. Credit score is at 680 (no late payments, just lack of a history)
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Fri Jan 03, 2014 2:40 am |
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Saidin3693
New Poster
Cash: $ 0.45
Posts: 2
Joined: 03 Jan 2014
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Hey thank you for the response. I'll definitely be buying 2-3 year old cars, I understand buying brand new is costly. I will also be driving 30k miles a year more than likely. My current car is a 6.0L V8 Pontiac GTO that gets 17 highway if I'm lucky with premium gas. My wifes car is a 2000 with 90k miles that is lucky to still be running. We were looking at Dodge Darts and a Chevy Colorado/Dodge Tacoma for myself. Maryland gets some crappy weather at times and I have to cross 4 bridges and travel backroads to get to work.
As for investing, do you all believe the 22.5k a year in the Vanguard IRA I have will be sufficient for investments ? I'm 22 years old.
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Fri Jan 03, 2014 6:20 pm |
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littleroc02us
Moderator
Cash: $ 384.35
Posts: 1891
Joined: 09 Feb 2009
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Your doing fine at age 22. I'm a former military guy myself from the 90's. Way old right.  In my years of service I always saw the guys wasting their money on vehicles. Don't do it. Save up and pay cash for cars around 10k. You can get a nice car with low mileage. My wife and I haven't had a car payment since 2001 and it was the dumbest financial decision I ever made was to spend $500 a month on a stupid truck. Just think how much money I'd made in investments if I would have not thrown that money out the window. Good luck and be smart financially.
Risk comes from not knowing what you're doing. (Warren Buffet)
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Fri Jan 03, 2014 6:55 pm |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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lol - when I was your age I had a new 1964 GTO. (It broke a lot).
Car selection is a big factor - in general modern cars provide 200,000 miles of trouble free service. So I'm guessing that your wife's car w/ only 90,000 miles has problems?
As for the GM/Dodge mini-trucks, be sure to read the reports first, both are pretty low on the lists. Take a look at the Japanese versions. way better reliability/quality. Or a Subaru AWD SUV if you're in it for 30,000 miles a yr and driving in rough weather.
Depending on what you invest in, that $22.5/yr from age 23 forward will be great. At 11%/yr it will be $5,000,000 when you are age 53. At 5.5%/yr it will be $1,700,000. As you can see, your investment selection is important, by doubling that 5.5% the final answer more than doubles.
The rule is that "risk and return are directly proportional". Most of us have about 30 years of wealth-building, then we move into wealth-preservation. So you invest in higer risk items (11%) for the first 30 yrs, then switch to low risk items to preserve your wealth.
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Fri Jan 03, 2014 7:01 pm |
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Radix3d
Preferred Member
Cash: $ 21.60
Posts: 105
Joined: 20 Mar 2013
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Damn, where you working to have $90K a year starting out? You get some kind of specialized training in the military?
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Sat Jan 04, 2014 5:12 am |
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CjSantana
New Member
Cash: $ 1.00
Posts: 5
Joined: 04 Jan 2014
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So, with a $90 income, $30K in cash (about to become $20K), the other numbers look "good"? How much should be going towards savings in the future? Should he be doing any kind of investing in adition to his IRA (which sounds like it's tied to work).
$300/mnth isn't too much for a car?
$1815 is "ok" for a mortgage? Does/should that include home insurance & property taxes?
$150 Insurance, is that auto, home, life? Is that $150/mnth? per Qtr?
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Sun Jan 05, 2014 9:53 pm |
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