I've been thinking a lot recently about my personal finances. Really I'm just trying to figure out how I may compare to other people who were in a similar situation at one point. Situation:

I'm 28, single, currently renting. I have 30k in saving, 11k in 401k, and employee stock.
I have 20k left in student loans (I know that is still a lot but I've actually paid off 68k in student loans)

Obviously, there are a ton of variables that can change(for better or worse) in the future that impact personal finances. But, how does my current situation sound? Do these numbers sound worrisome?

Where do you want to be?

edit: Do these numbers sound worrisome? I think you even asking this answers your question. The question is only what to do about it.

You can't compare to others. Everyone comes out school with different amounts of debt, everyone has different thresholds of standards of living, etc.

You have a 401k, that's a helluva good start. Keep contributing, pay off debt, then contribute more. As you get raises, try not to automatically up your standard of living. Try to save more. If you get $100 gross a week raise, save $50, then spend the remaining $25-30. If you're paid weekly or biweekly, set your budget to 4/2 pay checks a month. A 4 months a year you get that extra pay check, use the whole thing to pay off debt or save.

If you're debt is ~7% or higher, I'd pay it off now.

62strat said:

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If you're paid weekly or biweekly, set your budget to 4/2 pay checks a month. A 4 months a year you get that extra pay check, use the whole thing to pay off debt or save.

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Maybe the Tom Collins(s) tonight is blurring things up, but can you elaborate? TIA

Casey TableTennis said:

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62strat said:

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If you're paid weekly or biweekly, set your budget to 4/2 pay checks a month. A 4 months a year you get that extra pay check, use the whole thing to pay off debt or save.

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Maybe the Tom Collins(s) tonight is blurring things up, but can you elaborate? TIA

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Four months a year, you will get three pay checks in a month if you're paid bi-weekly instead of two. Set your budget based on only receiving two regardless so that the four extra checks a year can be used for debt service or retirement contributions.

Take maximum advantage of your single years to sock away some savings before 'life' expenses start to eat away at your budget. Yes, this is a conflict of interest as you also likely want to enjoy life now, to include having nice vehicles and traveling, but realize that how much you can save early in your career is far more significant to future net worth than saving later on in life. Make it a goal to max out your 401(k) and pay down that debt.

Agree with CS78 that comparing numbers with peers is not a healthy exercise. I'm a CFP in my mid 30's and take pride in what I have saved, but every day see clients my same age that have much more or much less than myself for various reasons (i.e. received an inheritance, doctors who just got through residency etc.). What really matters is your goals and how you plan to achieve them. Controlling expenses plays a huge role towards this end, as human nature is to allow our spending (and lifestyle) to increase as income goes up.

Personally, at 28 I was recently married and both my wife and I were debt free thankfully (due to military scholarships) with about six figures saved. In a way getting married a little later and having kids relatively late (age 34) allowed us to save a very healthy amount of our income (i.e. 40-50% before kids, now closer to 30%).

Not sure if anyone else has mentioned it, but spend some time exploring bogleheads.org and the wiki there.

Sooner Born said:

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The Wonderer said:

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Casey TableTennis said:

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62strat said:

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If you're paid weekly or biweekly, set your budget to 4/2 pay checks a month. A 4 months a year you get that extra pay check, use the whole thing to pay off debt or save.

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Maybe the Tom Collins(s) tonight is blurring things up, but can you elaborate? TIA

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Four months a year, you will get three pay checks in a month if you're paid bi-weekly instead of two. Set your budget based on only receiving two regardless so that the four extra checks a year can be used for debt service or retirement contributions.

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If you're bi-weekly, it's only two months/year where you receive the extra check.

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You're right. Math is hard late at night.

The Wonderer said:

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Sooner Born said:

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The Wonderer said:

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Casey TableTennis said:

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62strat said:

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If you're paid weekly or biweekly, set your budget to 4/2 pay checks a month. A 4 months a year you get that extra pay check, use the whole thing to pay off debt or save.

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Maybe the Tom Collins(s) tonight is blurring things up, but can you elaborate? TIA

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Four months a year, you will get three pay checks in a month if you're paid bi-weekly instead of two. Set your budget based on only receiving two regardless so that the four extra checks a year can be used for debt service or retirement contributions.

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If you're bi-weekly, it's only two months/year where you receive the extra check.

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You're right. Math is hard late at night.

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yes, a weekly payscale you get 4 months a year where you get an extra one; Biweekly payscale it's twice.

Either way, that's what I meant; set your monthly budget based on your biweekly pay (not your yearly divided by 12). This allows those extra paychecks to be purely bonus.

CS78 said:

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One tip I can give. Don't be afraid to save and invest taxable money. Much easier to make a move on investments like real estate and small businesses if you have some taxable money that you can get to quickly. Everybody gets tied up in Roths and 401Ks but forgets about the lifetime of opportunities that will come along in the meantime.

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"Will", or may come along?

Tax deferred and tax-free growth are once in a lifetime opportunities. You can't retroactively fund 16's 401(k) today.

If I wanted to invest in real-estate, I would tap equity on my home. If I wanted to invest in a start-up, I would draw the principal on my Roth. When I retire early, I'll Roth ladder my 401(k). These aren't funds locked away until 59.5.

We do invest in taxable, but only after we've maxed our tax advantaged space. We also VWINX'ed our home down payment in taxable.

bjork said:

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"Will", or may come along?

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Opportunities are there for the taking for everyone. "Luck" comes to those that make it and are in position to do so.

I get the whole tax advantaged thing but personally retirement at 59.5 sounds pretty terrible to me. I've made way more money by being able to move fast and often. Of course there is a learning curve that comes with experience. A lot of it comes down to do you have a business mindset or an employee mindset.

CS78 said:

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bjork said:

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"Will", or may come along?

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I get the whole tax advantaged thing but personally retirement at 59.5 sounds pretty terrible to me.

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Well, now I know you didn't read past the quote.

We fully fund all our tax advantage space. Still plan on retiring at 40-45. Anyone who still thinks you can't access your 401(k) until 59.5 needs to spend 5 minutes with Google.

NoahAg said:

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I'm no expert, but I think you're fine. Just keep plugging away. One piece of advice though: INVEST AND SAVE ALL YOU CAN BEFORE GETTING MARRIED AND HAVING KIDS.

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Kids, for sure. But what does married change?

Honestly, having a partner to share bills (name, a rent/mortgage) with affords you more saving opportunities.

Thank you all so much for the replies, all very insightful. It's an especially helpful reminder to not get caught up comparing myself to others but instead focus on specific personal financial goals. I think my financial history has been compromised of periods or cycles of aggressive saving and then periods of aggressive spending. I'm looking to change that and establish more "moderate" spending/saving habits that can be maintained over a period of time. Thanks again for the replies!

If you aren't budgeting, start budgeting.

You don't have to say exactly but I would be curious what sort of income you have had since you graduated? In my opinion that would help determine what sort of position you are in now.

The only thing I have learned from this thread is to appreciate my wife not spending me dry.

agmag90 said:

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Thank you all so much for the replies, all very insightful. It's an especially helpful reminder to not get caught up comparing myself to others but instead focus on specific personal financial goals. I think my financial history has been compromised of periods or cycles of aggressive saving and then periods of aggressive spending. I'm looking to change that and establish more "moderate" spending/saving habits that can be maintained over a period of time. Thanks again for the replies!

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use mint dot com. I created a bucket in transactions under misc called spending. I track every thing spent and establish a spending goal for the month. A do not exceed target.

You're young enough that where you are in life is still largely influenced by how lucky you were starting out. I wouldn't worry about your absolute numbers in terms of liquid net worth, I'd worry more about your income, your income potential, how fast you are growing your income, and how much you are saving. Think about your potential, and make a plan on how to realize it, and make a plan on how you're going to use it.

Some folks will have had their parents pay for their college, their cars, even their living expenses through college and even beyond. It's hard to compare yourself against those folks if you had to work through college and take out student loans. Don't fall into that comparison trap.

Focus on what you can control. Make sure you are learning good habits regarding money and investing. If you haven't already I would suggest reading blogs like Mr. Money Mustache and frequenting investing websites like Bogleheads. There may be good internet resources for how to better advance in your field or increase your earning potential.

Planning and self discipline will largely determine your future. And don't worry how you compare to others, only worry about if you're meeting your own needs and expectations. Somebody else will always be doing better. Focus on doing well enough for yourself that you can live a good life and feel accomplished.

Ok that's my feel good post for the week. Expect everything else from me on Texags this week to be bitter and mocking

tamutaylor12 said:

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The only thing I have learned from this thread is to appreciate my wife not spending me dry.

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Seems like something you'd pick up on in the early stages of meeting a woman. Some wommenz be spending way too much money.

My woman 'splurges' by getting a starbucks on her way to work a few times a month.

Is she a woman or a "woman"?

62strat said:

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tamutaylor12 said:

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The only thing I have learned from this thread is to appreciate my wife not spending me dry.

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Seems like something you'd pick up on in the early stages of meeting a woman. Some wommenz be spending way too much money.

My woman 'splurges' by getting a starbucks on her way to work a few times a month.

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62strat said:

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tamutaylor12 said:

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The only thing I have learned from this thread is to appreciate my wife not spending me dry.

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Seems like something you'd pick up on in the early stages of meeting a woman. Some wommenz be spending way too much money.

My woman 'splurges' by getting a starbucks on her way to work a few times a month.

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I'm fortunate in that my wife and I have completely separate checking/savings accounts. Our agreement is, I pay the mortgage and nanny, she pays for her car (mine is paid off) daycare and the rest of the bills. We split taxes right down the middle. We put equal amounts in 3 college funds. We put equal amounts into shared retirement and savings. This way there's no fighting about what I bought or what she bought. I have no idea how much money she has in her checking/savings and I don't care.

Ragoo said:

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Throwout said:

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62strat said:

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tamutaylor12 said:

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The only thing I have learned from this thread is to appreciate my wife not spending me dry.

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Seems like something you'd pick up on in the early stages of meeting a woman. Some wommenz be spending way too much money.

My woman 'splurges' by getting a starbucks on her way to work a few times a month.

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I'm fortunate in that my wife and I have completely separate checking/savings accounts. Our agreement is, I pay the mortgage and nanny, she pays for her car (mine is paid off) daycare and the rest of the bills. We split taxes right down the middle. We put equal amounts in 3 college funds. We put equal amounts into shared retirement and savings. This way there's no fighting about what I bought or what she bought. I have no idea how much money she has in her checking/savings and I don't care.

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gross

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This is very much an example of what works for you doesn't mean will work for me. Wife and I are very aligned on finances so having separate accounts never even crossed our minds. I always struggle to see how couples make that work. I could maybe see if you get married late in life but just seems more of two individuals as opposed to a family view. Obviously Throwout this way works for you and that is great and keep it going, not meant to degrade your view of finances.


OP as everyone has said, make a plan and stick to the plan. Give yourself enough to have fun now but with future goals set to secure yourself for retirement.

thaed137 said:

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This is very much an example of what works for you doesn't mean will work for me. Wife and I are very aligned on finances so having separate accounts never even crossed our minds. I always struggle to see how couples make that work. I could maybe see if you get married late in life but just seems more of two individuals as opposed to a family view. Obviously Throwout this way works for you and that is great and keep it going, not meant to degrade your view of finances.


OP as everyone has said, make a plan and stick to the plan. Give yourself enough to have fun now but with future goals set to secure yourself for retirement.

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I couldn't agree more. Much like you, my wife and I are completely aligned on our finances as well. We just choose to keep the personal spending separate. I wouldn't say we got married later in life (she was 27 and I was 32), but we both were successful professionally and felt comfortable keeping our personal monies/spending habits separate. And please don't take my response as feeling attacked. I was just pointing out that there are tons of ways to handling your finances successfully--both as a single income or as a shared income.

I didn't mean to derail this thread either. To the original poster, pat yourself on the back for being 28, having some money saved, managing your debt and thinking about the future. You can't do much better than that. Could you be saving more? Of course, we all could, but you'd be shocked at how many people at 28 don't have any savings at all. The good advice that people have given you here is to keep plugging along and when you have the opportunity to increase your savings, do it.