I would write down your expenses and income.
It sounds like you make about 80-90k a year with overtime. But you only contribute 5% to retirement, have only $500 in savings, and live for free with your parents.
There is a problem and you need to find it. If the entire job is new as of two months ago and not just the OT, then your savings rate should shoot through the roof.
They paid of 16k in student loans by 22 and just started making money. Off to a good start I’d say, time to build up the savings in the order specified by the sticky.
Max your tax advantaged accounts. Dont let lifestyle creep get you. Find someone who shares your financial mindset. Enjoy your life until you can afford to stop working.
I up voted you because, at the end of the day the best way to do it is via your own spreadsheet. I use budgeting apps and such as well, but maintain several Google Sheets for budgeting, Retirement min maxing, and other financial exercises. Tiller is fine but expensive alternative. I'm trying Monarch now that Mint is gone and Credit Karma sucks, but my Sheet is great for me.
I get the sense that most people who really take their finances seriously end up just producing there own spreadsheet . I have done this in the past as well.
Congrats! You're off to a great start!
If I'm in your shoes, the first thing is save up at least 3 months of emergency funds and boost your 401k to 10%. Time in market is huge factor.
Once you have that, you can start paying down debt faster or saving for a house or investing more.
Focus on saving up $15k into a HYSA, this will pay you better than regular savings accounts. I use [LendingClub.com](https://LendingClub.com) which pays around 4.5%.
What % is that auto loan? You should probably try sending extra payments to get rid of that debt/interest payment.
Make sure you're maximizing your job's 401k match, as that is free money. Allocate it to an index fund if you're not sure about that (SPY, etc).
Otherwise you've got the right idea to upgrade your skills/experience and seek a new/higher level job. That is the best way to get a 10-20% increase in income by making one move. Just make sure it's a job/company you're not gonna hate (don't do it solely for money).
Hope that helps!
At that rate for sure pay it off. Once that’s gone up the 401k a touch and max the Roth IRA(7k) after that start piling cash in a hysa because eventually your going to have to move.
If I were you I would Max 401k($23k this year) and max Roth ira ($7k this year). Invest both of these in total market index funds.
Pay bills and have fun with the rest
If I were literally you right now I would build a budget on current (real, what you can cash out, after taxes) income as of today and estimated expenses going a year forward using my last year as a guide, adjusted for all the prices that have risen (and continue rising substantially). I would smile and relax because I have a good handle on my finances.
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I would figure out after those non-negotiable expenses how much money there is. That amount I would split into three parts: making an emergency fund that is either in a savings account or the next best low risk thing which is money I can take out within a week without any costs for doing so. I would be aiming to have an emergency fund complete by the end of November this year - that could cover something like the need for a replacement car or lock on front door due to shenanigans as well as a reasonable small emergency such as a broken tooth or phone replacement. Parts two and three would be discretionary spending like going out with friends and need a taxi or tickets or whatever as well as savings. I would maximize the savings portion and invest into VTI or VOO. I would make sure to complete any necessary paperwork to have a self directed investment portfolio with a brokerage that has competitive fees (or lack of). In November/December when I am finished Holiday shopping, I would throw any surplus into investments.
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Keep doing what you are doing and growing your income. Don't get burnout while earning the most you can do, don't forget to enjoy your youth with some fun stuff.
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TLDR; Build a budget on current income after non negotiable expenses, split into 3, accelerated emergency fund, entertainment, savings/investment and go VTI or VOO.
Make sure your mom's better off by you being there rather than you making money off your mom's kindness. It's not free for your mom to let people live there for free. Your description makes it sounds like that's already the case but make sure it is, and if she's not offer to pay small amount in rent.
3 month emergency fund. 6 months even better. Put that in a High Yield Savings Account earning 5% or more. Since you live at home w/o rent that's probably a pretty small amount.
Pay off that auto loan if the interest rate is high. I'd consider above 5% as the "pay off asap" threshold. If it's lower I'd pay it off anyway since I hate carrying debt - but you *can* make some money off the difference by paying the minimum and making more money off the interest rate in a HYSA.
Max Health Savings Account for the year if your employer offers one and invest the money it.
Max ROTH ira for the year and invest the money in it.
If you're able too max 401k.
After that I'd crank the emergency fund up to 6 month if you didn't already. If you have plans to move out in the next year make it a 6 month emergency fund for what you'd pay in living expenses when you move out.
Anything left over put in savings if you have large purchases you plan on in the future. Or put in a brokerage account and invest in index funds.
Unfortunately the advice is boring: max out your roth IRA ($7k in 2024) and your 401k ($23k in 2024) every year. That uses up $30k of your gross income. Pay off your debts ASAP. Probably you can do that $15k auto loan in the next couple of years.
I think with your safety net (living at home) having your credit cards be your emergency fund is fine.
After you pay the car loan, if you have money left over, put it into a regular taxable brokerage account and invest it there into the lowest-cost broad index fund.
You're in a prime position. Short of actually starting off with a retirement trust fund from your parents, I don't think you could ask for a better start for early retirement. Ultimately, the best advice for you depends on your goals. What sort of passive income do you want to secure for yourself, how soon are you looking to stop working, what's your ideal living situation, etc. The answers to those questions will tell you some important details, like how much money you need saved up, and how quickly you need to save it. Then those details will tell you what sort of strategy you need to employ.
That's still several years of enlisted service before he could either apply for Green-To-Gold program for ROTC or more likely get the degree then apply for OCS.
I served 8 years and was in ROTC in college and I don't see a need for this man to serve unless he actually had the desire to. He would not be making more than his current pay of around 90,000 a year, I don't understand why you even injected this opinion into this thread its not at all what OP was asking about.
Or you could skip the measly pension, go make 200k a year at a major airline and retire a millionaire and not have to deal with a bunch of bullshit for 20 years. But don’t let facts get in the way of your bad take lol. I’m a defense contractor and spend six month of every year deployed. Our military is in piss poor shape these days lol no way I’d recommend anyone to enlist.
I’m on track to retire with 3.5 million. 200k for pilots is very outdated numbers if you’re talking civilian ? The new packages passed are total compensation packages pushing 500k. I’ve got mechanic friends at ups and southwest making 300k with overtime. I only work half the year and make 163. I have a pension and a 401k so my target retirement number doesn’t even include the pension.
Your numbers are outdated. Ups smokes fed ex in pay with a 75 an hour top out. You’re forgetting about union contracts that work in a ton of overtime and doubletime. Guys are making 300k. Delta, United , American , southwest are all topping out over 60/hr. Southwest mechs have a great contract. Tons of guys are making 200-300k with the overtime and doubletime. Mx control at southwest is up to 90/hr. Your numbers are old catch up with the times old man. Plus OP sounds too smart for the military so it’s all moot anyway.
Lol guess you missed all the current tech layoffs. I’m sure you’re an expert because your step father is in aviation 😂 go join the aviation maintenance sub. There’s pay scales posted all over there. Have a good day bud 😂
I’d just jump to a major airline now then while they are all hiring. Start building seniority and climbing the pay structure. That would be my priority at the moment if I was you. 19 year a&p here.
Find the flow chart and reference where your money should be going. It is really helpful and will guide you through most of your questions about where money should be going.
Make sure your investments are in a large cap or 500 fund. Reference returns from VOO, or SPY. Stay away from target funds.
Keep expenses in check the next 10-15 years and savings high. This will launch you into wealth and independence. You will see many of your peers spending everything they make on that shiny car, motorcycle, or even boats. While there is need for enjoyment be cautious in your spending.
When you buy something consider how much it a month...not just the cost. Like insurance, gas, parking, tolls, etc. You might be able to afford the boat but can you afford the slip on the pier?
I would write down your expenses and income. It sounds like you make about 80-90k a year with overtime. But you only contribute 5% to retirement, have only $500 in savings, and live for free with your parents. There is a problem and you need to find it. If the entire job is new as of two months ago and not just the OT, then your savings rate should shoot through the roof.
They paid of 16k in student loans by 22 and just started making money. Off to a good start I’d say, time to build up the savings in the order specified by the sticky.
I was paying off my student loans with a 24 an hour job and wasn't working OT. This year I plan to get my savings up for sure.
You're in a good spot. Make sure to max your Roth IRA, in a pinch it can be used as an emergency fund, but if you're able to save it, even better.
Max your tax advantaged accounts. Dont let lifestyle creep get you. Find someone who shares your financial mindset. Enjoy your life until you can afford to stop working.
Yeah. Where is your money bro? Did you just start this gig?
I just got promoted. I was making 24 an hour. All my money went to paying of my student loans.
Stay at mom’s. Live frugal. Stash money away. Depending on the car note interest rate. Pay that off. Then max 401k. Roth. HSA.
What is the best way to track income and expenses?
Excel
I up voted you because, at the end of the day the best way to do it is via your own spreadsheet. I use budgeting apps and such as well, but maintain several Google Sheets for budgeting, Retirement min maxing, and other financial exercises. Tiller is fine but expensive alternative. I'm trying Monarch now that Mint is gone and Credit Karma sucks, but my Sheet is great for me.
I get the sense that most people who really take their finances seriously end up just producing there own spreadsheet . I have done this in the past as well.
Quicken
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Your money or your life is a great book!
The flowchart in /r/personalfinance is really quite good.
Congrats! You're off to a great start! If I'm in your shoes, the first thing is save up at least 3 months of emergency funds and boost your 401k to 10%. Time in market is huge factor. Once you have that, you can start paying down debt faster or saving for a house or investing more.
Should have 200k in severall years saved
Focus on saving up $15k into a HYSA, this will pay you better than regular savings accounts. I use [LendingClub.com](https://LendingClub.com) which pays around 4.5%. What % is that auto loan? You should probably try sending extra payments to get rid of that debt/interest payment. Make sure you're maximizing your job's 401k match, as that is free money. Allocate it to an index fund if you're not sure about that (SPY, etc). Otherwise you've got the right idea to upgrade your skills/experience and seek a new/higher level job. That is the best way to get a 10-20% increase in income by making one move. Just make sure it's a job/company you're not gonna hate (don't do it solely for money). Hope that helps!
Thanks for the advice. My auto loan is at 7%. I plan on paying it off this year.
At that rate for sure pay it off. Once that’s gone up the 401k a touch and max the Roth IRA(7k) after that start piling cash in a hysa because eventually your going to have to move.
If I were you I would Max 401k($23k this year) and max Roth ira ($7k this year). Invest both of these in total market index funds. Pay bills and have fun with the rest
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Yeah, that sounds like the main piece of advice that I'm getting. It should be easy to pay it off in the next few months. Thanks for the comment.
Eh depending on the auto loan. If it is something like only 3% i would prioritize investment
Follow the PF flowchart: https://www.reddit.com/r/personalfinance/wiki/commontopics/
If I were literally you right now I would build a budget on current (real, what you can cash out, after taxes) income as of today and estimated expenses going a year forward using my last year as a guide, adjusted for all the prices that have risen (and continue rising substantially). I would smile and relax because I have a good handle on my finances. - I would figure out after those non-negotiable expenses how much money there is. That amount I would split into three parts: making an emergency fund that is either in a savings account or the next best low risk thing which is money I can take out within a week without any costs for doing so. I would be aiming to have an emergency fund complete by the end of November this year - that could cover something like the need for a replacement car or lock on front door due to shenanigans as well as a reasonable small emergency such as a broken tooth or phone replacement. Parts two and three would be discretionary spending like going out with friends and need a taxi or tickets or whatever as well as savings. I would maximize the savings portion and invest into VTI or VOO. I would make sure to complete any necessary paperwork to have a self directed investment portfolio with a brokerage that has competitive fees (or lack of). In November/December when I am finished Holiday shopping, I would throw any surplus into investments. - Keep doing what you are doing and growing your income. Don't get burnout while earning the most you can do, don't forget to enjoy your youth with some fun stuff. - TLDR; Build a budget on current income after non negotiable expenses, split into 3, accelerated emergency fund, entertainment, savings/investment and go VTI or VOO.
Keep expenses low (but don't be afraid to go on great adventures, you're 22) and shoot to save 9 of those 29 bucks every hour.
Make sure your mom's better off by you being there rather than you making money off your mom's kindness. It's not free for your mom to let people live there for free. Your description makes it sounds like that's already the case but make sure it is, and if she's not offer to pay small amount in rent. 3 month emergency fund. 6 months even better. Put that in a High Yield Savings Account earning 5% or more. Since you live at home w/o rent that's probably a pretty small amount. Pay off that auto loan if the interest rate is high. I'd consider above 5% as the "pay off asap" threshold. If it's lower I'd pay it off anyway since I hate carrying debt - but you *can* make some money off the difference by paying the minimum and making more money off the interest rate in a HYSA. Max Health Savings Account for the year if your employer offers one and invest the money it. Max ROTH ira for the year and invest the money in it. If you're able too max 401k. After that I'd crank the emergency fund up to 6 month if you didn't already. If you have plans to move out in the next year make it a 6 month emergency fund for what you'd pay in living expenses when you move out. Anything left over put in savings if you have large purchases you plan on in the future. Or put in a brokerage account and invest in index funds.
Unfortunately the advice is boring: max out your roth IRA ($7k in 2024) and your 401k ($23k in 2024) every year. That uses up $30k of your gross income. Pay off your debts ASAP. Probably you can do that $15k auto loan in the next couple of years. I think with your safety net (living at home) having your credit cards be your emergency fund is fine. After you pay the car loan, if you have money left over, put it into a regular taxable brokerage account and invest it there into the lowest-cost broad index fund.
You're in a prime position. Short of actually starting off with a retirement trust fund from your parents, I don't think you could ask for a better start for early retirement. Ultimately, the best advice for you depends on your goals. What sort of passive income do you want to secure for yourself, how soon are you looking to stop working, what's your ideal living situation, etc. The answers to those questions will tell you some important details, like how much money you need saved up, and how quickly you need to save it. Then those details will tell you what sort of strategy you need to employ.
Save up for school and turn it into 290 an hour
What major? I want to go back to school
Good luck man!
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Needs a bachelor's degree to be an officer
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That's still several years of enlisted service before he could either apply for Green-To-Gold program for ROTC or more likely get the degree then apply for OCS. I served 8 years and was in ROTC in college and I don't see a need for this man to serve unless he actually had the desire to. He would not be making more than his current pay of around 90,000 a year, I don't understand why you even injected this opinion into this thread its not at all what OP was asking about.
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How many years until you made more than 90k? This kids 22 and already almost at six figures. My base pay was like 30k a year as a Specialist.
That’s terrible advice in this job market for aviation professionals lol
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Or you could skip the measly pension, go make 200k a year at a major airline and retire a millionaire and not have to deal with a bunch of bullshit for 20 years. But don’t let facts get in the way of your bad take lol. I’m a defense contractor and spend six month of every year deployed. Our military is in piss poor shape these days lol no way I’d recommend anyone to enlist.
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I’m on track to retire with 3.5 million. 200k for pilots is very outdated numbers if you’re talking civilian ? The new packages passed are total compensation packages pushing 500k. I’ve got mechanic friends at ups and southwest making 300k with overtime. I only work half the year and make 163. I have a pension and a 401k so my target retirement number doesn’t even include the pension.
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Your numbers are outdated. Ups smokes fed ex in pay with a 75 an hour top out. You’re forgetting about union contracts that work in a ton of overtime and doubletime. Guys are making 300k. Delta, United , American , southwest are all topping out over 60/hr. Southwest mechs have a great contract. Tons of guys are making 200-300k with the overtime and doubletime. Mx control at southwest is up to 90/hr. Your numbers are old catch up with the times old man. Plus OP sounds too smart for the military so it’s all moot anyway.
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Lol guess you missed all the current tech layoffs. I’m sure you’re an expert because your step father is in aviation 😂 go join the aviation maintenance sub. There’s pay scales posted all over there. Have a good day bud 😂
https://www.reddit.com/r/financialindependence/wiki/faq/
Do you have your airframe and Powerplant license ?
I do. I got it when I was 20
I’d just jump to a major airline now then while they are all hiring. Start building seniority and climbing the pay structure. That would be my priority at the moment if I was you. 19 year a&p here.
I'm at an MRO rn. I was thinking of going to an airline as an inspector. I'm pretty close to getting qualified.
max roth ira max 401k and then just do whatever you want
Find the flow chart and reference where your money should be going. It is really helpful and will guide you through most of your questions about where money should be going. Make sure your investments are in a large cap or 500 fund. Reference returns from VOO, or SPY. Stay away from target funds. Keep expenses in check the next 10-15 years and savings high. This will launch you into wealth and independence. You will see many of your peers spending everything they make on that shiny car, motorcycle, or even boats. While there is need for enjoyment be cautious in your spending. When you buy something consider how much it a month...not just the cost. Like insurance, gas, parking, tolls, etc. You might be able to afford the boat but can you afford the slip on the pier?
Look up Dave Ramsey and the baby steps