How would you spend this money???

[mhamph]

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I was really blessed to have family support and my own salary saved up for tuition so I had to take out very little loans. However, on the flip side, I have very little in savings at age 27.

I'm trying to establish financial independence, savings, and other adult milestones. I will be making 89k pretax annually at my new position. No kids, no house. How would you direct your monthly earnings?

Current
Expenses
$1,200 for rent, utilities, insurance, and other revolving personal bills
$3,500 in cc debt at 10% interest
$6,000 in federal student loans
$9,000 in auto loan at 0% (gotta love toyota financing)

Savings
$650 in IRA
$10,000 in 401k
$0 in emergency funds
$0 for future house down payment

My current thought process is to devote 80% of money not going to rent and utilities to paying down debt (debating if that should include the 0% car loan?). Then 15% to emergency funds. After debt is paid off: 30% to emergency funds and 40% to down payment.

 

[tartesos]

Hookers and blow...


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[mvenus929]

Pay minimum payments until you have $1000 saved up for an emergency fund (with your income an expenses, I suspect this will happen the first month, cause if I can do it on 2/3s of your income and much more in debt, you certainly can). Then, pay off the credit card super aggressively. Don't put any more into your emergency fund until you have that paid off, as 10% is horrible.

After that, stash some into savings automatically every month (15% is fine), and the rest towards the debt. It shouldn't take you too long to pay off those small debts, so you'll be able to start investing in a relatively short amount of time. Save in liquid savings (high interest savings account, CDs, etc--not the stock market) until you have 3-6 months of expenses taken care of. Then max out a Roth IRA. Then save for a house and put the rest wherever you so desire.