I am about to turn 22 years old, I graduated college in May with a degree in Electrical Engineering and was lucky enough to have a job lined up which I started in June. I decided then I needed to become educated on personal finance and setting myself up for financial stability, and stumbled across this site which has been a wealth of infomation, thank you!

Regarding my current financial situation:

Cash: $3,600 ($1600 of this is my current E-fund)
Debts: Student Loans (16.2k total - down from 20k) - $4100 @ 2.25 % variable
$12100 @ 6.8 % fixed
Car Loan - $19,800 @ 0% (60 month term)

401K (company matches in full up to 6%) - 2.6k in Vanguard Target Retirement 2055
Roth IRA (just opened last week) - 1k in Vanguard Target Retirement 2060

The car is a 2012 Ford Fusion, which I plan on driving into the ground, I'm not the type that plans to buy a new car every 4-5 years. I'm living at home currently, paying my parents about $400/month for rent/utilities/food, so it's a good deal for me. I'm also paying down my student loans aggressively while I am living at home. Here is my plan going forward:

1) Have student loans paid off by December 2013 (at the latest)
2) Increase emergency fund to $4500 by December 2013
3) Max Roth IRA for 2012
4) Continue to contribute to 401k up to match until student loans are gone, then increase contribution

My current net worth is about -$11.5k, I'll be sure to keep all of you updated on my journey into positive territory and beyond!

Good luck on your journey.

Might be worthwhile putting up more of a budget, what your income is, repayments are and so on.

I have a feeling you could pay off your student loans quicker.

Geoff,

Thats a good idea, I'm still getting used to budgeting so this is going to be a work in progress.

Monthly take home pay : $3200

Budget- Rent/Utilities/Phone/Car Insurance : $550/month
Student Loan Payments: $1100/month
Car Payment: $335/month
Gas: $225/month
Roth IRA: $417/month
Leisure/Entertainment/Food: $350
Emergency Fund : $200

As I mentioned, this is subject to change. I also agree that I can pay my loans off faster, December 2013 would be the worst case payoff date. Any bonuses I receive from work as well as my tax returns are going to go towards the student loans, so I'm hoping to have them paid off by the end of next summer.

You've got a great start here.

Let me offer you a piece of advice - one that really worked for me when I started my career in a situation very similar to yours.

Define your budget now based on your starting salary. You are likely to see a few salary increases relatively quickly over the next few years. Don't inflate your lifestyle to consume those raises. Before they even kick in, set them to go automatically to either paying off your loans or straight to your 401k once your debt free.

You'll be maxing out your tax-advantaged retirement savings in no time, and won't ever feel it as much pain. Then after that raises can go some to increased savings, some to treating yourself well.

goldens543 some great advice here. I agree with Geoff pay your student loans off faster. I also agree with Panda make it a life goal to spend less than you make. And when those pay increases come adjust your loan payments contributions accordingly. I've always looked at budgeting as something fluid and not set in stone. Have you considered using mint.com to track expenses? Congrats! You are on the right track to becoming debt free!

A few questions:

1. Do you plan on pursuing further education? Would it help your career goals?

2. Does your job have any bonuses associated with it?

3. Do you project you'll have a nice return on your income taxes next year?

Eagle,

Thanks for the response! I started using mint in the spring, but just this past month I got it completely set up with all of my accounts (loans, 401k, etc) so now I have a starting baseline established. Regarding your questions:

1) Yes, starting next fall I plan on beginning graduate courses part time (electrical engineering still) through my company. They offer full tuition reimbursement for degrees related to our work functions, and I should be able to complete the degree in 3 years.

2) I don't believe there are yearly bonuses, but there are performance based bonuses.

3) Yes, I should have a fairly sizeable return on my income taxes in the spring, which I plan on putting directly towards my student loans.

This is why having them paid off by December of next year is a very conservative estimate. December would be the payoff date without any bonuses or tax returns being applied towards the loans.

I also believe the fact that I can pay my loans off quicker, Dec 2013 would be the toughest benefit date. Any rewards I receive from work as well as my tax profits are going to go towards the student education loans, so I'm expecting to have them paid off by the end of next summer.

Looks like some spam going on here with RossTaylor...



Excellent! So you will have to pay up front and then get reimbursed correct? Might want to start a savings fund for this so you don't have to take out more loans? Or what was your plan with tuition expenses? 3 years is fantastic! Have you already applied?



Performance based bonuses are good. Are those usually given quarterly, yearly, or what?
This could be used to pay off a significant portion of your debt.



This is a good plan.

4) Have you considered ways of saving money on your budget? Or perhaps earning extra income at least while you pay off your debt?

5) Are you planning on tackling SL 1 or 2 first? SL 2 would make more sense if you were wanting to pay off the highest interest first. SL 1 would make sense if you were trying to pay off the smallest loan first.

SL 2 $12100 @ 6.8 % fixed
SL 1 $4100 @ 2.25 % variable
CL 1 - $19,800 @ 0% (60 month term)

Actually our company has a deal with the university so that the tuition payment is not due until final grades for the course are in, so the company will directly reimburse the university.



I'm not sure when they are given, at this point any bonuses I get are just gravy, they are not planned in my debt payoff.



As far as making extra income, I haven't really put too much thought into it. I don't feel my situation is bad enough to devote my weekends to bringing in more money.



I'm currently tackling SL 1 first, I'm close enough where I want to just get rid of it. Doing the calculations it's only going to cost me about $150 in interest doing it this way, which isn't too bad for the peace of mind. I just paid $1400 more towards SL1 so it is down to $2700, and I should have it paid off in the beginning of December!

Unfortunately I was also in a minor fender bender this month, so I will be paying a $500 deductable to fix some bumper damage which will effect my E-fund. However, that's what it's there for and times like that make me glad to have money there for that purpose.