*Long time reader of GRS, first time poster.

I am currently 22 and will be graduating with my undergraduate degree in May of 2012. I just signed paperwork for a job with the company I am currently interning with after graduation which took a lot of stress out of my final year of school. My question is, where exactly should I be focusing my money with after I start working?

To aid with the above question I'll provide as much background information as I can.

I have around $10,000 in savings/checking and I try not to touch it much. I live somewhat frugally and only purchase things when I have saved up to a level I'm comfortable with.

Salary from my job will be roughly $47,000.

No students loans from college due to scholarships, parental funds, and a tuition remittance.

Rent/Electricity/Cable (with two other roommates) is roughly $400 a month.

I plan on purchasing a newer used Infiniti G37X within a month of two of starting work. This will be partially funded by the sale of my current vehicle (1997 Saturn SC2). My parents have also offered to let me sell their 2003 Mazda Tribute. I plan to take $3,000-$5,000 out of savings. I assume the car will cost between $20,000-$25,000. So after the sale of the two cars and taking my savings into account, I hope to only take out around a $15,000 loan.

I will still be on my parents health insurance. The money that I would have paid to fund my own will be automatically taken out of my account and put straight into an ING Direct Savings account.

What I assume I will have to start paying includes my cell phone bill and well as my car's insurance.

My company 401k matches 100% up to $16,000.

I feel pretty fortunate at this point, but I know I've worked my butt off to get where I am. After graduation I just want to make sure I make the right financial decisions to hopefully continue my fortunate situation.

Proceed with caution: Life style inflation ahead 9 more months.

I think it can be safe to say inflation won't be much of a problem. I think that's evidenced by my statement about my bank account and my current spending habits, as well as the fact that I have never carried a balance on my credit card. I've seen numerous friends who are in their mid-20's spend crazily once they started working, and that has provided a pretty good deterrent to me to not make the same mistake.

With that starting wage, and the intended car loan amount, you should be paying it off within the first year.

I'd be more inclined at trading in the two cars you have and getting something better to get you by, then saving money over the year to upgrade to the Infinity you want.

Yep.

Buying an Infiniti right out of college is a great example of lifestyle inflation.

+1

Why don't you just buy (and drive) the Mazda Tribute from your parents?

I've also considered it but it is on the brink of being a money pit. 185k miles and the transmission is "working", at least for the time being.

I can see what you guys are saying about the car somewhat, but if I were to spend recklessly on the car AS WELL AS unnecessary items (new clothes, eating out, etc) I would consider that lifestyle inflation. One purchase that I have a definite plan for on how to accomplish without spending outside my means hardly seems like an entire lifestyle choice.

I should clarify, I won't be purchasing it the second I start working. If it takes two months or if it takes six months to find exactly the right vehicle, than that's how long it will take. If I have to wait that won't be a problem because I will have that much more saved up for it.

Then why not sell it and buy a better and cheaper car?

Spending more than half your annual income on a used car doesn't sound like lifestyle choice?

I think you should probably plan for a new car, but save for a house instead and then charge your friends rent and pay for your car in no time.

So you have a nice car...big deal.

I'm not being mean, but poor people buy new cars when they get jobs and have nothing else to show for their life's achievements. You're better than that, so buy a cheap car and save for the Infiniti.

Dear OP,

Please, oh please, oh please, don't buy that infiniti! Listen to everyone here, they're not saying it to be harsh. You are starting off fresh and can choose to either enjoy the little luxuries of life along the way, or retire young, rich, or both? Which would you prefer?

If you have concerns about that older car. Then sell it, then add it to some cash you have and buyer a slightly newer used car. Then save up some more if you want, sell the used car, and buy something another step up. That way, YOU keep the interest.

If you want to buy a new car in a few years, then continue to trade-up and/or save the cash for it. Don't finance it!

Live below your means, save 20% to 25% of your income, and set yourself up for success.

I know millionaires who don't even drive cars that new & nice.

The Millionaire Next Door certainly doesn't.

Congrats on starting out right! I think choosing one thing to start spending some of your new salary on is perfectly fine, as long as it doesn't sneakily lead to other upgrades in your post-grad life. While I agree that you should wait until you're 6 months or so into the new job to seal the deal, there's another upside to partially financing a vehicle. Your credit report has different categories of credit: revolving for credit cards, mortgage for home loans, and installment loans like your car loan (having a fixed # of payments). I just financed 10k of a 17k car, and while I could have spent my $7k down payment on a decent clunker, I feel that diversifying my credit history also makes sense. (Plus the payments are manageable enough that I can pay it off in 3 years instead of 5!) Good luck!

That's one thing I wish I could check out in more detail right now. According to CreditKarma I've got a 732 score but that isn't a 100% true measure. I've been holding off on making a serious inquiry to what my score is because a true check will actually ding your score if you have more than 2-3 a year.