anyway, your employer 401k match doesn't make sense. No one is that generous. But whatever it is...obviously max it out.

Why burden your parents by staying on their plan when you can pay for your own? - you're grown now...start paying for essentials for yourself instead of throwing it away on a car...

edited out my comment about the car: i thought OP said 2007

It's a 1997 Saturn, that's 14 years old.

Self-initiated inquiries such as pulling your own report (for free @ annualcreditreport.com) and checking your score don't cost any points no matter how many times you do them. Getting your credit pulled by a lender (e.g. applying for a car loan) does lower your score a bit (depending on how many, how often, and what kinds.)



That's what I was thinking... if your employer really does match all the way to the IRS max, it would be criminal not to take advantage of it.

As geoff_tewierik mentioned it is from 1997. Paint is chipping all over it, covered in hail dents, just about to hit 100K in miles and is knocking on the door of some major repairs (transmission for one). The car was purchased for $3,000 around 2005/2006. Any major repairs would approach the car's overall value quickly so it doesn't seem that useful to repair it if something major breaks. Hence why I'm trying to ride this out for about another year until I can purchase a newer used vehicle ('09-'11).

I understood the 401K matching as follows: for every dollar I put in, it will be matched 100%. That matching will continue all the way up to $16,000. In theory, I could put in $16,000 and receive an additional $16,000 to my 401k account through the company's matching.

In regards to health insurance and the amazing plan my parents have, it does not cost anything additional to have me stay on their plan until age 26. Like I mentioned, I would funnel the cost that I would be paying for insurance into an ING Direct Savings account for targeted savings goals.

Pack as much as you can into that 401k and take public transportation (if possible). A car is absolutely the worst investment you can possibly make.

I would re-read your companies 401K match policy as I've never, ever seen one so generous. It is almost always that they will match you dollar for dollar up until a certain percentage of your pay (say, 6%). It should matter greatly to you the specifics of the match; if it were me, it would drive how much I contributed and I would be darn sure I confirmed with somebody.

As for the car, it is a personal choice but spending nearly your entire first year's salary (even if you have a lot of it saved up) is certainly not advisable.

Unfortunately Lincoln/Omaha aren't the most ideal cities for public transportation. I definitely see your point if I lived in a larger metropolitan area though.

My mistake on the 401k information, I found this in the employee handbook:

Matching Contributions (Vesting Schedule):
Years of Service:
1 - 0%
2 - 25%
3 - 50%
4 - 75%
5 - 100%

Dollar for dollar up to $16,500.
This company believes in a very generous benefits package to compensate for salaries that are slightly lower than what a mega-corporation can offer.

That covers the vesting schedule. Are you quoting what the handbook says for their actual match policy - "Dollar for dollar up to $16,500."?

Wow sorry, not sure where my head is today!

Contributions:
-Participants may elect to defer a portion of thier compensation through a salary reduction agreement not to exceed the max amount of $16,500 for 2011.

Employer Match Contributions:
-Matching contributions are discretionary.
-Historically the match has been $1 per $1 of participants deferred compensation. (Historically as it has happened every year for the last twenty)

Edit: Thanks for all the help/advice so far. Even though we may not all agree on everything, I welcome the suggestions because it helps me see different viewpoints I would have otherwise not considered.

That seems like a vaguely written policy to me. I'd check with somebody to see what, if any, limit they have on that $1 per $1 match. The discretionary language would make it very easy to limit their match or not match at all.

The most important part is clearly understanding the match so that you can use it in a manner that best aligns with your goals. Normally, people at least contribute to maximize the contribution they get from their employer.

I am not excessively worried about the "discretionary" wording (to be honest, if I were in charge of as generous 401(k), I would have that wording in there too!).

With 100% matching, you would almost be better off putting the money in the 401(k) and paying for a car with a credit card! Of course a better option is to get by with as little car as you can. With your health insurance covered by your parents, and a low housing payment, you should be able to max it out. As your income grows you can start saving up for that Infiniti in just a few years.

Mystic - I was fortunate enough to be in a situation not too dissimilar from yours. Here's what I'll offer as my broad advice -

1) Set yourself a reasonable frugal budget. Challenge yourself here. (As for whether that involves a new car or not is a debate you're already in here. I'd lean towards a cheaper new or used car, but that's because I like to have something to aspire to.)
Make sure your budget includes non-retirement savings needs.

2) Set the surplus of your salary to be automatically put into your 401k.

3) As you get raises - automatically contribute those raises to your 401k/IRA. (Or occasionaly set half to the retirement savings/half to yourself.)

4) Eventually you'll be maxing out your retirement savings and can apply the excess to taxable saving, increasing your lifestyle reasonably, whatever suits your needs.

I think overall the decisions that new grads make shape their lives for quite a while. If you create an affordable lifestyle in those first few years and battle lifestyle creep by directing raises to savings, then it's relatively painless to set yourself on an incredibly fiscally responsible path. You'll increase your freedom down the road and the options you have to meet your desires (house/kids/travel/whatever) without sacrificing your fiscal future will be greater. Sounds cheesy, but oh well.

You may or may not need a professional wardrobe depending on your employers policy.

You may or may not have to attend certain functions depending on the job.

Thank you! That is definitely one of the most thoughtful posts I've seen on the forums.

fantasma: The company that I have been interning at will be the company I work with when I graduate. Wardrobe wise the office is EXTREMELY casual unless we have a CEO type client stopping by on a particular day. I may not be with this company the rest of my life so over the years I will slowly be building my professional wardrobe so as not to panic when I have a shirt/tie/suit everyday type job.

All expenses are paid for on travel trips and outside functions like parties and events are all covered. For example, third company golf event for the year last Friday everything (drinks, golfing, etc) was all paid for.

PLEASE PM me this company's name...because I'd gladly put in 5 years to get a
165K nest egg....

honestly, i think you're missing the up to x% of your income part...