Hello!
After a few years of life changes I'm finally employed again and I'm not quite sure how to best deploy my capital. Here are some numbers:
34 years old, no dependents.
CC debt- zero
Student loans total: 52K
Group 1: 1,654 @ 3.86%
Group 2: 20,495 @ 7.05%
Groupd 3: 22,880 @ 8.08%
Group 4: 10,744 @ 7.94%
Assets: 20K on hand.
Income: 150k pre-tax, 17k a month after taxes when I'm working. In my field we only work 6 months a year. This is usually 3 months on, 3 months off. I'm currently a permanent employee but don't have a permanent job, meaning I'm not on a regular rotation yet. I’m assuming I’ll have a 3 month work tour, but it could be 75 days instead. It could also be longer- but again, no way of knowing.
During this time I don't have many bills. I've asked for extra work but we'll see if it comes- out of my hands. So I need to save for three months of expenses when I'm off. I'm currently in the start of my second month, so I expect 4 more paychecks totallying roughly 32K.
My goals:
6 month emergency fund
Prioritize retirement
Student loans
Eventually home downpayment (I'm guessing this will be back burner)
My thinking was to keep 15k as an emergency fund in a HYSA, 5k to start off my "living" expenses account and dump my entire next paycheck into the high interest student loans.
After that I'm thinking 50% goes into my savings account, 20% retirement, and the rest to debt.
I know I'm way behind the ball as far as retirement goes. I'd like to retire at 50. I just emailed the company about my 401K and am looking forward to setting that up as soon as I’m eligible. I believe it is a 7% match. Otherwise I'm planning on focusing heavily on index funds (boring, I know).
Expenses: Rent is currently 2k a month when I'm not working, nothing while I'm working. I don't know how much longer this situation will last so I want to have some cushion if it changes. No car (or car payment). My phone bill is around 300 a year. Currently living in a high cost of living city when I'm not working, but if my rent situation changes I would move to somewhere cheaper.
During my next work tour I’d like to increase my emergency fund somewhat.
If my current company doesn't have extra work then during my time off I could likely find other work at a lower rate. I would expect to earn anywhere between 8k-15k pre tax a month. I'm thinking I would be okay with working one extra month during my time off and keep the other two months off as a buffer, but I'd like to hear some other advice.
What should I prioritize now that I'm making money?
byu/Horrorsea1314 inpersonalfinance
Posted by Horrorsea1314
4 Comments
Prime directive answers all of this.
Are you a software engineer?
Given you are substantially behind on retirement savings for your age and goals, I would aggressively fund your retirement accounts from additional off schedule work.
So you only work for 6months and get 150k? Very nice