Just got my first "big girl job" making 26/hr for 36 hours a week **edit** as a 1099 Employee. I put aside 30% in a HYSA for taxes, leaving me with about 2,600. After life expenses, I am left with about 1,000.
These are the things I know I need to be saving for:
- Emergency Fund – at least 5k
- Car – maintenance and eventually a new one, mine is 9 yrs old currently
- Retirement – I opened a Roth IRA a few days ago, put 100 bucks in and bought the S&P500. This is where I feel most financially illiterate and need help.
- Travel fund – Traveling is really important to me and I want to make sure I can give myself at least a week long vacation, goal is about 2k
How would you split up your saving if you were me? I am 22F, live with 1 roommate, and have no debts at all.
22 and unsure of where to save/how much in each bucket
byu/Special_Ice_6698 inpersonalfinance
Posted by Special_Ice_6698
9 Comments
Why are you putting 30% aside for taxes? Does your employer not withhold money for them?
Follow the steps at [https://www.reddit.com/r/personalfinance/wiki/commontopics](https://www.reddit.com/r/personalfinance/wiki/commontopics)
Here are some of my other short- to medium-term saving categories:
* Yearly subscription fees (so I don’t forget)
* Medical expenses
* Home maintenance
* Pet emergency fund
* Vacation fund
* Donations / Gifts for others
* Xmas giving
I put varying amounts toward these each month.
Alongside the others’ questions, you might end up paying 30% taxes through federal income state, state income tax, and sales tax. But because you’re making $48,000, it will likely be less. The important thing to understand is that (a) your federal and state income taxes are already being withheld and (b) you don’t have to save much because of that. You will need to file your 1040 with the IRS by April 15 each year to see whether you paid too much for 2025 or whether you owe more.
Back to your questions, yes, emergency savings should be 3 months’ living expenses. Yes, start that sinking fund for a new car, but delay delay delay. You should really put in $7,000 into a Roth IRA. And if your job lets you contribute to a 401(k), you should be doing that too.
Why only 36 hours a week? Can you tack on a little more?
If your employer does 401k matching, make sure to meet that (most are 2-5%) or you’re leaving money in the table.
After that savings are personal preference, but an emergency fund is always a good start.
Check out r/themoneyguy and their FOO method for some good tips on saving while also investing.
if your working for someone, they are withholding unless you opt to do so yourself (smarter decision)
30% would be high though % your income level. that is fine, you will have leftover at year end if your CPA does a good job.
I personally do
30% Tax Account (70% goes to SGOV, 30% goes to market exposure). I sell SGOV to pay quarterly taxes.
30% Living
10% Emergency
10% Life Savings
is ——–> 80% of income.
Final 20% dispersed between fun, life savings, and anywhere I want. End of the year I take my tax savings and use them as I see fit.
*** I break each paycheck into this above form. When Emergency is topped off, that 10% can go anywhere I want.
10% life savings goes into IRA first, then personal life investments second. Lifesavings is just that, put away in the market, never touched. Should be so little that you never need to draw it but enough to retire rich.
When paying bills and credit cards, that comes out of the 30% living first. Yes these are all “savings accounts” that money is transferred into earning 4%. I hold 6 months life savings, and 30% living usually keeps me about 1 year or so of livable bills covered at any time.
On car, I buy used old Volvos and drive for 3-5 years. I put $200 a month to the side, that covers any expenses and cash is there to upgrade at anytime.
last Volvo was 10 years old when I got it for 8K, put 70K miles on it in 5 years and cost $750 for an alternator in that time. Sold it for 5K and upgraded to another one for 9K. Starting the same rotation again.
>These are the things I know I need to be saving for:
> Car – maintenance and eventually a new one, mine is 9 yrs old currently
Good for you for saving to buy a new car. Don’t finance one — don’t pay somebody else to use your own money.