Im 24, living in NJ. I don't want to give away too much information, but I am a teacher. My salary is around 60K a year. I have been with my gf for almost 4 years and intend to marry her. I live at home with my parents. I have about 50K in savings, and 13K in my retirmenent with no student debt.
I have a phone bill, gym membership, health insurance, car insurance and misc. subscriptions that average out to about $250 a month. I drive a 2002 Toyota with almost 200K miles
Here are my aspirations for the coming years
– Buy a certified pre owned used car
– Move out of my parent's and move in with my gf in west central NJ where its alittle cheaper
– Get married
– Get a dog
– Maybe kids
Which of these should I be prioritizing first? Also how much should I be putting into my retirment vs saving? this past year I was putting 1K a month into my 403b and sportically 500 into my Roth IRA
Just turned 24 and landed a decent job, I want to make a 5 year plan
byu/TheInternExperience inpersonalfinance
Posted by TheInternExperience
4 Comments
My retirement is completely through my work – but I also have a Roth IRA that I put $125/week into.
With your savings and current structure though you’re honestly on an excellent path to financial stability later in life. I would max out your Roth IRA (7000/year) even if that means taking from your savings, which are really high for someone your age and in general. To put it into perspective I’m 26 and have around 20k in savings making 90k a year. I have 25k in my pension currently as well.
I would for sure prioritize the Roth IRA first. It comes with various benefit that a 403b doesn’t. With the exception being if your employer does some type of 403b match, in which case contribute enough to get the match.
And I wouldn’t necessarily go spend a bunch of money on a car unless/until your Toyota starts costing major $ in repairs. Yes, a 2002 Toyota is old, but honestly if maintained well it could last another 100k miles. Remember, cars are not investments. They are depreciating assets that can literally be worthless on any given day from an accident. When it does come time to buy something try to spend as little as possible, pay cash (unless you can qualify for super cheap financing) and getting another Toyota or a Honda would be the way to go for max quality, resale value and low cost of maintenance.
Aim to keep at least 6 months worth of all your expenses in high yield savings account such as at Ally Bank at all times. That is your emergency fund. Plus any money you need within the next few years for major purchases (like a car, house, move). Remaining money can and should be invested to maximize your returns over the long run. Keep investments diversified and cheap – like a total stock market index fund (VTI) or an S&P 500 index fund (VOO).
Start with the Budgeting section of the wiki, then the flowchart for navigating financial priorities. There is a lot of good info throughout the wiki to continue building your financial literacy so you’ll be confident adjusting your plan as life changes.
ETA: With your current savings, no debt, and what appears to be a frugral lifestyle, you’re on a great track already!
You are in a very strong position at 24 with good savings, no debt, and steady retirement contributions. The first step is to keep at least $20,000 in your emergency fund and replace your old car with a reliable used one. After that, focus on saving to move out with your girlfriend so you can both gain independence and prepare for marriage. Keep putting about 15 percent of your salary into retirement between your 403(b) and Roth IRA while using extra savings for short term goals like a wedding and housing costs. By year three, start building a dedicated wedding fund so you can pay in cash. After marriage, you can think about getting a dog, and later on, plan for kids once you are settled with stable housing and income. Continue to increase your retirement contributions as your salary grows and review your plan every year. This way you will cover your short term needs while staying on track for long term security.