[sakuraicedtea]

I am 21 years old and will graduate in a year with 5 majors (please don't criticize me about how many I have, I love education :) with about a 3.3-3.4 gpa from a no. 45ish school in nation (however my primary major department is number 17th in the world and I think no.4 in U.S.). My parents wouldn't let me go to ivy league and I kinda didn't want to because I get a 75% break from the expensive tuition at this school. (Also a mysterious anonymous donor gave me a scholarship just randomly one year based on merit/ambition we think) My primary major is Management Information Systems. I have had 2 internships, one in my freshman year and one from Napster. Unfortunately they were both in marketing, because MIS is highly specialized and won't find one in the area. I attempted to find one for a third primarily in MIS but an almost guaranteed internship fell through at the last minute, leaving me stuck with nothing, and I need to graduate.

I don't really have leadership in club activities because I'm more of the behind the scenes leader who keeps clubs togethe. Although I'm hoping my job as an auxiliary police officer will help me in the leadership department (my advisor thinks I shouldn't even mention club activities compared to my job). Although I'm thinking of joining a business consulting club that actually does consulting for businesses (I have a year and a half left, so I could do it, especially since they need experienced seniors)

I wish I had started sooner in saving money. I feel so behind. However, the money that I had been saving since I was little went to paying for college (I saved 50% of what I earned since I was a toddler including allowance in a savings account). I will have no college debts when I graduate from college. My parents bought me a car when I graduated high school which is about 6 years old now (it was 2 years old when my parents bought it). So I won’t worry about a car for awhile I’m hoping (it has 25k miles on it and right now I only drive about 2 miles a day). I also have a laptop, computer, etc so I won’t have to worry about computing needs.

Starting this year/last year, I will be putting max contribution in a Roth IRA account (Right now I have 3,000 dollars in it). I save 75% of my money for my Roth IRA and investing. Recently I have started contributing $150 a month towards investing in a taxable account (however there are no transaction fees, just a fund cut once a year).

Ok I was just giving background: I need money advice career advice from my elder Purse goddesses/gods. Not specific questions, but just some advice.

Ok so heres a short-round up of my economic situation:

*I make about 9,000 dollars a year with my new job that I got in September. It also has the perk of having leadership qualities.
*3,000 in for 2006 ROTH IRA (I have more money but can’t contribute more because of that stupid 100% of income rule) will contribute 4,000 for 2007 and have already contributed $500.
*Will come out of college with no debts, used car, and furniture (so well set)
*Will have when graduate from college a gross of 2000 in taxable investing account (assuming that I make no money or lose money).

*Ok my question is, if I make 40,000 a year with my first entry-level job (I’m so worried I won’t so cross your fingers), do you think I could live on 25,000 a year if I contributed max of 15,000 to a 401k plan? Would that be advisable or a big mistake? I’m so freaked out about retirement especially with the baby boomer generation.

*Is there some general career advice? I’m just so freaked out right now about getting a job because it will be a new experience I really have no idea about (other than my part-time/internship experiences)


*If you could do it over again, what would you have done when it comes to money for the 22-23 year old on the first entry-level?



*How am I going to afford a purse habit :/ Just to save that 3000 dollars for my IRA account, required me to not buy anything extra over $10.00 for 6 months. T_T I feel like even spending 50.00 is stealing from my retirement. I want to be a VIC one day and I feel like I never will be able to because even if I make a lot of money, I will need to sock it away.

[Vegas Long Legs]

Wow!!! Congrats! 21 no debt, an education, & knows you need to save! You sound to me like you are ahead of the game instead of far behind.
You already know this but if you can sock away as much as possible when you are young it gets to be a point where you don't need to save as much for retirement. I don't know what your living arrangments are but I think you could live on $25,000 a year. You've done well so far! You show that you have self control & the desire to save for you is stronger than the ego needs.
When I was your age I got myself in financial trouble. It was 25 years ago. Credit card debt, student loans, had to have a BMW. I had to dig myself out. Thank God my dad said you need to learn a lesson so he didn't help me. I learned alot the hard way. But I'm thankful for it.
Alternate the months you can't spend more than $10.00 instead of 6 months straight if you can.
I love school too so you won't get any grief from me with 5 majors.
I think SS will be watered down so much these people that plan on using it for most of their income are going to be very disappointed. The person that says "may I take your order" at McDonalds is going to be much older than usual.

[IntlSet]

I'm just curious -- I've never heard of a school that allows you to accumulate 5 Bachelors, much less all at one time. They usually have caps on the amount of class credits you can earn. You must go to quite an interesting university!

You sound way better than your peers, money-wise.

[pidgeon92]

While it's never too early to worry about retirement, I think you might be a tad too worried. You should contribute to your 401K, at the very least, what your company will match. Beyond that, if you have extra income you aren't doing anything with, consider a money market to keep it liquid and/or a Roth IRA. You're off to a really good start. Don't spend your youth worrying about getting old, enjoy yourself.

[sakuraicedtea]

Originally Posted by Vegas Long Legs

Wow!!! Congrats! 21 no debt, an education, & knows you need to save! You sound to me like you are ahead of the game instead of far behind.
You already know this but if you can sock away as much as possible when you are young it gets to be a point where you don't need to save as much for retirement. I don't know what your living arrangments are but I think you could live on $25,000 a year. You've done well so far! You show that you have self control & the desire to save for you is stronger than the ego needs.
When I was your age I got myself in financial trouble. It was 25 years ago. Credit card debt, student loans, had to have a BMW. I had to dig myself out. Thank God my dad said you need to learn a lesson so he didn't help me. I learned alot the hard way. But I'm thankful for it.
Alternate the months you can't spend more than $10.00 instead of 6 months straight if you can.
I love school too so you won't get any grief from me with 5 majors.
I think SS will be watered down so much these people that plan on using it for most of their income are going to be very disappointed. The person that says "may I take your order" at McDonalds is going to be much older than usual.

I got into a bit of credit card debt but I will have it paid off before the 0 % interest period is over (and if all comes to fail I have the money to pay it off in another account for emergencies). I know this sounds terrible but I think it was good that I got into a little debt because it really taught me how to stretch a dollar while saving 75% of my income. I think I'm better prepared for life.

[Vegas Long Legs]

^^^ I know someone who is 55, who's lost their home & need to file bankruptcy. I would rather learn the financial lessons in my 20's than 50's.
I was responsible like you & then someone told me, have some fun, get some credit cards, buy yourself that BMW you like so well. That's why my dad made me bale myself out. I went against how I was raised & what my gut told me. It was not a fun 4 years digging myself out.

[Janos614]

Maxing out your 401K will reduce your pre-tax income significantly. I read that the rule right now, if you do not have an employer match, is to contribute 10% of your income on a yearly basis as the minimum. So, 15K is definitely a goal that you should keep for yourself, but don't forget that there are startup costs in setting up a new apt., building a work wardrobe, etc. that you will want to take into consideration, too. See what your after-tax salary amount is and then determine how much to contribute to your 401K after all your expenses are paid. Your contribution can be a percentage of whatever disposable money is left. That contribution will grow as your salary does, too.

As far as a bag habit, you could start putting aside a set amount every week, based on what you have left, and save money elsewhere to fund it. It'll be slower, but you won't have to deprive yourself this way.

I'm 27 and my first salary, at age 23, was a wakeup call. I hate to admit this but I did not fund my 401K right away and waited a year and a half, and while I was still learning how to handle my money, I do wish I'd socked away more. Not many people in their 20's think of 401Ks and retirement, etc. but you're definitely headed in the right direction.

Where are you planning to live and work after college? 40K doesn't stretch nearly as well in some parts of the country as it can in others, so an online rent calculator might help you figure that out. Also, be sure to negotiate your first salary well. That's the first step in building a good salary history, and you don't want to be cheated.

Finally, make a list of your financial goals for the next 5 years or so, once you get your first job, so that you have a vision to work towards.

[amy45888]

get the book "smart women finish rich" by david bach. it is so interesting to read. he really lays out to you in a simple way options for saving and reaching your dreams. i wish i had read this book first out of school (i'm 3 yrs out now).

[amy45888]

max your 401k to 15,500 if you can. the compound interest you receive by doing this early is so worth it. the book has all these great charts that show the difference of the same investment depending on age that you start at

[sakuraicedtea]

Well I'm hoping for a really low rent because I'm willing to live in a shoebox in order to save up for a small house (which I wouldn't even mind being apartment size because I just don't need that much space). That would go down the tubes if I live in a huge city like NYC where the cost of living is +++. What I would really like to do is to get a job near Ohio or Pennsylvania or a governement job. What I would really like to do is to get into something using Japanese but thats probably a pipe dream because even though I have lived in Japan for 6 months and have taken 3 years of intensive Japanese, I still really suck at it, mostly can only write 900 characters.

[angel2434]

wow. I'm so impressed with your money saving skills! I think you're in a great financial position to get started with life. You're inspiring me to put more money in my 401K too!

[Allisonfaye]

YOU are my hero! You sound so mature and responsible. I have no doubts that you will do well in life. I say max out on your retirement. If you save just the max for the next five years of your life and never put another penny in, you will be better off than people who start saving at something like 30 and keep putting in the max every year from then on.

[ladystara]

sakuraicedtea

I'm about in the same boat as you, I'm 23, just started my first job a few months ago straight out of grad school. However, my family has ground certain financial ideals from when I was little. You should pm me sometime or msn or aim :) It would be great to have someone that's in the same boat as I am!

[absolutanne]

Great thread! I am almost 1 year out of school and have contributed 20% of my yearly salary to my 401K. My company matches 8% so total I have 28% of my salary socked away.
My bf and I have decided we are going to be DINKS (dual income no kids) so it allows us to max our contributions until whenever we feel we want more take home pay.
I do not have any school loans because of scholarships and no car loans because I am driving my beatup 7 yr old car to death until I get the car of my dreams ~3 yrs from now. In a way, we are in fortunate positions to be out of school debt free.

So my advice is: always stay debt free and max your contributions! a $ you save today will be at higher value next year and def 40 yrs from now when you open your nest egg to use it.
This forum is evil that it tempts us soo much with gorgeous bags but good judgment and financial capability is key. Max your 401K and your IRA (which is $4K/ yr, if you have one) to lower your income bracket.

It all depends on your living costs. Like what you said, NYC is so expensive, you will have trouble keeping up with your plan if you live in a high cost area. Consider jobs in lower living indices (I think NYC is like 115)?

Sounds like you're on the right track, the key is consistency. Congrats on being mature for your age. I know so many ex classmates who bought Infiniti G35s or Lexus's the moment they got out of college and now are still in debt (on top of their school debt).