How I am doing???

[Savingmonster]

I few years ago, back in 2006 sometime I discovered this site and it helped me GREATLY!!!

I was like 16-17k in Credit Card Debt and NOTHING IN THE BANK, no 401k NOTHING..and more lost and confused more than anything else!

Today I am proud to say that I have NO (0) Credit Card debt becuz I snowballed my way out of it, it was Definitely Worth it!!!

But Now, i feel Like I am at a standstill for some strange reason, I just feel like I should do more.. I feel comfy, but I dunnoo what to do next lol.. Any Advice?

Here is my financial Break down.. And I live in NYC

Age: 32
pay:$65,000 yr
Rent= $1018
Car= None & I DONT NEED non in nyc..
School loans = 22k
401k = 25,000 (contrib 7%)
Savings = 30k (Capital ONE online account)

I don't have any major bills, I usually travel alot, spend maybe about 10-11k a yr total on Travling..

Any advice? At this point in my life, how do you think I am doing? And what else can I do?
Just curious what others on here think..

[snshijuptr]

First off, congratulations on getting rid of the "bad" debt!

Now for your new goals:

1) Pay off your student loans! The debt may be low interest, but its still there sapping away your money. If you go 2 years without a vacation, you could more than pay off your student loans!

2) Increase your retirement investment. Max out any 401k match then invest in a Roth IRA to have tax free retirement income (pay taxes now, not later).

Those first two goals should be enough for the moment. Also if you want to keep taking $10,000 worth of vacations , I hope you are not charging them.

[Savingmonster]

First off, congratulations on getting rid of the "bad" debt!

Now for your new goals:

1) Pay off your student loans! The debt may be low interest, but its still there sapping away your money. If you go 2 years without a vacation, you could more than pay off your student loans!

2) Increase your retirement investment. Max out any 401k match then invest in a Roth IRA to have tax free retirement income (pay taxes now, not later).

Those first two goals should be enough for the moment. Also if you want to keep taking $10,000 worth of vacations , I hope you are not charging them.

NO!!! I am never ever charging them!! I learned my lession (Big time, and I will never fall into that trap again).. $10, 000 in total.. This usually includes, my flight, food, hotels, etc, etc.. and it's spread across different countries.. 10k in total for everything.. So If I go to 3 differnt places, It will prob add up to about 10k for EVERYTHING..


I am aware I can pay off my loans, but damn, I am spoiled the vacation is such a big part of my life, I'll go crazy without them.. I think taking vacation is soo good for my physche..

[snshijuptr]

Could you take smaller vacations? I enjoy going an hours drive away and staying for the weekend to go wine tasting. Doing this 2-3 times a year could never cost me $10,000. For the next 3 years you could just scale back your vacations. Discover the places that are a quick trip away.

[am_vanquish]

Could you take smaller vacations? I enjoy going an hours drive away and staying for the weekend to go wine tasting. Doing this 2-3 times a year could never cost me $10,000. For the next 3 years you could just scale back your vacations. Discover the places that are a quick trip away.

You wouldn't have to do something like this EVERY vacation, you can meet somewhere in the middle. Just trading one of your more extravagant vacations for something more modest could get you down to $7k-$8k.

Are you actively putting money into the Capital One savings account, or did you reach the $30k and stop? If you're still contributing, how much each month?

[Savingmonster]

You wouldn't have to do something like this EVERY vacation, you can meet somewhere in the middle. Just trading one of your more extravagant vacations for something more modest could get you down to $7k-$8k.

Are you actively putting money into the Capital One savings account, or did you reach the $30k and stop? If you're still contributing, how much each month?

No no, i didn't stop.. I always try to contrib $600 - $1000 a mnt.. If I can't my goal is always to save atleast 8-10k yr, Even after all my vacations..I NEVER want to go backwards, for an example, at the end of the yr next yr, . I don't want to have 25k for an example.. That will be a HUGE failure to me..

I always defer my loans though .. I want to save more and when I get to a certain amnt in my savings account, say 60-70, I would like to start paying off the 22k I owe in school loans really really agressively..

I just feel more comfy if I have a more funds in the bank, even if it's costing me in interest when I defer. I don't want to pay off the loans and be broke have no money in the bank, you know? thats my worse nightmare I think, Esp in this economy.. I've just gotten so used to savings, thanks to reading this board and having you guys motivate me.

[Savingmonster]

Also, instead of going on vacations 3-4 times A yr, I'll reduce it to 2 max for a couple of yrs.. I am considering that..

My employer match, so I also might consider maxing my 401k as well.. I don't know about doing it now, but eventually I'll max it out.. Sometimes I feel like, I'll not make it to 65yrs old, lol, but I contrib a lil and increase 1% every yr (I am up to 7%), so If I DO make it, I will not be assed out, old, broke and retired. Something is better than nothing at all, right?

[ScrimpAndSave]

Do you plan on buying a home? Getting married?

[Savingmonster]

Do you plan on buying a home? Getting married?

Yes, I would like to buy/own my own home someday.... I'd try it now, but I don't want to make that jump just yet. I want to make sure I have enough to make substantial downpayment and I would still like a good amount to play with.. I hate the idea of living paycheck to paycheck, working to pay for a mortage and having nothing left..

Marriage? well that's another story lol... Nah, maybe one day I'll get married, I never say never, but right now I am not thinking about it.. My Ex girlfriend was THE Main reason was a mess to begin with, the bad debts, the Credit Cards. Once I got out the relationship, I refocused myself, buckled down and make better financial decisions and was able to SAVE!

If I was still with her, I would be in even bigger trouble financially.. So Marriage is the last thing on my mind, you know? I am not where I want to be yet, financially, so I'll be damn if I jump in a marriage.. Being single (not married) showed me I can accomplish a lot more, I mean A LOT MORE!

BUT, I never X out marriage all together, I will just take my time, no rush at all..

[snshijuptr]

Monster I think you've hit a little mental roadblock. You are no longer in a desperate situation, so its time to start paying off your reasonable debts like student loans. Its also time to set some big goals for yourself. I get the feeling you're young (disclosure: I'm only 23) so retirement, marriage, and owning a home seem far away. From my experience, they aren't. You might find someone tomorrow whom you want to spend the rest of your life with!

My recommendation right now is to create a goal that helps YOU focus. Is it counting down how much debt is on the loan, increasing your net worth, improving your credit score? All of these will have the same effect, but you need to find something to motivate you to keep on going. It may seem silly, but sometimes I wish I had debt to payoff, because debt, especially high interest debt, is a simple easy motivator. You now have more complex motivations to face. Turn you mind away from this "I could die tomorrow" attitude and try to find a really motivating financial goal.

[feh]

I suggest saving more for retirement. At 32 you're young, but you're not that young. 7% is insufficient; 15-20% is recommended. Pare back your vacations if necessary.

[Savingmonster]

I suggest saving more for retirement. At 32 you're young, but you're not that young. 7% is insufficient; 15-20% is recommended. Pare back your vacations if necessary.

Okay.. but 7% is for my 401k which increases yearly.. .. I usually save about 600-1000$ (mostly $1000) which goes into my online account..

But i'll seriously consider maxing out the 401k at the start of next yr.. ...

And Yes, I do have to cut down on the amt of money I spend on vacations yrly.. I realize that.. That will be tough, but I know I can do it..

snshijuptr, yes, I hit a mental road block.. But No way in hell I would want any debts, forget that. Living w/o Credit card debt is GREAT.. Only thing I have is store Cards and when I buy something, I imediately pay it off in Full the SAME DAY, I don't even wait for a statement.. I wish I was always this way..

My goal is, by time I am 38-40, I would like to be completely Debt free, NO School loans and have $100,000 (no including my 401k) in my online savings account to play around with.. My 30s are so crucial, As I get close to 40 I plan to be a little more aggressive.. Late 30s i'll seriously consider purchasing a home, etc, etc.. The goal will be to eventually increase my net worth.

I know some may think I am not agressive enough though, this is why I want to see what some of you guys say... I'll take advice..

[1milliondollarchallenge]

Hi,

congratualtions on coming so far and paying off all that debt as well as getting so much in savings.

I know you really don't want to scale back your holidays, but I see know other way for you to scale back. I can't fathom spending that much on holidays per year. I understand you enjoy them and you have considered you would scale back.

Have you looked into ways you can cut back on holidays and still have a great time? I have travelled internationally a few times and domestically a fair bit and none of my holidays were terribly expensive.


I think also you need to select a goal that will really motivate you because you are probably in a rut where everythign is going smooth but there are no major goals.

Good luck with it.

[Broken Arrow]

Welcome back, SavingMonster!

Believe it or not, but I remember you. (Hard to believe only because of my chronic short term memory. ) Yeah, I remember we were trying to talk you out of stuffing everything into the bank, and spread some out into retirement funding. So, very glad that you are making retirement contributions.

By the way, how are you getting $1000 a month rent in NYC? That seems rather low for the area.

Also, can you elaborate on the travel? Well, depending on what it is, you can probably save a lot there.

Anyways, just stopping by to say hello and am glad to see that you are doing much better these days.

[Joan.of.the.Arch]

Have you paid absolutely nothing on your school loans since you have been out of school?

How many years have you been out of school?

Do you really have your school loans formally in deferment, or are you simply not making any payments? Do you open the bills and statements that you are sent? How much did you own when you finished school? Has the amount you owe climbed over the years? What is the interest rate? Is it a variable rate? Is it a totally private loan, or was this government backed?

To me, it makes no sense to keep putting off that loan (I presume letting it get bigger and bigger) when you have more than enough money to easily make the payments or even to pay it off in one fell swoop.

Who would be giving you deferments on this loan (loans?) when you are employed, able to take vacations costing 15% of your income, contribute to a retirement fund, have money in the bank, no other debt, and no other extraordinary circumstances.