Post-Grad Savings

[Anonymous]

Hello everyone, 

I'm new to the forum and figured I might as well dive in. I graduated last May 2017 with a degree in Computer Science. Since then I've been working as a software engineer full-time and make 65K per year. Over the past year, I've brought my credit up from around the 490's to the 650's across the board. I currently have the AMEX Delta Gold Skymiles (1K limit), Discover IT (1K limit), NFCU cashRewards ($500 limit) and Capital One QS1 ($500 limit which will increase next month to at least $750 -- credit steps program). I have about $1,200 saved up and by August I will have about $2,200. After August I won't have much to invest/save because my student loans will be out of deferment. I owe about 68K in student loans and as of right now it looks like they will be having me pay about $600-700 each month. I currently stay with my parents and don't pay rent or own a home (besides $400 to help my parents out each month). I have a $466 car not that I opened in August of 2017 with 11.9 interest rate. I plan to refinance that next month with NFCU. $27k left on loan, $22K for 10-day payoff quoted from Capital One. I am wanting to find the best way to invest my money I currently have saved up. Right now it's just sitting and I feel like I could be doing much more with it. I am looking to invest for only short-term. Any ideas/recommendations for saving (or even credit and student loans) would be greatly appreciated.

TIA

[Anonymous]

Also, I contribute %3 of my checks to 401k. I am looking for a quick way to increase my savings fund so 401k probably won't help much as it is more long-term.

[Appleman]

To start congrats on graduating, the good salary and score improvements! Much to celebrate with those items.

My first suggestions is to explore some budgeting programs. Take a look at YNAB, Dave Ramsey, Mint and others to see what speaks to you. You are wanting to continue to improve and the best thing you can do is begin to budget that money. Not creating new debt will be the biggest obstacle. Once you have a handle on your budget you will see what you realistically can move around to various goals.

Good luck and congrats!

[Anonymous]

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@Anonymouswrote:I have about $1,200 saved up and by August I will have about $2,200. After August I won't have much to invest/save...  I am wanting to find the best way to invest my money I currently have saved up.... I am looking to invest for only short-term. Any ideas/recommendations for saving (or even credit and student loans) would be greatly appreciated.

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The best way to invest under 5k (if that is your only cash savings) is in a high interest savings account.  All financial planners will tell you that you need an emergency fund of cash. 

Some savings accounts will allow you to earn 5% on the amount.  The Insight savings account is one such option:

https://www.doctorofcredit.com/insight-5-apy-prepaid-card-5000/

I agree 100% with the other commenter that you should work on developing a budget and financial plan to enable you to save money, pay off CC debt, and pay off the loans.  (Paying the loans down has value but it is not as important as a budget and plan that will enable you to have zero CC debt and saving a decent chunk of money every month.)  You have been grossing 5k every month and have no rent -- and yet you anticipate only being able to save $1000 in the next four months.  That should be a signal that you have been spending too much (not being critical, just trying to be helpful).

Best wishes!

[Anonymous]

Thanks everyone for the replies. I am definitely going to check into a savings account with a better interest rate. Right night I’m using a basic one at NFCU. Also, I’ve been trying to work out a budget for myself so I figured I might as well share that on here too. Also, the only reason I haven’t saved much more by now is because I had to pay to delete collections and a lot of medical bill debt from when I was in school. I also just got back from a vacation in DC so that is why I haven’t been able to save more so far. But I guess like you all said there’s no reason I shouldn’t be saving more. So here’s what my monthly spending looks like....


First paycheck, take home $1734 :
God/Church/Helping others - $200
Car - $466.36
Comm College balance I have from two classes I took last year (couldn’t get financial aid because I wasn’t seeking a degree there...just two classes they had for cheaper) - $150 per month, this one will be paid off in 8 more months
Gas and food - $120

Total spend: $936.60
Total remaining: $797.40

Second paycheck, take Home Pay $1676:
God/Church/Helping others - $220
Sprint - $102
Netflix - $14
YMCA - $56.50 (for myself and Mom)
University balance I had left over after graduation - $175 per month, 4200 left
Car insurance (cheapest available due to dui from when in school) - $425
Gas and food - $120
Parents to help out with rent - $400

Total spend: $1,512.50
Total remaining: $163.50

Total net pay: $3,410
Total spend for month: $2,449.10
Total remaining for month: $960.90

I just now got to a point this month to where I don’t have any other medical bills or debt besides what’s listed above. So that extra $900 I will be able to do something with each month until August as that is when my student loan payments kick in which are estimated to be about $600-700 per month. Also the $400 to my parents can’t really be removed because my mom retired early due to a disability she has so it’s just my income and my dad’s.

[Anonymous]

You can open brokerage account and dollar cost average into an index fund monthly with your excess cash 

keep maybe 2 months salary in easy access cash account for emergency like car repair

[Anonymous]

Also I would try to get rid or car loan. Pay cash for cheaper car. I’m not a fan of borrowing to finance a depreciating asset. 

[silvius]

Definitely.  A paid for car with a good history of quality (Honda, Toyota, etc) will help you reach goals.  Congrats on the computer science degree, one of the smartest to get for those who have the discipline to stick with it!

[Anonymous]

What if we dont have the minimum amount (10K) for the index fund? 

[Anonymous]

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@Anonymous wrote:

What if we dont have the minimum amount (10K) for the index fund? 

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There are hundreds of good index funds that do not require a minimum investment of 10k.

As per your other thread, my advice is for you to first read a short but sound introduction to investing before trying to put money into funds.  The one I mention in your other thread is IF YOU CAN by William Bernstein.

In the meantime you can place your money into a high-interest savings account.  Some earn 5%.