My ship is coming in, and I am at a loss of what to do with the cargo - Page 2

paymydebt · 10-24-2009, 01:07 PM

Yes pay the debt off first. You will never start feeling rich until that's gone. Then increase your emergency fund which they say should be 3 months but why not make it 6 months to be more on solid footing. Cars do get old and start giving problems so you may have to consider saving up for a newer one. Then look into different types of savings & investments but research good to make sure they fit in with your future goals and are not a high risk level.

dfargher · 10-27-2009, 04:02 PM

This same thing happened to DH and I a couple years ago. We went from 35k to 108k in a matter of months. If I could give my past self advice it would be to IMMEDIATELY max out my 401(k), as in before you get your first paycheck. Bonus points if your work can direct deposit part of your paycheck into a separate regular savings account at a bank other than the one you normally use. The point is, hide that money from yourself so that you only see what you were living on before. Even if you are disciplined, seeing those dollars roll in so fast is a shock to the system.

Just do this for a few months, get the feel for it. Then, after you've had some time to think and plan and get advice, maybe start channeling some of those funds to other places: debt repayment, investments, etc. If you are comfortable with the way you have been living, try to keep that up for as long as possible.

One other VERY important piece of advise: DO NOT tell anyone what you make. If you can contain your excitement, try not to tell people how BIG of a deal it is that you got promoted. That was the single biggest mistake we made. We thought "our friends and family are real people, they won't care that we make more than them now. It won't affect the way they think about us." False. People will think differently if you make more than they do, they just can't help it. If you make significantly more, you stop having as many things in common, even if you don't change your standard of living.

DH and I drive the same car and have the same small TV we did when we were dirt poor newly-marrieds. We live in the same zip code (though we own now), we eat at the same restaurants (we even eat out less). We don't have a cable TV, and we still shop at thrift stores. But, our worries about the future are different. We worry about retirement, inflation, taxes, and when we'll have enough to start our own business. Our cohorts worry about getting out of debt, whether they can still get a house with 0% down, and the post-xmas bill they'll face in January. We can't relate to each other as well anymore. Now, we're in that 20-something transition period post-marriage, pre-children. So, some of this difference may be just attributed to growing pains, but it definitely feels like our friends look at us sideways on certain issues. We should never have opened our big mouths.

Just my $0.02...

Socal104 · 10-27-2009, 07:10 PM

Congrats on the promotion. I think everyone's got you covered well. Getting rid of the consumer debt is a no brainer and at 2.7% with an tax deduction (if you itemize), it's hard to want to pay that off when you are likely to be able to invest at a higher rate.

I would think beyond just building up a rainy day fund. Why not use this as an opportunity to build up some real wealth over the next 5 plus years? As other posters have commented, be your own tax man, max the 401(K) and put together a nice portfolio of stocks and enough cash so you don't have to worry. Good cars can last a very, very long time and being car loan free is the best feeling in the world. If it fits your profile down the road, I would put enough liquid assets together to buy a income producing property when the time is right (cashflow positive from day 1). If you have stocks, retirement, cash, and income producing real estate with no debt, you are completely in the driver's seat.

My suggestion is to max the 401(K) and then put away 15% of your income on top of that. Remember also that at $20K, you probably weren't paying any taxes, at $50K, its won't be too bad, but it might be a bit of a shocker.

Once you start earning more, its amazing how fast your expenses will rise with your income. Stay debt free (except for that super cheap student loan) and build up a nice set of assets. And as a previous poster said, don't tell everyone about it or every uncle and cousin that hasn't seen you in 10 years will suddenly be looking for a "loan".

Congrats again.

SoCal

Dr Dean · 11-01-2009, 01:32 PM

I would only like to add one suggestion to the good ones already posted.

That would be to make sure you use all the available new technology to make your emergency and other savings "automatic". Have whatever amount you choose to add monthly from your paycheck automatically drafted into your emergency savings and what ever other savings accounts you decide to fund.

The money that you don't see going to these other accounts will tempt you much less to overspend than a fat checking account-that will be calling your name everytime you see a "material something" you didn't buy back when you were broke.

Great to hear about the promotion and hope they keep coming.

10-24-2009, 01:07 PM	#11
paymydebt Junior Member Join Date: Oct 2009 Posts: 4 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	Yes pay the debt off first. You will never start feeling rich until that's gone. Then increase your emergency fund which they say should be 3 months but why not make it 6 months to be more on solid footing. Cars do get old and start giving problems so you may have to consider saving up for a newer one. Then look into different types of savings & investments but research good to make sure they fit in with your future goals and are not a high risk level. __________________ Pay My Debt - my journey to be debt-free

10-27-2009, 04:02 PM	#12
dfargher Junior Member Join Date: Oct 2009 Posts: 1 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	Take it slowly This same thing happened to DH and I a couple years ago. We went from 35k to 108k in a matter of months. If I could give my past self advice it would be to IMMEDIATELY max out my 401(k), as in before you get your first paycheck. Bonus points if your work can direct deposit part of your paycheck into a separate regular savings account at a bank other than the one you normally use. The point is, hide that money from yourself so that you only see what you were living on before. Even if you are disciplined, seeing those dollars roll in so fast is a shock to the system. Just do this for a few months, get the feel for it. Then, after you've had some time to think and plan and get advice, maybe start channeling some of those funds to other places: debt repayment, investments, etc. If you are comfortable with the way you have been living, try to keep that up for as long as possible. One other VERY important piece of advise: DO NOT tell anyone what you make. If you can contain your excitement, try not to tell people how BIG of a deal it is that you got promoted. That was the single biggest mistake we made. We thought "our friends and family are real people, they won't care that we make more than them now. It won't affect the way they think about us." False. People will think differently if you make more than they do, they just can't help it. If you make significantly more, you stop having as many things in common, even if you don't change your standard of living. DH and I drive the same car and have the same small TV we did when we were dirt poor newly-marrieds. We live in the same zip code (though we own now), we eat at the same restaurants (we even eat out less). We don't have a cable TV, and we still shop at thrift stores. But, our worries about the future are different. We worry about retirement, inflation, taxes, and when we'll have enough to start our own business. Our cohorts worry about getting out of debt, whether they can still get a house with 0% down, and the post-xmas bill they'll face in January. We can't relate to each other as well anymore. Now, we're in that 20-something transition period post-marriage, pre-children. So, some of this difference may be just attributed to growing pains, but it definitely feels like our friends look at us sideways on certain issues. We should never have opened our big mouths. Just my $0.02...

10-27-2009, 07:10 PM	#13
Socal104 Member Join Date: Oct 2009 Posts: 53 Thanks: 1 Thanked 1 Time in 1 Post Reputation: (31)	Your getting great advice Congrats on the promotion. I think everyone's got you covered well. Getting rid of the consumer debt is a no brainer and at 2.7% with an tax deduction (if you itemize), it's hard to want to pay that off when you are likely to be able to invest at a higher rate. I would think beyond just building up a rainy day fund. Why not use this as an opportunity to build up some real wealth over the next 5 plus years? As other posters have commented, be your own tax man, max the 401(K) and put together a nice portfolio of stocks and enough cash so you don't have to worry. Good cars can last a very, very long time and being car loan free is the best feeling in the world. If it fits your profile down the road, I would put enough liquid assets together to buy a income producing property when the time is right (cashflow positive from day 1). If you have stocks, retirement, cash, and income producing real estate with no debt, you are completely in the driver's seat. My suggestion is to max the 401(K) and then put away 15% of your income on top of that. Remember also that at $20K, you probably weren't paying any taxes, at $50K, its won't be too bad, but it might be a bit of a shocker. Once you start earning more, its amazing how fast your expenses will rise with your income. Stay debt free (except for that super cheap student loan) and build up a nice set of assets. And as a previous poster said, don't tell everyone about it or every uncle and cousin that hasn't seen you in 10 years will suddenly be looking for a "loan". Congrats again. SoCal __________________ www.LiveCheap.com Live the Good Life....Cheaply! Twitter: @livecheapnews Facebook.com/LiveCheap

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11-01-2009, 01:32 PM	#14
Dr Dean Junior Member Join Date: Oct 2009 Location: Georgia Posts: 14 Thanks: 1 Thanked 2 Times in 2 Posts Reputation: (12)	I would only like to add one suggestion to the good ones already posted. That would be to make sure you use all the available new technology to make your emergency and other savings "automatic". Have whatever amount you choose to add monthly from your paycheck automatically drafted into your emergency savings and what ever other savings accounts you decide to fund. The money that you don't see going to these other accounts will tempt you much less to overspend than a fat checking account-that will be calling your name everytime you see a "material something" you didn't buy back when you were broke. Great to hear about the promotion and hope they keep coming.