Baseline Financial Snapshot
This is a gloomy post, but one that has to be made. My very first net worth snapshot. Hopefully it is all up hill from here.
As an absolute baseline snapshot, I’m going to keep it very vague, but starting at month end it is all out in the open.
- SALARY: $50,000 per year paid monthly, $5,000 bonus with very high likelyhood that I will earn all of it and paid 25% at the end of each project ~ once per quarter, and $35 per diem for every night that I stay in a hotel which will usually equal out to 20 nights per month. Based on 33% tax rate, my monthly bring home should be ~$3,475 (not including any bonus). (However, since I started my job in late May, I may be able to get in on the 15% tax bracket if I work it right… any ideas?)
- I have about $750 in checking.
- I have about $125 in savings.
- I have 4 credit cards with a total balance of ~$2.700.
- I have 2 retail credit cards with a total balance of $1,400.
- I owe $18,220 on a federal student loan.
- I owe $3,500 on a retail bank student loan.
- I owe my parents ~$1,600.
- I have fixed monthly expenses not including payment on any of the above totaling ~$1,900 (although I’m currently trying to figure out how accurate this number is, and do know that starting in August this number will drop a fair amount).
- For those keeping track, we’re looking at about ~$27,420 in debt, ~$1,900 in fixed monthly expenses, and ~$3,475 in monthly bring home (not including any bonus).
Wow, that hurts. At least I am starting to really get a picture of where I am and what work needs to be done. I am excited nervous anxious to do my first end of month net worth analysis / update.
You should get a NetWorthIQ tracking thingy - it makes me motivated to see the little arrow going up. =) I too am WAY in the red, mostly from student loans.
As far as the tax bracket goes, I wouldn’t be horribly concerned about staying in the 15% bracket - we do have that lovely progressive system after all, so even if the money above the 15% cutoff is taxed higher, it’s still extra money. =) You can always put away money in your 401k to reduce your burden, and you can find a bunch of tax deductions. If your parents are NOT taking you as a dependent this year (mine didn’t when I graduated because they reasoned that May was less than halfway) you can claim the Lifetime Learning Credit for yourself (20% of the first $10k of expenses, even if they paid them.) And your student loan interest is deductible. And if you moved for your job, you can deduct that, etc etc etc…
Anyway, my experience last year (I also started in July) is that I was HUGELY overtaxed and even though I had more than $7k of self employment income, and even though I had worked a LOT at college, I still got like a $1k refund. So you can probably have 3 or 4 exemptions on your W-4… just remember to adjust it back down at the beginning of next year. You can use the W-4 calculator to figure it out once you get your first regular paycheck.
Wow! You’re much better off than I am…
=\
I shudder to think what numbers would pop out if I entered my info into the networthIQ thingy.
Wow, I admire how much detail you have in this post. I can’t bring myself to post exact numbers for my income… yet
Don’t worry so much about the debt - the bulk of yours is coming from student loans, which are a “good” debt. Just keep chipping away at it!
Definately track your net worth - it’s great positive reinforcement to remind you why we work so hard to LBYM.
Best of luck,
NP
The good thing is that you are in a position where if you keep your college student mentality a bit longer, you can pay that debt off very quickly.
BTW I would recommend NOT re-opening your past cards. Why tempt yourself to spend more????? I also recommend Dave Ramsey’s Total Money Makeover. Its a great book that walks you through all the babysteps including budgeting and how to pay off your debt quickly!