A Penny Saved

I got my first grown-up paycheck on November 1st. It was for $1,977.99 after taxes and health insurance. I started my new job on Oct. 1st, so it’s been a long time coming! But being a paid on a monthly basis is not that bad of a thing from a budget planning perspective. It makes it really easy to divide my money into the major categories that comprise my budget: living expenses, savings, and debt repayment. Respectively, these comprise approximately 45%, 25%, and 30% of my budget. Yes, that’s right: I plan on living on 45% of my income. And, no, this isn’t some naive fantasy - over the past year, I’ve been tracking my expenditures and I’ve found that yes, this plan is plausible, even comfortable, given my current standard of living.

Living Expenses: ~$890/month. I’m following the “keep living like a college student” strategy. I live in a tiny student apartment that I share with a roommate. All utilities except internet are included in with the $345 monthly rent. I drive a 1992 Ford Tempo, also shared with said roommate. My attendance is assured at any kind of cultural event that offers free food. My furniture is all hand-me-downs, dumpster-dive treasure, or constructed out of milk crates. I know I’ll acquire some nicer things eventually if I’m patient. I know that everything I’m doing now is providing a better future for myself and that knowledge is what motivates me.

Savings: ~$495/month. After I deposited my paycheck in my bank account, I transferred $750 of it into my savings account. I have mine with Capital One. (I also use this account to make payments on my mom’s PLUS loans, that’s why the amount is so high.) I like them because they give offer free checks and a debit card with a savings account, thus keeping my emergency funds very accessible. It’s not the best account for people who have trouble with overspending, but it works great for me. It has an APY of 4.75%, there are no fees, and no minimum balance. (There’s a $25 bonus for opening up an account with them right now. If you want a referral, leave a comment - I know the blog market’s saturated with these, but I figured it was worth a try!)

Debt payments: ~$593/month. Then I went to my Federal Direct loan account and scheduled a payment for $400. I’m signed up for automatic payments, but they don’t start until December. With the little payments I’ve made since I graduated, I’ve already reduced my monthly minimum payments by about $15. It’s exciting to think about how much I’ve saved myself so far in interest! I’m on the ten-year repayment schedule, but I want to get them paid off by my 30th birthday. That puts my deadline at August 13th, 2015. I haven’t consolidated them yet, so my interest rates on my various loans are between 5 and 6.95% - big enough to be annoying, but not big enough to put off saving and investing in favor of paying them off quicker.

That’s my situation. What do you think?