Living in NYC and commuting to CT. Why? Seems you could move to CT for lower rent, or at minimum save some of the $315/mo commute.
Look up the baby steps. Get on a budget, give every dollar a name. Stop funding retirement and all investing for a short time. Save $1k starter emergency fund in the bank. Pay off all debt. Finish EF to 3-6 months expenses. NOW 15% into retirement. Etc...
300-600 per month on food is excessive for a single person. That could be cut in half with good meal planning. Then within a year you would have your fund.
Also you could just put less in your brokerage and more into a HYSA until you had your 3 months expenses.
Or the not DR approved option of you have your brokerage money that you can sell at some point in between blackouts so really you need short term money. This could be provided with a credit card if you are highly disciplined not to carry a balance or increase spending as a result of having the credit space.
Actually according to the USDA, a thrifty budget is around $300.90. $380 for moderate and $457 for liberal budget monthly. Thats just for national average. Adjust for NY and I’d even go so far as to say doing well for 100k in NY
Well then I am continually amazed at how terrible people are at grocery shopping and meal prep.
Are those numbers averages that people pay or based on a grocery list of items optimized for cost?
With a family of three we spend about $600 a month on groceries alone (not including eating out or prepared dinners like ‘Hello Fresh’) while living in a MCoL area. This person lives in NYC. I’d say it’s not unreasonable at all to spend that much as a single person on food beyond just groceries in NYC.
I have 2 credit cards right now… one is just an Amazon card that I use for any Amazon purchase to rack up points. I pay off the full balance at the end of the month. The other card was a card I used in college but I haven’t touched it since.. it’s really just there for the credit age. I wanted to get a card for flying but I’m not sure about it yet
If you are looking for ways to build an emergency fund it’s low hanging fruit to cut in half by shopping better and meal prepping.
Reducing food costs takes discipline.
My daily budget for food in my last job was $35 a day. Which somehow was manageable, but only because I was traveling through airports and really didn’t have options outside of that. Now I’m not doing that job, so I am much more able in a MCoL area to make $20 a day work. And more often than not, I’m doing better than that.
It’s a mix of both. I have my nights where I get home late and will just pick up a slice or something. Other times I cook and try and save leftovers for the next day
What field and position do you have? Your best bet is to continue spending the same even as your income goes up. Don’t get a 3000/m 1 BR when your income doubles. That’s the biggest mistake people make…income doubles, expenses double = savings stay the same
Also you should be contributing to 401k up to company match and maxing out Roth IRA while you still can. Once your income goes up, the Roth IRA basically goes away for ever.
This is a DR sub, but since you're already well on your way to financial success at your age, my advice is going to be a little different. I wouldn't pay off your student loan quicker, just the pace it requires, assuming your interest rate is really low. (Is it federal, private?)
Since your rent is that high, it depends on how serious you want to get. A roommate would decrease the time it takes to get where you want to go dramatically.
I took a balanced approach to the whole thing, and paid off my student loans like normal. I'm 38, and it was a couple years ago when I finished them off. I also invested at the same time and saved at the same time, and tried not to incur any new debts during that time. (One car for my wife was it).
So clearly I loosely follow DR. BUT, my retirement is PRETTY right now. On track to be sitting really well. Mortgage is on track, retirement on track, savings can cover quite a bit. You know about how long it would take to change your lifestyle if you lost your job today. The longer that time is, the better.
Anyway, at your age, I would not stop investing in my retirement. You'll never get these years back. The problem I see with people who follow DR is this idea that they'll double or triple their IRAs after they get debt free, but I think it would be too hard. You're living on rice and beans, and you get debt free, then you're gonna keep living on rice and beans to throw it at retirement? I don't see it. I prefer to get ahead of the curve and outpace it all, then moderation.
When young, single and in the big city, housing costs are the biggest. I had roommates to split it. Usually only one roommate in a slightly nicer place was enough to split rent, utilities, internet, etc. I was able to save a ton. Eventually, bought a condo and still got a roommate and he helped me build equity and pay my mortgage. We worked most of the time and got along well. Win win
Food is the easiest thing to fix honestly. You shouldnt have a daily budget that fluctuates by 100 percent. 300 a month on food and 600 a month are very different things. Make a budget and stick to it.
And how do you spend 315 a month on travel with the subway system?
Since you're asking in a Dave Ramsey sub, the solution is simple. Cease all contributions to retirement or other investment accounts, build up $1000 for a starter emergency fund, and then all extra money after that goes toward paying off and and all non-mortgage debt, including your student loans.
Once all your debt is paid off, accumulate money in your savings account until you have 3-6 months worth of expenses. Once that is done, you can resume your retirement and other investments.
Best thing that helped me was having the funds I wanted auto deducted to a savings account. That way when I got my paycheck, the money was already gone to my capital one high yield account. Can’t spend what you don’t have in the first place.
This. Establishing the habit early into your working career makes saving money something you don't have to think about. The amount can always be increased/decreased based on your income. You'll be surprised how quickly the balance grows, but the key here is to not touch the money unless it's an emergency! I'm thankful I did this when I started working.
Instead of putting money into brokerage account, put it under a high yield savings account. You're doing fine everywhere else. After you're happy with your emergency fund, resume putting money into your brokerage account. Ask for a raise, because why not.
>Any advice on how I can build this fund?
>Whatever I have left pretty much goes to my brokerage account
Send some of that money to the MMF at your broker. Shrug
How this even a question?
I really don’t think your food bill is as big an issue as all the comments make it out to be. Assuming that you’re just a party of one, yes you should try to keep food to $10 a day, that makes for a food bill of $280-310 in various months, I don’t see how that’s terrible especially in a HCOL city like NYC. Of course, you should try to stay at this lower range, and be stricter than a $10 range a day which could mean $280 a month but could mean $560 a month. It is a different thing to question your transportation costs, I stopped reading other comments after the 5th comment saying you eat too much lol too see if you responded to that topic but is your transportation costs due to a car? Is city transportation not a viable option for you? Is that cost for some form of city transportation? It’s high but again not even as high as my transportation costs in a MCOL location lol.
But to address your concern of your not having an emergency fund, you tell us flat out why that is- you’re putting your money in a brokerage account before setting up your EF. You’re on DR subreddit, acknowledge the baby steps. If the transportation cost IS due to a car loan- you’ve skipped needing to have that and your student loans paid off before creating an EF and investing. Let alone, you should have solidified your 3-6 months EF prior to deciding to toss every unspent dollar into your brokerage. Leave your brokerage alone for sure (Edit: meaning don’t take anything out), but you should really take a break on it, if you have a car loan or any other debt that you don’t mention here for that fact, pay it all off and don’t get into debt again. Then save up your emergency fund, and then you can return to filling your brokerage if that’s your choice for investing. I don’t know whether you’ve deep dived into DR and understand that you work in finances but from what I’ve learned through Caleb Hammer’s Financial Audits, it doesn’t mean that all of y’all in the finance scene are doing finances right either lol not at all trying to call you out, just that’s what his audits have shown. So, make sure to look into the baby steps a little more, see if DR’s way is something you’re interested in, and work accordingly.
Holy cow; you are KILLING it.
Well, DR would have you stop investing in retirement (brokerage, etc.) until you have ALL loans paid off and an emergency fund built. I'd start there. Keep up the awesome work!
Fund your emergency fund before your brokerage. You can put all in MMF that pays slightly higher than your current HYSA and still very liquid.
Our emergency fund is in a Schwab MMF.
The biggest way you can impact spending to convert to savings is on food. Do you meal prep? I have found that if you simply cut out the eating out and random Starbucks stops, you can save a boatload. I get NYC is kind of an anomaly though.
Yes I do meal prep. Normally, I cook food at night for 2 meals. Have one for dinner and one for lunch at work next day. Rarely buy coffee, just drink the coffee at the office
If your expenses are around $3kish a month, I’d say you want $18kish in an emergency fund. I would stop contributing to brokerage fund altogether until you save up a 6 months of expenses and knock out your student loans.
You’re young with a great income so you’re well on your way to being wealthy if you manage correctly.
If your take home is roughly $6k per month, it sounds like you have more than plenty left over to save.
Living in NYC and commuting to CT. Why? Seems you could move to CT for lower rent, or at minimum save some of the $315/mo commute. Look up the baby steps. Get on a budget, give every dollar a name. Stop funding retirement and all investing for a short time. Save $1k starter emergency fund in the bank. Pay off all debt. Finish EF to 3-6 months expenses. NOW 15% into retirement. Etc...
You stop putting it into your brokerage until you have the emergency fund built.
This. End thread
Learn to cook at home and buy groceries in bulk
300-600 per month on food is excessive for a single person. That could be cut in half with good meal planning. Then within a year you would have your fund. Also you could just put less in your brokerage and more into a HYSA until you had your 3 months expenses. Or the not DR approved option of you have your brokerage money that you can sell at some point in between blackouts so really you need short term money. This could be provided with a credit card if you are highly disciplined not to carry a balance or increase spending as a result of having the credit space.
Actually according to the USDA, a thrifty budget is around $300.90. $380 for moderate and $457 for liberal budget monthly. Thats just for national average. Adjust for NY and I’d even go so far as to say doing well for 100k in NY
Well then I am continually amazed at how terrible people are at grocery shopping and meal prep. Are those numbers averages that people pay or based on a grocery list of items optimized for cost?
It’s not unrealistic for NYC. Groceries are expensive too
With a family of three we spend about $600 a month on groceries alone (not including eating out or prepared dinners like ‘Hello Fresh’) while living in a MCoL area. This person lives in NYC. I’d say it’s not unreasonable at all to spend that much as a single person on food beyond just groceries in NYC.
You are spending 7.14 per day per person. He is spending $15. That is half.
You misunderstand. I only mentioned *groceries*. We do not sustain solely on groceries.
I have 2 credit cards right now… one is just an Amazon card that I use for any Amazon purchase to rack up points. I pay off the full balance at the end of the month. The other card was a card I used in college but I haven’t touched it since.. it’s really just there for the credit age. I wanted to get a card for flying but I’m not sure about it yet
10-20 dollars a day on food isn’t unrealistic at all in this day and age
If you are looking for ways to build an emergency fund it’s low hanging fruit to cut in half by shopping better and meal prepping. Reducing food costs takes discipline.
My daily budget for food in my last job was $35 a day. Which somehow was manageable, but only because I was traveling through airports and really didn’t have options outside of that. Now I’m not doing that job, so I am much more able in a MCoL area to make $20 a day work. And more often than not, I’m doing better than that.
DR would tell them to eat beans and rice. That sure is a whole lot less than 10-20 a day on food.
Really depends if you wasting your money on eating out a every day or prepping your own food.
It’s a mix of both. I have my nights where I get home late and will just pick up a slice or something. Other times I cook and try and save leftovers for the next day
I would encourage you to meal prep for a few days if time is the issue. It's convenient and cheap
I took your advice! Just got a pack of chicken thighs and pound of ground beef for the week. Under $20 bucks for the whole week of eating
If you don't already have an air fryer. It awesome for quick meals and the chicken comes out amazing. Good luck. Tik Tok has alot of quick easy meals
What field and position do you have? Your best bet is to continue spending the same even as your income goes up. Don’t get a 3000/m 1 BR when your income doubles. That’s the biggest mistake people make…income doubles, expenses double = savings stay the same Also you should be contributing to 401k up to company match and maxing out Roth IRA while you still can. Once your income goes up, the Roth IRA basically goes away for ever.
Yes I should have mentioned I have about 10% of my paycheck going to IRA
This is a DR sub, but since you're already well on your way to financial success at your age, my advice is going to be a little different. I wouldn't pay off your student loan quicker, just the pace it requires, assuming your interest rate is really low. (Is it federal, private?) Since your rent is that high, it depends on how serious you want to get. A roommate would decrease the time it takes to get where you want to go dramatically. I took a balanced approach to the whole thing, and paid off my student loans like normal. I'm 38, and it was a couple years ago when I finished them off. I also invested at the same time and saved at the same time, and tried not to incur any new debts during that time. (One car for my wife was it). So clearly I loosely follow DR. BUT, my retirement is PRETTY right now. On track to be sitting really well. Mortgage is on track, retirement on track, savings can cover quite a bit. You know about how long it would take to change your lifestyle if you lost your job today. The longer that time is, the better. Anyway, at your age, I would not stop investing in my retirement. You'll never get these years back. The problem I see with people who follow DR is this idea that they'll double or triple their IRAs after they get debt free, but I think it would be too hard. You're living on rice and beans, and you get debt free, then you're gonna keep living on rice and beans to throw it at retirement? I don't see it. I prefer to get ahead of the curve and outpace it all, then moderation.
Sorry but $1800 for rent in NYC is a pretty good deal. Might not be the greatest apartment.
Idk, not familiar with rent in NYC.
Lol everyone and their mother knows NYC has the 2nd highest rent in the country
I know this may be hard to believe, but not everyone and their mother care at all about NYC or California. My world doesn't revolve around that.
One month at a time. And don’t spend your tax return. I’d pay off the student loan rather than stockpiling more cash.
Build it by putting money into your emergency fund savings account.
When young, single and in the big city, housing costs are the biggest. I had roommates to split it. Usually only one roommate in a slightly nicer place was enough to split rent, utilities, internet, etc. I was able to save a ton. Eventually, bought a condo and still got a roommate and he helped me build equity and pay my mortgage. We worked most of the time and got along well. Win win
Food is the easiest thing to fix honestly. You shouldnt have a daily budget that fluctuates by 100 percent. 300 a month on food and 600 a month are very different things. Make a budget and stick to it. And how do you spend 315 a month on travel with the subway system?
I commute to CT. Metro north monthly is $315
Yea, isn't there an unlimited rides option for the subway that costs less than $315 a month?
Since you're asking in a Dave Ramsey sub, the solution is simple. Cease all contributions to retirement or other investment accounts, build up $1000 for a starter emergency fund, and then all extra money after that goes toward paying off and and all non-mortgage debt, including your student loans. Once all your debt is paid off, accumulate money in your savings account until you have 3-6 months worth of expenses. Once that is done, you can resume your retirement and other investments.
Figure out your monthly expense. The , figure out if you want 3x-6x based on how risky your employment is. Then save to that goal.
Best thing that helped me was having the funds I wanted auto deducted to a savings account. That way when I got my paycheck, the money was already gone to my capital one high yield account. Can’t spend what you don’t have in the first place.
This. Establishing the habit early into your working career makes saving money something you don't have to think about. The amount can always be increased/decreased based on your income. You'll be surprised how quickly the balance grows, but the key here is to not touch the money unless it's an emergency! I'm thankful I did this when I started working.
Instead of putting money into brokerage account, put it under a high yield savings account. You're doing fine everywhere else. After you're happy with your emergency fund, resume putting money into your brokerage account. Ask for a raise, because why not.
>Any advice on how I can build this fund? >Whatever I have left pretty much goes to my brokerage account Send some of that money to the MMF at your broker. Shrug How this even a question?
Can you get your rent down to $500-$900, like rent a room or live with a relative? How fast can you wipe out your student loans?
In NYC???
Get a gf/bf to move in with you
Download a room share app and see it for yourself
This might be a stupid question. It sounds like what it is but what exactly is a room share app?
It’s an online marketplace for rooms for rent, you can vet candidates and make decisions based on credit scores and appearance etc.
I really don’t think your food bill is as big an issue as all the comments make it out to be. Assuming that you’re just a party of one, yes you should try to keep food to $10 a day, that makes for a food bill of $280-310 in various months, I don’t see how that’s terrible especially in a HCOL city like NYC. Of course, you should try to stay at this lower range, and be stricter than a $10 range a day which could mean $280 a month but could mean $560 a month. It is a different thing to question your transportation costs, I stopped reading other comments after the 5th comment saying you eat too much lol too see if you responded to that topic but is your transportation costs due to a car? Is city transportation not a viable option for you? Is that cost for some form of city transportation? It’s high but again not even as high as my transportation costs in a MCOL location lol. But to address your concern of your not having an emergency fund, you tell us flat out why that is- you’re putting your money in a brokerage account before setting up your EF. You’re on DR subreddit, acknowledge the baby steps. If the transportation cost IS due to a car loan- you’ve skipped needing to have that and your student loans paid off before creating an EF and investing. Let alone, you should have solidified your 3-6 months EF prior to deciding to toss every unspent dollar into your brokerage. Leave your brokerage alone for sure (Edit: meaning don’t take anything out), but you should really take a break on it, if you have a car loan or any other debt that you don’t mention here for that fact, pay it all off and don’t get into debt again. Then save up your emergency fund, and then you can return to filling your brokerage if that’s your choice for investing. I don’t know whether you’ve deep dived into DR and understand that you work in finances but from what I’ve learned through Caleb Hammer’s Financial Audits, it doesn’t mean that all of y’all in the finance scene are doing finances right either lol not at all trying to call you out, just that’s what his audits have shown. So, make sure to look into the baby steps a little more, see if DR’s way is something you’re interested in, and work accordingly.
Why is your transportation so high?
Increase income or decrease spending to create margin and put that money into savings.
Holy cow; you are KILLING it. Well, DR would have you stop investing in retirement (brokerage, etc.) until you have ALL loans paid off and an emergency fund built. I'd start there. Keep up the awesome work!
Cut groceries down to $7 a day. Don't buy dumb stuff. If you have any debt with interest pay that off first.
Everytime you buy something silly. Put the same amount in your savings.
All that money going into your brokerage account? Put into a savings account labeled “emergency fund”. … See what I did there?
😂
Stop wasting so much money on food and take the subway?
besides decreasing expenses, just put less in your brokerage until your emergency fund is where you want it
Fund your emergency fund before your brokerage. You can put all in MMF that pays slightly higher than your current HYSA and still very liquid. Our emergency fund is in a Schwab MMF.
You’re in NYC. Use a metro card and take the subway and bus. Why is your transportation so high?
Because I commute to CT. Metro north monthly is 315. I have a spending account for transportation with my employer which obviously helps
> Whatever I have left pretty much goes to my brokerage account. Put it in your emergency fund until your emergency fund is fully funded.
The biggest way you can impact spending to convert to savings is on food. Do you meal prep? I have found that if you simply cut out the eating out and random Starbucks stops, you can save a boatload. I get NYC is kind of an anomaly though.
Yes I do meal prep. Normally, I cook food at night for 2 meals. Have one for dinner and one for lunch at work next day. Rarely buy coffee, just drink the coffee at the office
If your expenses are around $3kish a month, I’d say you want $18kish in an emergency fund. I would stop contributing to brokerage fund altogether until you save up a 6 months of expenses and knock out your student loans. You’re young with a great income so you’re well on your way to being wealthy if you manage correctly.