Apologies for this long post. I’m 27. I kind of fucked up w.r.t. savings. Not going to lie. I’m sorry, but all I can think of when other 27-year-olds post their savings is that I fucked it up big time. Going to talk to a financial advisor from Nvidia next week, but I want to hear from people on blind as well. I need help clearing the Edu and Car loans as soon as possible. And also on how to save money. This lifestyle will definitely fuck me up in the future. I want a nice house down the line. After a few (3-4) years. I want to set my life properly by having good savings and investments by then. Not trying to be an idiot. Just looking for some help. Base is 175. I get 6k in hand monthly after 401k (12k/yr), ESPP (15%), HSA, and other deductions. I spend ~$5000-5200 per month on everything. All calculations are below. Breakdown of 5000-5200 -> - I use a master’s bedroom and a private bathroom. Rent is 1500 + 250 utilities. - Car and insurance are 450. - Food and others - 1000. Very conservative estimate. I can easily bring this down. - Subscriptions - streaming and health - 150. - YouTube tv, Netflix, Disney plus, fitness pal, Apple fitness plus, Apple Music. I need to bring this down too. - Phone bill - I pay for myself and two other family members’ phones and bills. $320. - Edu loan payment: 1k. - Mom money. Around 350-500 per month. Loans: - Car: 8k left. 6% interest. Refinancing it next week. - Edu: 42k left. 5 years left at 11.45% interest. Money I have: - 20k in cash. - 42k in 401k. - Yet to get Nvidia espp stock and RSUs. Espp would be 10k, and RSUs would be ~55k in summer next year. It should have been 70k. But stock dropped. Whatever at this point. - No intel stock. (Previous company). Sold it off asap all the time. Past and current expenses plus problems- - I spend a lot. Safe to say that I have a spending problem. Unnecessary clothes, shoes, tech products, different experiences, and adventures. It should be cut down. - I had to help my financially struggling family members. It was my choice. They helped me a lot when I was a child. It resulted in significantly fewer savings and the selling of Intel stocks. - My brother and sister stayed with me for a year. Cause they were not in good mental shape. I had to take care of them and took to trips. My choice again. But again, I lost a lot of savings. - Had family emergencies in Canada and India. Flew black and forth multiple times. Going again in September. Hopefully, the last. - I sent money for my parents to get a good and safe SUV. And I send my mom some money from time to time. Let’s say 700-1000 every two months. My questions: - Do I clear my loans ASAP or try to invest in others and gain higher? - Do people typically sell their RSUs to pay the loans off? Cause it seems like a good idea to me instead of paying that much interest on my loan. - How much of my 20k savings should I use to pay my edu loan off? Given my 5k/month expenses, I need 30k in savings for the 6-month rule. I don’t even have that. FML. - Where to refinance auto loan? My credit is 772 with 4.5year history in the US. I'm looking to maximize my savings. I am just looking for some help. Thanks for your time. Tc 175 + 70. (It is 170 + 53 after the stock drop)
Why tf is your loan interest rate so shit. 11% for student loans is unheard of. Get that refinanced too while you’re at it.
Yes. Planning to change it to a personal loan in India. When I was taking my edu loan, I wanted to go with a no-collateral type of loan to have no dependencies on my parents and it resulted in a higher interest rate. Thank you!
I mean you’re at nvidia so it sort of paid off but that loan is brutal lol. Good luck with it.
Given how high inflation currently is I would not rush to pay off the 6% loan.
Seems like if you can cut back the discretionary expenses and family assistance for 12 months, you could clear out your own debts and build up some more savings. I'd start with that, then max out your 401k
That’s a good idea. Given current conditions, I can easily cur down ~70% but not in total. Contributing to 401k exactly to get the max benefits and nothing post that for now. Goal is to be debt free and maximize others. Thank you!!
Same. We have same base and RSUs. I am not touching my espp. and contributing 7K /yr in 401K . Apart from this i am able to save 1K from paycheck. So yearly saving is: ESPP:21.5K+ 401K : 10K + Paycheck Savings: 12K= 43.5K and not counting RSUs. I also support my family back in India. It’s good that you were in a position to support your family, don’t regret it. Just cut down on eating out, you can easily save 500/month. Feel free to DM, if you wanna talk. As age goes, i am 29.
That’s great to hear. Will def DM you tomorrow. Thank you for your support. One question - Why not move your 401k to 12k to maximize our nvidia 401k matching policy? It wouldn’t affect a lot on your savings, is what I feel. What do you think? Need to cut down on food. For sure. That’s a very very bad habit. The worst part is the Starbucks coffee. I feel fine drinking it. But when I see the bill pop up as a notification on my phone, I feel extremely bad. Haha. Thinking that coffee was not worth $6.76 or whatever. And true, I’m glad that I was of some help. I do t expect any money back but just the satisfaction that I helped them helps me.
You are right , i can contribute more in 401K. I needed few extra bucks to pay me monthly emi of education loan.
Your top priority should be the 11% edu loan. It doesn’t make sense to hold cash when you are paying such a high rate. Refinance and if the new interest rate is still at 6% or higher, then use all your cash to pay as much as possible. Apart from that it seems that you have $1k net income (total income - expenses) per month. In order to increase this you need to increase income and reduce expenses. Your income seems aligned with your experience, so I’d focus on expenses. Looking at the big ones: - 1500 for rent: you don’t mention which area this is. Could you downsize? - food and others: this is too high. Do you eat outside a lot? Does nvidia offer food for employees that you can take advantage of? - subscriptions: cut them all. Yesterday. You don’t need any of those - phone bill: get a cheaper plan. Look at MVNOs as well.
Thanks for all your inputs. Highly appreciated. I’m living in Santa Clara. And usually to get a peaceful room, 1400-1500 is the minimum ask anyway. Food is definitely on the very-high side. I have been drinking so many coffees outside. No DoorDash or similar but the coffees. Nvidia has reduced priced food for employees. But it is salty as I find it and I have started to just cook at home to eat what I want. I kind of factored in outside food I might order and eat during a couple of small weekend trips, etc. Just removed all my subscriptions. Saved a big amount suddenly. This feels good! Phone is something I can’t change for a couple of months. Will change that asap too. What phone plan are you on?
Highly recommend the debt snowball strategy. Also suggest organing your bank accounts differently: https://www.huntergalloway.com.au/barefoot-investor-bank-accounts/ ---- The debt snowball method is a "do it yourself" debt-reduction strategy, whereby one who owes on more than one account pays off the accounts starting with the smallest balances first, while paying the minimum payment on larger debts.
Will check it out. Thank you. :)
If you’re trying to cut costs get rid of all streaming expenses first. Take another look at your food budget. My wife and I together spend about half of what you do in groceries + eating out monthly. Also for renting a room you should definitely be spending less, even in a HCOL area. Currently paying 88.80 a month for two unlimited lines with T-mobile. I know I probably could go cheaper with Mint or pay as we go. Suggest you take a look at budgeting tool to help you bucket your money before you spend it. I love youneedabudget.com
streaming, food budget and phone bills are huge. Learn to cook and stop ordering takeout. Stop buying organic stuff and shop at Walmart. Payoff your carloan with a single payment instead of refinancing. Your 401k savings are good. How many years working in US ?
https://youtu.be/xpgFygwc5H8. Might find help in this video
Thank you! Will check it out now.
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All the help you did your family member and family, i feel you should really feel happy and proud, these are money well used and that is the purpose of money. Regarding savings, don't worry so much, you are in a good career and young, so you can save a lot. Start by putting yearly targets - like 50k per year
Thank you. Do you mean saving 50k a year?
Yes