I figured that another good way to start off would be to currently say what I actually DO have, maybe also a slightly more positive topic for myself too! In high school and throughout college, I tried to save as much as possible. I paid off my car in full and I have never carried a balance on my credit card. I now own a rewards credit car that I put almost everything on except for gas. That card gets fully paid off whenever my bill is due so that I don’t have to pay any interest. Might as well take advantage of that 1% cashback, right?
Other than my massive student loans, here is what I current have in my bank:
- Checking Account: $2,000
- Savings Account: $22,000
- CD: $550
Now I know that most people reading this are probably going straight to my savings account and saying that I have way too much in there, and now I would fully agree with you. I only have an interest rate of 0.90% in my savings account. I plan on lowering my emergency fund to $15,000 and maybe even $10,000 while I am still living at home.
Next month for my loan payment I fully plan on paying off ‘Private 3’ loan for $3,067 @ 7.92% on top of making my regular loan payments for the month. This will bring my emergency fund down to $19,000 which I’m still perfectly fine with at this time.
For retirement savings I currently have:
Employer 401k: $3,186
Roth IRA: $5,548
I’m currently contributing 6% to my Employer 401k, and they match with 3% – the max matching I can get at 50% of employee contribution up to 6%. I’ll take that free 3% and I’m fine with my 6% contribution while I’m still paying off my loans. I maxed out my Roth IRA this year, pulling from my savings account. The money probably would have been better off going into a loan because that’s guaranteed making 7.92% interest while the chances of my Roth doing better than that are pretty low. Maybe it’s just the psychological aspect of starting to save that I enjoy though, similar to to my problem of keeping too large of an emergency fund for my current situation.