And well, I got my first paycheck, and woah this is a lot of money!
I've been spending like crazy, buying all sorts of stuff, but the inner frugal girl inside me says this is a big nono..
What should i be doing with this money?
Saving for something?
Some kind of a retirement savings?
Invest or something (I hear lots of terms like liquid and solid)
I don't know, I am 23 years old and very confused...Please give me your advice.
I make about $5800/month, and I only have about $2000 of expenses (but currently Im shopping like a lunatic)
Nothing wrong with blowing your first check on stuff you want - I did the same thing 50+ years ago. Just don't get into the habit. If your job has a 401K, get it it at least up to the amount of any employer match. Max out a ROTH IRA every year. If you buy a house, buy a decent one in a decent area, but don't buy the most expensive one you can get financed for, even though the realtors will push you hard to do that - they make a % so have incentive to push you toward spending as much as you can.
You make a lot, and can easily afford to spend some money on things you want but don't need. That's ok as long as it doesn't get out of hand after the first couple paychecks. But invest most of the excess in something like growth mutual funds. Drive a decent car but not a super expensive one. Pay off any credit card balances every month.
When you retire, you'll be real glad you did all this since you'll be able to do pretty much what you want to.
Bank a lot of it. You may want a spouse and a house in the near future. Plus the mini-van and children. Normally, I would say to ignore formal retirement plans at your age (a house IS part of a retirement plan - because you lock in the price, and someday the mortgage expense ends) but given your high salary, if your company has a matching retirement plan give it strong consideration.
It is okay that you have splurged some. Now listen to your inner frugal girl. "Liquid" means it is cash, or very easily converted to cash. "Solid" is not an investment term. One might say it to confirm they made a good choice.
Get a credit card and use it wisely. - - PAY IN FULL every month after you get and review the statement!
My suggested budget
2000 expenses
1000 for extra debt repayment, ill assume you have student loan debt
550 Roth IRA
500 liquid. Just a regular savings account
1700 for personal expenses, travel, things that come up
does your employer offer a 401k plan?? if so, take advantage of it and start saving $$ into it now while you are young.............if they don't offer one, you can search for one online; just be sure to ask what their fees are
