What's an acceptable amount of "spending money"/savings?

Question

I’m new to the working world and I’m still focused on college when I was cheap. I feel overwhelmed and guilty when I spend money. I’m not sure if I’m being wasteful or not. Here’s where I stand…

$2,830/month after taxes - Insurance/Phone/Rent/Utilities($700)= $2,130/month

$250 - 401k like plan (taken out before the $2800 total)
$250 - IRA
$400 - Money Market Fund (future wedding/honeymoon –3 months emergency there too)
$280 - savings (plane tickets, small expenses that may come up so I don’t have to dig into emergency, etc. If this reaches $750, I split between IRA and MM)

Result is $1200/month. I give myself $300/week. This covers food, pet care, gas, and anything else I desire in one week. If have a big purchase (plane ticket or a vet bill, need or want), I take it out of my savings but I often supplement with my personal weekly allowance.

I know that what I have is a blessing and I do not want to mess it up. Do you think this is appropriate?

I should also add that my workplace has included health care and a great retirement program in addition to the 401k, so I even have that for future security...

Answer 1

Wow, impressive

I would suggest 6 months emergency fund.

As far as savings and money market make sure you are earning the max you can and still keep it liquid. Does your money market and savings earn at least 5.05% these banks do with no fees or minimums
www.emigrantdircet.com
http://www.us.hsbc.com/1/2/3/personal/savings/online-savings

You should consider buying a house/apartment depending on where you live. Having a place to live that is totally paid for (save taxes and maintenance) when you are retired is nothing to sneeze at and could be a huge financial asset should something arise.

You should also consider regular investing in the stock market through mutual funds and/or ETF's.

Answer 2

Well, $300 a week for spending money is a little high, but you figure food at $50-$100 a week and that's 1/3rd right there. However, a lot of the service industry people (customer svc, cleaning people) barely clear $1200 a month and they pay their rent and everything out of that so you arent being 2 cheap.

You are certainly 1 step ahead of almost everyone else by starting your savings right away as well as your IRA. Very few people are smart enough to have that 3-6 month emergency fund/cushion.

I personally don't spend more than $40 a week on food but I only eat out maybe once a week and I take my lunch to work.

It doesnt hurt to feel guilty once in awhile but as long as you stick to your savings and priorites, it's ok to spend money on yourself now and then. Just don't get caught up buying new clothes every week or following every fad. That can cost a bundle.