As a new, just employed engineer graduate, how much money should I save each month after expenses?

Question

I will have rent, car payment, loan, utilities and other living expenses. I am trying to decide how much I can afford for an apartment and still have something to save. I know the more the better, but whats the minimum?

Answer 1

The minimum is whatever you can afford. The maximum is whatever you can afford. Since you say you have a loan, I would focus on paying that off as quickly as you can before you start saving money for yourself. That is still a debt, and you can't say you're saving money until it is written off. Not to mention how much you will save on interest.

Once the loan is paid off (check that there aren't any penalties for paying it off early), start saving as much as you are comfortable putting away. You might have to make some lifestyle cuts, like not going out as much, or not eating take out as often, but in the end, it's worth it.

Answer 2

Congratulations on becoming an engineer, SweetPea! It is truly a wonderful and rewarding career.

Right now, you aren't making a lot of money, so save $25 from each paycheck. Put it into a savings account or mutual fund. Or, whatever you have leftover on payday from the previous paycheck, bank that. When you reach $x, move it into a mutual fund.

Your paychecks are going to get significantly bigger in a short amount of time. When this happens, increase the percentage of your savings.

For instance, I recently got a new engineering job with a $10,000 increase more than my previous one. I will live off of the previous salary (which was extremely comfortable, including the savings) and bank the remainder.

Feel free to email me for specifics. I save a LOT of money with pain.

Answer 3

Typical rule of thumb is your rent should not go above 1/3 of your gross income. Less if you have heavy debt (i.e. your car payment, any balances on credit cards). Try to make sure you save *at least* 10% of your gross income, and really, as much more than that as possible. These rules hold true for pretty much anybody, but as an engineer, I'm sure you'll understand this: The more you save now, thanks to the magic of compound interest, the more you'll have at retirement. I know, that sounds like a long ways off, but as one engineer to another, believe me, it makes a big difference *when* you start putting money away. Good luck.

Answer 4

I will go low key at first, get rid of the car and buy a used one so you have one less monthly payment.

Find the cheapest place to stay, rent sharing, room for rent etc. Just play homeless for a while. If you listen, you will have very little expenses and nice chunk of monthly savings.

If you save $1700 a month or more (this is in addition to 401K payroll deductions etc), you can gradually upgrade your tastes and eventually live like a normal human being.

Answer 5

that's what i might do If I have been you earnings: $2000/Month Unavoidable expenditures like hire, cellular telephone etc: $1200/Month reductions: $800/Month a week pass $a hundred and fifty/Month on your reductions as habitual for next twelve months. in this way your checking account might constantly be at minimum point consistent with paycheck and you're protecting $50 as an added for extra expenditures. in case you think of you prefer greater fee then substitute the pass to $a hundred twenty five/Month. in case you think of you could save greater then substitute the pass to $one hundred seventy five/Month. you will possibly hesitate to have any added fee because of the fact your checking account has minimum stability. in case you hold each and each of the earnings one single account, then you does no longer even comprehend while or the place it became spent.

Answer 6

It depends on your situation. I personally like to save about 1/3 of my income after all expenses (housing, car, credit card, insurance, food, gas,clothing etc.). I feel it is more of a personal choice then a rule of thumb.

Answer 7

Minimum savings should be 15% of pretax income. (I don't remember where I read that, but I have read it numerous times. BUT before investing, (according to Suze Ormon, along with other financial advisors), you should have 9 mos worth of living expenses saved up in an emergency acct.

Answer 8

Make a budget for yourself and stick to it. Set aside a certain amount every month that you want to save. Don't buy anything on impulse, even if it seems like a great deal at the time.