I’m a 25M who recently graduated from PA school a few months ago. I’ve been working at my new job for the last couple of months, and with the new year coming up, I’m trying to figure out the best way to budget for saving, investing, etc. I have some general knowledge about investing and recently opened a Roth IRA. Here are my current numbers: Salary is 110k a year, which is about $5870 a month after deductions like taxes and my 401k. My 401k contribution is $1,100, which is 6% of my paycheck, and my employer matches 3%. Right now, I have 70% in VIIIX, 15% in VRGWX, and 15% in VEMPX. My Roth IRA has $2000, split about 50/50 between QQQM and SPLG. I have $1500 in checking and $7000 in savings, which earns 4.00% APY. My monthly bills, including rent and utilities, are around $750, and other bills are about $60. I also pay off my credit card every month, which is about $250. So, my total monthly bills come to around $1060. For gas and groceries, I spend about $250 a month, making my total expenses around $1310. I have school debt of $146,000, and I’m currently consolidating and signing up for an income-based repayment plan since I’m working at a nonprofit. My monthly payments should be around $700 to $800. I also owe my parents $15,500, and I want to pay them back quickly, thinking about $500 a month. Any advice would be greatly appreciated. I got engaged two months ago, and I plan to get married in Summer 2026. I want to save for a down payment on a house soon but need to figure out my finances first. My fiancé is graduating soon, aiming for a salary of around $50 to $60k in June 2025. Thanks for your help.
Hey, congrats on your graduation and engagement. You’re doing really well for yourself. I think the 50/30/20 rule is a solid guideline. If you can grow that 20%, it’ll help you in the long run. Consider budgeting 20% for savings, with 10% for liquidity and another 10% for retirement. You’re already doing better than that. For housing, aim for 30%, and the rest can be for your other expenses. Establish an emergency fund too, maybe 6-12 months of your bills based on your risk tolerance.
@Payton
That sounds good, but what do you mean by liquidity?
Dex said:
@Payton
That sounds good, but what do you mean by liquidity?
Liquidity is just having cash available for unexpected expenses or opportunities. It’s good to have some money readily accessible.
@Payton
Also, consider a whole life insurance policy. It can serve as a safety net and also allow you to take loans against it while still earning dividends.
Have you thought about making your 401k contributions Roth? You’re at a low tax rate now, which is a good time to pay taxes on that money before it grows.
I support your plan to pay back your parents first. Keeping that relationship strong is really important, and it’ll feel good to get that off your plate.
Congrats on your engagement and making such big life decisions. It’s a lot to handle, but you seem to have a solid plan. Just keep an eye on your expenses and adjust as needed. Maybe try budgeting for fun stuff too, like a date night or weekend trip.
If you want to keep track of your budget, I found this Google Sheet really helpful. You can save a copy for yourself and customize it. Here’s the link: https://docs.google.com/spreadsheets/d/1lX9eJwNj7k8McluyGriXCfqtwK1QeK2RiHYSL4xzjBE/copy.
Or if you’re looking for something more comprehensive, I really like Monarch for budgeting. It tracks everything and helps set goals for your finances. You can check it out here: Redeem your extended 30-day trial for Monarch | Monarch Money.