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0. Retirement savings - 20% in Roth 401k A. Mortgage/Rent ~1/3 of residual income + electric + internet. It's more expensive per foot than what I could get, but I live within walking distance of work, so no fuel or commuting for work. I can literally leave work and get home in 5 minutes. I put value on that and the free time it allows me. B. Credit cards / Personal Loans - $250/mo car loan, pay off CC each month. No student loans because I worked all throughout college and managed to find a scholarship or two. I put everything on my credit card and pay it off at the end of the month. 2% back AMEX FIA retirement card, so I get a 2% discount on everything I would be buying anyway, and I don't have to figure out point multipliers and how stores are categorized. Contrary to most advice here, I have a brand new car. Why is that? I moved 1000 miles away from my friends and family, so in the mean time I have no support network should I get I have problems. Thus the warranty and free roadside assistance has value to me. My reliability requirements on the car were fairly high, so I was looking at 2007+. Once you add in the car loan, I was easily within reach of the new car. I got 0% financing on the new car, vs ~3% on a used model, and I get really good gas mileage. Now I can keep meticulous care of my new car and keep all the service records and know exactly how it's maintained. New cars aren't necessarily a bad purchase, you just have to keep them longer to amortize the value. My insurance is about $600 more per year on a 2011 vs the 2001 I had prior, but I'm still under the magic age of 25 or 26. I keep good coverage though, higher than the state required limits. In summary: in a given month, I don't see 20% of my pay, as that's contributed to a 401k. I pay ~50% of the remainder, split between rent/utils and other expenses, leaving me with the rest for non-retirement savings. |