Mar 22nd, 2007
I decided to make a series about a fictional character (though he is based on a conglomeration of people that I know). The idea is that he is the typical guy coming out of college with some various debts and a shiny new job. I think this reflects a majority of college grads at this point. I will set his starting salary a little higher than average (roughly 5k a year over average) for the simple reason that I will be using my own spending habits which due to job related duties and the fact that I don’t mind spending extra money to eat healthy at home might be higher than average. This is scalable as well. For instance you might make 45k a year but only have student loans and no credit card debt. The idea is more to take “theory” and make it into “reality”….something I haven’t seen done anywhere, except with people using their own situations. The blogs I have seen of this have tended to be poorly kept and irregularly updated. My goal is to be consistent so as to get a good picture of just how quickly your finances can change.
Weight: 180 lbs
Student Loans: $18,000.00
Credit Card Debt: $5,000.00
Car Loan: $14,000.00
Monthly Set expenses:
Car Payment: $300.00
Utility Payment/Cable: $300.00
Cell Phone: $40.00
Car Insurance: $80.00
Joe estimates that his assets total about 20k. His car is worth 16k, and he has a laptop that he bought with student loan money. He also has a nice guitar and some other odds and ends that add up to about 4k.
Joe is starting his first job. He got lucky, he landed a job with IBM doing java software development. His salary will be $60,000 a year. For the sake of making things easy we will say he received his first paycheck March 1.
Joe’s company does a standard 401k match, where they match every percent up to 3%. Joe decides to put 5% of his salary toward his 401k. He also enrolls in their health insurance plan, which costs him $100 per month and is automatically deducted from his paycheck.
His per paycheck donation is $125.00 to 401k. His per paycheck total taxes are $623.00 (based upon Fed + Colorado withholding). This leaves him with $1752. Take out the health insurance and it becomes $1702. We will round this to $1700 for the sake of my (fairly small) rounding errors in tax calculation.
So here is where we start: on march first, Joe has received his first paycheck, and paid half his monthly fixed bills. He will pay the other half mid month (as I generally do). This leaves Joe at $990 on March first in his bank account.
Here is how his financial situation looks like right before his first paycheck (February 28):
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