No, I haven’t forgotten about Joe. One month was plenty of time to give him to settle into his new job. First lets take a look at those debts and savings.
Since Joe has a nasty high percentage rate on his car loan (10.37 percent) he payed:
Car Prinicpal: $179.04
Car Interest: $120.96
He now has $13820.96 remaining on his car loan.
On his credit card he had a $5000.00 balance at 20% interest rate. His minimum payment was $125.00 however, he decided to pay $200 this month toward his card so it came out to be:
Credit Card Principal: $116.67
Credit Card Interest: $83.34
He now has $4883.34 remaining on his credit card.
Luckily he is only 2 months out of school so he still doesn’t have to pay on his school loan (6 month grace period) which is a good thing because he didn’t budget his expenses all that well this month, as we will look at below in a minute.
Now for the good news.
Joe’s contributions to his 401(k) were $200.00 per paycheck including company match ($125 + $75) for a total of $400 for the month.
After debts and savings this month, Joe had $1980.00. However that extra $200 he put toward his credit card dropped him down to $1780.00
Starting money $1780.00
Gas for the month: $180.00
Camera Radar speeding ticket: $60.00
New jeans and shoes: $126.00
Restaurants/Eating out: $869.00
$1780.00-$1767.00 = $13.00
Here is a graph of how it looked for the month:
Not a TON of movement on the bars, but its a progressive thing. On the flip side, notice the nice blue blip of retirement savings after only 1 month. I really can’t repeat enough…if you haven’t started a 401k, do it TODAY. And read my article on 401ks. And then read more.
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