Hello! I'm 23 and will start my first real job in February next year. I'm currently single, frugal, and not too tied to any one place yet.
I live in an area where public transit is decent enough to get me to work and back, so I am planning not to have a car for now. I do ride a motorcycle for fun, commuting on nicer days, and for the occasional longer trip. I might get an e-bike to shorten up commute times on less nice days.
Note that I do not have any student debt due to picking a college where I had nearly a full ride (not quite, but youth savings + internships covered the rest).
My personal rule of thumb is a modified version of the 50/30/20 rule that focuses on aggressive investment:
- Based on after-tax, after employer Roth 401k match income
- 50% savings/investments
- 30% needs (basic rent, food to survive, transit, basic wellness)
- 20% wants (motorcycle stuff, eating out, etc.). I deserve to treat myself somewhat.
"Spending" money is money that I can spend at my discretion, even if it counts for a need. So groceries and transit fares count as spending money, but a gym membership or motorcycle insurance doesn't because those are constant pre-planned expenses.
I'd like your feedback on my model and comparisons between your plans!
Things look pretty good. I have a couple recommendations that I do myself.
If you've been utilizing the ~700 in wants for things like travel, put a few hundred into a "trip" fund. That way youre always ready for bigger travel plans in the future, without dipping into other money.
Plan for clothes and shoes as you will always need these (over a long enough time).
Put some of the savings away for specifically for a new motorcycle. You can just track it on the spreadsheet monthly and then pull it out of one of your savings avenues when you need a new one. Make it less stressful when you need a new vehicle.
Otherwise, the ratios are very good, keep tracking this every month and be sure you're following it. Since you are starting now, you can even reduce the savings amount to have more fun while you can. Saving anything over 30% is a huge benefit to your retirement though!
The clothes and shoes fall under miscellaneous needs. I rarely need new clothes since I don't care much about fashion.
I have thought about separating wants into a short term and medium term wants categories. For now I'm keeping them together, and if I have a lot of money stored up, I can unleash it on a larger trip (probably motorcycle track days...)
I have a 2012 Triumph Street Triple 675R, and it's the perfect bike for me. It's stupidly fast, very agile, and I am simply nowhere near the capability of this motorcycle. I plan on keeping it until it either blows up, gets totaled, or if I move or give up motorcycling altogether. If I did get another motorcycle it would be something like a Kawasaki Z125 to mess around on.