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Anonymous
Anonymous asked in Business & FinancePersonal Finance · 4 years ago

Here are my bills, what is considered savings, discretionary, fixed and what area should my debt payments be coming from?

200 apt rent & utilities

15 internet

25 phone

135 auto insurance

60 fuel

40 car maintenance

35 fast food

75 groceries

49 restaurants

25 gifts

32 doctor copay

59 healthcare

53 prescriptions

45 personal care

27 clothing

48 travel

---------

923 total

these are the averages I spend in each category on a monthly basis over the past 2 years.

I havn't had my own car for 2 years but have an auto insurance payment and fuel expenses due to paying for my dads truck insurance and paying carpooling costs with coworkers)

I have 1400 per month after taxes that I can put toward savings and debt.

my student loans are 100/month and I am trading my bus pass in next week for a 2014 Volkswagen Jetta that I am buying private party.

Please tell me should my debts be taken automatically from checking/savings?

Are groceries a fixed expense while eating out is discretionary?

lastly, should I calculate my percent income for each category based on pre-tax income or after tax income?

Thank you!

Update:

Let me clarify, I am buying the car private party but am financing it through my credit union.

1 Answer

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  • 4 years ago
    Favorite Answer

    First set up a checking account with the ability for you to pay your bills electronically. Also set up a savings account at a credit union near you. Do not get checks, an ATM card or electronic payments.

    Your first savings should be for an emergency fund, such as you blow up your car engine, lose your job or end up in the hospital. When you have $1,000 stop saving and pay off any contractural debts such as car payments, student loans, credit cards, etc..

    I'm the meantime set up your monthly bills, such as you enumerated where YOU pay them automatically from your account. Do not let them take money from you: you give them the money.

    Now it is time to start long term saving. Try to save 15% in a ROTH IRA, with after tax money and 10% toward long term purchases such as a house and or investments in mutual funds or real estate.

    This is a start.

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