Email question: How should I begin my financial life?

Hello Pete,

I'm a 23 year old who graduated from college in May 2013. By December 2013 I had two part-time jobs, one of which will become full-time in April 2013.

My average monthly income is $1,300, which will be $2,400 after my switch to full time. I have $1,400 in savings. I don't have any credit cards. I currently owe $28,457 in student loans at $321 a month (unfortunately, I didn't know your book existed when I was in high school). I live with my parents and pay $300 a month to contribute; I'm hesitant to move out and buy a car (despite the fact that I'd really like to and think I have the financial resources to do so) since I'm looking at going to grad school in Fall 2015 in New York.

Now that the rush of "Hooray!!! I have a full time job!!!" has worn off, I realize I have a lot of heavy lifting to do to financially and I really don't have a clue where to start. The only pro-active financial move I'm making is putting half of each paycheck into a basic savings account. How can I best save for grad school? retirement? Would it be a waste to acquire independent housing and a vehicle if I may end up in New York in 2-3 years?

Any advice you can give would be appreciated.

Thanks!

Hey... person, sorry I lost your name.

Let me just say, you are doing great! You're hustling with your two jobs/soon-to-be one, you are paying a great amount toward your student loans per month (I often see people pay way less, which only hurts them in the end), and even though you are living at home you are contributing rent. So far so good.

Flexibility is going to be your savior over the next few years. You want to put down roots while you are here and when you go to New York, but resist enmeshing yourself too much financially. Flexibility will allow you to pick up and leave without too much financial damage.

Another thing you need to establish is a money theory. Already you've mentioned one: saving half your paycheck. Come up with a few others and you'll be way ahead of everyone else. I have no doubt in my mind you will be successful because you are already making wise, level-headed decisions.

As far as practical advise goes, don't buy a car in the next few years if you can avoid it. And even if it sucks, living at home is a great decision, especially since you are paying rent to your parents and not just leeching off of them. For the next few years you can stockpile money and when you move to New York, use your savings for living expenses while you are in grad school. If you decide not to go to grad school, then you can consider buying a car, moving out, etc., but if your plan remains the same just keep doing what you're doing.

In all sincerity you really are on the right path and I think you have a great future ahead of yourself, as long as you keep making such wise decisions. I also answered your question on The Pete the Planner Radio Show on WIBC this past week, listen below to hear my answer (and hear the fake gender and name I gave you).