Books/advice for just starting out?

[oneasterisk]

Yeah I don't agree with it all, but it's a decent plan of attack. To quicken paying down your student debt he suggested cutting out extraneous bills and/or getting a second job to supplement your income.

Step 3 is to have 3-6 months at minimum. In this day and age, it's probably better to have at least 1 year.

Ramsey says to postpone contributing to retirement accounts until you've completed Steps 1-3. I personally was contributing while I still had debt. I guess I could have paid off my debt faster and then contributed more, but I thought getting the company match and stock returns was more important. I understand he's got a method to his madness, but I don't necessarily have to agree with him

[mysticaltyger]

Originally Posted by Garfunkle524

I'm 24 years old, 2 years and a few months out of school with a mountain of student debt (most is not in my name, but it's there and needs to be paid), ok salary at a good job. Thanks to my student loan payments I break about even on a monthly basis. Recently I lost my whole emergency fund and I feel like I'm treading water right now. I have very little in the bank, so I'm basically starting from scratch. I have a fairly good credit score and pay all my bills/CCs on time in full.

Because of this recent financial disaster I had to endure, I'm starting to take a greater interest in micromanaging my personal finances. I've set up my profile and budgeting on mint.com and I'm excited to start closely scrutinizing my spending habits.

What sort of books/advice/websites are out there for someone in my position? I want to learn how to sensibly and realistically be aggressive with paying off my car/student loans while starting to build my own finances. Now is the time that I want to start setting the framework that will let me be well off when I'm in my 40's (hopefully the student loans will be paid off by then!).

EDIT ADD: Notice I didn't post this in the Frugal Living forum. I'm certainly interested in living more frugally, but I don't want to hear 829304328543942340 people tell me I'm wasting money by not growing my own organic garden or that I should be living in an RV.

For the general mindset on both money and career management, I think The Difference by Jean Chatzky is unbeatable.

Suze Orman's book for the Young, Fabulous & Broke is ok for those starting out.

For retirement investing, I say skip the books and just invest in a good balanced fund (mix of stocks & bonds) and stick with it. Any one of those listed below will do:

Oakmark Equity & Income
T. Rowe Price Capital Appreciation
Fidelity Balanced
Vanguard Wellington
FPA Crescent
Dodge & Cox Balanced
Mairs & Power Balanced
Vanguard STAR
Vanguard Balanced Index

If you can get into any of these without paying the sales charge (as is the case with 401k, plans, these are also worth a look:

American Funds Income Fund of America (A, R4, R5, or R6 share classes only)
American Funds American Balanced Fund (A, R4, R5, or R6 share classes only)
American Funds Captial Income Builder (A, R4, R5, or R6 share classes only)
American Funds Global Balanced (A, R4, R5, or R6 share classes only)
Van Kampen Equity and Income

[Joseph Marnix]

1. Get a monthly budget going.
2. Save 3 to 6 months of monthly budget as emergency fund.

When you get to that point, I might spend cash in a book.

It also sounds like saving $1,000 in your emergency fund will give you a bit more peace of mind rather than feeling like threading in water.

The good point for you is you have this early awareness in money.

[Where's Kitty]

I moved out at 18 and found "Please send money" a good book at the time. Young, Fabulous and broke is also pretty good. Lots of general info! I knew nothing and my parents are just horrible with money so any book was a good book for me.

[Lacerta]

Originally Posted by oneasterisk

Yeah I don't agree with it all, but it's a decent plan of attack. To quicken paying down your student debt he suggested cutting out extraneous bills and/or getting a second job to supplement your income.

Step 3 is to have 3-6 months at minimum. In this day and age, it's probably better to have at least 1 year.

Ramsey says to postpone contributing to retirement accounts until you've completed Steps 1-3. I personally was contributing while I still had debt. I guess I could have paid off my debt faster and then contributed more, but I thought getting the company match and stock returns was more important. I understand he's got a method to his madness, but I don't necessarily have to agree with him

I agree with this. It is a good overall plan, but I think $1000 is too little too, especially if step 2 is going to take a while. On the other hand, it doesn't make sense to have $10k sitting in the bank making practically no interest, while you are paying 12% on a loan for $9000. If you feel your job is secure for a little while, pay off the loan. Or, in my opinion, better yet, pay off $2000 a month to make it go away very quickly while still maintaining and replenishing your emergency fund. By the time it is paid off, in just a few months, hopefully you have added at least $1000 back in and so still have $2000 left over, and can start building it back up. Sometimes you just have to make that judgment call. I really think that getting debt free is a balancing act between an adequate emergency fund and eliminating higher interest rates. If you have higher rates, pay those off before you beef up your emergency fund.

I tend to do things the complicated way, and as such, I would probably take a stepped approach
1. Have a $1000 emergency fund
2. Pay off anything over 12% interest
3. Get a $2000 emergency fund
4. Pay off anything over 8%
5. Build to a 3 month expenses efund
6. Pay off anything over 5%
7. Build to 6 months or a year expense efund
8. Pay off anything else.

If you don't have anything over 8%, then I would just start out with the 3 months efund first. And those numbers are obviously arbitrary. Others may disagree, but you get the idea. At certain interest rates, security is more important than interest. You don't want to have so little in an efund that you have to put expenses on a 12% credit card because you spent your money paying off a 5% loan.

Oh, and I really agree that you should start investing sooner rather than later. Even if you just put enough in a 401k to get the company match to start with. I would take advantage of that whenever you have it available in your life. I wouldn't start investing more heavily in IRAs or 401ks until you get onto my step 8. Hopefully most of your debt is low interest, and you get to step 8 quickly.

[Garfunkle524]

Originally Posted by Lacerta

I tend to do things the complicated way, and as such, I would probably take a stepped approach
1. Have a $1000 emergency fund
2. Pay off anything over 12% interest
3. Get a $2000 emergency fund
4. Pay off anything over 8%
5. Build to a 3 month expenses efund
6. Pay off anything over 5%
7. Build to 6 months or a year expense efund
8. Pay off anything else.

If you don't have anything over 8%, then I would just start out with the 3 months efund first. And those numbers are obviously arbitrary. Others may disagree, but you get the idea. At certain interest rates, security is more important than interest.

This is the point I'm at right now. I'm building my security fund. Unfortunately it's a slow process because after living expenses and minimum payments on loans (CC's always paid off in full every month) I have very little money leftover. I certainly don't live an extravagant lifestyle by any means, but my recent financial debacle spooked me into wanting a bit more than a few grand in the bank. I have no plan B, no outside financial support even in the worst of emergencies, so if I run to $0 I'd be homeless. That's enough motivation for me to save a fat emergency fund.

I have enough debt that after step 5 I would be stalled for MANY years. The debt in my name would likely get paid in only a couple years, but that Parent Plus Loan I'm paying is going to be haunting me until I retire.

By the way, I picked up Orman's book and have just started it. Seems like it will have lots of useful advice.