How Much to Save / Spend

Hi all,

I am starting full time as an IB Analyst in SF next year and am curious how much I should think about saving a year? Assuming I get a mid-bucket bonus at a BB and spending ~$2k a month on rent and utilities, and living a standard IB lifestyle (going out/drinking whenever I get a chance) what is a reasonable amount to be putting away and/or investing long term? Thanks!

 
Best Response

Agree with Charizard on maxing retirement contributions if that's possible. I would add a few suggestions:

Even while living at home, you should still "charge" yourself rent in the form of an automatic transfer from checking to savings, or paying down student loans. This amount should be equivalent to the market rent in the area (~$1,200-1,500 for NYC). I know a lot of people who lived at home to "save" money and ended up spending more because they were not disciplined and viewed the "savings" as money they could afford to spend.

I'd also open a separate savings account as an "emergency fund'. This account should contain at least six months of living expenses to cover your a** should the SHTF (medical expenses, laid off, etc). Being able to deposit this is difficult/impossible off the bat so drop $1,000 (or more) to get started and contribute monthly (about $150). Set up an auto transfer so you don't have to think about it.

You mentioned investing, I'd suggest checking out low fee services such as Wealthfront or Betterment which allow you to make regular contributions online and it's really easy to set up. You can also get a Roth set up, which was mentioned above. Given your age, I wouldn't worry too much about timing the market and just focus on constant contributions instead.

Hope this helps

 
YourWorstEnemy:
On average I would say bout 3.50

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