Hello, Oh My Dollar Forums. I have some questions, and also a situation.
Situation: I’m graduating from graduate school with my MLIS on May 1st. (I also have a bachelor’s in children’s literature & an associate’s in computer science). This is a stupid time to graduate, but whatever. I expect eventually I will find a job. I will make $720/month from my Extremely Part Time job for the foreseeable future (and I will start freelance writing/editing again but I haven’t figured that out yet so haven’t calculated at all for it). Rent is $745/month, utilities / internet like $150, groceries $150. I also pay about $600 of my parents’ bills every month, which I am going to Try to Stop Doing. I also have $30,000 in a Regular Savings Account (which I have already paid taxes on).
How much money should I take out from the Regular Savings Account to ‘live on’ for the next year-ish of unemployment? How much money should I set aside for “fun things” each month?
Where should I put my Savings Dollars that I don’t need in the meantime? I tried to open a Chase high-yield savings account but I got busy and they closed it while I was still figuring it out (there was no money in it). I’m not interested in Investing.
thank you for your wisdom and perhaps even your well wishes
your monthly hard costs are 1045/month (assuming that you stop paying for your parents’ bills), and after your part time job is taken into account, you have a $325 monthly deficit.
That is $3900/year that you are in the hole ignoring any random needs/emergencies (e.g. need to buy an outfit for an interview, shoes get holes or start hurting your knees). My recommendation at this time would be to assume/pencil in 200/month for the rando stuff you aren’t currently counting, plus $50/month for fun things.
$575/month deficit is $6900 for the year.
As you pick up additional work, I’d say the first $575 per month gets used instead of your savings, and the next $125 goes to fun. Anything else, builds the savings further.
As a non US person I don’t know the right place to put funds in the meantime.
So personally I’d probably split it $10000/living, $20000/savings. With your part time job and potentially any other work you only need ~2/3 of that per plainjane’s math (even with the additions), but that gives you wiggle room if there are a couple months where get pulled back into helping parents or your part time job has a slow-down or that inflation thing gets worse, whatever.
As far as where, that kind of depends what you’re looking for. If you just want to drop it in and not think about it, there are a couple national banks with decent savings rates and promos that don’t (currently–obviously worth checking before you sign up) have too many qualifications in the fine print. The ones I’ve seen recently:
Discover recently pinged me about a promotion where there’s a $200 bonus if you open a new account and deposit $25000 or $150 if you do $15000. With what you have I’d probably drop in the full $25000 to start and then pull the other $5000/living back out after you’ve gotten the bonus, and their ongoing rate is 3.6% which isn’t bad. It is subject to change, unfortunately, but I think all of them are.
Chase has a $300 bonus offer on $15000, but their ongoing interest rate is crap so you probably wouldn’t want to leave it there after you get the bonus, and moving twice may be more hassle than you want. It’s also possibly you’re not eligible for this one given what you said about the closed account
Capital One and Amex both have savings accounts with rates around 3.6% too, although no bonuses right now that I’m aware of
I’ve seen online banks that get into the low 4% range (just search ‘best high yield savings account’) but I’m a little leery of recommending most/any of those since I haven’t used them myself
If you’re up for having direct deposit(s) and typically some number of debit card transactions you can look up high yield checking accounts too…I know Affinity Federal Credit Union has a checking account that pays 5.5% on balances up to $15,000 which is the best I’ve found/use checking wise, and their savings is only a little lower than the ones above at 3.25%. But again no guarantee how long the rates will hold, and that has some hassle I don’t know if you want to deal with (AFCU specifically requires at least one direct deposit of $250/mo and 12 debit card transactions for the 5.5%, which usually involves me buying 12 individual bananas because it annoys me, but that’s just me).
I agree with Kenner’s math… Just round and keep 10k available just in case sounds reasonable to me.
I’ve been using Ally (online bank) over 10 years now, very happy. You have to be aware of the limitations (like it’s hard to get a large sum of money or bank/cashiers check quickly) but the interest rates around 4% are real and they have CDs (Certificates of deposit) as short as 6 or 9 months. These let you lock in an interest rate for that time, but there’s a nominal penalty if you withdraw early (like, a couple months interest, not something that will eat your principal…).
Congratulations @latitude on graduating, sorry about the job market, and wishing you the best of luck!
How difficult is it going to be to stop contributing to your parents?
Will it be easier to keep on top of a budget if you take out what you need for the year (hard stop, this is my yearly limit and I never touch it again vibes) or if you take out monthly (too hard to not spend it all at once)?
Currently I spend like $70/week on Coffee and Takeout and Pastries because I work all week and I’m downtown so I don’t have Refrigerator etc. I will not have access to a variety of coffee shops in the same way in the near future so I assume this will completely change. I have a backlog of Cool Things to consume / enjoy etc, and I also have Credit Card Points if I have a Nice Things Emergency.
Parents: [I wobble my hand back and forth] I expect this to have a high “up front” cost, the biggest thing here is that I pay their phone bill which is $330 (phone bill + their two phones on a payment plan) and divesting from their phone bill to a Mint Mobile plan ($360/year) is going to require paying off my phone ($487).
Much easier to take out what I need for the year! I currently get my full stipend every 6 months and budget from that so it will be “easy” to budget with a sum of money.
I use the Doctor Of Credit website when I’m researching savings/checking accounts. If you’re looking at their high yield savings, definitely be sure to read the fine print, but they list interest rates much higher than you’ll find most other places. I think you want a high yield FDIC insured savings account for your money! (As opposed to a money market account.) If you’re willing to put in the work, it sounds like you have enough cash to do some savings account bonuses, if that’s interesting to you.
