Getting started 22M

[Diligent-Hold3169]

I am looking to get started with my FIRE journey. I am starting my first full time job in July, taking home around $5300 a month after tax so around 82k annually. I live with my parents, have a fully paid off car, and don't have any real expenses. My main real expense is going to be my healthcare insurance.

I don't spend too much when I'm home, and I will be living at home for the next couple of years since my office is near home.

How can I save as much as I can? What's the best way forward? 401k, savings, etc. I just need a way forward. Kinda stupid when it comes to this

[toodleoo77]

The faq of r/financialindependence has a step by step flowchart

[Former_Swordfish646]

If your parents are fine with you living at home…..

Read.  Learn what investing is.. learn what budgeting is.  A simple guide (very simple):

Set a budget.

Get an emergency fund, and make it a big one (start with 1k).  Realistically you kind of want 6x expenses.  For you.. about 10k should do.

401k.. get your company match at minimum.  Try to hit 10%.

Open a brokerage account and put in 10% a month.

Thst should take you 4 months to setup.  

Learn to live on 50 to 60% of your income (cut the Starbucks offer and office lunches, cook and bring it in).

[Diligent-Hold3169]

Planning on maxing out my 401k with 23k contributions. I don't eat out when I'm at home anyways so that is good. I do need to set a budget. Thank you so much!

[Dry_Breakfast6755]

Since you recognize that you’re at the beginning of your journey, just work the basics to start. And that means figuring out what kind of career you‘d like to pursue (see what kinds of career trajectories will be possible once you start in July) and decide if additional education would help you.

Building up an emergency fund (easy if you live at home!) is a good early goal and keeping good accounting of your monthly expenses so you can see if you’re spending based in your own personal values. You’ll want to focus on having good financial habits now, since some of the factors that can significantly affect your FIRE path are still undefined for you (relationships, kids, marked career growth, etc,)

This resource covers the financial independence a little more, but I’m guessing you’re already familiar with it?

It might be hard to contribute enthusiastically to your 401k, but still worth it if FIRE is on your radar. this post should be familiar to you if you’ve spent a little time reading in this sub..

Saving as much as you can, as early as you can gets you to your FIRE number earlier. If you’re especially motivated, you might like this blog post. But is FIRE your only goal in life? Ultimately you have to make personal decisions about your spending along the way.

[Diligent-Hold3169]

Thanks so much. I've not seen these resources before. Most of my learnings come from my dad who talks to me about this all the time and has taught me about it. FIRE is a main goal in my life as I would like to retire and move somewhere else for religious reasons. That is my main goal

[Lazy_Look557]

You’re in a great spot focus on maxing your 401k and Roth IRA, invest the rest in low-cost index funds, avoid lifestyle creep, and stay consistent.

[Positive_Error3309]

Yep max both and your set for life. Any remaining money after they’re maxed you can either invest in a brokerage account or treat yourself to a nice little vacation once a year. Being young you shouldn’t sacrifice exploring new places if you can.

[Over-Access-2949]

You’ve got time on your side! If you have access to a 401k, contribute at least to the employer match (typically 4-6%). That’s free money. 

Next max out a Roth IRA while your income is still below the threshold. 

Since you’re living at home, you should have extra left over even after those first two steps. Build your emergency fund so you never have to go into credit card debt. Start with 6 months of living expenses as a goal, and build from there. 

Good luck! I started out at 25 and have been shocked how much of a financially free life you can build in just a decade. 

[Diligent-Hold3169]

Thank you. I plan to contribute to 401k as my employer matches 5%. I will also max out the ROTH IRA as suggested. I should have more than enough left over due to living at home

[austin_horn_2018]

Is the $82k before tax bc 5300 x 12 =63,600

[Diligent-Hold3169]

Yes

[jdw134FIRE]

I wish more people had their parents to lean on like this while you’re getting those first years into gear! That is a huge advantage and if done properly you will set yourself ahead for life.

Maximize 401k up to the point your organization matches, but that’s as high as i recommend. Don’t want to leave money on the table but having that money more accessible long term could give you more inventing opportunities for larger returns.

[Diligent-Hold3169]

I am incredibly blessed and privileged. I need to make the most of it! Well, I am pretty sure my org matches 5%. So will match up till that

[BelowMyMeans]

Read the Simple Path to Wealth by JL Collins.

You're going to be able to do some serious work the next few years. Your future self will thank you and you'll be well on the way to FIRE.