New Grad Budget Advice
Moving to a HCOL area this summer for my first corporate job out of college and want a reality check on my budget plan.
Base salary is $110k with a $10k signing bonus and an small expected year end bonus. I am putting 6% into my 401k to max out the 8% employer match. Health insurance is fully covered. Monthly take home after taxes and the 401k contribution is $6,323.
I have $160k in student loans and want to pay them off as fast as possible.
- $140k in Parent PLUS Federal (average 8% interest, ~$2,000 minimum) that
- $20k in Personal Federal (average 5% interest, ~$200 minimum)
My employer contributes $100/month directly to my personal loans. Because of that match and the higher interest rate on the PLUS loans, my plan is to pay the $200 minimum on the personal loans and put the remaining $3,800 of my monthly loan budget toward the Parent PLUS loans.
My parents took out the parent plus loans with the understanding that I would pay them back, and are not dying anytime soon so I think it would be best to pay them off aggressively. If I average $4k a month I would pay them off just around 4 years in, assuming I don't get a raise in which allows me to pay more.
Monthly budget breakdown:
Student Loans: $4,000
Rent+Utilities: $1,250 (splitting an apartment near public transit)
Groceries: $300 (employer covers weekday lunches)
Phone: $30
Transit: $0 (employer covers transit pass, I don't own a car)
Vacation/Savings/Gifts: $250
Free spend: $493 (dining out, coffee, entertainment, dates)
Questions:
- Is a $4,000/month loan payment realistic in a HCOL area leaving this little wiggle room?
- Should I put my $10k signing bonus straight toward the high interest PLUS loans, or hold it in a HYSA as an emergency fund since my monthly cash flow is going to be tight?
- Any other help or pointers in helping me pay this off?