Curious how your spending and money management stacks up? In this series, we talk to real folks just like you, who’ve shared their tales of spending, saving, and searching for loose change.
Today, we hear from Alex, a 24-year-old computer programmer in Orlando. Work is pretty much life right now as he is making his way in this competitive industry and dreaming big of Silicon Valley. Since his current employer offered to match 3% of all 401(k) contributions, he opted to put away 3% of his monthly paychecks to get that matching contribution. Beyond that, Alex hasn’t thought too much about his retirement yet, because he feels like he’s just getting started. But, there’s one thing he knows for sure: Spending a lot of time by the ocean will be part of his plan.
Occupation: Computer programmer
Location: Orlando, FL
Housing costs: $1,000
Groceries and home supplies: $450
Dining out: $450
Loans: $500 auto/$500 student
Health, dental, and vision insurance: $0, covered under his parents’ plan
Auto, homeowner, and umbrella liability insurance: $150
Life insurance premium: $0
Lawn service: $0
Cell phone: $75
Clothing, misc.: $300
Credit card debt payments: $300
MONTHLY SAVINGS AND INVESTMENTS
Roth IRA: $0
Savings: $100 a month
Employer-sponsored retirement plan: $138
OUR CHAT WITH ALEX
How difficult is it for you to put money away for retirement? Have you had to give up anything?
I just started working full time for my company a year ago. I have always heard the advice to max out your employer’s 401(k) matching contributions, so that’s what I did when I started working. My company matches our contributions up to 3%, so I put in 3% every month to get that match. I already felt like I had a lot more money than I was used to having when I started receiving my full-time salary, so I haven’t had to give anything up so far.
If you had to put away more money for your retirement, what would you cut out of your budget?
Could I get rid of my student loans? I wish! Aside from my apartment, I guess my biggest expenses are my car and happy hours. If I had to, I could cut down on going out. The car stays, though, for sure. I can’t give up my ride!
What are your retirement goals? What age do you want to retire? What do you want to do in retirement?
I haven’t thought too much about retirement, I guess. I had an uncle who retired when he was 55, but then my parents are still working and they are both 59. I see a lot of senior citizens working at places like grocery and home goods stores, so maybe that’s something I’ll want to do when I get older. If I had to guess now, I’d say that I’ll probably work at least part time into my 70s — just to keep myself busy — if nothing else. Somewhere in there I’d like to travel, do some things on my bucket list, like a safari in Tanzania and a trip down the Amazon River. Then it’ll be time to hit the beach. Retirement will definitely involve spending time by the ocean. Ultimately, I see myself settling down back here in Florida, on the coast somewhere on the Gulf side south of St. Pete, maybe near Sarasota or Siesta Key. Hey, everyone else retires down here. Why shouldn’t I?
What does “health” mean to you?
I suppose it means eating the right foods and getting exercise. Right now, based on that, I’m not very healthy. I work long hours and sit behind a desk. My company does have an on-site health club I need to check out, and I should try to make some meals at home. I buy lunch almost every day, which probably isn’t super healthy, and it’s an added expense. So there you go; that’s something else I could cut out of my budget to save more for retirement — lunches out.
Are there luxuries that you always need to include in your budget? Housecleaner? Grocery shopper?
I’m a pretty basic guy, but I do like purchasing UFC fights when they are on pay-per-view and going to EDM shows. Also, I take serious pride in my car, which can add up. When I got this job, my big splurge was buying a new car – well, new to me – classic car. I’ve been making some upgrades here and there, so between that and the car payment, it’s definitely a big budget item.
Do you have a financial planner? If so, explain why your planner is valuable.
I don’t have a financial planner yet. But my company is hosting an educational event, and we can schedule a one-on-one appointment with someone if we go to that meeting. I’m going to check it out.
In addition to saving for retirement, what are some of the big picture items you want to invest in?
A motorcycle and, someday, a classic car that I can restore. Also, a house at some point. In my line of work, the bigtime is in Silicon Valley, and I’d love to get on board with a cool company or really exciting startup out there. But I understand real estate is crazy in that area, so that house purchase may be farther down the road. Or maybe it’ll just have to wait until I can cash in some stock after getting in on the ground floor of some big tech IPO!
What intimidates you in planning for retirement or what questions do you still have?
This question makes me think I’m not thinking enough about retirement. I don’t really have any questions, but that’s probably because I feel like I’m just starting out, and I have a lot to learn. I will need to find a financial planner to help guide me through all this. I know it’s a long way away, but my parents keep reminding me that the future will be here before I know it. So it’s probably not a terrible idea to start planning now.
THE WRAP UP
At 24 years old, Alex just started working full time as a computer programmer and is living a pretty carefree life where retirement seems like a concept in the distant future. When he signed his employment paperwork, he opted to contribute enough to his employer-sponsored 401(k) to receive his company’s full 3% matching contribution. He knows he wants to travel and ultimately settle down by the ocean when he retires, probably sometime in his 70s.
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