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How to manage large temporary salary of $100,000?

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How to manage large temporary salary of $100,000?

Postby dov » Sat Jun 29, 2013 6:52 pm

For the next 3 or so years, I'm earning 100k a year from an online business.

I don't know how sustainable it is. I got the job because of the connections my uncle has, but it's not a permanent job and he made that very clear. I plan on finishing the two years of college I have left.

What smart financial decisions should I make with this money? I'm going to pay off my student loans and save money for a condo or a house. I live in a place with high housing costs, average is about $400,000, and I do want to live here to be with my family. What else should I do? Should I keep my part time job? Long term, quitting might not be a good idea. I won't be able to show that I have job experience, and while the other job is legal, it's not something I'd want to put on my resume.

I know this online job sounds sketchy, but it's perfectly legal. I had my parents help look over the contract and they think it's fine, I'm going to pay taxes on it and everything. I hope I can get answers that actually deal with how to manage my finances instead of questioning where they come from.

Thanks for answering.
dov
 
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How to manage large temporary salary of $100,000?

Postby marquise » Sat Jun 29, 2013 6:54 pm

Clear all your debts and save all you can. If you can do the online business and still keep your part time job, then do. When you go looking for the sort of job you really want, it means there will be no break in continuity with your work experience. Employers like to see continuity. It shows you are reliable.
marquise
 
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How to manage large temporary salary of $100,000?

Postby ann » Sat Jun 29, 2013 7:00 pm

dont exceed your spending over 3 thousand a month. since its 100k you gotta think there is 12 months in a year making less than 8.5k a month save the 5k in to a savings account so you dont touch it.
ann
 
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How to manage large temporary salary of $100,000?

Postby jimmy99 » Sat Jun 29, 2013 7:11 pm

Just as an added note, you can live off of a ridiculously small amount of money. If you make 8.5k a month, and you don't pay rent, bills, etc., live extremely cheap so that you can stretch the money further. I would even suggest making a budget, and then seeing how far you can stretch it all into savings. You make $8333 a month

10% goes to long-term (retirement) savings: $833.30 a month, I would keep this here because it will have a chance to really grow an boost your savings so that you won't be strapped in the future.

15% goes to debt repayment/emergency fund: $1249.95 a month, set this aside into a regular savings account so that you won't be tempted to touch it. It sounds like you're still in college, which means that any students debts you have won't be collected until 6 months after you finish school; save up this money as much as you can so that when you finish school but haven't yet found the career job, you can pay off the monthly payments towards school debt. If you have any credit/revolving debt, get those cleared asap and then do the saving.

35% goes to housing (rent, mortgage, bills, utilities). You have $2916.55 a month for this stuff, which ten to one you do not spend money on, put into another regular savings accounts towards a house. Bear in mind that if this job lasts two years, you'll only accumulate $69 997.20, which is great for a down-payment on a house, but you may decide to save even more once this job ends so you can get a lower mortgage.

15% goes to transportation (gas, insurance, repairs, bus): $1249.95 a month, which again you could set aside into one of your previous savings accounts, or you could put this towards a new car.

25% goes to life (food, entertainment, clothing, gifts, travel, medical, wants, phone, internet, cable, other). You have $2083.25 a month, or $520.81 a week for all this stuff, which is a RIDICULOUS amount to live off of.


If you can handle the online and the part-time job together, live off of your part-time income and save your entire 100k income, or only tap into that 100k if you absolutely need it.
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