Comments on: About To Enter The Workplace For The First Time? Try The 50% Solution http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/ Simple, applicable personal finance advice for the modern world Sat, 21 Nov 2009 14:05:16 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: bob http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-301911 bob Thu, 12 Jun 2008 14:35:03 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-301911 The way I see this is that I could do this and live like a pauper now and be very rich later, or use a 75/25 plan like I am doing now and live comfortably now and still be pretty rich later. It's all about balance. The way I see this is that I could do this and live like a pauper now and be very rich later, or use a 75/25 plan like I am doing now and live comfortably now and still be pretty rich later. It’s all about balance.

]]> By: -Heather. http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-235757 -Heather. Fri, 11 Apr 2008 20:46:46 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-235757 I have to agree with Bethany about *where* you live and *what* sort of job you have making a huge difference. My first year out of college - more than a decade ago - half of my monthly income would have been around $700. I *did* have student loan debt as well as medical expenses. I had medical insurance, but trust me, prescriptions and doctor visits add up quickly even then. I'm not saying that it's impossible, just much much harder in certain areas of the country and with certain careers/jobs than with others. My other objection is this sentence: you’re trading years of your life away for stuff. You’re trading away countless amazing experiences so you can have some quick-fix material conveniences. I spend much more of my money on experiences than on stuff. Taking courses, occassional fine dining, some memberships to organizations. I guess it's not really an "objection" -- just an assumption that you may not have realized you made. I still think it's a great article. There's probably people that read it and think 50% is completely impossible but might start saving 30% when, before reading this they weren't saving at all. I have to agree with Bethany about *where* you live and *what* sort of job you have making a huge difference. My first year out of college – more than a decade ago – half of my monthly income would have been around $700. I *did* have student loan debt as well as medical expenses. I had medical insurance, but trust me, prescriptions and doctor visits add up quickly even then. I’m not saying that it’s impossible, just much much harder in certain areas of the country and with certain careers/jobs than with others.

My other objection is this sentence: you’re trading years of your life away for stuff. You’re trading away countless amazing experiences so you can have some quick-fix material conveniences.

I spend much more of my money on experiences than on stuff. Taking courses, occassional fine dining, some memberships to organizations.

I guess it’s not really an “objection” — just an assumption that you may not have realized you made.

I still think it’s a great article. There’s probably people that read it and think 50% is completely impossible but might start saving 30% when, before reading this they weren’t saving at all.

]]> By: Pedro http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-210203 Pedro Mon, 24 Mar 2008 05:17:10 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-210203 Thanks for the great article! I am 21, graduating in May, and moving into Seattle in June. This article plus the comments have really helped me in how I will try to live and use my money :). Thanks for the great article! I am 21, graduating in May, and moving into Seattle in June. This article plus the comments have really helped me in how I will try to live and use my money :).

]]> By: GourMay Chef http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-208389 GourMay Chef Fri, 21 Mar 2008 01:03:55 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-208389 I love this article! I started working full time ten months ago after graduating with a master's degree. However, I have a lot of student loans that were mainly private loans, unsubsidized, with interests varying from 5-9%. I had to pay them off... I just hate debt. I didn't worry about the loans while studying for exams, but once I started making income, I first spent most of it (bad idea), and then got into credit card debt too! So now I'm retracking my values and goals. I have paid off my credit card bills, and ten months into working full time, I have cut my student loans by $10,000 so I just have a little less than $9,000 to pay, which I'm sure I can before this year is up. I would like to save 50% of my paycheck, but I'm waiting until the debt is done. I currently match my company's 401K, and contribute $50 automatically to a high yield savings account. I'm glad I learned this early on in my career. Once I am out of debt, I do not plan to get into debt again, unless it's a house. Thanks for an awesome post! I love this article! I started working full time ten months ago after graduating with a master’s degree. However, I have a lot of student loans that were mainly private loans, unsubsidized, with interests varying from 5-9%. I had to pay them off… I just hate debt. I didn’t worry about the loans while studying for exams, but once I started making income, I first spent most of it (bad idea), and then got into credit card debt too! So now I’m retracking my values and goals. I have paid off my credit card bills, and ten months into working full time, I have cut my student loans by $10,000 so I just have a little less than $9,000 to pay, which I’m sure I can before this year is up. I would like to save 50% of my paycheck, but I’m waiting until the debt is done. I currently match my company’s 401K, and contribute $50 automatically to a high yield savings account. I’m glad I learned this early on in my career. Once I am out of debt, I do not plan to get into debt again, unless it’s a house. Thanks for an awesome post!

]]> By: Lauren http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-208140 Lauren Thu, 20 Mar 2008 17:05:04 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-208140 OK but what about a house fund (since you are sucha big fan of home ownership.) I save over half my paycheck but only in a high interest savings account. I don't want to put it in an index fund since ideally that is for longterm (at LEAST 7 years) goals and I would like to buy a house within 5. OK but what about a house fund (since you are sucha big fan of home ownership.) I save over half my paycheck but only in a high interest savings account. I don’t want to put it in an index fund since ideally that is for longterm (at LEAST 7 years) goals and I would like to buy a house within 5.

]]> By: Know The Ledge http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207681 Know The Ledge Thu, 20 Mar 2008 01:51:00 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207681 This is some great advice, which I wish I would've had years ago when I started my career. One of my biggest regrets is that I didn't save enough money early on, and I really didn't make much to be able to save. At the very least I could've started other endeavors to try to build my income later on, but I did neither. Now I'm in a fairly high paying job, but I'm really stuck to it since we don't have the flexibility in our finances to live without it at this point. It's frustrating to me because I'm convinced that it's not what I want to do with my life. Anybody that is starting their career, listen to this advice, you'll love yourself later for it. This is some great advice, which I wish I would’ve had years ago when I started my career. One of my biggest regrets is that I didn’t save enough money early on, and I really didn’t make much to be able to save. At the very least I could’ve started other endeavors to try to build my income later on, but I did neither. Now I’m in a fairly high paying job, but I’m really stuck to it since we don’t have the flexibility in our finances to live without it at this point. It’s frustrating to me because I’m convinced that it’s not what I want to do with my life.

Anybody that is starting their career, listen to this advice, you’ll love yourself later for it.

]]> By: Bobby http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207656 Bobby Thu, 20 Mar 2008 01:19:04 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207656 Sounds like a good idea. I have put it into action as of yesterday for the 50/50 plan. What I use to do was put all my money in a savings, and take what I need for expenses, though I probably saved more this way, I also probably spent more because I had to pull money to for groceries, rent, and other bills. I will graduate in May and it sounds like a good plan even if I plan to live in CA, expensive parts, because my bills will be low due to renting a room in a house. Thanks for the great idea, it allows me to have enough money for bills and groceries and buy the stuff I want while saving a lot, the other half. Sounds like a good idea. I have put it into action as of yesterday for the 50/50 plan.

What I use to do was put all my money in a savings, and take what I need for expenses, though I probably saved more this way, I also probably spent more because I had to pull money to for groceries, rent, and other bills.

I will graduate in May and it sounds like a good plan even if I plan to live in CA, expensive parts, because my bills will be low due to renting a room in a house.

Thanks for the great idea, it allows me to have enough money for bills and groceries and buy the stuff I want while saving a lot, the other half.

]]> By: Jesica http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207588 Jesica Wed, 19 Mar 2008 23:02:28 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207588 This really isn't as extreme as it sounds. I basically do this right now. I took this job so that I could pay for school. I've been living off of about 50% of my income (rent, food, etc.), the other 40% goes to pay my tuition, and 10% goes into my retirement account. I'm 21 and in school at night and on weekends. I'm a few months from graduating, have it completely paid off (no student loans) and will continue to sock away that money. Except I'll be putting 15% to retirement (hey, stocks are on sale!) and the rest of my tuition money in my ING. I've also got sub accounts to help me save up for a car (I'll be taking the bus to prolong the need for this), for an eventual downpayment on a home, seed money for a business start up, and for asplurge spending/vacation fund to reward myself for working hard! I work hard to save money, but make sure that any gift money is spent on something fun or nice for me... because otherwise life is no fun! It doesn't take a lot of money to do this. I only make about 2k/month and am in Seattle... better than CA by far but still not the cheapest city to live in. You just have to get creative with your spending, and only spend on what is important to you. Thats why I have roomates, why I will drive my junky car until it dies, why I only spend $30/week on food. In the end, it will be well worth it! This really isn’t as extreme as it sounds. I basically do this right now.

I took this job so that I could pay for school. I’ve been living off of about 50% of my income (rent, food, etc.), the other 40% goes to pay my tuition, and 10% goes into my retirement account. I’m 21 and in school at night and on weekends. I’m a few months from graduating, have it completely paid off (no student loans) and will continue to sock away that money. Except I’ll be putting 15% to retirement (hey, stocks are on sale!) and the rest of my tuition money in my ING. I’ve also got sub accounts to help me save up for a car (I’ll be taking the bus to prolong the need for this), for an eventual downpayment on a home, seed money for a business start up, and for asplurge spending/vacation fund to reward myself for working hard! I work hard to save money, but make sure that any gift money is spent on something fun or nice for me… because otherwise life is no fun!

It doesn’t take a lot of money to do this. I only make about 2k/month and am in Seattle… better than CA by far but still not the cheapest city to live in. You just have to get creative with your spending, and only spend on what is important to you. Thats why I have roomates, why I will drive my junky car until it dies, why I only spend $30/week on food. In the end, it will be well worth it!

]]> By: Steph http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207569 Steph Wed, 19 Mar 2008 22:23:24 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207569 Thank you so much for this post Trent! I'm graduating with my masters in July and I'm entering the career world for the first time and this post was exactly what I was looking for. I've never made more than $15/hour in my life, and it will be hard not to spend all my newfound money, especially without a husband or kids to support. Thank you so much for this post Trent! I’m graduating with my masters in July and I’m entering the career world for the first time and this post was exactly what I was looking for. I’ve never made more than $15/hour in my life, and it will be hard not to spend all my newfound money, especially without a husband or kids to support.

]]> By: Golfing Girl http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207457 Golfing Girl Wed, 19 Mar 2008 19:56:34 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207457 I was appauled you didn't mention the Roth IRA. To me it's the obvious next step after funding the company match to the 401K. But I'd rather be at my job that I like versus being paid half to do what I love. I usually agree with you Trent, but not on this one. I rank retirement well above following my dreams. I was appauled you didn’t mention the Roth IRA. To me it’s the obvious next step after funding the company match to the 401K. But I’d rather be at my job that I like versus being paid half to do what I love.
I usually agree with you Trent, but not on this one. I rank retirement well above following my dreams.

]]> By: Phil A http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207425 Phil A Wed, 19 Mar 2008 18:49:49 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207425 Save what you can whether it's 1% or 50% of your salary. Save what you can whether it’s 1% or 50% of your salary.

]]> By: Tyler http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207416 Tyler Wed, 19 Mar 2008 18:19:45 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207416 @Bethany: I've got a BA in music education from a private liberal arts college, and I'm teaching. Even on my beginning teacher's salary, I'm able to use 50% of my income to pay down student loans (yes, I'm not saving other than an emergency fund, but 6x what I'm required to pay on the loans). You can do it, but you have commit to it. @Bethany: I’ve got a BA in music education from a private liberal arts college, and I’m teaching. Even on my beginning teacher’s salary, I’m able to use 50% of my income to pay down student loans (yes, I’m not saving other than an emergency fund, but 6x what I’m required to pay on the loans). You can do it, but you have commit to it.

]]> By: Linda http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207402 Linda Wed, 19 Mar 2008 17:53:27 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207402 Trent, GREAT POST! You really inspire me. Trent,
GREAT POST! You really inspire me.

]]> By: Johanna http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207394 Johanna Wed, 19 Mar 2008 17:36:01 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207394 @Bethany: Living in Chicago on $850/month would be a bit difficult. But it is by no means impossible IF you ditch the car (Chicago has great public transportation) and choose your housing carefully. Getting a roommate (or two or three) can cut your rent to less than $500, and $350 is more than enough for food and incidentals. @Bethany: Living in Chicago on $850/month would be a bit difficult. But it is by no means impossible IF you ditch the car (Chicago has great public transportation) and choose your housing carefully. Getting a roommate (or two or three) can cut your rent to less than $500, and $350 is more than enough for food and incidentals.

]]> By: Bethany http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207380 Bethany Wed, 19 Mar 2008 17:02:45 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207380 Trent, I appreciate the sentiment here, but you speak from a place of privilege, and worse, you don’t appear to realize it. I don’t know many recent college grads who could live on 50% of their take home income. Maybe it’s just that I graduated (in 2005) from a liberal arts college. No doubt. Regardless, you are universalizing from your own experience. I don’t have ANY debt – no school loans, no car loans, no credit card debt, nothing. It would STILL be a stretch for me to pay my rent and buy gas and food on $850 per month (half of my monthly take-home pay, as you suggest). I live in the Chicago area, so my costs are higher than yours in Iowa. Furthermore, not every employer offers a 401k plan immediately upon hire (at my company you have to wait a year before participating). Not all companies match your contributions, either. I grant that you could start a Roth IRA, instead, but I would have appreciated an acknowledgement that not everyone works at an employer like yours. Especially if you start out in a job close to your passion (like in the non-profit sector – maybe these are just MY passions), you will probably not be making enough money to follow this plan. Unless your degree lands you an entry-level job that miraculously pays well, most of the advice in this post is not that helpful. I guess I should have been a business major; ironically, I could then afford to pursue my dreams. I thought I was pursuing my dreams with my English major. Pff. Trent,

I appreciate the sentiment here, but you speak from a place of privilege, and worse, you don’t appear to realize it. I don’t know many recent college grads who could live on 50% of their take home income. Maybe it’s just that I graduated (in 2005) from a liberal arts college. No doubt. Regardless, you are universalizing from your own experience. I don’t have ANY debt – no school loans, no car loans, no credit card debt, nothing. It would STILL be a stretch for me to pay my rent and buy gas and food on $850 per month (half of my monthly take-home pay, as you suggest). I live in the Chicago area, so my costs are higher than yours in Iowa.

Furthermore, not every employer offers a 401k plan immediately upon hire (at my company you have to wait a year before participating). Not all companies match your contributions, either. I grant that you could start a Roth IRA, instead, but I would have appreciated an acknowledgement that not everyone works at an employer like yours.

Especially if you start out in a job close to your passion (like in the non-profit sector – maybe these are just MY passions), you will probably not be making enough money to follow this plan. Unless your degree lands you an entry-level job that miraculously pays well, most of the advice in this post is not that helpful.

I guess I should have been a business major; ironically, I could then afford to pursue my dreams. I thought I was pursuing my dreams with my English major. Pff.

]]> By: kz http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-2/#comment-207361 kz Wed, 19 Mar 2008 16:04:53 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207361 MC - there are a lot of us who had PLENTY of expenses in college. My parents were not able to pay for my expenses, so I had tuition (with the help of student loans), school expenses, rent, utilities, car insurance and entertainment expenses to take care of myself, and I know I'm not alone on that. I don't think the numbers (50/50) are as important as the idea that, regardless of your circumstances, it's extremely helpful to live on as little as possible and save the balance. Admittedly, those of us who did pay our way through school may have a slight leg up on that experience, but it's a lesson for all. MC – there are a lot of us who had PLENTY of expenses in college. My parents were not able to pay for my expenses, so I had tuition (with the help of student loans), school expenses, rent, utilities, car insurance and entertainment expenses to take care of myself, and I know I’m not alone on that. I don’t think the numbers (50/50) are as important as the idea that, regardless of your circumstances, it’s extremely helpful to live on as little as possible and save the balance. Admittedly, those of us who did pay our way through school may have a slight leg up on that experience, but it’s a lesson for all.

]]> By: A in NC http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-1/#comment-207342 A in NC Wed, 19 Mar 2008 15:13:21 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207342 Great post Trent. I took your advice TODAY and re-did our budget. I couldn't get it all the way down to 50% BUT when I had re-done the numbers, I discvoered we will be paying off $30K in debt in 25 months. DANG That feel f-ing GOOD! YOU Rock dude. Keep up the good work. Your writing is a real inspiration! Sometimes the most obvious approach is not so obvious. Great post Trent.
I took your advice TODAY and re-did our budget. I couldn’t get it all the way down to 50% BUT when I had re-done the numbers, I discvoered we will be paying off $30K in debt in 25 months.
DANG That feel f-ing GOOD!
YOU Rock dude.
Keep up the good work. Your writing is a real inspiration!
Sometimes the most obvious approach is not so obvious.

]]> By: Powderpuff http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-1/#comment-207328 Powderpuff Wed, 19 Mar 2008 14:38:07 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207328 I am paying 50% of my income towards student loans and credit card bet that I accumulated during school. I'm trying to hit it hard and pay it all off so I can look towards a home since rent in the city is sky-high. I guess that would be similar to saving 50%. I am paying 50% of my income towards student loans and credit card bet that I accumulated during school. I’m trying to hit it hard and pay it all off so I can look towards a home since rent in the city is sky-high. I guess that would be similar to saving 50%.

]]> By: SJean http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-1/#comment-207323 SJean Wed, 19 Mar 2008 14:14:56 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207323 It's a nice idea but much more possible in some parts of the country than others. Also, sometimes your first job just doesn't pay much. I think rather than just making the cut at 50%, new grads just need to make a budget (a tight one!) and stick to it, saving everything they can. But 50% is a good goal. It’s a nice idea but much more possible in some parts of the country than others. Also, sometimes your first job just doesn’t pay much.

I think rather than just making the cut at 50%, new grads just need to make a budget (a tight one!) and stick to it, saving everything they can.

But 50% is a good goal.

]]> By: CyanSquirrel http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/comment-page-1/#comment-207319 CyanSquirrel Wed, 19 Mar 2008 14:13:15 +0000 http://www.thesimpledollar.com/2008/03/18/about-to-enter-the-workplace-for-the-first-time-try-the-50-solution/#comment-207319 You want to focus on contributing anything above and beyond what's required to get the full employer match for your tax-advantaged plan to an after-tax account because taxes are only going to go one way: UP! They are at historic lows and our political leadership has plunged us into eye-popping deficits and debt. That, coupled with the crumbling infrastructure in our country, and we will likely see taxes increase for those of us who are Gen X/Y and beyond. You want to focus on contributing anything above and beyond what’s required to get the full employer match for your tax-advantaged plan to an after-tax account because taxes are only going to go one way: UP! They are at historic lows and our political leadership has plunged us into eye-popping deficits and debt. That, coupled with the crumbling infrastructure in our country, and we will likely see taxes increase for those of us who are Gen X/Y and beyond.

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