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sciguyCO t1_j6ol668 wrote

>So now what should I do with all this extra disposable income i’ll have moving forward?

I'd say try out a new perspective: no income is "disposable", it just gets different jobs of varying importance. As a responsible adult, you get to set your own priorities. Though there are guidelines to help out.

The wiki has its Prime directive that gives a good roadmap. The top part of the flowchart there sets you up with a good financial foundation:

  • Set up a budget where you plan your outgoing money to be <= your incoming money. This will likely take some time to nail down, especially as things shift while you progress through the next steps.
  • As part of that budget, you allocate income to your mandatory expenses (rent, transportation, minimum debt payments)
  • Contribute enough to your employer's retirement plan (if any) to maximize the amount of match (if any) you can get from them.
  • Pay off high-interest debts (especially credit card balances) as fast as your income allows
  • Build an emergency fund to protect you against unexpected events
  • Save 15% of your income towards your eventual retirement.

Once you've nailed down those half-dozen things, you have a bit of flexibility on how to move forward. You can (within your budget) expand your lifestyle. You can save for a big future purchase (new car, first home). You can aim for early retirement. Or any mix of those that matches your goals / values.

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