Help! Disposable income & no clue how to use it ....

Call your local Primerica Representative. They will put together a comprehensive Financial Needs Analysis at no cost to you. I am a Rep in Ohio, or I would personally work with you. Just as a general Rule, Money Markets are a good place to save an Emergency Fund, money remains easily accessed. As far as your 401k, you only want to put in what your employer will match you. You will then want to max out your Roth IRA. The Financial Plan will also help you plan the best way to pay down your debt. If you need assistance finding a rep in your neck of the woods, let me know.

Andrew

A bad chunk of advice that you have been given. You are always better off to pay off these debts as soon as you can to minimize the fees and interest. The best way to raise your credit score is time. If you behave credit-wise, your score will go up perhaps

75 points a year.

You do what everyone else does on our rung of the economic ladder. Work steady and maximize your income. Upgrade yourself if you have to. Max out your retirment account options, including 401K, Roth, IRA, etc. Live as cheap as you can, rent a reasonable place, avoid car loans, and save some money. When you are truely ready (and not before), then get into a starter home. A decade or so later, use the increase in the home value and your value to move up to nicer home.

What is more important is what you don't do. Spending wildly, buying lots of toys, accumulating debt, and buying a house that is over your head are great ways to ensure you retire broke or even in debt. Don't do these things, even though most of your friends, relatives, and neighbors will be doing it.

-john-

It seems to me that you have three goals at this time:

1. Raise your credit score, to achieve the lowest interest rate possible on a future home mortgage
2. Save to buy a house
3. Save effectively for retirement.

1. See
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   , clicking on "read more,"for a very good overview of your credit score, and very specific, easy tounderstand steps for raising it. Some of what you said in your post aboutthis is flat out wrong, which should be good news.

1. It sounds like you have made huge advances in managing your money. That's fantastic; take some pride in this. May I suggest now putting your monthly expenses on a spreadsheet? E.g. rows for the monthly electric bill, phone bill, food, insurance, entertainment, etc. expenses. This will keep you aware of exactly how much you can live on and how much you can save for a house each month. Doing so also keeps one aware of when one is, shall we say, over-indulging and maybe can cut back to save more. Where to put the money while you're saving for a house? First, make sure you have six months to a year of emergency expenses covered, with this money in a Money Market fund. Then start investigating the cost of a house (or condo?) in your area.
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   is a great place to start. Figure at least 20% down, for now. If it will take at least two years to accumulate the down payment, then use a bullet strategy of CDs. That is, buy CDs each month that all mature in the same month--the month you want to get serious about making a down payment on a house. Lastly, make sure you can actually afford the house you're contemplating. In addition to the mortgage payment, there are property taxes, insurance payments, a fund for upkeep of the house, association fees, etc. Ask more about this here or elsewhere as you get closer to having the down payment.

1. People will differ on this, but IMO, it's absolutely very smart to start off with all your retirement savings in an S&P 500 index fund. It's the best choice you could make, in my opinion. But at some point, you will want to start diversifying. To get you started on understanding how to diversify (also known as "allocate one's portfolio for optimal return"), try

(Take the 49-question survey.) (Fast but general.) (Fast but general.) (Click on: "Go to Personal Investors... " ; "Planning & Education" near top; "Retirement Planning"; "I'm already saving... "; "How should I allocate my assets" on the right, middle; "I accept" at the bottom.)

Also, note other posters' comments about 401(k) and Roth IRA strategies.

Im curious as to why you recommend a spreadsheet?

Why not just use something like Quicken?

Because

1. All I know about Quicken is that one usually has to pay money for it. I prefer to spend my money on skiing, etc. :-)
2. If one has a computer, chances are it included some sort of perfectly good spreadsheet software. Being acquainted with spreadsheets is a good skill to have.
3. It's very easy to throw together a precisely customized spreadsheet of one's expenses.
4. I personally don't want to trust too many canned programs to compute my finances for me. Lots of people love Turbotax for their yearly 1040, for example. I know several people I respect a lot (off line and online) who recommend it. But they also concede it has had a few bugs in the past.

OTOH, certainly I know many people who swear by Quicken. If you use it, why don't you say a little about how it works and what you like about it, with particular attention to why you feel it's better than constructing one's own spreadsheet?

wrote E wrote

Oh Im not sure quicken IS better! Mater of fact I was hoping maybe you could show me a way to quit using it

Example...Im using Quicken now....and track EVERYTHING expense wise. Even if I buy a 50 cent soda at work I enter it into Quicken

So I guess my question is.... how do I enter in a 50 cent transaction like soda above into and excel sheet?

One pays for a spreadsheet, too.

And aside from that, one pays for the use of a Spreadsheet with one's *time* if not one's money. Not that I use Quicken's budget stuff, but I do track spending on it because I'm already entering every transaction anyway, so spending by category is a free side effect.

Anyway, I prefer to spend my *time* on skiing, etc. Compared to the value of my time setting up and maintaining a spreadsheet (I used to use one for this sort of thing - back in, oh, '90), the cost of Quicken is *way* way less.

Reinventing wheels and carving them by hand is rarely the efficient thing to do when someone else has a factory mass-producing excellent and effective ones very cheaply.

(That goes for many more things besides just Quicken, BTW)

As far as TurboTax, the likelihood of a bug in TT screwing my taxes up is almost certainly far far lower than chance that I'll miss something or miscalculate something if I do it by hand. Professional tax preparers use specialized software to do taxes, too, and for the same reasons. Their software often can handle special cases better than TT or TC, of course, but it's not like they write their own spreadsheets for that stuff except in very very specialized cases - and for the same reason - both more efficient and more accurate most of the time.

There are exceptions. Certainly. But they are exactly that - exceptions.

I have my "Elle's Expenses" Microsoft Works spreadsheet set up with months of the year in 12 columns and category of expense in the rows. At the moment I have about 13 rows, or 13 categories of expense types. Monthly cash (or check) expenses for incidental things like the occasional soda pop at the softball field go into my "Not credit carded" row. Once a day or so I enter any cash expense as part of a sum for the "not credit carded" cell. For instance, right now, my March expenses cell for "not credit carded" contains:

=2.75+10+2.5+3+4+2+7.4

The 7.4 at the end is for the $7.40 check I paid for a book of postage stamps today. My spreadsheet of course adds all the numbers up and displays the total, but I can highlight the cell and see what you see above.

The 13 categories include phone bill, homeowners' association fee, property taxes, gas-electric bill, water bill, health insurance, credit card bill, etc. I massage the "credit card bill" cell a little when I charge, say the water bill or health insurance, to my credit card. The goal of the massaging is to try to make the credit card cell reflect mostly grocery items: Food, cleaning supplies, auto supplies(!), etc.

The purpose of the detail in the categories is so I can track where I'm getting hit hardest for inflation. If it's utilities, maybe I'll buy some better windows for the house some time.

I've been doing this for only about 15 months now. It gives me peace of mind. I'm thinking of adding a dedicated row for "Major House Maintenance Savings Plan," (like a new roof in ten years) but that's easy to do. I'm sure others would want to add a dedicated cell for auto repair expenses; mortgage; etc.

What's wrong with the way Quicken does this?

Don't do this. Primerica is a MLM scam. They will not give you advice that is in your best interest. Rather, they sell you what makes them the most money. The reps are ex-shoe salesmen and people off the street who go to a weekend seminar, and then are turned loose as so-called financial planners. Don't let one of these weekend wonders near your pocketbook, not unless you want to learn about transfer payments (that, transferring your money into their pockets).

-john-

Nothing wrong with how Quicken does it.

Im just the type of person who likes the idea of using off the shelf "tools" such as spreadsheets or databases like Access to do such things. Rather than using Quicken

BUT.....Im not smart enough to take such general tools (excel, access) and "make" them do what I want.

hence the question

MLM???

Multi-level marketing. While there is nothing illegal about most MLM schemes, many operate in a grey area of legality. Primera is a classic MLM scam. They recruit people off of the street to become financial planners. These folks have no background or training. All they do is go to a weekend of religious-like training on how to be a member of their cult-like organization. The products that Primerica sell are poor performers, have long-term locks in them, and they are vastly overpriced. They have to be in order to pay out the huge amounts of commissions that flow across 7 levels of downlines.

I really don't care who you buy your financial products from, but I do care that you get a good product for a reasonable cost. If anyone pitches a Primerica product to you, be sure to compare that to similar products on the open market. You will find that load fees are less on the open market, rates of returns on fixed investments are often higher on the open market, interest rates for loans are often less on the open market, and you are not locked in for life on many of the open market products.

Typical things that Primerica try to do include:

a) selling you very expensive "lifetime" life insurance, when you can get term for 1/20 of the cost. Term is best for most people anyway since they will have few responsibilities once their kids grow up, and most people can go self-insured by that time due to their retirement savings.

b) selling you a high-fee home re-finance at a higher interest rate by telling you that you will save money by going to a bi-weekly plan. In reality, most people can get the same effect by paying their current loan biweekly without doing a refi or paying a high fee, and simply paying an extra payment once a year accomplishes the same thing with no additional fees.

MLM can be a legitimate form of business. There are even some legitimate MLM companies out there. The key is that they have to have a product that is competitive on the open market. That works for some unusual products that have a hard time getting into stores like high-end skin cream, high touch items like cosmetics, or odd products like blue-green alge. But those that sell the $6 light bulbs or $5000 water filters are simply scams wrapped around a pyramid scam. Avoid them at all costs.

-john-

Thanks. The probable meaning occured to me, after I posted the message of course.