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The budget breakdown of a 25-year-old Software Engineer on $9K a month in Austin, TXFeatured

Posted in:Advice Compensation Lifestyle Money

The Budget Breakdown aims to broaden the conversation on money and offer insights into various approaches to spending, saving, and investing.

✨ Want to share your monthly budget breakdown with us? Please fill out this form here and we will get back to you (can be posted anonymously like this one 😉).

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💰 Income

Monthly Gross Income: $9,918.75

Monthly Net Income: $6,895.42

Other Income Sources: $60,000 in stock, vest every 3 months where I receive ~ $2,800 after taxes

🏡 Monthly Fixed Expenses

Rent: $1,243.77

Utilities (Electricity, Water, Ring, Laundry Rental): $185

Internet: $72

Transportation:

Car Gas: $100

Parking (included in coworking office): $0

Car Insurance: $134

Renter’s Insurance: $20

Debt: $3,315 (Credit card – balance transfer 0% interest until March 2025) – I pay $125 a month and use my vests to pay it off in time (scheduled payments) which will go towards my savings budget once paid off

Subscriptions: $58 (StretchIT, AppleCare, Spotify, iCloud storage, swipewipe)

Coworking space: $49 ($300 is reimbursed by my job, so net is $49)

Cell phone: $90

🛒 Monthly Variable Expenses

Groceries: $750 (focusing on body recomp, using premade meals, high quality foods)

Everything at my discretion (online shopping, partying, eating out): $500 (what is left over, sometimes I splurge and take from other categories like food)

💸 Monthly Savings and Investments

Emergency Fund Contributions: $2,100

Retirement Savings: 6% of my gross income ($119,025 salary) for the full 3% match of my 401K

Other: 5 installments of $222 for a life coaching program: Courage Driven Latina. After paying it all, this will go towards my savings.

🎁 Monthly Miscellaneous

MMA (Mixed Martial Arts): $179

Health and Wellness: $79

⚖️ Final Balance

Total income: $6,365

Total expenses: $6,365

Final balance: $0

💭 Money Reflections

1. How much does tracking your personal finances influence your spending, saving, and investing habits?

I used to track every single transaction for 4 or so months this year, now I just pay my bills immediately when I get paid / separate my fun money from my bills. I only keep a balance on one credit card (I finally paid off the other ones) and pay off my transactions daily and have a single balance transfer on another card. As long as I’m not in the red and contribute the $2,100 to my savings, I am okay. I do track my savings/debt payment contributions with a new spreadsheet each month since last year.

2. Is there anything you wish you would spend less money on?

Partying maybe.

3. What do you consider important to spend money on?

The future: fitness and retirement (should do more retirement funding).

4. Do you have any short-term or long-term financial goals?

$30,000 in cash savings and no debt.

5. Are there any specific saving or investment strategies you follow?

Immediately paying my bills and funding my savings account after getting paid, paying off my card transactions daily.

6. What was your relationship with money like growing up? Did you talk about it with your parents/caregivers?

I was very bad with my money and my caregivers/parents didn’t speak to me about it even when I asked for help budgeting.

7. Did you receive any formal or informal financial education growing up?

8. Do you feel well-versed in personal finance? What resources have you used to educate yourself?

I feel like I know enough, I used NerdWallet and CreditKarma as well as articles online about specific things. I’ve also used LearnLux through my job to speak to certified financial advisors.

9. What advice about money would you give to your younger self?

SAVE YOUR MONEY! TRACK IT!!!!! I made 6 figures for a year through a string of internships when I was younger and have nothing to show for the money I made back then, which is more than I make now without even considering inflation! It blows my mind how financially irresponsible I was!

💡 Ask the community

How can I improve my budget? Is it unwise to lump so many categories into “discretionary spending”? Should I fund my Roth IRA over my 401K? (I think I would be liable to empty out my Roth IRA in the future.)

LeenaB·Nov 26

Great job OP! I recommend funding your Roth IRA after funding 401k as the former is for post-tax monies and the latter pre-tax.Ideally you are contributing the max allowed limits to BOTH, but I would prioritize 401(k) over the Roth IRA first and then contribute the rest to the Roth. Look into back door Roth IRA contributions once your income increases for a legal workaround to contribute more.

dianagarcia·Nov 27

I don’t think it’s unwise to lump your discretionary spending. As long as you're keeping an eye on your limit you should be fine. Great job paying off debt and your retirement contributions, those will really change your financial outlook as your income grows and you keep up those good habits. Thanks for sharing!

jwolcott·Nov 28

Great job with the progress you’ve made, you’re almost debt free! One note about credit cards - if you’re carrying a balance then paying them off daily saves you interest. If you pay off a particular card in full every statement, there should be no interest because of the grace period. That said, check the fine print because sometimes it takes a few months of paying in full to regain the grace period.As you recognized yourself, you should absolutely be contributing more to your retirement accounts. It’s okay to keep building your emergency fund a little longer, but honestly I would try to max out your 401k soon. The 2025 contribution limit is $23.5k and you could hit that if you put much but not all of your emergency fund savings there instead. So as soon as you’re comfortable with your emergency fund, raise that contribution percentage. It really helps to literally max out contributions early in your career because of compounding gains, and once you’re used to maxing it out, you don’t really miss the money in your budget. A Roth IRA is a good idea too, and you could either contribute slightly less to your 401k or use two quarterly stock payments to mostly fill it up.

susanlee·Dec 03

I'll throw in my two cents (heh) on how to improve your budget:1. Pay off those credit cards ASAP. You're burning money by paying interest.2. Then, max out your retirement. I'm not a financial advisor, but I'm pretty sure you can contribute to an IRA and 401K. If you maxed out your 401K, then work on maxing out your Roth IRA (you can withdraw money from an IRA as long as its equal to or less than what you contributed to it).3. Invest more! Mutual funds, S&P 500, and/or CDs with high interest rates. I like Ally for CDs and High Yield Savings Accounts.Overall, you're doing a great job!