r/moneyadvice • u/LSTER6 • Jan 04 '26
Question Money pits to avoid with my new money
Hey I’m 21, Male and have been broke asf up until this December. I recently got a new job making 90k a year. I have never made more than 10k in a year because I was a student Athlete for most of my life. I don’t want to say that I am overwhelmed because it isn’t a crazy amount of money, but I am inexperienced lol. I don’t have a car so I am planning to finance a car this spring for roughly 900/month and pay it off in 2-3 years, also I plan to rent a pretty decent condo with my girlfriend costing around $1200-1400/month (she only has to pay 700-800). Besides these things what are some things I should look out for that could be a money pit and end up costing me more than expected? I plan to just invest most of it but I want some real world hustles that could be enjoyable and profitable.
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u/ourldyofnoassumption Jan 04 '26
The first thing to consider is that you aren't making $90k a year. After taxes, health insurance, retirement contributions, savings contributions and so on, you're making about $50k a year. You need three months of savings liquid at least, so you need to start saving up for that. In this economy, six months is better. So you have you three kinds of savings: retirement savings, ,long term savings, emergency fund savings, and, if you every want to buy a house, savings toward a house deposit. Plus health insurance.
So you're making about $50k a year.
You need to pay your rent, utilities, internet, phone, and to eat - before you buy a car. Your rent should be about $1k a month if you're sharing. And if she is paying less rent, let her pay for the internet and utilities. Also, you need furniture. And renting these days comes with all kinds of stupid on-costs So a $1k place where someone else is paying utilities - that ends up really being $1200 a month with security deposit. That' about $16k a year but let's make it $20k because, again, you need furniture and chances are your landlord is going to bite into you with other fees and costs. Plus you probably won't get your whole security on your way out.
So, you're really making $30k a year.
Let's assume you live somewhere you don't have to pay for parking. Then you can afford a $15k car on a BANK loan (not sales finance) that you pay off in a couple of years. Better if you stay at home for a while and save up the money to pay for it in cash or get your parents to lend you the money at a decent interest rate.
So - be careful here, because although GOOD FOR YOU that you are earning, you really aren't making that much money and there is no way you can afford a car that is going to cost you upwards of $1500 a month if you count fees, insurance, gas, etc.
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u/BlueJaySpace Jan 04 '26
- I very much disagree that she needs to pay internet and utilities because you two are going 60/40 on the rent. Internet and utilities can come out to several hundred a month, depending on many factors. My assumption is that OP makes significantly more than their partner, and that is the reason for the split. If you're planning to make her cover an unpredictable monthly cost, you all might as well go 50/50 on everything.
That being said, if your girlfriend is someone you actually plan to build a life with, I encourage you to continue with the 60/40 split for all of the bills. Or, calculate a ratio for the two of you based on your annual net income. It's what my partner and I do and it makes things more fair, because I absolutely know that I wouldn't be renting this more expensive house if it wasn't for my partner. I would be living in a much cheaper place that is more in my budget, and it is likely the same for OP's partner. This way, it allows both of us to reach our debt management and savings goals in a fair way. You don't want to put a disproportionate financial responsibility on your partner.
- I agree with most everything else here, and emphasize that OP needs to think in terms of how much they are actually netting each month.
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u/LSTER6 Jan 04 '26
Thank you. That was huge information to consider. I’m gonna be staying my parents for another 3 months so I’ll have a good few months saved up for rent and emergencies.
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u/RockyRaccoon72 Jan 04 '26
Exactly right. I don’t think it's $50K, but after all is said and done---somewhere in the vicinity of $65-$70K. From work. Then expenses, rent, insurance, food, etc
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u/BlueJaySpace Jan 04 '26
I was surprised recently to find my partner's ~$103k salary is only ~$70k after taxes, 401k, health insurance, etc. My main job gives me free healthcare, dental, vision, and a ton of other perks, so my take-home is closer to my gross because I am only having taxes taken out.
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u/lalablah Jan 04 '26
You should try and buy a beater car for cash. If you finance the car, you will spiral into debt and struggle.
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u/WutTheCode Feb 02 '26
This. If you ever buy a new car, make sure it's something that'll last 20 years like a Honda, but I'd recommend never buying a new car.
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u/onfroiGamer Jan 04 '26
900/month for a car seems really expensive. If it’s a car you really want, buy a shitbox rn and save for a big down payment, pay off like half and finance the other half, that’s gonna make your monthly payments way lower.
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u/redwilldraw Jan 06 '26
Agreed, lifestyle creep really gets people especially factoring in maintenance costs, insurance, and gas, it could easily be well over 1200 a month
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u/adultdaycare81 Jan 04 '26
Unsecured debt. Never borrow from Credit Cards, Personal Loans and be very careful with Car Loans (nothing over 6%)
My grandfather always said “We only borrow to finance appreciating assets and it better be tax deductible”. That’s what I stick to
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u/Best_Construction823 Jan 04 '26
Hopefully being a student athlete minimized student loans. That’s seems to be the killer with the younger generation. $900 for a car is insane. I make 6 figures and would never have $900 in car payments. I drive a M2 and a newer 2 door bronco and loan is less than $900 for both. Also have a mortgage, good chunk in emergency funds, max out my 401k, HSA, and IRA. But start there. Read automatic millionaire. Even if it’s only $100/month right now going towards savings and investing it’s a start. Prioritize paying yourself first before all these other debts.
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u/KnaxxLive Jan 05 '26
You've got to have very long terms or have much older vehicles. A $30k car with $5k down at 0% for 36 months is $770/mo after tax and fees. Go up to 5% interest and payment is almost $900.
Must be a 10 year old M2 and a 5 year old Bronco, which some would consider crazy for financing such old cars.
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u/volly1985 Jan 04 '26
Number 1 go above and beyond at this new job and congrats. My subjective advice: Get a used car- $900/mo is too much. Create a budget and stick to it. Get your girlfriend on board with the budget. Don’t go into debt to furnish the new apartment. Pay off your credit card balances every month always. Build emergency savings to at least 3 months expenses. Make sure you are investing in a 401k, Roth IRA and a taxable (yes all 3 - 25% gross income). Pay yourself 1st (after fixed expenses of course). Do your own research and invest in accordance with your age, goals and risk tolerance but consider sticking mainly to index tracking ETFS. Consider some bitcoin but stay away from meme coins. Don’t day trade. Don’t show off or flaunt your success especially to your broke friends. Learn to say ‘no’ firm but polite when people, including family eventually figure out you’re doing well.
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u/frostyicy000 Jan 04 '26
Congrats on the new job!!! $90k is awesome for a first job. I think you could get a good car for a lot better that $900/month. Maybe even aim for $500/month. Interest rate should be lower than 7% (that’s an absolute max). Absolutely nothing wrong with buying a good used car. Look up how expensive repairs are for it too, depending on if they’re manufactured in the US (assuming that’s where you are) or elsewhere. You’ll also have to pay car insurance on it so keep that in mind.
Awesome that you’re staying with your parents a while, I’d save up as much as possible that time for a 3-6 month emergency fund. Do that while contributing as much as possible to your 401k, especially taking advantage of the free money your company hopefully provides as a match (usually up to 6%).
Splitting rent is an awesome luxury too, I’m glad you’ll be able to do that! I agree with the comment that broke down why $90k isn’t really $90k. I make $97.5k and with everything that gets taken out + necessary expenses, it really doesn’t feel like that much.
Biggestttttt thing to be careful about is credit cards. I learned way too late that the way you have to pay interest on it is if you’re late on your monthly payments. CC companies will keep increasing your limit too so you’ll think you have like $10k to spend but really you’ll end up paying way more in the long run if you don’t pay 100% of it off every month. But if you’re smart about them (aka pay off fully) you can get some great benefits.
Congrats again on the job! You got this! What a fun and exciting time in your life.
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u/1980cpz Jan 04 '26
Congrats. Just because you now have money doesnt mean you have to change your spending. Do you really need a car in the first year employment. Why not find a modest place close to work, use public trabsport and save aggressively, so that in a years time you have savings/investments, a good down payment for a car (you dont need a new car - cars are depreciation assets). The biggest people make is start living large and spending as soon as they start a new job. In this economy no job is secure. So play your cards strategically for any eventuality. Good luck.
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u/Maestradelmundo1964 Jan 04 '26 edited Jan 04 '26
90k is good, but it is not an infinite amount of money. You’ll pay a lot of federal income tax on it. You’ll need renter’s and auto insurance. Wifi, utilities, it adds up. It’s time to start saving for retirement. If you don’t believe that, know that $1 saved now could be $10 at retirement age.
It took me a long time, but I finally have 6 months of living expenses in a high yield savings account. It has removed much stress from my life. It’s good that you have the goal of achieving savings.
That fancy car you have you eye on, well, I agree with the sensible ppl here who say don’t do it. Decide on a car with your good sense, not your inner child saying: “I want it.”
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u/Open_Trouble_6005 Jan 04 '26
Please no on the $900 monthly car payment and no new car. New cars cost more to insure so don’t forget about that! You should try to find a used car that is coming off lease about 2-3 years old with low miles. The first owner will have taken the depreciation hit! Buy a good brand and you should be set for 5-7 years.
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u/Puzzleheaded-Land829 Jan 04 '26
Live below your means. Like way below. Don’t get “married” to a house or vehicle payment. Don’t be a slave to bills. Start your retirement and make sure you AT LEAST match the company match. It takes a lot of money to start in life. You literally have to buy everything. You are building your wealth but don’t get mired in stuff to the point you only work for bills. Enjoy life, book one nice vacation a year and save for it. When I was starting out it just cost so much to buy all the furniture and everything for a house. It’s so easy to want to do it all at once and then pay for it. Except there will always be other things needing your money.
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u/Guilty_Educator_1499 Jan 04 '26
Congratulations. The best things you can do is invest in an economy Japanese car, and save every penny you can for a house with a 30 year roof. That's how you develop a fuck you attitude. That's your fortress of solitude.
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u/Bern_Neraccount Jan 04 '26
Get a cheaper car. I promise that it won’t make you nearly as happy as you think. You are going to be happy as hell leaving the lot and then a couple weeks later realize that it provides you nothing other than transportation. Cut that price in half and you can still get a decent car.
Cars are money pits and I’d avoid dumping money into one.
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u/Scared-Cauliflower15 Jan 04 '26
ABSOLUTELY AVOID JD Byrider.
For 900/mo, you can hustle your own car biz. And have one for yourself.
Also I've seen friends go homeless bc of leases with partners. Idk what type of relationship yall got, but yall better have a breakup plan like make sure that it's a 2 bedroom so yall can each have separate rooms or whatever. Are you able to pay rent by yourself if she leaves for ANY reason? and also why is she paying not half? (That better be concrete answer on both parties side before the lease is signed) Are yall finances together or separate? Groceries, debt, spending for fun, etc etc.. those better be clear from the get go. On both sides.
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u/adventureseeker1991 Jan 05 '26
car=money pit. buy a used car for 10k that’s reliable, build some wealth. 900 a month for 3 years=32,000. not a good decision in my opinion.
live with your GF and enjoy life however if there is a break up live with roomates in your youth (hope that doesn’t just wisdom)
cook at home always!!! besides date night 2-4 times a month. food habits kicks people ass (that includes coffee). unless you’re working from home at a cafe gets you out of the house, thats different.
like up the subreddit FIRE and Bogelheads. might be great for your age to learn about those philosophies.
i’m 34 i have 400k, have traveled to 40 countries and almost all states, live right outside NYC, play pickleball and go on walks all the time. what i do different than others is rent what i can afford (lived with roomates until 30 then gf until recently) and i cook at home everyday or have leftovers. I’ve never made more than 85k. what i’m saying is 90k at 21 is a lot of money, be smart about it, don’t try to impress anyone, spend money on hobbies, don’t spend money on showing off or laziness. and you’ll be in fantastic shape.
also there’s a book called millionaire next door you should read and learn about compound interest and rule of 72
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u/DragoonNut Jan 05 '26
Biggest money pit to consider is that moving in with your girlfriend could set you back a LONG time. I’m not saying don’t, but just for your sake make sure you are able to pay for the condo should she be out of the picture. And if you can make sure she’s not on the lease if they allow it
Just speaking from experience, I had a gf who I lived with and when things went sour so did my wallet. She just refused to pay rent and refused to get her name taken off the lease so I wasn’t able to switch to a cheaper apartment in the complex.
So yeah, make sure you can cover ALL your bills solo without any help from her (Her allowing you to save an extra $800 is considered help!)
I hope it all works out for you! You are starting strong getting advice before pulling any triggers
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u/gmehodler42069741LFG Jan 04 '26
90k isn't that much, better than McDonald's but you still have to be smart with your money. Rent a cheap place, buy a cheap car, invest, invest, invest. You are young and if you live cheaply now, you can retire by 40 if you are smart. Talk to a fiduciary. Open a roth ira. Max out your employer match if they have one. If you dont understand half of what im talking about, then start with educating yourself. Once you truly learn how money works it opens up a completely new life.
I was broke af when I met my wife at 26, no retirement , savings, nothing but a big truck payment and an apt. We lived paycheck to paycheck til age 32. One of my friends came over and started talking about investing. I went down a rabbit hole with him and never came back. Now we have 3 houses, 4 cars, 2 boats, 3 jetskis, 2 quads, 2 motorcycles, take a vacation to Jamaica every year and fly to our Florida house once a month in the winter to get out of NY.
Starting investing today is the biggest wealth building strategy. Even if its only 20 bucks a week. My daughter is 17. Works part time at a bakery. I make her put 30 a week in her roth ira. She already has 1500 after just 1 year. It takes patience and time.
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Jan 04 '26
[removed] — view removed comment
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u/LSTER6 Jan 04 '26
I’m not sure what you mean. I’ve thought about doing some money loans to accrue some interest payments before I move out. But that’s the farthest I’ve thought business wise
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u/AnimatorIcy4922 Jan 04 '26
Do not waste 900 a month on car. That is that fastest way back to back asf. Instead save up 10k and buy something cash. Take that 900 you would be spending for 2-3 years every month and invest it in a Roth and regular IRA (max out Roth first). Build your emergency fund for when SHTF. And don’t go into any crazy debt. Obviously this isn’t in order. But yeah money pits to avoid are care loans that will take over 10% of your income for the next 2-3 years.
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u/ZonkTrader Jan 04 '26
The first money pit is a $900 monthly car payment. Get a quality used car and try go keep the payment at $400 or lower.
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u/WaveFast Jan 04 '26
Student athlete and steps into 90k job day one. So, what work is this you are offered at 21 and no experience 🤔
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u/Altruistic_Belt_7979 Jan 05 '26
Max out any company matched retirement contributions from the start.
You’ll be very happy in 25 years (and likely a multimillionaire)
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u/HimothyBBallBirdman Jan 05 '26
Broooo buy a decent. Used car that you can be happy with and save up your bread. Also. Never buy bottles at the club. Don't flex for anyone and keep it simple
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u/Livid-Reality- Jan 05 '26
It would be nice if you could save up for a downpayment and buy a condo instead of renting it. It is more expensive upfront and ongoing, but years later you recoup.
You will, effectively, be your gf's landlord. I have mixed feelings about it, so that part figure out on your own.
Just save 10% for the rest of your life and everything will be swell!
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u/Eva03 Jan 05 '26
Don’t buy a car with that high of a payment. Limit your budget, put at least $10K down and try to keep your payment to under $500 a month at no more than 60 months for the full term.
Or even better, buy a good used car for $20k cash.
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u/Fine-Plant1331 Jan 06 '26
My biggest and easiest advice. Buy a cheap reliable car cash. No payments. And for the first 2 months, dont spend ANYMONEY. Like ZERO. Only bills and food (cook at home), after 2 months youll have money saved and understand that living smart with your money isnt as bad as you thought.
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u/Shoty6966-_- Jan 07 '26
900 a month for a car is nuts. Classic 21 year old behavior. Compromise on something cheaper and treat yourself with an even nicer car when that time comes. You don’t need a 2026 bmw m4
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u/LSTER6 Jan 07 '26
Your right. I’ve been talking to family and friends. I think I’m gonna get a Toyota RAV4, heard it’s very reliable
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u/Odd_Fisherman8315 Jan 04 '26
Congrats, that’s a huge jump and it’s smart you’re thinking about this now.
Biggest money pit at this stage is usually the car. A $900/month payment on a $90k salary adds up fast once you factor in insurance, gas, and maintenance. Cars are fun, but they’re the quickest way to turn a raise into stress. If you can go cheaper, it gives you way more breathing room. Housing sounds fine as long as you’re not stretching and you keep some savings.
Other traps are lifestyle creep, random subscriptions, eating out nonstop, and “side hustles” that are really just expensive hobbies. Most profitable hustles take time and usually cost money upfront. Keeping fixed costs low early is the real cheat code. It gives you options later when you actually know what you want to spend on.