My partner and I recently moved in with two of our close friends. One of our roommates is very wealthy and has a trust fund they have access to. They are also very religious in a socialist, “we can just build heaven on earth if we choose to” way. With that being said, our roommate is having us all pool 50% of our income into a shared account (it is in both of our names with a local credit union and a 5% interest rate). And ALL off our needs will be charged to that account. Like ALL ALL needs, transportation expenses, food, rent, utilities, healthcare expenses, and so on. Anything our 50% doesn’t cover will be supplemented by their brokerage account when needed. This includes surprise medical bills and car repairs and so on.
I grew up VERY poor and this is the most financial stability and autonomy I have ever had in my life and I need help with how to budget all this money. I also just got a promotion at work and am making 10k more a year.
I am debating on weather I should turbo charge saving and dump my money in my HYSA or pay down my car loan asap. My partner wants me to split the two and keep contributing to my HYSA as well as pay down my loan with extra money. I really want to get rid of my loan ASAP bc I don’t want debt other than my student loans. After my loan is gone I can then start savings that money. I am more than ok with having little money for “fun” stuff to focus on savings and loan because this is such a unique opportunity. I also feel guilty spending money on non-essentials when my savings are so low and I have debt, but I also struggle with being too restrictive. Let me know your advice and I will leave my current budget below
Gross Annual salary $62,721
Net Annual Salary $42,650 (I work in local gov)
Paid weekly $820
Current HYSA balance $4400
Checking/savings balance where I spend from $1000
Roth IRA $700 (I am 24 and poor so I know this is low but hoping it will compound, yes the account is invested)
Car loan 10.89% $9600
Student loans avg 4% $25000
monthly breakdown
$1640 - Shared checking account for agreed upon “needs”
$100- student loans
$500 - HYSA
$400 - car loan (extra payment, reg payment comes out of the shared account)
$50 - Roth IRA, (I also have a pension plan I contribute to each paycheck automatically)
$548 - “fun” money
Our lease is for two years and I get a raise (3-6%) and cost of living adjustment (3%) each year. I also work in elections and expect to make about 4,000 (net) extra in OT this year (we are very understaffed plz pray for me lol). I would put this towards savings or loans.
Thank you in advance for any advice, all my friends are poor and our parents cannot give good financial advice so I’m learning everything on my own. I know this is a strange situation and I promise our wealthy roommate can be trusted and is reliable, we have been best friends for years and we have seen each other through A LOT)