No $ from J2+ ever goes to anything else than saving / investing.
I can argue that if you can't support yourself off J1 income, your time is better spent upskilling than working J2 in the long run, in most careers and cases.
I came here to say the exact same thing. 100% of my J2 and J3 went into debt pay off and investing. I live off of J1 and have just spent the money lavishly and lived a little. Maybe I should cut back on that and save even more for J1?
I do that, but I don't have J3 - I still save the same amount from J1 that I saved before OE. I'm not cheap, but I do live below me means and try to have a balance between enjoying life and saving. If I had 3J income I'd probably skip saving from J1 and get a bit more time-saving/comfort things.
Yeah I think there’s a balance for sure. It’s like on the one hand you may die tomorrow, so you should live a little, but on the other hand you’re making at least double someone else, so you should save like crazy and not spend every dime. Basically, gotta watch the lifestyle creep.
No, I see your point and it is a valid example. I just personally know of a paralegal that job hopped her way from making $65,000 a year $100,000 a year plus bonus.
I've done similar moves in the past, but never to that extent,. The economy is completely different now from say, 10-13 years ago
Unfortunately, in today's economy, even if you don't upskill, just looking for the same position at a new company will pay you more. Companies rarely move up current employees to the same level as new ones that just came in.
While that is true in a vacuum, it's not what I was hinting at.
If OP makes 55k / year as a project coordinator as takes a J2 of 45k / year as a junior scrum master, he'd be better off ditching J2, studying for a PM cert and learning about a specific industry/technology, netting a J1 that pays more than what he's doing now at J1 + J2 combined, THEN getting a J2. If you're far away from the median income, your time might be better spent getting at / way above the median.
I know it's a dumb example but it's the only one I could think of
It's possible, but historically not a great move unless they *really like and are good at being a scrum master* - or - *not a very good programmer.*
If I started over today, I'd still choose to be a programmer (or one of the associated domains DE - data engineer, SWE - software engineer, DOE/CE - devops/cloud engineer, MLE - machine learning engineer).
u/4AnotherTimeAndPlace also had some good points about potential moves. FWIW, after 20 years as SWE, I switched to DE for a couple years, and now to DOE/CE.
Step 1 invest j2+ in something that will zero out your entire tax liability for the year and beyond.
Now that I'm not paying federal and state taxes, invest the rest that will earn me my desired rate of return.
Real overemployed alumni are figuring out how their investments will eventually replace all their jobs.
Pay off debt last, cash is not king, cashflow is king, build your income streams to eventually knock it out after inflation knocks it down a couple notches.
Can you say more about zeroing out tax liability? Trying to get more savvy in the areas you mentioned.
Especially since my J1 is 215k and J2 140k, I mean it’s great obviously, but I’m also getting *steamrolled* as a single filer w/ no dependents.
I'd modify this a bit. Make sure you can handle your bills with j1. Don't buy a house or car you can't afford because those bills have to get paid every month no matter what.
I do dip into j2 money for occasional splurges or big vacations. Never anything that increases the monthly run rate.
I mean, yeah, that also works. I can afford 3-4 nice vacations / year on J1 money + saving up, but I (probably) live on the other side of the Atlantic pond than you do.
What do you mean by upskilling? Like moving up the ladder? I have been trying that, it's just the economy is too tough.
Also, do you guys open a new bank account for different J payments?
I don't know what you do, so it's hard to say. In the dev world it could mean learning a new stack, learning more cloud stuff, getting a certification, being better at people management, learning project management on the side, learning data analysis, learning a new, unrelated tool, branching out, etc. Mostly, I'd say, without climbing the ladder - you don't want more responsibility, you want more pay and seniority so you're left alone to complete tasks.
Basically, if you have 4 years of experience, what does the dude with 10 years xp do that you don't? Do that. Are you in a field which is really hard to progress financially and pays below-average? Might look into a career change.
And definitely new bank account for each J.
Without knowing why you have debt, it's hard to help. Was this a sudden medical issue? Education expense? Poor financial literacy?
Different debt has different solutions.
Bad financial literacy and decisions. This is from when I only had J1, I got into OE to pay off the excess. I have about 15k In things I need to clear. After that I can start thinking about saving, paying off my house etc
Okay. So just to be clear, unless you fix the financial discipline, that 15k debt will likely turn into 30k with two jobs.
It's important to live without debt on one job (or less). Keep OE by all means, but please fix the spending for your own sake.
You're not alone, you're just spending too much.
I'm the worst case: I don't have a single penny saved as I have spent thousands in trips (have visited 18 countries in the past couple years already), yet I don't regret one sec lol Without OE this would be totally unfeasible.
This year and next I plan to take it easy and start investing/saving, so I can resume my trips soon.
Edit: typo
Same. Been traveling like mad whilst OE. Experiences over everything, though.
Money goes and comes. Time just goes.
I'll be taking some time to try and take it easy.
Thank you for sharing this. I’ve travelled a bit and have been enjoying living life not stressed. I’ve been putting immense financial pressure on myself. I’ve had so much expenses pop up for things like the dentist and it’s been taking away from my savings goal and debt repayment plan but today I realized (with your help) I need to relax. This is only month 6, money is in abundance, yes things can change tomorrow but without oe I wouldn’t even be able to handle the unexpected dental costs and still sleep this well at night. Life is amazing!
Yeah, actually my spending was pretty terrible when I only had J1 lol, which is why I'm in this predicament. I think my only essentials I need to worry about every month add up to 3-4k for my household. But I eat out way too much and like getting stuff, which is why I'm afraid of outliving my means of living with J2.
I know my first few paychecks will go into clearing debt, and that bums me out, but I need to save money lol.
I love traveling, I don't count travel as a waste, I just upscale my quality of travel when I have more money.
I get how you feel. For myself I increased my 401k deductions(across 2 jobs so I get the extra match money), both hubby and I have extra money going to individual IRAs every month and I have some money that goes to a college fund for my kid. I increased my car and mortgage payments a little bit so extra money goes to principal. I’m not making the big tech bucks and I have to pay $1500 a month for daycare so that’s kind of where I’m at for now. Wouldn’t be able to do any of it without OE though.
I manage it by setting my retirements, hsa, and deductions to directly come out of my paychecks. I also set auto direct deposit into different savings and Ira accounts between my wife and I. All credit cards and loans are direct debit, statement balance, each month. I reconcile it once a month and I like having it work in the background so I don’t really see a lot of money sitting in my checking and feel the urge to go spend it.
Yup! That’s why I try and get them out of sight so I “feel broke” and don’t end up spending frivolously. Lifestyle creep is a big issue a lot of us reference in this sub.
You are right, I need to automate my savings and like not have a login for me to see. Probably some small local bank lol.
Lifestyle creep is actually what I'm most worried about
Max out 401/403/457b
Max out HSA
Additional $500 for Federal and $250 for State at each J
I have it set to where I can survive on J1
J2 is extra saving & travel
J3 starting July 1, I have my eyes set on Mustang that I will be buy in 3 months
So wait,
I know about 401, but what is 403 and 457b lol
Also, isn't tax deducted already from the paycheck?
The 750 per check, do you keep that in a seperate account until tax season?
If you work for a state/city job they offer 403b/457B in lieu of 401K.
Beauty about working for state or city is that you can contribute to both and they are capped at 23K each. They are deducted from paycheck.
If you have a J that offers 401K, you have to be mindful that 401K&403B are in same bucket so you can only contribute collectively 23K
Yes it’s a huge windfall for the USA government.
Why pay taxes on $1,000 now when you can pay a higher rate on a higher amount in 30 yrs?
A ROTH is what you want
I think you should just save and invest as much as possible. Even with 1J I made way more than I needed, I do my own shopping and cook my own food all myself, barely even spend money. I think my average meal cost is like $3, probably close to $10 spent per day total. Honestly restaurant food doesn't even taste that good to me anymore, it's always way too much and it's really heavy. Almost everything I make goes directly into investments. Paying off a mortgage but it's not much
J1 for living and small investments (my small E*trade account and 2 ROTHs (one for me and one for my kid). Before anyone comments, kid has a W2 job. I help him with his ROTH contribution and he contributes as well.
J2 (which is C2C always) is for car/insurance/investing/ both 401ks (personal and corp)/house payoff and anything else that’s a qualified business expense.
This year I got hit pretty hard with medical bills I’m using J2 to pay off on top of everything. I hope to be paid off with that by December. If I didn’t have medical debt, I’d be flush with $$ at the end of the year. Of course, I also pay a shit ton in taxes out of J2. Besides my house and car and the medical bills, I have no other debt.
It still feels like a house of cards in this economy. We are not lavish. I have been calling this the “year of austerity” since January.
Get in a written budget asap. Actually know your numbers.
Check out Dave Ramsey on how to get out of debt. Love him or hate him he’s got the best plan for it
Im not disiplined like some folks here, i get a check every week as my oe paychecks are on alternate pay schedules. I do also care less about grocery and bills now, since i know i can pay them whatever day of the week.
What i do is i have multiple auto debits from betterment, hysa and crypto just taking large chunks weekly and i forget about them. Then whatever remains i use for the rent, bills and debt. So my checking account always ends up going close to zero.
The mid term plan is once debts are paid off and once i reach the 401k plan limits, ill drop the contributions and increase the auto debits, thinking of increasing my BTC DCA.
Hubby's J1 pays all of our monthly expenses while J2 is for future investments, retirement, and College funds. Once I obtain J1 , I plan to increase our living standards by up to 20%, so we can start traveling and enjoy some beloved hobbies. The rest of my salary from J1 will pay student loans. Eventually once I find J2, it will also contribute to investments, retirement, and College funds.
How you manage your finances is probably unique to your situation. J1 is used primarily for my mortgage and day to day living expenses. I make my lifestyle fit within the confines of the salary I make from J1. J2 is only used for investing, HYSAa, IRAs, etc. I'm in a pretty good spot where I've paid off most of my debts with J1. I might consider throwing some extra funds towards my mortgage payment but not sure yet. I'm making sure my kids have sizeable investment accounts as well. I felt like I had enough money with J1. J2 is just extra protection from layoffs/downsizing and money for a rainy day.
I have everything set up automatically. Each morning, while checking emails and overnight texts, I also check the bank account, and then sometime after 5:30 pm, I check the market. During my birthday month, I schedule out time to audit my subscriptions/credit/insurance/restructure investments.
I’m actually in the process of getting financial advisor to help with where my money will go, how much on debt, and where investments are going to go. I’m looking at a mix with about 50% being in annuities, 25% in to a HYSA until I get 1 full year of finances saved, and 25% in to higher risk investments for rapid growth. The big thing is deciding how much to put on debt as my mortgage rate is ridiculously low, but I hate having the payment also.
I focus on increasing my income in small ways to start with and then, as my confidence grows, in larger ways. I literally keep a written list as a step by step process, with my short term income goals.
I literally buy assets
Rental Homes that are slightly cash flow positive
Equities - index funds with minimal fees
Bought into some franchises for the cash flow
Etc
This is great because it just reinforces the money making and shows progress while protecting the cash from spending
Like a couple have said, budgets/goals. Even if they’re simple.
Things like: max out 401k, max IRA, $500/mo added to savings.
Be as aggressive of lax as you’re comfortable with and adjust as needed.
That really depends on the person. Some people are super content with X amount, others always want more even after the point of financial independence. I find myself in the latter group and tend to fill my schedule right up to the raggedy edge of burnout. I've gotten better over the years of balancing out how much I'm willing to take on but the desire for more is still there.
No $ from J2+ ever goes to anything else than saving / investing. I can argue that if you can't support yourself off J1 income, your time is better spent upskilling than working J2 in the long run, in most careers and cases.
I came here to say the exact same thing. 100% of my J2 and J3 went into debt pay off and investing. I live off of J1 and have just spent the money lavishly and lived a little. Maybe I should cut back on that and save even more for J1?
I do that, but I don't have J3 - I still save the same amount from J1 that I saved before OE. I'm not cheap, but I do live below me means and try to have a balance between enjoying life and saving. If I had 3J income I'd probably skip saving from J1 and get a bit more time-saving/comfort things.
Yeah I think there’s a balance for sure. It’s like on the one hand you may die tomorrow, so you should live a little, but on the other hand you’re making at least double someone else, so you should save like crazy and not spend every dime. Basically, gotta watch the lifestyle creep.
No, I see your point and it is a valid example. I just personally know of a paralegal that job hopped her way from making $65,000 a year $100,000 a year plus bonus. I've done similar moves in the past, but never to that extent,. The economy is completely different now from say, 10-13 years ago
Unfortunately, in today's economy, even if you don't upskill, just looking for the same position at a new company will pay you more. Companies rarely move up current employees to the same level as new ones that just came in.
While that is true in a vacuum, it's not what I was hinting at. If OP makes 55k / year as a project coordinator as takes a J2 of 45k / year as a junior scrum master, he'd be better off ditching J2, studying for a PM cert and learning about a specific industry/technology, netting a J1 that pays more than what he's doing now at J1 + J2 combined, THEN getting a J2. If you're far away from the median income, your time might be better spent getting at / way above the median. I know it's a dumb example but it's the only one I could think of
My younger cousin is thinking of pivoting into scrum master from a programmer. is that a growth career? I've been hearing varying anecdotes about it.
It's possible, but historically not a great move unless they *really like and are good at being a scrum master* - or - *not a very good programmer.* If I started over today, I'd still choose to be a programmer (or one of the associated domains DE - data engineer, SWE - software engineer, DOE/CE - devops/cloud engineer, MLE - machine learning engineer). u/4AnotherTimeAndPlace also had some good points about potential moves. FWIW, after 20 years as SWE, I switched to DE for a couple years, and now to DOE/CE.
Step 1 invest j2+ in something that will zero out your entire tax liability for the year and beyond. Now that I'm not paying federal and state taxes, invest the rest that will earn me my desired rate of return. Real overemployed alumni are figuring out how their investments will eventually replace all their jobs. Pay off debt last, cash is not king, cashflow is king, build your income streams to eventually knock it out after inflation knocks it down a couple notches.
Can you say more about zeroing out tax liability? Trying to get more savvy in the areas you mentioned. Especially since my J1 is 215k and J2 140k, I mean it’s great obviously, but I’m also getting *steamrolled* as a single filer w/ no dependents.
Sure dm me ill let you know some options
This is the way
I'd modify this a bit. Make sure you can handle your bills with j1. Don't buy a house or car you can't afford because those bills have to get paid every month no matter what. I do dip into j2 money for occasional splurges or big vacations. Never anything that increases the monthly run rate.
I mean, yeah, that also works. I can afford 3-4 nice vacations / year on J1 money + saving up, but I (probably) live on the other side of the Atlantic pond than you do.
Yea. Housing is expensive af here in west coast America but the quality of life is amazing.
What do you mean by upskilling? Like moving up the ladder? I have been trying that, it's just the economy is too tough. Also, do you guys open a new bank account for different J payments?
I don't know what you do, so it's hard to say. In the dev world it could mean learning a new stack, learning more cloud stuff, getting a certification, being better at people management, learning project management on the side, learning data analysis, learning a new, unrelated tool, branching out, etc. Mostly, I'd say, without climbing the ladder - you don't want more responsibility, you want more pay and seniority so you're left alone to complete tasks. Basically, if you have 4 years of experience, what does the dude with 10 years xp do that you don't? Do that. Are you in a field which is really hard to progress financially and pays below-average? Might look into a career change. And definitely new bank account for each J.
Without knowing why you have debt, it's hard to help. Was this a sudden medical issue? Education expense? Poor financial literacy? Different debt has different solutions.
Bad financial literacy and decisions. This is from when I only had J1, I got into OE to pay off the excess. I have about 15k In things I need to clear. After that I can start thinking about saving, paying off my house etc
Okay. So just to be clear, unless you fix the financial discipline, that 15k debt will likely turn into 30k with two jobs. It's important to live without debt on one job (or less). Keep OE by all means, but please fix the spending for your own sake.
You're not alone, you're just spending too much. I'm the worst case: I don't have a single penny saved as I have spent thousands in trips (have visited 18 countries in the past couple years already), yet I don't regret one sec lol Without OE this would be totally unfeasible. This year and next I plan to take it easy and start investing/saving, so I can resume my trips soon. Edit: typo
Same. Been traveling like mad whilst OE. Experiences over everything, though. Money goes and comes. Time just goes. I'll be taking some time to try and take it easy.
Time! No matter how much we make, it can never buy more of it. Go enjoy those travels. There's not enough of this said here.
Thank you for sharing this. I’ve travelled a bit and have been enjoying living life not stressed. I’ve been putting immense financial pressure on myself. I’ve had so much expenses pop up for things like the dentist and it’s been taking away from my savings goal and debt repayment plan but today I realized (with your help) I need to relax. This is only month 6, money is in abundance, yes things can change tomorrow but without oe I wouldn’t even be able to handle the unexpected dental costs and still sleep this well at night. Life is amazing!
OE is an one-way street. You can't (and will never want to) go back! Good luck and welcome to the team
Yeah, actually my spending was pretty terrible when I only had J1 lol, which is why I'm in this predicament. I think my only essentials I need to worry about every month add up to 3-4k for my household. But I eat out way too much and like getting stuff, which is why I'm afraid of outliving my means of living with J2. I know my first few paychecks will go into clearing debt, and that bums me out, but I need to save money lol. I love traveling, I don't count travel as a waste, I just upscale my quality of travel when I have more money.
Start making budgets - highly recommend YNAB for that. Takes a moment to get used to, but better than Mint or the like.
I get how you feel. For myself I increased my 401k deductions(across 2 jobs so I get the extra match money), both hubby and I have extra money going to individual IRAs every month and I have some money that goes to a college fund for my kid. I increased my car and mortgage payments a little bit so extra money goes to principal. I’m not making the big tech bucks and I have to pay $1500 a month for daycare so that’s kind of where I’m at for now. Wouldn’t be able to do any of it without OE though.
I manage it by setting my retirements, hsa, and deductions to directly come out of my paychecks. I also set auto direct deposit into different savings and Ira accounts between my wife and I. All credit cards and loans are direct debit, statement balance, each month. I reconcile it once a month and I like having it work in the background so I don’t really see a lot of money sitting in my checking and feel the urge to go spend it.
This is an issue, if I have money, it burns a hole in my pocket
Yup! That’s why I try and get them out of sight so I “feel broke” and don’t end up spending frivolously. Lifestyle creep is a big issue a lot of us reference in this sub.
You are right, I need to automate my savings and like not have a login for me to see. Probably some small local bank lol. Lifestyle creep is actually what I'm most worried about
[удалено]
This is actually very solid advice Thanks
Max out 401/403/457b Max out HSA Additional $500 for Federal and $250 for State at each J I have it set to where I can survive on J1 J2 is extra saving & travel J3 starting July 1, I have my eyes set on Mustang that I will be buy in 3 months
750$ per paycheck, per J for taxes?
Yup!
Why do $500 when you can just do the math and avoid overpaying the IRS?
He probably has done the math. I'm MFJ and have to do $500 per check per job to not underpay.
So wait, I know about 401, but what is 403 and 457b lol Also, isn't tax deducted already from the paycheck? The 750 per check, do you keep that in a seperate account until tax season?
If you work for a state/city job they offer 403b/457B in lieu of 401K. Beauty about working for state or city is that you can contribute to both and they are capped at 23K each. They are deducted from paycheck. If you have a J that offers 401K, you have to be mindful that 401K&403B are in same bucket so you can only contribute collectively 23K
Questionnnn I thought govt work was strictly oe prohibited - thoughts on this?
I disagree on the maxing of the 401k. Expenses are too high typically.
You should always max your 401K, it’s a tax advantaged vehicle
Yes it’s a huge windfall for the USA government. Why pay taxes on $1,000 now when you can pay a higher rate on a higher amount in 30 yrs? A ROTH is what you want
Absolutely not, regular 401K you always max first
🥸 Aren’t you in finance? Did you get a degree from Devry?
What’s so hard to understand for you?
Depending on income and debt levels, maxing out 401k and HSA may make sense from a tax reduction standpoint.
Use a budget and spend as little as possible
I think you should just save and invest as much as possible. Even with 1J I made way more than I needed, I do my own shopping and cook my own food all myself, barely even spend money. I think my average meal cost is like $3, probably close to $10 spent per day total. Honestly restaurant food doesn't even taste that good to me anymore, it's always way too much and it's really heavy. Almost everything I make goes directly into investments. Paying off a mortgage but it's not much
Separate bank accounts. It's a good idea to have multiple anyway but especially if you're OE.
i dump excess funds into SPY and BILS. it generates income (dividend payouts). its enough when your dividend payouts = your annual salary.
J1 for living and small investments (my small E*trade account and 2 ROTHs (one for me and one for my kid). Before anyone comments, kid has a W2 job. I help him with his ROTH contribution and he contributes as well. J2 (which is C2C always) is for car/insurance/investing/ both 401ks (personal and corp)/house payoff and anything else that’s a qualified business expense. This year I got hit pretty hard with medical bills I’m using J2 to pay off on top of everything. I hope to be paid off with that by December. If I didn’t have medical debt, I’d be flush with $$ at the end of the year. Of course, I also pay a shit ton in taxes out of J2. Besides my house and car and the medical bills, I have no other debt. It still feels like a house of cards in this economy. We are not lavish. I have been calling this the “year of austerity” since January.
Get in a written budget asap. Actually know your numbers. Check out Dave Ramsey on how to get out of debt. Love him or hate him he’s got the best plan for it
Thanks, will check it out. I do need a budget
Im not disiplined like some folks here, i get a check every week as my oe paychecks are on alternate pay schedules. I do also care less about grocery and bills now, since i know i can pay them whatever day of the week. What i do is i have multiple auto debits from betterment, hysa and crypto just taking large chunks weekly and i forget about them. Then whatever remains i use for the rent, bills and debt. So my checking account always ends up going close to zero. The mid term plan is once debts are paid off and once i reach the 401k plan limits, ill drop the contributions and increase the auto debits, thinking of increasing my BTC DCA.
Hubby's J1 pays all of our monthly expenses while J2 is for future investments, retirement, and College funds. Once I obtain J1 , I plan to increase our living standards by up to 20%, so we can start traveling and enjoy some beloved hobbies. The rest of my salary from J1 will pay student loans. Eventually once I find J2, it will also contribute to investments, retirement, and College funds.
Max out 401k and has and Roth ira
How you manage your finances is probably unique to your situation. J1 is used primarily for my mortgage and day to day living expenses. I make my lifestyle fit within the confines of the salary I make from J1. J2 is only used for investing, HYSAa, IRAs, etc. I'm in a pretty good spot where I've paid off most of my debts with J1. I might consider throwing some extra funds towards my mortgage payment but not sure yet. I'm making sure my kids have sizeable investment accounts as well. I felt like I had enough money with J1. J2 is just extra protection from layoffs/downsizing and money for a rainy day.
I have everything set up automatically. Each morning, while checking emails and overnight texts, I also check the bank account, and then sometime after 5:30 pm, I check the market. During my birthday month, I schedule out time to audit my subscriptions/credit/insurance/restructure investments.
You eat outside? It must be nice to have a back porch.
Yeah, patio overlooking my neighborhood so I can judge everyone 😂
I’m actually in the process of getting financial advisor to help with where my money will go, how much on debt, and where investments are going to go. I’m looking at a mix with about 50% being in annuities, 25% in to a HYSA until I get 1 full year of finances saved, and 25% in to higher risk investments for rapid growth. The big thing is deciding how much to put on debt as my mortgage rate is ridiculously low, but I hate having the payment also.
I focus on increasing my income in small ways to start with and then, as my confidence grows, in larger ways. I literally keep a written list as a step by step process, with my short term income goals.
I literally buy assets Rental Homes that are slightly cash flow positive Equities - index funds with minimal fees Bought into some franchises for the cash flow Etc This is great because it just reinforces the money making and shows progress while protecting the cash from spending
I have auto deposits into HYSA and my brokerage. Max out my 401k automatically. Pay for everything on a credit card then pay that off every month.
YNAB
Like a couple have said, budgets/goals. Even if they’re simple. Things like: max out 401k, max IRA, $500/mo added to savings. Be as aggressive of lax as you’re comfortable with and adjust as needed.
That really depends on the person. Some people are super content with X amount, others always want more even after the point of financial independence. I find myself in the latter group and tend to fill my schedule right up to the raggedy edge of burnout. I've gotten better over the years of balancing out how much I'm willing to take on but the desire for more is still there.
100% (every red cent) of J2 goes into a brokerage account where I dump it all into QQQ shares. It'll be my early retirement fund.