USA TODAY US Edition

Do things step by step to ease cluttered mind

- Pete the Planner

Peter Dunn: You know that little voice in your head telling you everything is happening at once and, without a plan, life quickly will become overwhelmi­ng? Listen to it. It’s correct. And just so you know, at various times in your adult life this voice will return with the same warning, as you consider biting off more than you can chew.

I see it all the time. New car, new house, new job and a baby. Or new marriage, new city, new dog and grad school. I don’t know why so many people decide to make so many big decisions and changes at once, but we often do. The key is to look at each individual decision in relation to the other decisions that need to be made, and then try to predict possible side effects.

Let’s break down your situation in just that way. We’ll cover retirement, current housing, transporta­tion, student loans, a major consumer purchase, marriage, future housing and combining finances. Sounds overwhelmi­ng to me, too.

Let’s start with the end: Retirement. Your commitment to your future self is admirable and impressive. No additional action is needed now, but understand that a job change could leave you without this retirement stability. If 23 percent of your income truly is being set aside for the future just three months into your career, you are the young role model every generation needs.

Your housing situation is trickier. While it’s great to not have housing expenses now, you must make decisions now that will allow you to easily absorb your future monthly housing expense. You can’t overcommit your $2,500 per month of available cash flow to a plan that doesn’t allow you to use some of that cash flow permanentl­y on housing. Let’s table this for the moment.

The primary question you should be asking is how much longer can you realistica­lly stay with your parents. If you stay with them for 12 more months, you can commit $30,000 toward your financial priorities ($2,500 per month for 12 months). Determinin­g this will allow you to decide which items to place on your “to do” list. For example, maybe the $30,000 pays off your car, buys a ring, puts some money into savings and pays off a third of your student loan debt.

But if you stay with the parents for just three more months, your attack plan changes.

If you’re sensing that I’m avoiding the engagement ring question, you’re perceptive. From a prudent personal finance perspectiv­e, there’s no good answer other than spend as little as possible. Sure, a ring is a sign of love. But do you love her more if you spend more? Or do you love her more if you make tough financial decisions that will benefit both of you greatly in the future?

Back to housing. I would not be in a rush to become a homeowner. To do it properly, you need a significan­t down payment. But you also need significan­t savings to help deal with the rigors of homeowners­hip. Renting for a year or two after leaving your parents’ home will help you get more comfortabl­e with combining finances with another adult and a better sense of what you can afford in a home purchase.

Finally, calculate how much money you’ll both have to apply toward your monthly priorities once you combine resources. You’re throwing $2,500 toward them now, but that will change when her $2,800 per month and her expenses enter the equation. Your girlfriend likely has priorities of her own, such as nursing school loans, savings needs, etc.

Take all these interrelat­ed financial decisions in a step-by-step manner and know that everything doesn’t have to have happen at once.

Peter Dunn is an author, speaker and radio host, and he has a free podcast: “Million Dollar Plan.” Email him at AskPete@petethepla­nner.com. The views and opinions expressed in this column are the author’s and do not necessaril­y reflect those of USA TODAY.

Your girlfriend likely has priorities of her own, such as nursing school loans, savings needs, etc.

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