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Started By
Message
SAVING MONEY?
Posted on 7/25/11 at 4:25 pm
Posted on 7/25/11 at 4:25 pm
Im about to be in my mid twenties and me and my wife together make a gross of 100k a year..im looking for advice on how much money we should be saving/ investing..also to see how long have you personally been saving to get where you are now financially?
6
Posted on 7/25/11 at 4:45 pm to mightyjet
We need more info, it depends on where you live and what lifestyle you live.
Posted on 7/25/11 at 4:49 pm to mightyjet
What debts do you have? Pay them off.
I'm not big on saving tons of money. Save 6-9 months of living expenses and then stop. Put AT LEAST 15% in 401ks/IRAs/investments.
Have fun with the rest
I'm not big on saving tons of money. Save 6-9 months of living expenses and then stop. Put AT LEAST 15% in 401ks/IRAs/investments.
Have fun with the rest
Posted on 7/25/11 at 4:58 pm to mightyjet
Over a long period of time, avoiding interest = income. But it's a lifestyle choice. IE, I've never financed a car. Bought my first one, used for 900 bucks when I was 16. Plowed my wages (yep I worked full time at 16) into savings to pay for a better car at 19. Rinse, wash, repeat. Works with houses, too. Interest rates are low now. They have not been in the past and they shall not be in the future.
Posted on 7/25/11 at 4:59 pm to mightyjet
The short answer is that you should save until it hurts, and then save some more. Seriously.
Now for details - if y'all have a company match in your 401(k), stock plan or anything else, max it out. It is free money.
I wouldn't worry about having a special savings account to cover more than a month or so of expenses until you max your Roth. You can withdraw whatever you put into a Roth without any penalties whatsoever, let that be your savings account. You can set aside a little in a special account for a month or so of unforeseen expenses but beyond that use the Roth so you can get the tax-free earnings.
Don't worry about paying off low-rate debt. In fact, if you qualify for the lowest mortgage fixed rates I'd pay the absolute minimum required. Rates are historically low, you are probably better off using extra cash for something else. High-rate debt is another matter, of course, but don't be in a hurry to pay down a low rate debt.
Don't buy stuff that loses value quickly. That means buy a used car, not a new one. Take cheap vacations. Etc.
Now for details - if y'all have a company match in your 401(k), stock plan or anything else, max it out. It is free money.
I wouldn't worry about having a special savings account to cover more than a month or so of expenses until you max your Roth. You can withdraw whatever you put into a Roth without any penalties whatsoever, let that be your savings account. You can set aside a little in a special account for a month or so of unforeseen expenses but beyond that use the Roth so you can get the tax-free earnings.
Don't worry about paying off low-rate debt. In fact, if you qualify for the lowest mortgage fixed rates I'd pay the absolute minimum required. Rates are historically low, you are probably better off using extra cash for something else. High-rate debt is another matter, of course, but don't be in a hurry to pay down a low rate debt.
Don't buy stuff that loses value quickly. That means buy a used car, not a new one. Take cheap vacations. Etc.
Posted on 7/25/11 at 5:16 pm to mightyjet
quote:
The short answer is that you should save until it hurts, and then save some more. Seriously.
This is good advice, especially if you and/or your wife don't have extremely stable employment.
My wife and I are a little older than you but our income is roughly the same as you mention above. We save ~20% for retirement (ideally this would be closer to 15%...we are catching up for the lost years in my early twenties in grad school) and save ~10% on top of that. We have no debts besides the house, which makes it easier, and we live in Alabama.
Another thing that helps is that we don't tend to spend a lot of $$ to have fun. We do a lot of things together with our families who live close by.
Posted on 7/25/11 at 5:31 pm to foshizzle
quote:
. Take cheap vacations. Etc
I would advise against this, vacation is the only time you get off. Splurge a little bit, a much better return on life then going to the beach and eating in every night. Especially before you have kids, have something to Look forward to. It will also make your marriage last longer.
Posted on 7/25/11 at 6:06 pm to reb13
quote:
I would advise against this, vacation is the only time you get off. Splurge a little bit, a much better return on life then going to the beach and eating in every night. Especially before you have kids, have something to Look forward to. It will also make your marriage last longer.
I was actually going to say something similar. For the most part, I'm not a big spender- dont buy expensive clothes, my honda car is perfect, dont get the latest and greatest gadgets every year, etc. What I do spend my money on are the experiences....taking vacations with the family, treating friends and family to sporting events or day/weekend trips, or just a night out eating and drinking. To me, thats what is worth it.
Posted on 7/25/11 at 7:02 pm to mightyjet
Our retire sometime 55-60 plan is maxing both 401k's every year and did the same for our Roth IRAs when we qualified. I hope to stay with my employer for my whole career and that (pension) is crucial to being able to retire early. Otherwise, I'll be in the 68 crowd.
If it were just me, I would save a lot more, but the wife keeps me sane. After all expenses, we put aside $1000-1500/month strictly for vacations/home improvements/gadgets/etc. Every year whatever isn't spent from that savings is invested.
Where we save:
-401k's
-My employer's stock purchase plan
-Paying the 30yr mortgage on a 12yr schedule
-Pay cash for cars and an 8yr (or more) goal per vehicle
-4 month emergency fund
-I do some equity trading as a hobby which pays better than a savings acct.
Other info:
-Same age but a higher combined income
-$230k left on the mortgage
-Both in grad school (both part-time)
Advice: Max your retirement and live below your means. Most of my neighbors live beyond their means, but I always say "just because you CAN afford something doesn't mean you should buy it."
eta: where I blow money is $400/month commuting.
If it were just me, I would save a lot more, but the wife keeps me sane. After all expenses, we put aside $1000-1500/month strictly for vacations/home improvements/gadgets/etc. Every year whatever isn't spent from that savings is invested.
Where we save:
-401k's
-My employer's stock purchase plan
-Paying the 30yr mortgage on a 12yr schedule
-Pay cash for cars and an 8yr (or more) goal per vehicle
-4 month emergency fund
-I do some equity trading as a hobby which pays better than a savings acct.
Other info:
-Same age but a higher combined income
-$230k left on the mortgage
-Both in grad school (both part-time)
Advice: Max your retirement and live below your means. Most of my neighbors live beyond their means, but I always say "just because you CAN afford something doesn't mean you should buy it."
eta: where I blow money is $400/month commuting.
This post was edited on 7/25/11 at 7:06 pm
Posted on 7/26/11 at 9:05 am to LSUKTR
We currently do not have any kids, after expenses we have a small credit card debt and we haven't been really saving just using the extra money to pay off the debt, we are getting close to being done with all of the little things so I was just getting a feel for the direction we should head in. We currently have about 1600 after expenses per month and that should go up to maybe between 2500-3000 when we're done paying stuff off. Should only be left with student loans.
I work for city government there is no 401k only a pension. And we are looking to buy a house in the near future.
I have been looking into a ROTH IRA not sure which one to choose still doing research.
I work for city government there is no 401k only a pension. And we are looking to buy a house in the near future.
I have been looking into a ROTH IRA not sure which one to choose still doing research.
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