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Message
Question for MT: Putting Finances on Cruise Control
Posted on 5/1/13 at 10:19 am
Posted on 5/1/13 at 10:19 am
It has been just over a year since I started browsing here and learning about money management. So far it has been very successful as far as spearheading my retirement plan and emergency savings. I max out my Roth IRA and contribute 10% of my salary to my 401(k). As for emergency savings, I have enough to cover expenses for over a year. With one set of major expenses coming up that I am preparing for, I will be placing nearly ~$900 in after tax salary each month into a savings accounts. I wish for further advice from the board on managing that extra money in way I will benefit down the road.
My question for the board is, how do you spend your extra money leftover from bills, debt, rent, and retirement?
As for me, I feel like everything I have is on cruise control besides this last remaining amount. I am not seeking to increase my 401(k) contributions, yet. Although it might be a route I approach if I can't find an alternative that I like. Would I be wise to just stash it into a savings account although I already have more than what is necessary in savings? The key here is putting my mind at rest, and preventing any big splurges of spending without thinking it through.
My question for the board is, how do you spend your extra money leftover from bills, debt, rent, and retirement?
As for me, I feel like everything I have is on cruise control besides this last remaining amount. I am not seeking to increase my 401(k) contributions, yet. Although it might be a route I approach if I can't find an alternative that I like. Would I be wise to just stash it into a savings account although I already have more than what is necessary in savings? The key here is putting my mind at rest, and preventing any big splurges of spending without thinking it through.
This post was edited on 5/1/13 at 10:24 am
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Posted on 5/1/13 at 10:23 am to RickAstley
What is your living situation? If renting, buy. If you own, I would increase my payment. A year of expenses is almost too much to let sit in savings so I wouldn't go that route.
Another option is help pay my wife's student loans
Another option is help pay my wife's student loans
Posted on 5/1/13 at 10:27 am to CQQ
I currently rent, and due to having such a short credit history, low credit limit, I am prepaying a years worth of rent at the end of July, beginning of August. So I will have my living situation taken care of between August 2013 - July 2014. That is my big expense that I am currently preparing for. I plan to carve at my emergency savings for that payment as I work on planning for what is next. Once that is paid, my monthly expenses will be insurance and utilities.
I am not married, and I have a secured credit card, 1 year old account, that I am using to build credit. My credit score was around 670 last I checked. I don't want to put that all away and not enjoy myself, at the same time I do not want to spend it all either on junk.
I am not married, and I have a secured credit card, 1 year old account, that I am using to build credit. My credit score was around 670 last I checked. I don't want to put that all away and not enjoy myself, at the same time I do not want to spend it all either on junk.
This post was edited on 5/1/13 at 10:30 am
Posted on 5/1/13 at 11:06 am to RickAstley
quote:
how do you spend your extra money leftover from bills, debt, rent, and retirement?
I contribute a set amount each week to Savings, contribute a set amount bi-weekly to my kids accounts, and contribute a little over 13% to my 401k. Now, in my case and I believe this is frowned upon the MT, but my wife and I have seperate accounts. I also pay the daycare and a few bills while she handles the mortgage and a few bills. She likes her account to stay around $2K, while I like living paycheck to paycheck so to speak. I will drown mine out at the end of each month down to about $100. For example, if I have $245, which is what was left in April, I take the $145 and either (a)invest it in equities (b)put it into Savings (c)build our vacation fund or (d) purchase some silver (eagles, Morgans, etc.).
It is really up to you. I honestly do not think you could go wrong as long as you are not blowing it.
ETA: Be spontaneous with it, keep it interesting. The path to become wealthy is slow and boring. Use that extra to spice it up a little bit with whatever you think will benefit you.
ETA2: Or the new obligatory MT answer, Bitcoins.
This post was edited on 5/1/13 at 11:09 am
Posted on 5/1/13 at 12:07 pm to OnTheBrink
Thanks
What is the difference between (b) and (c) for you, besides the label? As for me, my savings is my emergency fund and all of my money that I am not putting towards bills/retirement. I haven't placed a label on certain amounts or what not, which is what I am somewhat gearing towards. I am interested though if I should be looking towards buying land, a house, stocks, etc...
quote:
I take the $145 and either (a)invest it in equities (b)put it into Savings (c)build our vacation fund or (d) purchase some silver (eagles, Morgans, etc.).
What is the difference between (b) and (c) for you, besides the label? As for me, my savings is my emergency fund and all of my money that I am not putting towards bills/retirement. I haven't placed a label on certain amounts or what not, which is what I am somewhat gearing towards. I am interested though if I should be looking towards buying land, a house, stocks, etc...
Posted on 5/1/13 at 12:34 pm to RickAstley
For me, Savings never gets touched. Ever.
Vacation fund will be used for a trip at some point, so, although technically that money is mine and "saved" I plan on spending it and do not even count it towards Savings.
I guess it depends on your goal and time frame. Even if you plan on getting married in the next couple of years, I would nix the purchase of a house. You could still save for one, but I would put off buying one. Lets be honest, your future wife will have the final say. That and the 3 bedroom/2 bath you purchase now may not be enough a couple of years into marriage.
Vacation fund will be used for a trip at some point, so, although technically that money is mine and "saved" I plan on spending it and do not even count it towards Savings.
quote:
I am interested though if I should be looking towards buying land, a house, stocks, etc...
I guess it depends on your goal and time frame. Even if you plan on getting married in the next couple of years, I would nix the purchase of a house. You could still save for one, but I would put off buying one. Lets be honest, your future wife will have the final say. That and the 3 bedroom/2 bath you purchase now may not be enough a couple of years into marriage.
This post was edited on 5/1/13 at 12:36 pm
Posted on 5/1/13 at 12:45 pm to OnTheBrink
quote:
Even if you plan on getting married in the next couple of years, I would nix the purchase of a house. You could still save for one, but I would put off buying one. Lets be honest, your future wife will have the final say. That and the 3 bedroom/2 bath you purchase now may not be enough a couple of years into marriage.
This is a valid point. I got my 3 bed/1 bath house 2 years before we got married. Now, we are expecting a baby and are worrying about adding a 2nd bathroom.
Posted on 5/1/13 at 12:46 pm to CQQ
quote:
This is a valid point. I got my 3 bed/1 bath house 2 years before we got married. Now, we are expecting a baby and are worrying about adding a 2nd bathroom.
Thanks. Only reason I know, EXPERIENCE!
Posted on 5/1/13 at 1:13 pm to OnTheBrink
quote:
Lets be honest, your future wife will have the final say.
Well good to know. I really considered buying a house a few months back, fortunately, I did not. Marriage is something floating on my radar. I don't intend to get married this year, but if all is still going well with my current SO into next year, I will be studying it in depth.
Posted on 5/1/13 at 1:41 pm to RickAstley
Would be a different story if you two purchased together, with marriage in sight. The only thing I would tell you then is make sure you plan for the family that will soon follow.
I guess my main point was to make sure you did not buy a house that was just adequate for you alone. Because the future wife will bring plenty of stuff to the table and your once spacious house will become a cramped barracks.
If I were you, I would mark those "additional" funds monthly for a house in the future.
I guess my main point was to make sure you did not buy a house that was just adequate for you alone. Because the future wife will bring plenty of stuff to the table and your once spacious house will become a cramped barracks.
If I were you, I would mark those "additional" funds monthly for a house in the future.
Posted on 5/1/13 at 3:25 pm to RickAstley
One option would be to consider buying a house with rental in mind. If you get married, and the house is not suitable for a growing family, you can rent it. The first property that I bought I still have, and it's been rented since 1996. It last appraised for three times what I paid for it, and I only paid two years of the original mortgage.
Posted on 5/1/13 at 3:40 pm to RickAstley
I own a place with plenty of equity in it. I max my Roth, 401 and an HSA. Anything extra I feel perfectly free to spend on hookers and blow although I usually don't. I figure if I max out my savings every year I can tap the HELOC for a low-interest loan and then cut back on vacations for awhile.
If the interest rate rises on the HELOC I will probably worry more about setting aside savings.
If the interest rate rises on the HELOC I will probably worry more about setting aside savings.
Posted on 5/1/13 at 4:08 pm to foshizzle
Are you "maxing" your employer match or actually maxing out your contributions. IE $17,500?
If so, having $25,000 to put away every year must be nice.
If so, having $25,000 to put away every year must be nice.
Posted on 5/1/13 at 4:11 pm to Teddy Ruxpin
quote:
actually maxing out your contributions. IE $17,500?
This is the correct answer.
And it's also why I don't feel a shred of guilt over vacations, although my car is a 13 year old beater.
Posted on 5/1/13 at 4:36 pm to tigerrocket
quote:
One option would be to consider buying a house with rental in mind.
I considered that option if I were to have committed to buying the house I looked at earlier this year. I still think about it every so often, the main thing is I do not have the drive to take on the extra responsibility of being a landlord.
Posted on 5/1/13 at 4:54 pm to foshizzle
quote:
This is the correct answer.
That's awesome.
quote:
And it's also why I don't feel a shred of guilt over vacations
I wouldn't either. If you're retirement doesn't work out with you doing that, then I imagine America is pretty screwed.
quote:
although my car is a 13 year old beater.
Nice. Mine is a 1996 so 17 years old. Got it my senior year of high school in the fall of 2002. Really do need to take better care of that thing.
Posted on 5/1/13 at 9:47 pm to Teddy Ruxpin
quote:
If you're retirement doesn't work out with you doing that, then I imagine America is pretty screwed.
Probably. There are always risks though, I could get injured badly enough that work is out of the question, for example. I live in DC so income is high but so are pedestrian injuries. I know someone who got run over last year and is brain injured. When I found out I immediately contacted my insurance agent to up my coverage. All kinds of stuff can happen.
quote:
Mine is a 1996 so 17 years old. Got it my senior year of high school in the fall of 2002.
Buying used is never a bad idea IMHO.
Posted on 5/2/13 at 10:07 am to foshizzle
I contribute well over the minimum of what my company will match for my 401(k). I figure with each raise I will continue to increase my investment into my 401(k), but 10% is satisfactory for me right now. I have had no problem with making some financial goals previously, but right now I am struggling with that. Once I come up with a definitive list, I might revise my 401(k) investment and increase it further.
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