This is too high - unless your monthly expenses are outrageous (in which case, fix that first) - I wouldn't set that higher than 6 months of expenses - now you should have a car replacement fund, too - and $50k, total can fund both of those. You want the car fund to, ultimately, self-generate so that you can pull $18k or so, every 5 or 6 years, to replace a car.

quote:
And I don't know what goal to set for a 401k

I think 15% of gross, total for your Roth and 401K is a good goal. And start with 401k - IF you're getting a match - say 5% is typical, but your situation may vary. So you buy 10% with 5, but only give yourself credit for 5% (the other 5% is free money) - then I would get to 10% on your Roth and not worry about the "balance" - buy shares for 40 to 50 years and worry about "the balance" in your 50s and 60s.

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Posted by LSUengineer12

The Best Side

Member since Dec 2011

1850 posts

Posted on 3/11/15 at 10:49 am to Ace Midnight

quote:
This is too high - unless your monthly expenses are outrageous (in which case, fix that first) - I wouldn't set that higher than 6 months of expenses - now you should have a car replacement fund, too - and $50k, total can fund both of those.

I guess I just threw a figure out there, but currently 6 months of our expense is around 22k. Not sure where it'll be in 5 years, esp if we have kids and such. And yeah, included in that is a vehicle budget.

quote:
I think 15% of gross, total for your Roth and 401K is a good goal.

Well i'm contributing enough to 401k to get match now, and about we're both contributing about 1/2 the annual max to a roth until we build our combined emergency fund. Then we'll plan to start maxing both of our roths. Hopefully about a year/year and a half from now.

This post was edited on 3/11/15 at 10:54 am

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Posted by Fat Bastard