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Message
re: Saving for Children's Wedding
Posted on 2/24/18 at 1:11 pm to PJMLSU
Posted on 2/24/18 at 1:11 pm to PJMLSU
Because investing in GE ATM isn't a bit of a gamble?
I'll give you props for the mostly blue chips, but I still say you should have something like this all in an index. Its a lot less headache (and fewer taxable events) than trying to keep your own portfolio balanced weighting for essentially the same results.
Hey, You asked for thoughts and advice. I'm giving my thoughts. You are free to use or disregard.
I'll give one last parting impression that may or may not be applicable.
BS on the budget thing.
With a AGI in the six figures, you can afford more than 100/month for savings. Are you building an emergency fund whose cash flow can be diverted when you attain your goals? Are you absolutely buried under debt? If not, there is a lot of fat still there, its just been classified as must haves when you went over the budget.
But for the sake of constructive argument: Regardless of weather the above applies or not, the math doesn't work out in your favor putting aside that little for 3 kids when they are approaching 10. The AVERAGE wedding is 35k all together. You are looking at having around 10k-12k per kid if they marry at or before their mid 20s. That isn't enough to pay the rental fees of an average venue before food and entertainment. You need to put more, or you will find yourself being forced by your wife to borrow for the wedding and in a spiral of debt because you are living so close on the margins.
An easy way to do it is to fix your current budget, and allocate all annual raises for the next couple of years to savings rather than beefing out the household budget.
I'll give you props for the mostly blue chips, but I still say you should have something like this all in an index. Its a lot less headache (and fewer taxable events) than trying to keep your own portfolio balanced weighting for essentially the same results.
Hey, You asked for thoughts and advice. I'm giving my thoughts. You are free to use or disregard.
I'll give one last parting impression that may or may not be applicable.
BS on the budget thing.
With a AGI in the six figures, you can afford more than 100/month for savings. Are you building an emergency fund whose cash flow can be diverted when you attain your goals? Are you absolutely buried under debt? If not, there is a lot of fat still there, its just been classified as must haves when you went over the budget.
But for the sake of constructive argument: Regardless of weather the above applies or not, the math doesn't work out in your favor putting aside that little for 3 kids when they are approaching 10. The AVERAGE wedding is 35k all together. You are looking at having around 10k-12k per kid if they marry at or before their mid 20s. That isn't enough to pay the rental fees of an average venue before food and entertainment. You need to put more, or you will find yourself being forced by your wife to borrow for the wedding and in a spiral of debt because you are living so close on the margins.
An easy way to do it is to fix your current budget, and allocate all annual raises for the next couple of years to savings rather than beefing out the household budget.
This post was edited on 2/24/18 at 1:37 pm
3
Posted on 2/24/18 at 1:17 pm to S1C EM
quote:
Apparently, you're expected to give them all equal sums of cash for their weddings, now. Or maybe just in general if they don't marry.
Pretty sure this was always the case in some form or another.
Lots of folks get help on their first down payment, allowed to stay in a renthouse for free, etc, etc. Its not like the concept of parental seed money is something new or gender related.
The biggest change is how much wedding have ballooned from tradition. You get a quote from a photographer to capture a family event, you'll get a number.
You tell the same one its a wedding, that number triples, and comes with a stipulation you must buy a physical photo album as well.
The end result being that wedding can arbitrarily cost tens of thousands of dollars very very easily.
Posted on 2/24/18 at 1:33 pm to Volvagia
Open a Joint account for you and the wife and make it c/o your kids name(s). Buy a good Growth Mutual Fund, reinvest dividends and capital gains. That’s what I usually recommend for folks looking to save for kids outside of an education account. Do it that way so you can control it after they turn 18, unlike an UTMA, etc.
Posted on 2/24/18 at 1:39 pm to Volvagia
quote:
Traditional IRA isn’t even in the cards, and the fact you suggested it is part of why I recommended getting out of stock picking.
Was thinking Traditional because of the tax deduction, but reading more, I am not eligible.
quote:
Roth is viable, depending on desired distribution to kids goes. You can withdraw contributions without penalty, but don’t touch the growth. You are going to want to up your contributions however.
This is now my inclination
quote:
If you get a sufficient balance of quality stocks that generate a decent amount of income, their margin is fairly assessable and is the only form of borrowing I would do for this. Just HELL no on the HELOC. Just be careful not to over leverage.
I just threw that in. But if I didn't save now for a wedding now it would likely be my only option. Call that the nuclear option.
quote:
Robinhood isn’t a vehicle. It’s a colorful shell for a taxable account. Eh. Nothing wrong with it, except perhaps not a fan of no DRIPs
Agreed
I am leaning towards a Roth IRA Vanguard Target Date Fund. It would replace my Robinhood account and my direct deposits would go here.
I wish I could save for my kids higher education, but it just isn't in the cards right now.
Posted on 2/24/18 at 1:41 pm to Volvagia
quote:
Hey, You asked for thoughts and advice. I'm giving my thoughts. You are free to use or disregard.
You have been a help. I came here for some insight and you have provided. Thank you for that.
Posted on 2/24/18 at 1:55 pm to PJMLSU
quote:
paying for the wedding is going to happen. As of now I can't afford to save for both. The amount of debt they decide to take on is up to them. There are 1000's of scholarships out there if you look for them. If I save for their higher education then have to pay for weddings I will be the one taking on debt.
Sheesh. I am with everyone else here who thinks you have priorities a bit skewed.
You’re missing out on state tax deduction and (small as it may be) the state contribution to 529. Giving your children a head start on education will go a long ways to giving them a better start. To hell with a wedding.
Posted on 2/24/18 at 1:57 pm to PJMLSU
quote:
See original post,paying for the wedding is going to happen. As of now I can't afford to save for both
Might be the most retarded thing I’ve seen posted on Money Talk. Saying that, just follow Volvagia, I didn’t go back and check spelling, his advice. I want to so bad, but I understand you aren’t here to ask if your decision is stupid, you are asking what’s the best way to go through with a stupid decision. Good luck
For other posters who are reading, if you can only afford one, take care of your kid’s education over a wedding
Posted on 2/24/18 at 1:59 pm to PJMLSU
quote:
Was thinking Traditional because of the tax deduction, but reading more, I am not eligible.
....
The problem isn’t your being eligible, it’s the fact you would have to pay marginal income tax rate, PLUS a further penalty on any amount you withdrew.
quote:
I am leaning towards a Roth IRA Vanguard Target Date Fund. It would replace my Robinhood account and my direct deposits would go here.
That one isn’t bad. Consider this one as well;
LINK
Posted on 2/24/18 at 2:02 pm to Volvagia
quote:
Pretty sure this was always the case in some form or another.
I'm not saying you're wrong. I just haven't seen it much.
quote:
Lots of folks get help on their first down payment, allowed to stay in a renthouse for free, etc, etc. Its not like the concept of parental seed money is something new or gender related.
And maybe this is why I see it differently. Everything you listed above I did not have. My wife and I bought our first house on our own, no money from anyone else. When I did live with family, I paid rent from 18 on (I will say, my family situation was a little different than most 18-year-olds). I paid for my gas from 16. Paid for insurance from at least 18, maybe earlier. And have a pretty hefty set of student loans from school. No parental money there, either. I worked 35 hours a week while in school full-time (I do not advise this). Oh, and my car was an '85 Pontiac Bonneville. POS.
Now, I'm not saying that I won't try to do for my kids. I will. But there are going to be things that I will expect them to take on on their own. I guess I'll decide on a wedding when we get there. Education expenses will depend on where they decide to go and how much it costs, etc.
quote:
The biggest change is how much wedding have ballooned from tradition. You get a quote from a photographer to capture a family event, you'll get a number.
You tell the same one its a wedding, that number triples, and comes with a stipulation you must buy a physical photo album as well.
The end result being that wedding can arbitrarily cost tens of thousands of dollars very very easily.
You're 100% right on this. It's pretty crazy. I think you can find some creative ways around some things, though. My wife and I go to church with a professional photographer and got a deal. Her parents were friends with a guy who owned a print shop, so invitations were a no-brainer. And I had some connections in the food and beverage world who handled catering. And we were married at our church (novel idea, right?
). I know people have gone crazy with venues, food, etc. But you really can cut things back and still have a great experience, too. Posted on 2/24/18 at 2:03 pm to Volvagia
Roth doesn't seem like that good of an option to me. He'd have to either only use the growth or pay the taxes and penalty to use the entire thing. A regular taxable investment count is the best option here, no?
Posted on 2/24/18 at 2:23 pm to Mingo Was His NameO
Ideally, yes.
But it IS an option. If I was in his shoes, and “forced” to pick the least of shitty choices, it would be the cornerstone of a strategy I’d employ.
I’m reluctant to detail it though because it’s very much a robbing Peter to pay Paul scenario and might turbocharge the impact of further bad choices.
You are mistaken or I misunderstood you however.
100% of the money you put in a Roth can be gotten penalty free.
So if I put 10k today in there, and leave it for years. It grows to 16k. I can still take back that 10k with no further taxes or penalty, gaining 6k of “free” growth. If there is a market downturn, it will be ruinous to the overall return but you can still withdraw that 10k as long as the value exceeds that amount.
It’s a very useful attribute that allows one to hybridize money roles in low cash flow situations. Though I’d recommend it more for loosely defined savings such as a job loss emergency fund rather than this.
But it IS an option. If I was in his shoes, and “forced” to pick the least of shitty choices, it would be the cornerstone of a strategy I’d employ.
I’m reluctant to detail it though because it’s very much a robbing Peter to pay Paul scenario and might turbocharge the impact of further bad choices.
You are mistaken or I misunderstood you however.
100% of the money you put in a Roth can be gotten penalty free.
So if I put 10k today in there, and leave it for years. It grows to 16k. I can still take back that 10k with no further taxes or penalty, gaining 6k of “free” growth. If there is a market downturn, it will be ruinous to the overall return but you can still withdraw that 10k as long as the value exceeds that amount.
It’s a very useful attribute that allows one to hybridize money roles in low cash flow situations. Though I’d recommend it more for loosely defined savings such as a job loss emergency fund rather than this.
Posted on 2/24/18 at 2:28 pm to Volvagia
quote:
BS on the budget thing.
I made some unwise financial choices in my late twenties/early thirties.
With that said, 36% of my GROSS income is taken up by children's education, Mortgage and a personal loan payment (finished in 5 years).
I drive a 12 year old truck, wife drives a 2015 SUV after we traded in a 10 year old Saturn SUV when the engine blew. No family vacation last year. Christmas is paid for using CC points (No CC debt). Wife and I have 2 jobs for extra income.
No cookie needed, just wanted to give you a perspective of our budget. YNAB has been an eye opener for me. Things have improved tremendously over 12 months and I think they will continue to improve.
quote:
An easy way to do it is to fix your current budget, and allocate all annual raises for the next couple of years to savings rather than beefing out the household budget.
Going to 401k.
This post was edited on 2/24/18 at 2:37 pm
Posted on 2/24/18 at 2:33 pm to PJMLSU
quote:
wife drives a 2105 SUV
Hope you used the Will Call method. Also, may I borrow your time machine? I got a few stocks I'd like to get in on in 1997...
This post was edited on 2/24/18 at 2:34 pm
Posted on 2/24/18 at 2:36 pm to Volvagia
Volvagia
You sound knowledgeable on this subject, either because of experience or profession.
I know saving for a wedding over a 529 is crazy but it is not worth a divorce. Seriously.
Thanks for the link.
In my situation, is there a professional in the NOLA area I should seek out on FA type stuff. I'd love someone to rip apart my budget, maybe I am doing it all wrong, but I don't have any one to critique it except my wife.
Boy have we gone OT or what
You sound knowledgeable on this subject, either because of experience or profession.
I know saving for a wedding over a 529 is crazy but it is not worth a divorce. Seriously.
Thanks for the link.
In my situation, is there a professional in the NOLA area I should seek out on FA type stuff. I'd love someone to rip apart my budget, maybe I am doing it all wrong, but I don't have any one to critique it except my wife.
Boy have we gone OT or what
This post was edited on 2/24/18 at 2:38 pm
Posted on 2/24/18 at 2:38 pm to PJMLSU
Fair enough.
What percentage is the employer contribution?
What I’m driving at is 10% plus employer match/profit sharing/etc can be a decent retirement number.
The cost of taking out a sizable loan later and service it may outweigh the costs of those 401k amounts. Furthermore there is the added benefit of YOU controlling the Roth assets, as opposed to 401k which comes attached with rules that may change at any time.
If you DO decide to go the Roth route, you are still putting that money towards retirement after a fashion. You are essentiomally loaning your wedding budget to yourself and keeping the interest.
But the only way it can work is if you do whatever you can to maximize that contribution as soon as possible. ~400/month ideally (yes I recognize that is a very high number, but it’s one you need to get close to within 18 months if you want the Roth approach to be secure).
If you don’t think getting at least past the 250/month with the next year is possible, stick to taxable. You are gonna need the growth component.
What percentage is the employer contribution?
What I’m driving at is 10% plus employer match/profit sharing/etc can be a decent retirement number.
The cost of taking out a sizable loan later and service it may outweigh the costs of those 401k amounts. Furthermore there is the added benefit of YOU controlling the Roth assets, as opposed to 401k which comes attached with rules that may change at any time.
If you DO decide to go the Roth route, you are still putting that money towards retirement after a fashion. You are essentiomally loaning your wedding budget to yourself and keeping the interest.
But the only way it can work is if you do whatever you can to maximize that contribution as soon as possible. ~400/month ideally (yes I recognize that is a very high number, but it’s one you need to get close to within 18 months if you want the Roth approach to be secure).
If you don’t think getting at least past the 250/month with the next year is possible, stick to taxable. You are gonna need the growth component.
This post was edited on 2/24/18 at 3:08 pm
Posted on 2/24/18 at 2:39 pm to PJMLSU
quote:
there a professional in the NOLA area I should seek out on FA type stuff
Hopefully someone here knows a good one. When you go see him make sure wife is with you, and bring all this wedding stuff up to him/her in front of wife. Would like to know what he says about it, hopefully he’d be straightforward about it to your wife.
Posted on 2/24/18 at 2:43 pm to windshieldman
quote:
Hopefully someone here knows a good one. When you go see him make sure wife is with you, and bring all this wedding stuff up to him/her in front of wife. Would like to know what he says about it, hopefully he’d be straightforward about it to your wife.
I will have her read this thread
Posted on 2/24/18 at 2:44 pm to Volvagia
quote:
You need to put more, or you will find yourself being forced by your wife to borrow for the wedding and in a spiral of debt because you are living so close on the margins.
If he has a wife who is hell bent on spending more for 2 weddings than they can afford, it won't matter how much he has saved to pay for it. She will simply raise her wedding budget to another level higher and they will still end up in debt. There is no such thing as having "enough" money for a wedding if you don't have a firm sense of what you can afford and the willingness to stick to that. If you have no college savings for any of your kids, then you cannot afford anything more than a reception in the church dining hall. Put your foot down and pay for their education first. Your daughters may hate you for a while because they don't know any better but one day they will thank you for making a debt free college degree the top priority. And then if your kids get scholarships, use that college money to buy them a wedding.
Posted on 2/24/18 at 2:46 pm to Volvagia
quote:
What percentage is the employer contribution?
6%
It's Vanguard with very low fees
Performance has been what you would expect over the past 10 years
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