How do I prioritize my savings and investment.

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Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

How do I prioritize my savings and investment.

Post by Nad » Sat Nov 30, 2019 8:56 pm

Hello!
I would appreciate help prioritizing my savings and investment progress. Honestly, the progress is pretty slow. I’m a public servant living in the DC area. Cant make more $$ at work without acquiring a student loan. Its not a well paying career but there is a pension. I dont have any debt (except Mortgage $226k) but I’m not getting ahead either. I’ve been reading Dave Ramsey, Mr Money Mustache, Bigger Pockets.... Its all starting to run together. I want to be sure that what little $ I have is spared and, might I dare, grows. I want to invest, fund pension, set up 529’s and pay down my mortgage. Which order is best? I appreciate any help.
Signed,
Desperately Seeking Ducky (and all of his genius friends)

Age:40
Married filing jointly
Emergency: 7mos Personal
Household emergency: 7mos
IRA:$12k
Mutual:
529: Empty
Tax bracket :25% federal
Home Equity: $106k
I just got an inheritance and I want to put it to good use.

RevFran
Posts: 39
Joined: Sun Jul 07, 2019 4:48 pm

Re: How do I prioritize my savings and investment.

Post by RevFran » Sat Nov 30, 2019 9:22 pm

How much is the inheritance? Does your spouse work, and with similar income horizon? How many kids, how old?

User avatar
FiveK
Posts: 7859
Joined: Sun Mar 16, 2014 2:43 pm

Re: How do I prioritize my savings and investment.

Post by FiveK » Sun Dec 01, 2019 12:23 am

Common suggestions include Prioritizing investments and Investment Order.

How do those fit your situation?

Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

Re: How do I prioritize my savings and investment.

Post by Nad » Sun Dec 01, 2019 1:15 am

RevFran wrote:
Sat Nov 30, 2019 9:22 pm
How much is the inheritance? Does your spouse work, and with similar income horizon? How many kids, how old?
Hello! Thanks for your reply. The final inheritance amount isn’t yet clear. So far I have received $15k. My spouse makes about the same salary. The children are 6yo and 8yo.

Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

Re: How do I prioritize my savings and investment.

Post by Nad » Sun Dec 01, 2019 1:16 am

FiveK wrote:
Sun Dec 01, 2019 12:23 am
Common suggestions include Prioritizing investments and Investment Order.

How do those fit your situation?
Thank you! I will review the selections now.

Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

Re: How do I prioritize my savings and investment.

Post by Nad » Sun Dec 01, 2019 1:32 am

Nad wrote:
Sun Dec 01, 2019 1:16 am
FiveK wrote:
Sun Dec 01, 2019 12:23 am
Common suggestions include Prioritizing investments and Investment Order.

How do those fit your situation?
Thank you! I will review the selections now.
The mr mustache article was especially helpful! Now I have to pick a Company fund to match. Previously I used a previously established account that is separate from my company pension account. Thanks for the reminder. -N

User avatar
scubadiver
Posts: 1107
Joined: Sun May 04, 2008 9:48 pm

Re: How do I prioritize my savings and investment.

Post by scubadiver » Sun Dec 01, 2019 2:53 am

Nad wrote:
Sat Nov 30, 2019 8:56 pm
Hello!
I would appreciate help prioritizing my savings and investment progress. Honestly, the progress is pretty slow. I’m a public servant living in the DC area. Cant make more $$ at work without acquiring a student loan. Its not a well paying career but there is a pension. I dont have any debt (except Mortgage $226k) but I’m not getting ahead either. I’ve been reading Dave Ramsey, Mr Money Mustache, Bigger Pockets.... Its all starting to run together. I want to be sure that what little $ I have is spared and, might I dare, grows. I want to invest, fund pension, set up 529’s and pay down my mortgage. Which order is best? I appreciate any help.
Signed,
Desperately Seeking Ducky (and all of his genius friends)

Age:40
Married filing jointly
Emergency: 7mos Personal
Household emergency: 7mos
IRA:$12k
Mutual:
529: Empty
Tax bracket :25% federal
Home Equity: $106k
I just got an inheritance and I want to put it to good use.
Welcome to the forum!

A few questions that might help us provide better feedback:
(1) Are you currently contributing to the TSP? If so, how much? If not, you should at least contribute 5% to get the full matching contributions.
(2) What are your monthly expenses? How does that compare to your gross monthly income? By the way, there is no 25% federal tax bracket. If I had to guess, you are probably in either the 22% or 24% bracket.
(3) What are the differences between the "Emergency: 7mos Personal" and "Household emergency: 7mos"?
(4) What is the interest rate on your mortgage?

JBEB
Posts: 44
Joined: Thu Oct 03, 2019 6:45 pm

Re: How do I prioritize my savings and investment.

Post by JBEB » Sun Dec 01, 2019 10:48 am

I think take one thing at a time...some things that I did that helped my household that might be applicable to you

Figure out all fixed costs (and figure out if and where they can be lowered)
-I refinanced my mortgage saving me about $150 a month, sold the hot tub (got 3k and lowered electric by about 70 bucks, got rid of hbo ($15), talked down cable ($30ish), talked down xm radio ($10)

Still in process of figuring out how to do better with food. We dont go out to eat as much which is saving us about $100 a month, but we could do better with groceries. My wife is starting to make lists and not make random trips.

Save credit card bonuses for certain designated areas such as extra savings or vacations. We have no problem paying off bills weekly. I would highly suggest not using them if you cant do this.

Just the steps above made very big changes to my account with very little changes to lifestyle.

Your list of Dave Ramsey, MMM, Bigger Pockets sound like mine. May I also suggest Choose FI and The Money Guy Show. I read a lot of the blogs, but more so the podcasts religiously and follow up reading up on things that might be actionable. I turned my car, walks, and workouts into a classroom. (google money guy order of operations)

I also got an extra job one night a week that I put all towards debt (maybe in your case savings)

Also make sure your spouse is on board and willing to hold up their end (whatever that is)

Good luck and keep us posted on progress

delamer
Posts: 9339
Joined: Tue Feb 08, 2011 6:13 pm

Re: How do I prioritize my savings and investment.

Post by delamer » Sun Dec 01, 2019 12:13 pm

Start by tracking your (and your wife’s) expenses to the penny over the next 3 months or so.

Any time you spend cash, write down the amount and the category (food, clothing, gas, medical, utilities, etc.). The amount of expenses paid by check or credit card will be available from your statements, but you’ll need to wrote down the category (for example, if you go to Walmart and charge $50 for groceries and $25 for garden supplies).

Don’t try to adjust your spending, just record your normal.

I almost can guarantee that you’ll be surprised at how much money you are spending in certain categories.

Using that information, then you can create a spending plan for the future that will reflect what is important to you — like $25/week to each kid’s 529 plan rather than $50/week on eating out.

Make sure the spending plan includes irregular expenses like auto insurance and home repair.

Ultimately, doing all this will help you prioritize your savings and investment in the way that makes sense with your income and values.

Good luck.

JBEB
Posts: 44
Joined: Thu Oct 03, 2019 6:45 pm

Re: How do I prioritize my savings and investment.

Post by JBEB » Sun Dec 01, 2019 12:32 pm

To piggyback off of the last post

I went through my CC/Bank account to figure where my money was going.

I drank 2 energy drinks a day (dont judge we all have our vices lol). I did the math at 4 dollars a day, that is basically $120 a month. I finally had some motivation in cutting it in half after seeing how much I was spending

Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

Re: How do I prioritize my savings and investment.

Post by Nad » Mon Dec 02, 2019 12:58 am

Thanks for the resources. I will definitely review them. I also think I can make extra $. I am probably the only person in my office who doesn’t have 2 jobs. I want to spend time with the family but long term it may be better to work more now. I really need to switch to a more lucrative career!

I did update my budget and I realized I can cut expenses in a few areas and reduce food expenses. Also, its time I called around to see if I can get discounts on existing cards and services. My credit is excellent so that should help. Also, I’m calling HR tomorrow to look into maxing donations to the fund.

My spouse is hesitant about budgeting...😔.

JBEB wrote:
Sun Dec 01, 2019 10:48 am
I think take one thing at a time...some things that I did that helped my household that might be applicable to you

Figure out all fixed costs (and figure out if and where they can be lowered)
-I refinanced my mortgage saving me about $150 a month, sold the hot tub (got 3k and lowered electric by about 70 bucks, got rid of hbo ($15), talked down cable ($30ish), talked down xm radio ($10)

Still in process of figuring out how to do better with food. We dont go out to eat as much which is saving us about $100 a month, but we could do better with groceries. My wife is starting to make lists and not make random trips.

Save credit card bonuses for certain designated areas such as extra savings or vacations. We have no problem paying off bills weekly. I would highly suggest not using them if you cant do this.

Just the steps above made very big changes to my account with very little changes to lifestyle.

Your list of Dave Ramsey, MMM, Bigger Pockets sound like mine. May I also suggest Choose FI and The Money Guy Show. I read a lot of the blogs, but more so the podcasts religiously and follow up reading up on things that might be actionable. I turned my car, walks, and workouts into a classroom. (google money guy order of operations)

I also got an extra job one night a week that I put all towards debt (maybe in your case savings)

Also make sure your spouse is on board and willing to hold up their end (whatever that is)

Good luck and keep us posted on progress

Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

Re: How do I prioritize my savings and investment.

Post by Nad » Mon Dec 02, 2019 1:00 am

:sharebeer
No judgement! I started making coffee at home and renewing my love of peanut butter and jelly after I realized how expensive eating out was becoming.
JBEB wrote:
Sun Dec 01, 2019 12:32 pm
To piggyback off of the last post

I went through my CC/Bank account to figure where my money was going.

I drank 2 energy drinks a day (dont judge we all have our vices lol). I did the math at 4 dollars a day, that is basically $120 a month. I finally had some motivation in cutting it in half after seeing how much I was spending

Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

Re: How do I prioritize my savings and investment.

Post by Nad » Mon Dec 02, 2019 1:04 am

Thank you!
I realized after starting this inquiry that I had stopped budgeting my “ extra” money once I automated my bill payments. I am going to go back to the Ramsey envelopes based on my previous budget. Spending cash is much harder than swiping my card.
delamer wrote:
Sun Dec 01, 2019 12:13 pm
Start by tracking your (and your wife’s) expenses to the penny over the next 3 months or so.

Any time you spend cash, write down the amount and the category (food, clothing, gas, medical, utilities, etc.). The amount of expenses paid by check or credit card will be available from your statements, but you’ll need to wrote down the category (for example, if you go to Walmart and charge $50 for groceries and $25 for garden supplies).

Don’t try to adjust your spending, just record your normal.

I almost can guarantee that you’ll be surprised at how much money you are spending in certain categories.

Using that information, then you can create a spending plan for the future that will reflect what is important to you — like $25/week to each kid’s 529 plan rather than $50/week on eating out.

Make sure the spending plan includes irregular expenses like auto insurance and home repair.

Ultimately, doing all this will help you prioritize your savings and investment in the way that makes sense with your income and values.

Good luck.

Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

Re: How do I prioritize my savings and investment.

Post by Nad » Mon Dec 02, 2019 1:34 am

Hello!
1) I have been saving but I stopped adding to the TSP and 403b in order to make housing repairs last year. I save $450/mo For emergencies. I buy stocks sometimes.
2) I’m not sure of the percentage but I save $450 monthly and have about $350/mo left in the household after paying bills.
3)The personal emergency account is money that I’ve saved. The household account is money that my spouse and I put aside for child and household expenses. We have seperate personal accounts and one joint for shares bills.
4) Mortgage is at 3.8%
scubadiver wrote:
Sun Dec 01, 2019 2:53 am
Nad wrote:
Sat Nov 30, 2019 8:56 pm
Hello!
I would appreciate help prioritizing my savings and investment progress. Honestly, the progress is pretty slow. I’m a public servant living in the DC area. Cant make more $$ at work without acquiring a student loan. Its not a well paying career but there is a pension. I dont have any debt (except Mortgage $226k) but I’m not getting ahead either. I’ve been reading Dave Ramsey, Mr Money Mustache, Bigger Pockets.... Its all starting to run together. I want to be sure that what little $ I have is spared and, might I dare, grows. I want to invest, fund pension, set up 529’s and pay down my mortgage. Which order is best? I appreciate any help.
Signed,
Desperately Seeking Ducky (and all of his genius friends)

Age:40
Married filing jointly
Emergency: 7mos Personal
Household emergency: 7mos
IRA:$12k
Mutual:
529: Empty
Tax bracket :25% federal
Home Equity: $106k
I just got an inheritance and I want to put it to good use.
Welcome to the forum!

A few questions that might help us provide better feedback:
(1) Are you currently contributing to the TSP? If so, how much? If not, you should at least contribute 5% to get the full matching contributions.
(2) What are your monthly expenses? How does that compare to your gross monthly income? By the way, there is no 25% federal tax bracket. If I had to guess, you are probably in either the 22% or 24% bracket.
(3) What are the differences between the "Emergency: 7mos Personal" and "Household emergency: 7mos"?
(4) What is the interest rate on your mortgage?

Topic Author
Nad
Posts: 9
Joined: Sat Nov 30, 2019 7:29 pm

Re: How do I prioritize my savings and investment.

Post by Nad » Wed Dec 04, 2019 6:12 am

Thank you very much for your response. Its clear that I have to get more disciplined!
delamer wrote:
Sun Dec 01, 2019 12:13 pm
Start by tracking your (and your wife’s) expenses to the penny over the next 3 months or so.

Any time you spend cash, write down the amount and the category (food, clothing, gas, medical, utilities, etc.). The amount of expenses paid by check or credit card will be available from your statements, but you’ll need to wrote down the category (for example, if you go to Walmart and charge $50 for groceries and $25 for garden supplies).

Don’t try to adjust your spending, just record your normal.

I almost can guarantee that you’ll be surprised at how much money you are spending in certain categories.

Using that information, then you can create a spending plan for the future that will reflect what is important to you — like $25/week to each kid’s 529 plan rather than $50/week on eating out.

Make sure the spending plan includes irregular expenses like auto insurance and home repair.

Ultimately, doing all this will help you prioritize your savings and investment in the way that makes sense with your income and values.

Good luck.

User avatar
Duckie
Posts: 6897
Joined: Thu Mar 08, 2007 2:55 pm
Location: California Bay Area

Re: How do I prioritize my savings and investment.

Post by Duckie » Fri Dec 06, 2019 6:51 pm

Nad wrote:Cant make more $$ at work without acquiring a student loan.
What does this mean? That the only way to get a raise is to get a degree in something?
Its not a well paying career but there is a pension.
<snip>
Age:40
Married filing jointly
Emergency: 7mos Personal
Household emergency: 7mos
IRA:$12k
Mutual:
529: Empty
Tax bracket :25% federal
Home Equity: $106k
I just got an inheritance and I want to put it to good use.
<snip>
I have been saving but I stopped adding to the TSP and 403b in order to make housing repairs last year. I save $450/mo For emergencies. I buy stocks sometimes.
So you have a TSP, a 403b, a taxable brokerage account, and at least one IRA. You need to consolidate this information using the Asking Portfolio Questions template. The more detailed information we have, the better advice we can offer.

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