*Edited 1/12/18 to reflect change from "EFT" to "ETF" and to change link to images to higher resolution images
A lot of my issues have already been addressed, please read my porfolio with this guiding question in mind
I can realistically save ~$1,500/month and maintain my current spending (entertainment, travel, bills, ect). There are 4 appealing ways to use my money, how much should I put toward each? What should my timeline look like? Maybe a good strategy that would maximize my savings??
- down payment for a house
- saving for a car payment for a new car(s)
- putting toward retirement (putting more money than just company match toward my husbands 401K/contributing to a roth IRA for me/husband)
- paying more than the minimum toward my student loan debt
I just started my new job late 2016 and have been trying to get my bearings with my personal finances. I’ve been waiting to post because I feel fairly overwhelmed by the large amount of information available and trying to self-educate in advance to avoid seeming too ignorant, but being a bit overwhelmed by the self-education process. I’ve only started my research and have taken a personal finance class while in school (very basic). I did get the Boglehead guide and started reading that but still feel fairly new to all of this. I decided I’d go ahead and bring what I have to the table and see if you guys could offer some insight.
income: net ($6,500 per month/ $84,00 per year)
• Gross Income: 135,000ish + husband 13,000ish
• Net income after taxes, health insurance, 401k, HAS, company stock: ~$84,000 per year (~$6,500 per month)
investments/savings/assets (~$42,000 with $26,550 going in each year from 401K/HAS/stock)
• Emergency funds: $10,000 earning 0.02% in my credit union savings account (sigh)
• Total 401K (making max contribution yearly with 6% company match): $23,000 (invested in the MyRetirment 2055 fund) We will start contributing the 5% to get a 4% compnay match from my husbands 401K ASAP
• Total HSA (making max contribution yearly): $6,000 (haven’t invested it yet)
• Company stocks (contributing $1800/year with 15% match up to 18K): $2,800
• Assets: 2 cars, both 10+ years old which we owe without debt
debt: ~38,000 (monthly payment is 650 between the two of these)
• student loan from my grandpa at 0.5%: 22,000
• student loan at 3.27% variable 5 year loan :15,000
monthly bills: $2,855
• church donation (1/10 of my gross income): $1,050 (every 4 weeks)
• rent: 595
• student loans: 650 (175 to my grandpa and 475 to lender)
• other misc (internet/cell/insurance/utilities/gym): $484
• savings for a downpayment on a house: ~6,000 invested in ETF through robin hood (earned $240 since I started putting in there the start of 12/2017)
• we can generally save ~$1,500 per month after entertainment, food, travel, ect
Tax Filing Status:
• Married Filing Jointly – no dependents (yet)
• Federal: 25% (until ’18 which will change to 22%)
• State: 9.9%
State of Residence: Oregon
Age: me: 26 Husband: 34
Desired Asset allocation: not so sure, help?
Desired International allocation hmm? none?
Investement options through my work/my own investement
401k investment options
HSA investment options
ETF investments through robinhood
1. Regarding my emergency fund/extra savings
a. I wish to be making at least some money on the 10K that is sitting in that account. I did some very minimal shopping when it came to credit unions and found that most in my area do not offer a great return. I do know that using the credit union co-op, more credit unions are available to be, however I have no idea how to begin researching rates on credit unions. Would a credit union be the best option for me, if no, then what? If yes, any guidance on searching out a credit union with good rates?
b. My brother has recently told me about Robin Hood, a free stock trading app. I have started using to put the money I’m saving for my down payment on a house into ETF stock using Robin Hood. I wonder if it is a wise choice to put my savings for a down payment into ETF. If so any direction on ETF selection would be helpful.
c. I wonder if it would be reasonably safe to also use the 10k for emergencies to buy ETF. My thought is that I would still be able to get the funds out within a reasonable amount of time (during market hours and it will take 5 business days for the money to seat) so my money would still be fairly liquid.
2. Regarding retirement savings
a. Any in helping me choose how my funds are allocated (both 401K/ HSA) would be appreciated!
b. Should I be contributing to 401K for my husband? A roth IRA for both me and my husband? How much? Is there a good tool to know how much I need to be saving? We would like to enjoy some of our money now for vacation, ect. to have a nice work/home life balance before I turn 65+ but I do want to have a secure retirement.
3. Regarding buying a house
a. I have a few strategies I’ve been thinking about for timing and buying a house. Any thoughts or suggestions to help me decide which is a good idea or if they are all garbage, and maybe there is a better idea even still? Keep in mind, we want to be in a house in the next 1-2 years and we can save about 20K per year for a house. Right now we have 6K in savings and an additional 10K in emergency (which we would use at the time of buying a house, then immediately work toward replenishing that)
- Save up 20% down for a 150-200k house that I will live in for ~5 years to save up 10-20% down on a 500K+ house with land (we want to build a net zero, off grid house with some land and do some homesteading). Then move into the new house and use the old house for a rental property where the renters pay the mortgage payment.
- Save 5% down right now and buy the 150-200K house, then in ~2-3 years buy the 500K+ house and have the other house be a rental, with the mortgage being paid off by the renters.
- Save up 5% down right now and buy our 500k+ house with land, and later buy a rental property if/when we have additional savings