Quote:
Originally Posted by disneysteve
I'd want to know why someone earning $275,000 only has $4,000 in savings.
I think you are majorly underinsured. How does the income break down between each of you? Since your DH is insured for 6 times more than you, I'm guessing he is earning the bulk of the income. You currently have $420,000 in debt so if he were to die tomorrow, you'd only end up with $1,080,000 after repaying everything. I know that sounds like a lot, but would it be enough for you to maintain your current lifestyle, and if so, for how long?
To answer your question, you have essentially nothing in savings. One major home repair (heater, AC, roof, etc.) would wipe out 4K in a flash. You need to get that up significantly. You are only contributing 6% to retirement. That isn't enough. Get it up to at least 10% and preferably 15%.
What would I do from there? To answer that, I'd want to see the other side of the spreadsheet. List your expenses for us. Show us where all of the money is currently being spent and why so little is going to savings.
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First--yes 4000 in savings is pathetic but if you read my earlier post we have only be making this kind of money for 6 months now. During that 6 month period I have managed to eliminate 35,000 in credit card debt. So if it was not for the credit card balances I would have chosen to put money in savings.
As far as 401k --we are contributing the max that my dh employer will match--currently 6%, they match 3%. My concern is the 401k annual contribution limits, which will be $16,500 for 2009. What happens to the amount over that?? I don't know but I don't want to be paying some kind of tax penalty for this.
Life insurance--I am looking to increase this-again, policies were purchased prior to my husbands new job. He was previously a medical resident and we were living on 45,000 a year. I am now a stay at home mom. No real income for me-just all the work.
Take home pay is roughly 14,000 a month
Mortgages 2600/month (includes taxes and property insurance)
Car payment 571/mo
Car Insurance 120/mo
Home phone/internet 75/mo
Dish 58/mo
Student Loan Min 1200/mo
Utilities 300/mo (gas, water, electric)
Credit Card Payments 3500/mo (trying to pay off by Mar 1)
529 contribution 70/mo
Pre-school 185/mo
Cell phones 120/mo
Life Insurance 90/mo
Total 8889/mo
That does not include food, incidentals, gas, vacations, entertainment, etc which I am currently not charting/tracking.
Hope that answers some questions.