Quote:
Originally Posted by coreys
Thanks for the info Jim. Anything else you money mavericks would suggest??.
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Post 14 shows $8988 or something similar, but did not include gas. This suggests to me you really have no budget which tracks your expenses.
I for one would feel better giving advice if you knew EXACTLY how you were spending your money. Controlling expenses will have a larger impact on your situation than any savings advice I give, any tax advice a CPA could give, or other advice any other poster here will offer.
Know your spending, control your spending. $9k per month in expenses is HIGH. Probably in top 20 percent of all USA households, dare I guess top 10 percent? You are spending more than 100k per year.
I normally advise 15/5. 15 percent to retirement and 5 percent to short term savings.
I am going to suggest you do 20/10 because of the recent rise in income.
20 percent ($1800/mo) to accounts marked for retirement. 401k is only going to be around 7 percent, 13 percent of your income will be going to a taxable retirement account.
10 percent $900/mo) to accounts marked for short term financial needs. Use this to get 6 months expenses in savings.
Take all debt payments like SL and 2nd mortgage and round them up to nearest $100. Paying $620 for something- round it to $700 (to get rid of the debt). This applies to all debts except the 1st mortgage.
Finance nothing from this point forward- this way you are not going to spend more than you earn. If you cannot pay cash for the new car, WAIT. The 10 percent ($900/mo) will have 10k set aside within 12 months. If you really want something which costs 40k, then either set aside 900 for 48 months or set aside $3600 for 12 months. You have the money if you have the discipline.
From a tax standpoint you may want to consider a larger house if the tax works out. Wait 18 months to make this decision.
Look at your tax liability this year. Look at it again in 2010 when you do 2009 taxes. If it costs you $800k to save $900k in taxes over 30 years, only you can decide if that makes sense to you (I am only guessing at numbers of 800k and 900k). Be prepared to see 10k-40k type tax bills over 30 years while you have this level of income.