Seeking savings advice

**BuckyBadger** · 08-15-2012, 03:43 PM

That's a pretty general question! You didn't say what your net income is every month. I'm guessing like $3500? That's a pretty important detail.

So assuming you net about $3500, there's ~$2300 left over every month.

Where is that going now?

We can get into discussions about investing and saving, but those two pieces of information would help a lot!

**WillJohnson** · 08-15-2012, 04:36 PM

I net $1,306 per paycheck (bi-weekly) after taxes, health insurance, and 401K. I would say my main spending other than expenses is going out to eat, which comes to about $75-$100 a month. Other than that I usually save the rest, which leaves me with approximately $1,400 left over.

**BuckyBadger** · 08-15-2012, 04:55 PM

Originally posted by WillJohnson View Post

I net $1,306 per paycheck (bi-weekly) after taxes, health insurance, and 401K. I would say my main spending other than expenses is going out to eat, which comes to about $75-$100 a month. Other than that I usually save the rest, which leaves me with approximately $1,400 left over.

Okay -- but that's kind of my question. You say that you have $1400 left over every month, but you only have $2000 in your checking account. Either you're spending the excess, or you've got another account somewhere that you didn't list.

**skydivingchic** · 08-15-2012, 05:06 PM

You look to be off to a good start. A few comments for your consideration.
- You should be saving an absolute bare minimum of 10% of your salary (not counting company matching) toward retirement. 15 - 20% would be ideal. You can do that with a combination of 401k up to the company match, Roth IRA, then back to 401k if there is still extra.
- Get an emergency fund in place. This is typically recommended to be 3 - 8 months of expenses, depending on your personal situation and who you listen to. So a good goal for you might be somewhere around $5k. Adjust this based on how secure your employment is, what catastrophic expenses you could reasonably foresee (medical deductibles, auto deductibles, etc).
- Your budget appears to be missing a few things. What about irregular expenses like auto registration, medical copays and/or coinsurance, clothing, haircuts, gifts, car maintenance, etc? I would recommend you spend a few months writing down every penny you spend to help you get a really good handle on where your money goes. Spend some time estimating the more irregular expenses and get categories in your budget for them so that they don't come as "surprises" or wreck your cash flow and budget.
- What are your goals? Do you want to take vacations? Get married or have kids? Buy a house? Those things cost money. Estimate how much these goals will cost and try to put a timeline on them. Then work backwards to figure out how much you would need to save to meet them.

Overall, you are off to a great start - congratulations!

**snafu** · 08-15-2012, 09:42 PM

What is your 401K currently invested in? Do you have any choice in choosing employer matched investment? In the previous century it was common for employers to withhold 7% of gross earnings for their 'defined pension plan.'

Depending on your age and tolerance for risk, you need to contribute sufficient funds over 35 years to cover Bonds, USA Equity and International Equity Mutual Funds or Exchange Traded Funds {ETFs} Have a look at Kiplinger's Magazines at your library or bookseller.

**jpg7n16** · 08-15-2012, 10:24 PM

How old are you?
Are you married/single? Kids?
How comfortable are you with risk?
When do you want to retire? And how soon do you want to get a home?

Do you have any other accounts not listed? CDs? Savings accounts? Trading accounts? IRAs?

What prompted your interest in getting advice? ie - what made you reconsider your situation?

And what sort of retirement planning have you done so far? How much do you think you'll need?
AARP Retirement Calculator - How to Retire, Plan for Retirement

**WillJohnson** · 08-17-2012, 12:57 PM

I am 27 years old and just recently got engaged (we plan to get married next November). I recently paid cash for an engagement ring so that is why I only have $2,000 in my checking account. If you all would like to take it into account, she makes $50,000 a year with similar expenses as I do if not less. Also, we both have stable careers so losing a job is not a major concern at this time. I'm pretty risk tolerant and market swings do not really bother me as I know I am in in for the long run. 60% of my 401K is an index fund that mirrors the S&P 500, 20% International large cap value/growth, 10% large cap growth, and 10% mid cap value. The main reson for asking for advice is because I want to make sure that I am saving properly for my future and am looking for a good way to do that while also saving for a 20% down payment. I would like to get a home within 2 years if possible. Should I strive to pay off auto loan before anything or focus more on saving? Let me know if you all need any other information from me and thank you for all of the helpful advice so far.

Seeking savings advice