I'm so freaking confused about what I should be doing!

[littletoobigformybritches]

This line of conversation may be better suited for a new thread. I think I got the advice I was looking for and feel much better about the track we're on for the moment. Thanks everyone again for your input.

[rennigade]

making 100K/year in dc is nothing more than middle ground. your attitude put you in the situation your are currently in. for some reason you think you have millions to spend, when in reality, you do not.

you have been DENIED.

[Snave]

littletoobigformybritches,

Congrats on being young and having a job that pays you WELL. I am not sure what all the commotion is about on this thread by some about all incomes are high in DC, etc... It is petty if you ask me. As for some additional advice, you are smart enough to come on the board and ask for advice and from your responses, it seems you are little bit financially savvy (better than a lot of mid-twentysomethings). I would just suggest reading some financial books if you haven't started doing this already. You have many years ahead of you and the more you learn, the better you will be equipped in the future. Most everyone on here has probably read some financial books to help them better understand many of the concepts that you are discussing such as The Automatic Millionaire, Rich Dad/PoorDad, The Millionaire Next Door, etc...

[prosper]

I live and have lived in various areas within the DC metro area. My profession and my hobby has allowed me to meet people of all walks of life. Based on my experience and my friend, who is a contracting job recruiter for the DC metro area,$102K a year for an individual is the exception rather than the norm in this area. That is the top tier of incomes. In addition, their are not many 25 year olds making that much money that I have come across.

[littletoobigformybritches]

I guess I don't understand some posters' need to diminish my family's accomplishments. I know many, many families who would give an arm and a leg to be making $172,000/yr at 25-26 years old. If you don't, then you must not know that many people. I came here for advice on how to be a responsible steward of the money that we make, not to be compared to anyone else. I don't know if this stems from jealousy or what, but if you have a problem with my attitude, then I suggest that you simply stop reading my thread.

[littletoobigformybritches]

snave, I'm getting more involved with personal finance kind of as a hobby and kind of out of necessity. I guess it really hit me when we ran our taxes for 2008 and realized that if we didn't change something, we'd end up owing more than $5,000. With a couple of tweaks, I have that down to only $1,700, and that I can live with.

Since then I've been to Dave Ramsey's Financial Peace University course and learned a lot there. I've also read some of Suze Orman's books about women and money so far. On my list still to read are the ones that you've mentioned, plus 'Getting to Yes', 'The millionaire mind' and 'Good to Great'. I've also just read a review about 'Rich like Them' which I think I'll add to the list.

I just don't want to blow what I know is an exceedingly rare opportunity (to start off so well at such a young age) to 'change my family tree' as Dave would say. I don't want to just piss away this money on cars and shoes (well, I do WANT to, but I know better than that). Mostly, I think I want to prove my Dad wrong. He's the one who told me that he thought that I was 'a little too big for my britches' when I asked him recently if he and my mom have long-term care insurance and how their retirement accounts have faired lately. He gave me the speil about eating nothing but rice and beans off of a card table when they got married and about how they only had enough money to buy one Christmas present back then (which was a radio, which he still has in his office to this day). He just doesn't understand that a person of my age can make wise choices with large amounts of money. And I'll be the first to admit that I definitely do need guidance, which is why I am here, asking these questions. I've tried my best so far to make good decisions, but I often feel out of my depth on planning for the future, which is why posters like Jim and others have been so helpful. Any other constructive advice is truly appreciated.

[Snave]

I agree and that is why I made my comments. I have been on the site for a while now and I usually see everyone give good advice. I do believe you got several pieces, but need to just weed out some of comments. Please continue to post and ask your questions. That is how you (and all of us for that matter) end up more educated and better off when it comes to our finances.

I will tell you that I was in a similar boat to you when it came to my finances from an income perspective at your age (I am 33 now). I felt I had done well (obviously others would have liked to knock me down a peg or two), and was looking for answers like you are. I started reading books and learning what I could do. I also asked advice from those I thought might know a thing or two. You can continue to ask here or you might have a mentor or two at work that you can speak with at lunch, etc... if you have the impression they might be financially savvy. My guess is those at work (mentors), would probably have a guesstimate of your income and could understand where you are coming from. I have had some of my younger employees ask me financial questions because they know that it is something I am interested in. I am happy to sit down at lunch and discuss their questions. One more thing... It seems like your dad has an opinion I don't know if you would value it, but if he is someone that is financially savvy, he might be a nice person to turn to. He probably wouldn't mind telling you his thoughts if you asked.

[Snave]

I think I was typing my last post as you were typing yours and didn't see the comments about your dad. Still, if you go into it not questioning HIS finances, but rather what he would do if he were in your shoes, you might get somewhere. I can understand his defensiveness at your line of questioning. I think you just apporached it a little wrong. Bring it back to your finances, don't start calling him out.

[littletoobigformybritches]

Thanks Snave for understanding where I'm coming from. You're right, I did go about talking about things with my Dad the wrong way. It started off about life insurance because my husband and I just bought new policies and my parents are appointed guardians of our daughter in our updated wills, so I was just telling them what was going on with that. Then I brought up long-term care insurance because we were already talking about insurance and because Dave Ramsey told me to talk to them about it before they are actually in need of it just to make sure that that box is checked. Plus, he is also pretty sensitive about the retirement thing because he had most of his invested in his company and then in 2001 they went bankrupt and he lost something like $2 mil. over night. He pretty much had to start from scratch at 45, so I was just worried about where they are now in the event that I may some day have to support them so that I could plan for that. The conversation didn't go very well, to say the least. Anyway, I do respect his advice, but obviously with all my student loan debt, they didn't save anything for their kid's college, so he just can't really identify with me having all this disposable income at this age. He's proud of me, but I don't really think that he knows how to guide me. KWIM?

[ScrimpAndSave]

I'm not sure I would consider that "disposable" income if you have so much debt.

[pearlieq]

I guess I don't understand some posters' need to diminish my family's accomplishments.

For what it's worth, I don't understand either. I kept thinking I was missing something or there was some kind of history between the OP and other posters or something.

Even someone read the thread and thought "That's not really all that much money" why on Earth would they feel the need to share that? The desire to feel superior? The need to be right all the time? The overwhelming urge to take a total stranger down a peg or two? The desire to prove that they actually know what having "real money" is and not wanting the little people to get excited over a mere pittance? I don't get it.

I've been scratching my temple at the whole thing. Very, very odd. And frankly, not very flattering to the Saving Advice community. I would be embarassed if I referred a friend here and this was the first thread they saw.

To the OP, I grew up in a fairly middle class background and remember feeling a bit giddy and overwhelmed when I added my salary and my DH's and got a number bigger than I'd even seen (though now I guess I've been thorougly schooled, er, I mean "DENIED", that it really isn't anything to sneeze about ). It doesn't go as far as one might think, but I did need to learn how to manage it.

You're on the right track. Let the oddball comments roll off your back and stick around. This a generally a good group and you'll get decent advice.

[feh]

I don't have specific suggestions for your situation, but here is a little advice (of course you can take it or leave it ).

Your earning potential seems to be very high for such a young couple. If you are interested in having an early retirement, you are in excellent position to do so. I realize you have a lot of debt, but I would try to invest as much as you can in the next couple years, while the market is down. This is an excellent time to buy; possibly a once in a lifetime opportunity.

Additionally, try to live frugally, even though you won't need to. Save as much as you can. If you're able to sock away a lot when you're young, you'll be sitting pretty when you reach middle age. Don't buy the mansion just because you can afford it. Don't buy the $40K car just because you can afford it. Live well within your means and save all that extra cash.

[bethany4455]

I am also confused about our finances. We have also been grossing $200k+ for about 4 years at age 35 and seem to be getting nowhere. I thought it would be easy to figuire out what to do with this much money. It seems there are alot more responsibilities that come with higher earnings. The biggest responsibility is being in a higher tax bracket. There seems to be very few tax breaks!--Anyways.. my only input is that at this income we can't contribute to a roth as others have suggested. And daycare tax savings also don't exist at this level unless you use a flex spending plan through employer which also may not work if you make too much money.
Also we used va loan for home and it added $5,000 to the price of our $225,000 home but did get us a decent intrest rate at 6% in 2005(good at that time with no down payment) VA loans come with a cost. Wish we would have waited and had a down payment instead. I am also very emotional about saving for kids college and pretend the money I put in their accounts is seperate. I just have to do it. Maybe I should cut down to. I am not much help because I am also confused but am taking advice from your post so thank you!

[jIM_Ohio]

I am also confused about our finances. We have also been grossing $200k+ for about 4 years at age 35 and seem to be getting nowhere. I thought it would be easy to figuire out what to do with this much money. It seems there are alot more responsibilities that come with higher earnings. The biggest responsibility is being in a higher tax bracket. There seems to be very few tax breaks!--Anyways.. my only input is that at this income we can't contribute to a roth as others have suggested. And daycare tax savings also don't exist at this level unless you use a flex spending plan through employer which also may not work if you make too much money.
Also we used va loan for home and it added $5,000 to the price of our $225,000 home but did get us a decent intrest rate at 6% in 2005(good at that time with no down payment) VA loans come with a cost. Wish we would have waited and had a down payment instead. I am also very emotional about saving for kids college and pretend the money I put in their accounts is seperate. I just have to do it. Maybe I should cut down to. I am not much help because I am also confused but am taking advice from your post so thank you!

Bethany-
you may be better off starting your own thread as when some threads get to 6 pages, people stop looking, or because two different issues are being discussed, some details might be lost.

If you make 200k, I will ask a few questions:

1) do both spouses work?
2a) if yes, do both spouses have access to workplace retirement account?
2b) if both do not work, does the one working spouse have access to a retirement plan?
3a) if 2a) is yes (both spouses have access to plan), what are the gross incomes and benefits available to each (dependant care, HSA, 401k and similar)
3b) if 2a) is NO (both spouses work, but one or both does not have access to benefits), then what benefits do exist and what is occupation of spouse without the benefits available?
4a) if 2b) is YES, specify plan
4b) if 2b) is NO, specify occupation of spouse which is working and how income taxes are filed (Schedule C or other)
---
What state are you in? Have you looked into using "married filing seperately" to itemize on lower income spouses return?

On 200k your best deductions (in order) will be:
1) 401k or similar retirement plan
2) HSA health plan (if available)
3) mortgage interest on schedule A
Schedule A does get phased out, but not eliminated (to best of my tax knowledge). As I see issues with taxes for working people with incomes of 200k-300k I clearly see the logic with using a house for tax deduction purposes... But not all on this board will agree with this logic either.

Start a new thread and post some of the info to the questions above for better assistance.

[feh]

I am also confused about our finances. We have also been grossing $200k+ for about 4 years at age 35 and seem to be getting nowhere. I thought it would be easy to figuire out what to do with this much money. It seems there are alot more responsibilities that come with higher earnings. The biggest responsibility is being in a higher tax bracket. There seems to be very few tax breaks!--Anyways.. my only input is that at this income we can't contribute to a roth as others have suggested.

Even if Roth or 401K isn't available to you, don't let that stop you from saving. Just open a taxable account. Obviously not as advantageous, but it's better than nothing.

My wife and I probably have half of our retirement funds in taxable accounts, because we simply had more to save than we could put in 401K and Roth accounts over the years.