Feel like I'm living paycheck to paycheck

**kork13** · 01-18-2014, 04:42 AM

As a first-look assessment, I wouldn't worry about it and I think you're on a good course right now. Max out your retirement accounts as you're planning, then you can put any additional money you'd like to save into taxable accounts. It sounds like you have sufficient cash savings readily available to you, and if you find that you truly need access to some of that money, the Roth IRAs' contributions can be withdrawn without penalty if that really becomes necessary.

I think the more important matter is that you understand WHY you're feeling that you need to direct more money to taxable (more liquid) accounts? I'm not suggesting that doing so would be a good or a bad thing -- simply different from the plan you currently have in place. So either the plan is wrong for you, or your fears are unjustified. Are you concerned about upcoming expenses (like the birth of your child)? Are you afraid you might lose your job? Or is it just a general, amorphous fear & concern about nothing identifiable?

If the case is either of the former, then you should ask yourself what it would take to make you more comfortable with your situation moving forward. Would diverting $300/mo from your 401k to taxable accounts help you sleep better at night? If that will give you peace of mind, then do it. If it's the latter case (no real reason for concern), then sit back & strap in. You're in a good situation, money is fungible, and you have a sound plan in place to meet your needs.

Bottom line: Identify WHY you're uncomfortable focusing your savings into retirement & other tax-advantaged accounts. If there are valid concerns, adjust your plan to the point that you regain that level of security you're looking for. As time & resources allow, try to maintain the most advantageous plan for your family given your circumstances.

**humandraydel** · 01-18-2014, 07:59 AM

Originally posted by kork13 View Post

I think the more important matter is that you understand WHY you're feeling that you need to direct more money to taxable (more liquid) accounts?

It's probably half and half. My car fund isn't as big as I'd like it to be and I don't really have a separate house maintenance fund. Of course, at any time I could reduce retirement contributions and cash flow $2k per month if I had to. I think I'll stick with it and see how I feel - I can always change contributions later.

**Reggie** · 01-18-2014, 03:12 PM

Is your home paid off? If so, I think you are doing okay. I'm hesitant to suggest reducing retirement because of the tax benefits and the fact that you don't need the cash right now. If you find you need cash, reduce the retirement savings.

**scfr** · 01-19-2014, 09:59 AM

Is it possible you're feeling a little financial anxiety due to the major life changes (recently married, baby on the way)? If so, that's very normal ... I've felt the same at every major turn in my life. One thing you may want to look at is life insurance ... either getting a policy for you and/or your wife if you don't already have them, or increasing coverage if you do. Even if you decide you don't need it or have plenty of coverage, it may make you feel better knowing that you are prepared. Good luck.

**LivingAlmostLarge** · 01-22-2014, 05:04 AM

I totally feel like we live paycheck to paycheck because in some ways we do. We live on what we get paid period. There isn't any fat in our paycheck. We don't target any extra savings because it is all gone before we see it. Taxes, savings. We see less than half my DH's gross. I always wonder people write net but with our net it'd be hard to save more. Not to mention all bonuses are gone before I see it. So DH gross like $4800/paycheck and I saw $2200 deposited into our checking account. That's what I can spend.

**agarlits** · 02-01-2014, 06:39 AM

Originally posted by humandraydel View Post

I'm NOT living paycheck to paycheck but...

For the past few years I've always saved a decent amount each month in order to save up for a house, EF, car fund, etc and it felt good. Now, for 2014, I'm making a few changes after getting married (and having a baby soon) and I'm getting a little nervous about only being able to save ~$100 in post tax savings each month.

I doubled my 401k contribution from 10% to 20% (which will max the 401k), maxing an HSA ($5k), and funding an extra Roth for my wife. So I went from saving ~$15k in retirement and $15k in taxable to saving $30k for retirement.

I'm 32 years old and have ~7 months EF, a small car fund, and 0.5x salary in a Roth, and 1.5x salary in 401k, yet I feel like I should switch some back to taxable investing - am I being irrational?

You're doing a great job of saving for your old man, I think you just feel like you're doing something wrong because you got used to doing it the way it was before. Assuming that your house is payed off and you have no outstanding debts I think you're on the right path to retiring comfortably.

**elcidd** · 02-01-2014, 02:07 PM

You're in great shape

Based on what you posted, I think you are in great shape. Many people don't even do 1/2 of what you are doing when it comes to saving. I agree with you that you should have a decent sized car maintenance fund and a reasonable home maintenance fund. However I would not get stressed out with either one.

It sounds like you probably have excellent credit as well. I would keep a credit card with a high limit available, just in case a car or home emergency occurred, and slowly fund my car and home maintenance account to a level where I feel comfortable.

The best way to find out what is a good level for a house maintenance account is make an inventory of the systems in your home and how old they are. Find out their useful life range and what will it cost to replace, then divide by how many years are left.

Make a plan to save this amount every year. Nevertheless, I think you have your finances well in hand.

Lionel

Feel like I'm living paycheck to paycheck