What to do with 10%?

[LivingAlmostLarge]

So we've always used company vehicles to help moderate our savings. DH and I will continue to save the maximum 401k and we plan on keeping our same living expenses as before job to now.

But we've had until now an Employee stock purchase plan of up to 10% contributions to buy company stock. Our previous plan was to buy and hold 2 years and pay long term capital gains on the 15% gain we get from investing in the plan. It sort of was an enforced savings account.

Now we don't have. We're trying to decide what to do. Long term obviously we'll funnel the money into a taxable account.

Two issues, one I feel like we should save more into a taxable account than 10%. I know it's okay 5% long term and 5% short term. But at the same time I feel this guilt like we could save more so shouldn't we? Or is it okay and we're allowed to enjoy the rest of the money?

Second we don't have a house. This year I was toying with the idea of saving the 10% into cash and maybe furnishing the house. DH is willing to consider us buying more furniture and better quality than stuff we've had since college. We'll likely need some stuff like I want a king size bed. I also want a real desk. Maybe furniture for the kids rooms. I'm also not sure if we're going with a turn key home or needing renovations.

But would it be wrong to not save for a year or two the 10% and direct it to our cashflow? Honestly we are planning on saving on bonuses like previously and we probably can handle the cash flow of what we want but since we don't have the ESPP i am tempted.

Suggestions and thoughts?

[disneysteve]

Sorry but your post is kind of confusing to follow.

Are you saying that you've been putting 10% into the ESPP and you no longer have that option available to you? And you want to know what to do with the money that was going toward that?

Not counting that 10%, what % of income are you saving for retirement?
Do you have a fully funded EF?
Do you have any debt?

You say you don't have a house but then talk about buying furniture for the house. Do you mean you want to buy a house? If so, how much do you have saved for the down payment?

[snafu]

Suggestions...While I understand your desire for nice furniture, it's not practical to chose more than a 'wish board' until permanent housing has been established with possession date. With room dimensions and wall outlines, order what you will and have all delivered to your new residence.

Replacing ESPP with a taxable account is reasonable if you have a minimum 5 year window to ride the vagaries of the stock/bond/international investment choices. The USA market is very high just now, it's an election year, there will be a new administration, lots of international upheaval, change is unavoidable.

Can you be comfortable just saving 10% until the 'elephant in the room' settles with housing and DH's probation period/ 1st bonus results?

unedited thoughts

[LivingAlmostLarge]

We've been used to saving 10% into an ESPP and we don't have that option anymore.

We've got a fully funded emergency fund. We've got 20-30% down payment or more depending on how expensive a house we buy. The plan is to buy in the next 11 months before our lease is up in July.

No debt unless you count a car lease of $220/month. Long story. We save for retirement 20%, we save all bonuses so our savings is basically 35-50% of our salary depending. We probably should save more for college but right now I want to settle on our house, get into a routine and then maybe start tailoring college savings after that.

so we have that 10% that used to go to the ESPP and i'm not sure what I want to do with it.

Snafu I was debating saving the 10% cash for buying furniture after we buy the house. I would never buy the furniture now. This is just an earmarked cash savings.

The taxable accounts we have are in six figures alone not counting our cash on hand for buying a house and EF we used to live. We ended up not needing to touch our taxable accounts and lived off cash we saved. We also have a retirement account that we haven't touched either. Right now we are in some flux and after we settle into our permanent home we plan on downsizing the cash EF and stash more into a taxable account.

I agree the stock market seems high which is why I am playing with the idea of using the next year cash to buy furniture and stuff instead of investing it. We do a boring ETF split of stocks/bonds.

I have talked about investing in RE but I think the market is really hot right now and not the right time. I can't my DH on board right now because we need to iron out our financials long and short term. We have a lot of things up in the air but I think we'll have extra cash since our rent is cheap relatively and our income is better than expected.

[sv2007]

The things you suggest sounds like 1-time spending; my thoughts on those are just buy them if you are thinking about buying them. Even if they are mistakes, it is minor in the long run. Good furniture lasts a long time; even with a kid around they last (just not as pretty any more).

Now, as for kind sized bed, since you mentioned that you don't own a house.. I assume you may move often. We had to throw away ours (pretty expensive) because the movers couldn't figure out a way to move it due to a turn in the stairs. (and these movers were able to move our couch by hoisting it to the second floor room from the backyard; they are creative). If you move around, the kind size mattress can be a real pain.

I've never viewed ESPP as savings; I feel it I keep it around, I'm overly exposed to the company. In fact, whichever company I work for, I never hold any of its stocks due to (1) I have a bunch of options/RSUs that's vesting and (2) I'm working there.

[scfr]

Just a few random thoughts:

1. ESPP: You indicated that when you had it your plan was to buy and hold for 2 years. Does that mean you were selling it after 2 years? If so, what were you doing with the proceeds of the sales? And can't you keep doing that (put some savings wherever you were putting the stock sale proceeds)?

2. Furniture: Sure, no reason not to buy a couple pieces of nice furniture once you have your new house. And it's a good idea to start saving now. But it doesn't necessarily have to be 10%. And the reason is that you don't have to buy a whole house full of furniture at once. You can start with one or two pieces and add gradually as you continue to save.

3. Kids: They need SAFE furniture, no doubt. But you don't have to spend much on it. They're not going to be using it long. You may be able to find things on Craigslist or garage sales (Facebook or actual). Personally, for the kids, I'd opt to put money away in their college funds rather than spending on furniture that they will only use for a few years. This is coming from someone who does not have children herself (so some may think I have no right to comment), but who has been contributing to her niece and nephew's college funds from the day they were born. I've never spent much on "stuff" for them, but I will invest in their future.

[disneysteve]

3. Kids: They need SAFE furniture, no doubt. But you don't have to spend much on it. They're not going to be using it long. You may be able to find things on Craigslist or garage sales (Facebook or actual). Personally, for the kids, I'd opt to put money away in their college funds rather than spending on furniture that they will only use for a few years.

Kind of OT, but I wanted to comment on this. When we were getting ready to have our daughter and furnishing her room, we purposely chose to spend a little more and get "real" furniture rather than kiddie furniture. We did that specifically so we wouldn't have to replace it a few years later when she outgrew the pink sparkly dresser or rainbow-painted armoire. We got nice quality cherrywood furniture that included a removable changing table top for one of the pieces. When she outgrew that, off went the changing table. She is now almost 21 and still has and likes her furniture just fine. Some day when she is grown and on her own, she can either take the set with her or we can keep it as a guest room. So we paid more than many people do for kiddie furniture but it is now 21 years old and going strong.

[LivingAlmostLarge]

We haven't moved actually often and couldn't get a king bed up to our master 3rd floor attic in our last place that we lived 10 years. This is another long term move. We're renting so I won't buy anything until we move into our permanent home.

Yeah we hold usually for 2 years for gains then sell. We do have a lot of RSU and stuff but we just try to hold it no more than a single stock value we hold other amounts. After we sell we just move it into the taxable account we have. We haven't had a ton of RSUs I guess because that we tend to have sold since it's plain income and we sell to cover taxes all the time.

scfr just tranferring money to cash account we used to live this year or into a taxable account. We don't spend it.

disney steve i was debating doing that. We have ikea stuff for us and the kids bought used and it's been beaten up. one kid has a dresser I've had 20 years since college. Other we just got but it's small. So we haven't bought real furniture for either kid. They actually both have queen beds and we tend to sleep with them and use for guests. But we were thinking of buying something maybe they could use in college? We never did a nursery. I have my crib with headboard but am thinking of selling it.