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LOL well thats pretty extreme.
NT: Official Personal Finances Thread
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Elaborate why financing makes no sense. Im interested in your pov.
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Not true. At 0-3% financing, you're better off putting that 30k in cash elsewhere. Yea you're paying interest, but you could be gaining more from investments.
And leasing is probably the worst way to go if you're actually wanting to save money. Only time I'd do it is if I have money to throw around and wanted a new car every 3 years.
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Because if I wanted to make monthly payments on car I'd just lease and pay less per month than financing
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But you give the car back and you don't own it after you finish your payments.........
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I have no interest/desire in owning a car for that long. Either I'm going to buy it cash and sell it after 2-3 years without paying interest in between or I'm going to just do a 24-36 month lease and get to the next one
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Better off always leasing if your switching cars every 2-3 years. Putting down all that cash on a depreciating asset just to sell it in 2-3 years. Better off just making payments for the rest of your life and investing the rest.
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Just need some advice on how I'm spending/saving.
Currently:
- Putting 25% of my paycheck in my 401(k), hitting the max allowed (18k)
- Not putting any additional money in my personal savings, but have 6 months emergency fund saved already
- Rest of my money goes to living expenses (rent/ insurance/ groceries, etc...)
- I have zero debt. No car note and currently rent (month to month)
- Last check of FICO is 768
My main concern is that I feel like I'm not keeping enough in my personal savings (fluid). Should I contribute less to my 401(k), maybe reduce to 15-20%? Also, my car is getting pretty long in the tooth, and I may have to get something new in the next 6-18 months. Thinking about setting some money aside for the down w/o dipping in my emergency fund.
Thanks in advance
Currently:
- Putting 25% of my paycheck in my 401(k), hitting the max allowed (18k)
- Not putting any additional money in my personal savings, but have 6 months emergency fund saved already
- Rest of my money goes to living expenses (rent/ insurance/ groceries, etc...)
- I have zero debt. No car note and currently rent (month to month)
- Last check of FICO is 768
My main concern is that I feel like I'm not keeping enough in my personal savings (fluid). Should I contribute less to my 401(k), maybe reduce to 15-20%? Also, my car is getting pretty long in the tooth, and I may have to get something new in the next 6-18 months. Thinking about setting some money aside for the down w/o dipping in my emergency fund.
Thanks in advance
antidope
Supporter
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When it comes to car purchases I personally have a price cap that I'm not willing to exceed and won't amend it for quite some time.
When it comes to purchases I've followed one simple tenet that has served me well in life. "If I can't buy it cash then I don't deserve to have it". Sounds extreme but it works, iIhave a credit card but it's really a pseudo debit card with the added benefits that come with it, any loan I've taken out post student loans I've had the cash to make that purchase and just use the loan as a means to build credit/not give up the liquidity.
The most important thing though that it does is keep me from going spend crazy even on things that jIcould pay for in cash.
When it comes to purchases I've followed one simple tenet that has served me well in life. "If I can't buy it cash then I don't deserve to have it". Sounds extreme but it works, iIhave a credit card but it's really a pseudo debit card with the added benefits that come with it, any loan I've taken out post student loans I've had the cash to make that purchase and just use the loan as a means to build credit/not give up the liquidity.
The most important thing though that it does is keep me from going spend crazy even on things that jIcould pay for in cash.
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Unless you're getting a match on the full amount of your 401k, I would only contribute up to the match (automatic doubling of your money), then max out a Roth IRA if you're eligible, then go back to contributing to your 401k. The problem with 401k's is that you only have a limited number of options to contribute to and the fees can eat significantly into your earnings. On top of that, the advantage of a Roth IRA is your contributing post-tax dollars so your earnings will grow tax free.
If you have money left over, look into other income vehicles like Real Estate or other passive cash flow investments. Or even start saving to buy a house. Then you'll be building equity and building wealth that way too.
Otherwise, it looks like you're killing it! Congrats!
hot route
Banned
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The only thing I can think about is Saving. Nevermind about investing and all that. I think when people start to understand life as it unfolds, having that savings really helps.
I believe Saving is a life style, a personality, and trait.
I believe Saving is a life style, a personality, and trait.
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Thanks, [COLOR=#red]crcballer55[/COLOR]. Just logged into my Fidelity and this is what I currently have contributed:
View media item 1868037
I have no plans to increase my contributions past 25%, but in accordance to your post, should I just break it down this way:
6% BASIC BEFORE-TAX
6% BASIC ROTH
13% SUPPLEMENTARY ROTH
25% Contribution Amount Total
As far as your comment on saving for a house, should I just keep those savings in a regular savings account? If so, are there any banks you could recommend? Thanks again!
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Open up a separate roth account, outside of your company. Vanguard or Fidelity.
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Actually, I think 25% is a little rich to contribute just to retirement. Most professionals would recommend 15%, but the earlier you contribute the max, the sooner you'll be able to coast and not have to contribute anything since the amount your account is making should be making more than you're able to contribute.
What I would do is:
1. Contribute up to any match your company offers in a 401k
2. Contribute up to the max in a Roth IRA account outside of your company diversified in 4 separate funds (large cap {blue chip stocks}, Small cap, International, & dividend producing funds)
3. Once you've contributed the max to your Roth, go back to your 401k and contribute until you've hit the 15% threshold.
4. After you've hit 15% of your gross income in retirement, start saving for a home in an non-retirement investment account.
Contributions to the stock market should be viewed as more than a 5 year investment term due to market volatility. If you put the money for a home in a regular savings account, the market will grow more than the interest in your bank account.
Hopefully that helps.
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Personally I would fill up all tax free buckets first.
1.401K up to the match
2.Max out HSA
3.Max out Roth or traditional IRA
4.Fill up 401K to the max
1.401K up to the match
2.Max out HSA
3.Max out Roth or traditional IRA
4.Fill up 401K to the max
antidope
Supporter
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I do 12% to my 401k and get a 6% match. I've done at least ten percent from the minute I started working and am fine with it.
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.
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Double. My bad. 
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Double.
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Double.
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I think your monthly budget (if using a spreadsheet) should be put together on a weekly basis.
Bill due dates fall within certain weeks, on certain days. Sometimes it's not as simple as listing you income and expenses out without due dates and pay periods in mind:
INCOME: $5000
RENT: $1200
EXPENSES: $900
I do mine something like this:
January 10 - January 17
INCOME: $2500
RENT: $600 (half)
EXPENSES: $280
Total Left Until Next Pay Period: $XXXX
January 18 - January 24
INCOME: $0
EXPENSES: $500
Total Left Until Next Pay Period: $XXXX
January 24 - January 31
INCOME: $2500
RENT: $600
EXPENSES: $660
Idk if that makes sense, I'm on my phone. The math isn't right and I pulled the dates off the top of my head, but hopefully it makes sense.
Bill due dates fall within certain weeks, on certain days. Sometimes it's not as simple as listing you income and expenses out without due dates and pay periods in mind:
INCOME: $5000
RENT: $1200
EXPENSES: $900
I do mine something like this:
January 10 - January 17
INCOME: $2500
RENT: $600 (half)
EXPENSES: $280
Total Left Until Next Pay Period: $XXXX
January 18 - January 24
INCOME: $0
EXPENSES: $500
Total Left Until Next Pay Period: $XXXX
January 24 - January 31
INCOME: $2500
RENT: $600
EXPENSES: $660
Idk if that makes sense, I'm on my phone. The math isn't right and I pulled the dates off the top of my head, but hopefully it makes sense.
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antidope
Supporter
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That quintuple post.
The way I do it is that I have all my recurring expenses logged into the spreadsheet already. I know what they're going to be so why not. Then I input anything else that comes along.
The way I do it is that I have all my recurring expenses logged into the spreadsheet already. I know what they're going to be so why not. Then I input anything else that comes along.
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I make my budget based off a biweekly pay schedule (total bill/2) the 2 months I get paid 3 times I still let that go to the bills checking.
All bills are automatically allocated to through direct deposit.
Bills go to my bills checking acct. , gas/food/spending money goes to my debit checking acct., remaining goes to savings acct.
+Paycheck Income
-Mortgage
-Utilities
-Student Loans
-Car Loan
-Car Insurance
-Gym
--------
+Total left over after bills
-Gas
-Food
-Spending money
------
+Total remaining (savings/debt payoff)
I just stick to this and I am fine, no need for me to rework my budget weekly/bi weekly.
Mint tracks everything I just closely track the expenses to make sure everything is categorized correctly.
All bills are automatically allocated to through direct deposit.
Bills go to my bills checking acct. , gas/food/spending money goes to my debit checking acct., remaining goes to savings acct.
+Paycheck Income
-Mortgage
-Utilities
-Student Loans
-Car Loan
-Car Insurance
-Gym
--------
+Total left over after bills
-Gas
-Food
-Spending money
------
+Total remaining (savings/debt payoff)
I just stick to this and I am fine, no need for me to rework my budget weekly/bi weekly.
Mint tracks everything I just closely track the expenses to make sure everything is categorized correctly.
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hot route
Banned
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Like what do you use?
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Has anyone used You Need A Budget software? How is it?
Also some blogs on personal finance:
http://livingstingy.blogspot.com
Mr. Money mustache
Also some blogs on personal finance:
http://livingstingy.blogspot.com
Mr. Money mustache
