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Hello All
Old 05-05-2007, 08:06 AM   #1
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Hello All

Hi Im Bicho6 and I want to learn how to save.

I'm 27 y/o and I just got a new job that will bring in 70k a year not including bonuses

I have 5k left on my car with 18 months left
I have about 24k in studend loans at around 3.75% interest

Believe it or not that is about it on my debt. I am getting married in July 2008, My fiance and I have been saving for that past few months and we have 12k in a HSBC online savings account making 5.05% interest. I am lucky to live with my parents rent free. This allows me to save alot of money both for the wedding and for a house.

I live in Rhode Island where multifamily/tenement homes are all over the place. If I purchased one of these the renters income would be a huge help in paying for my mortgage. But the laws for multifamily homeowners are tough on us. If a tenant were to not pay it would screw me up bad. Does anyone have any experience on this sort of issue and tips on saving for a home and wedding at the same time.

oh my fiance is a school teacher making about 40k a year (its her first year)

My new job will be offering me a 401k that matches 50%. It will be a no brainier to max that out but other than that what should I do. how does someone like me start saving for a retirement, wedding and home all at once while paying off school?

Thanks for any help
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Re: Hello All
Old 05-05-2007, 10:50 AM   #2
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Re: Hello All

Welcome to the board, Bicho6. Sounds like you guys are well on your way.

The "conventional wisdom" is to fund your 401(k) to the match and to then put your savings in yours & your fiancée's IRAs. After that you'd save money in taxable accounts.

Student loans at 3.75% are a great deal. I wouldn't rush to pay that off. What's the interest rate on the car loan? Is it worth paying that off early?

The less money you spend on your wedding, the more money you have for your house...
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Re: Hello All
Old 05-05-2007, 12:00 PM   #3
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Re: Hello All

Welcome Bicho6! Sounds like you're off to a great start.

If this is your first homebuying experience, and you don't have a 'good' tenant lined up ahead of time, I'd strongly suggest you think about holding off from trying the 2-family. If you can't find a good tenant - or they don't pay and you have problems in that area - that's the last thing you need to add to your life in addition to your great new wife and life together, especially when children might be right around the corner.

In addition to what Nords suggested, what is your and your fiance's health insurance like? Whenever people ask for ways to save more, I can't help but always throw out the Health Savings Account option (especially if the two of you are relatively healthy). It's a way to deduct contributions off of your taxes and have your earnings grow tax free, and never pay taxes on the gains. It's the single greatest savings plan in the tax code for us mere mortals that don't have special write-offs for arcane business loopholes.

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Re: Hello All
Old 05-05-2007, 01:13 PM   #4
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Re: Hello All

The interest on my car is 7%

I not really sure about the health insurance.. My fiance and I just take whatever our jobs offer us. I will look into it
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Re: Hello All
Old 05-05-2007, 01:40 PM   #5
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Re: Hello All

I follow Newport and Providence real estate - prices are still close to the peak, cap rates are very low - can you wait a few years for those to balance out before you buy?
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Re: Hello All
Old 05-05-2007, 01:43 PM   #6
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Re: Hello All

Quote:
Originally Posted by bicho6
The interest on my car is 7%
I'd continue to save for the wedding and the house, but I think I'd try to put about a third of that savings toward getting rid of the car loan...
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Re: Hello All
Old 05-05-2007, 02:45 PM   #7
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Re: Hello All

Quote:
Originally Posted by macdaddy
I follow Newport and Providence real estate - prices are still close to the peak, cap rates are very low - can you wait a few years for those to balance out before you buy?
really?? you think the market still might drop?.. I have been looking at the prices in east providence.. though they are high they seem reasonable...

another thing the first time home buyer deals in RI are one of the best in the country. After I am married my fiance and I will not qualify for there deals because we will have a high combined income. But if i buy the house before I get marry I will still qualify.
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Re: Hello All
Old 05-05-2007, 08:52 PM   #8
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Re: Hello All

Live with your parents?

Time to grow up and move out.
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Re: Hello All
Old 05-05-2007, 09:18 PM   #9
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Re: Hello All

Welcome to the forum Bio and congrats on your upcoming wedding.

Quote:
Originally Posted by newguy888
Live with your parents?

Time to grow up and move out.
Not to hijack this thread, but this is a very 'nuevo American' but prevelant cultural concept. I remember when (in the 50's) (apologies for sounding like my (and probably your) grandfather), many families were 'extended families'. Grandparents, Parents, children, and sometimes even grandchildren living in the same house. It was usually 1st generation (parents) born here. It's still done all over the world, Europe, Asia, Africa, .... It's just that our emerging middle class economics allowed the kids to move out on their own and now everyone thinks that this should be the norm.

Talk about a great way to LBYM.

...I believe we currently have made it somewhat PC by calling the kids 'boomerangs'. This way those who are 'embarassed by this extended families thing, can 'explain it' to the neighbors.

... don't listen to them Bio ... take your time ... and save some more money for the house.
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Re: Hello All
Old 05-05-2007, 09:28 PM   #10
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Re: Hello All

Quote:
Originally Posted by newguy888
Live with your parents?

Time to grow up and move out.
I don't really know what exactly you read to think I haven't grown up. But I do agree with you on the second part it is time to move out. Hey thanks for logging in and giving me that wonderful financial advice

::starting to wonder if this forum is serious::

BTW megacorp-firee my grandparents also live in the same house. Both my parents come from another country when they were in there mid teens.
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Re: Hello All
Old 05-05-2007, 09:39 PM   #11
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Re: Hello All

Quote:
Originally Posted by bicho6
::starting to wonder if this forum is serious::
I have found that this forum has some serious people with good financial experience and knowledge. It is NOT as serious as the diehard forum though. These guys here actually have a sense of humor ... although it can be a bit biting or crusty at times.
Quote:
BTW megacorp-firee my grandparents also live in the same house. Both my parents come from another country when they were in there mid teens.
I rest my case.... my grandfather lived with my oldest uncle (his son) and my cousins.
I think this is a great way of living and is one of the duties and obligations of family.
... rather than kicking your kids out because it is 'time' (whenever that is) and farm out our old people because we 'want our space'.... shame on us for being so self centered.
... sorry ... stepping off soapbox now.
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Re: Hello All
Old 05-05-2007, 09:40 PM   #12
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Re: Hello All

Quote:
Originally Posted by bicho6

::starting to wonder if this forum is serious::
Just like out there in the real world, there are all kinds on this forum. It helps to have somewhat of a thick skin and ignore the irreverent comments from the peanut gallery.

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Re: Hello All
Old 05-05-2007, 11:48 PM   #13
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Re: Hello All

I've found that whether someone would feel comfortable moving back home to live reflects a lot on the relationship they had with their parents growing up... people who say moving back home is fine tend to have had good childhoods and attentive, caring parents... people who say it's not okay, sometimes have trauma in their backgrounds... it's just a generalization but I've found it to be pretty true.
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Re: Hello All
Old 05-06-2007, 08:00 AM   #14
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Re: Hello All

*shrug* DH and i both had reasonably good upbringings and couldn't wait to get out on our own. That said, I know several sharp, mature folks who live with their folks and who are ahead of us financially. Of course I also know some people who basically leech of their parents. Sounds like bicho6 fits in the former group.
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Re: Hello All
Old 05-06-2007, 09:58 AM   #15
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Re: Hello All

Bicho, welcome! It's always nice seeing younger folks thinking long term.

It can feel like a dilemma: where to save, what to pay off, what to spend. The real secret is controlling expenses -- what we call LBYM, living below your means. I always recommend The Millionaire Next Door to new young savers.

If you and your future wife are on the same page about LBYM, you will be amazed how quickly your can accumulate net worth.

Best of luck, and congratuations!

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Re: Hello All
Old 05-06-2007, 11:41 AM   #16
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Re: Hello All

Quote:
Originally Posted by bicho6
::starting to wonder if this forum is serious::
It's a serious forum, Bicho6, whose accomplishments rest on their own merits. A number of us have been ER'd for some time, with at least one member for 20 years and several others well over a decade. At least two books have been written with information found here. Experience talks.

It's also a forum reknowned for its inability to stay on topic I mean short attention span wide-ranging discussion of just about any issue with a humorous perspective.

You'll get to know the experience (and credibility) of the posters as you see more of their posts. Length of membership or total number of posts isn't necessarily a reliable indicator of the value of the advice... or the quality of the humor.

It's also a rather tolerant board, isn't it, newguy?

As for ohana housing, I was raised in a family where interpersonal skills were somewhat lacking. Nothing to call the child protective services about, and there was love, but let's just say that I developed a somewhat reactionary & contrarian approach to authority that I haven't entirely grown out of. I beat feet as fast as I could get free and I would never even have considered the "move back home" option. Things are better now but we're not close in any sense of the word.

Same with spouse's parents. We tried a closer living arrangement for over five years, mainly for the sake of the only grandkid, and let's just say that was an eye-opening learning experience for everyone. Not to be repeated.

Nothing wrong with boomeranging for fiscal reasons. However I think that too often it's a complicated codependency of guilt and a parental failure to relinquish a role that's served its purpose.
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Re: Hello All
Old 05-06-2007, 10:42 PM   #17
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Re: Hello All

Quote:
Originally Posted by bicho6
I don't really know what exactly you read to think I haven't grown up. But I do agree with you on the second part it is time to move out. Hey thanks for logging in and giving me that wonderful financial advice
I'm a fellow young pre-FIRE hopeful (30 years young) who also happens to live at home (parents are in another state 7 months/year, though, so it kind of helps).

Just learn to shrug it off bicho6. I've heard it from some people, and have just learned to deal with it in the same way I deal with people who act like I have three eyes and ten heads when I don't spend 110% of my taxable income.

I realize that in some cases, living at home can be for malformed reasons (mooching off of parents, immature, don't want to deal with the real world, parent(s) can't stop babying their child). However, I purely do it as a sacrifice to help the stash grow all the faster. And believe me - 6 years of living at home has done wonders financially.

Of course, I also thought that I would be married by now and have a place of my own - although I'm currently still working on that part of my life.
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Re: Hello All
Old 05-07-2007, 10:57 AM   #18
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Re: Hello All

Quote:
Originally Posted by MooreBonds
I'm a fellow young pre-FIRE hopeful (30 years young) who also happens to live at home (parents are in another state 7 months/year, though, so it kind of helps).

Just learn to shrug it off bicho6. I've heard it from some people, and have just learned to deal with it in the same way I deal with people who act like I have three eyes and ten heads when I don't spend 110% of my taxable income.

I realize that in some cases, living at home can be for malformed reasons (mooching off of parents, immature, don't want to deal with the real world, parent(s) can't stop babying their child). However, I purely do it as a sacrifice to help the stash grow all the faster. And believe me - 6 years of living at home has done wonders financially.

Of course, I also thought that I would be married by now and have a place of my own - although I'm currently still working on that part of my life.

I want to get the hell out of my house and get a place of my own. But this is helping me save for a good future. It is in my family values and obligation that when my parents come of an age when they can not live independently, the rest of there lives will be spent in my home they helped me save for. This is not something that is discussed or agreed about, its just how it is. If others find it awkward I guess it good your not a part of my family?
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