Turning 30, Getting married and getting started.

[Coderguy]

Hello!

Short time lurker (about 2 hours). I've already done about 10 hours of reading on the site and I feel like I have learned a ton. I've been very proud to have read some of the suggested books already.

I am 29 years old and will be marrying in six weeks. I'm a software developer.

I come from 0.00, and I messed up college. I ended up getting back in; but on loans. My college debt is approximately 30,000.00. I started my career by paying off 22,000.00 in credit card debt. I now contribute to a money market account and my 401k.

I don't have a solid FI or ER goal. It all feels rather unrealistic right now. I have always enjoyed and read many financial books (you would think not with my debt problems). My minor was in Econ with a focus on banking.

So, I would rather have the more realistic goal of getting a real portfolio together; reducing my expenses where possible; and largely increasing my savings input and knowledge. I hope to participate in the community, learn; and hopefully retire wayyyy before 70.

Here are my numbers:

Assets:
401k (403B): 10,000.00
Money Market: 825.00 (Just started)

Monthly Money Flow:
150.00 - Money Market
130.00 (7%) - 403B
50.00 (2%) - Roth (not sure what is up with this)
600.00 - Rent
320.00 - Car Payment
100.00 - Car Insurance
125.00 - Gas/Maintenance
60.00 - Cell Phone
400.00 - Wedding (just until the end the year)
320.00 - Food/other.
35.00 - Insurance
250.00 - Consolidated student loan 'mortgage'

I make 62k a year before taxes. I plan to split the 400.00 between extra loan payoff and saving at the end of the year.

If I could ask a question, it would be what is the single most important thing to get done immediately? I just increased from 5 to 7 percent on my 403B; a friends says to push it to 15%? I should mention there is no matching, my employer cancelled it.

Hope to talk to many people and learn many things; thanks up front for what I have already learned.

 

[aaronc879]

What's you soon-to-be wife's financial/job situation?

 

[Coderguy]

What's you soon-to-be wife's financial/job situation?

She makes about 34K before taxes. She has a great savings and a steady job (though as you can see, she took quite the pay cut exiting journalism).

She has no debt, no car payment, etc.

 

[Htown Harry]

Welcome, Coderguy.

You're pointed in the right direction - you have reduced your debt, you know your net worth, you have a monthly budget and are forming the outline of a FIRE dream.

For the very short-term, I would think you will want to focus on riding out the financial turbulence ahead of you in the next few months. I recently saw this article that may be of interest as a thought-starter: Financial Planning Checklist for Newlyweds

Some questions to consider...

Joint checking or separate accounts? (There have been some lively threads on this one...)

Is your fiance's financial situation straightforward enough to be easily merged into a new financial security plan for two?

Will any of your rent, insurance, gas or other expenses be going down?

What are some financial strategy or tactic changes you can anticipate as the title at the top of your financial balance sheet transitions from "My Plan" to "Our Plan"?

 

[aaronc879]

Together,with your wife, your income is double the national average in an area with below average cost of living. You should be able to save a lot. If she has a 401K she should be putting in enough to get the match and then fully fund a ROTH ira. Then you should build up your emergency savings from <$1000 up to 6 months worth of expenses minimum. Then after funding a ROTH for both of you i'd put money towards your car payment or student loans(whichever has higher interest rate). Get the debt paid off then never go back into debt unless it's to buy a house and I would reccomend buying a house that you can afford on your income alone.

 

[Coderguy]

Welcome, Coderguy.

Joint checking or separate accounts? (There have been some lively threads on this one...)

Is your fiance's financial situation straightforward enough to be easily merged into a new financial security plan for two?

Will any of your rent, insurance, gas or other expenses be going down?

What are some financial strategy or tactic changes you can anticipate as the title at the top of your financial balance sheet transitions from "My Plan" to "Our Plan"?

I think we can merge plans easily, although I'm not sure how to approach it. This may be something emotionally easy but technically challenging.

We already live together; and we have been shifting the bills towards me.

In changing from my plan to our plan, it will be 'some travel' becoming 'lots of travel'.

Great article!

 

[Coderguy]

Then after funding a ROTH for both of you i'd put money towards your car payment or student loans(whichever has higher interest rate).

We can't decide what to do here... dwindle her savings? Leave it for me to pay with spending money? We want to be fair (she saved her money; I borrowed money I didn't have); but it doesn't make since to keep it totally seperate.

We plan to make a third account for joint savings/bills (mortgage, vacations, etc) but otherwise keep separate accounts.

I don't know how to get her involved. I've tried getting her to read some of my finance books (that got me paying off my CC's, and eventually led me here).

I'm feeling less like I have a plan :-(

 

[aaronc879]

We can't decide what to do here... dwindle her savings?

When your married there is no "her" savings it's both of yours. You make twice her income. If you can't use "her" savings then she can't benefit from "your" high(er) income. If her savings is in cash earning less than 2% interest then I think it would make sense to use it to pay off at least one of the loans. Make sure you leave enough cash for 6 months expenses minimum.

 

[aaronc879]

In changing from my plan to our plan, it will be 'some travel' becoming 'lots of travel'.

What do you mean by this?

 

[Coderguy]

What do you mean by this?

I just mean any retirement plan will go from having some yearly travel to a lot of yearly travel. I like to travel, she loves to. So I know she will want the plan to include a lot more travel.

 

[ronocnikral]

welcome as well.

i would agree you have some tough planning and iterations to do with your bride (as htown harry pointed out). i would suggest laying out some goals and writing them down, with how and timelines. one of my financial goals in life is to never have a car loan. i have so far been successful with that. i drive my wife nuts with all the questions and sharing, but i think she puts up with it because it gives her greater security knowing i'm not going to empty our emergency savings to go buy a boat.

keep those wedding costs low. we have a wedding photography business and as someone who knows the in's and out's of the industry...don't get caught up in all the hype. there are always deals/kickbacks being made between vendors, so don't buy more than you need to. and make it enjoyable for those most important to you (my sister skimped and those closest to her ended up doing all the work, we weren't able to enjoy the wedding). let me know if you have any wedding planning questions (no, i won't help you pick your colors).

 

[growing_older]

I'm older than you, so I'll offer some advice in hindsight. The three things I did about your age that I'm most glad now that I did:

1. Work with spouse to be so we agreed on a plan for OUR money. Everything shared.
2. Saved in tax deferred (401k, IRA or 403b) up to max the plan allowed, usually 15%
3. Paid down debt aggressively and avoided taking on any new except a mortgage.

My experience was that no matter what our income(s) were, we thought about money and adjusted our lifestyle instinctively to whatever take home pay was. Plenty of people live just fine on incomes less than our (yours) so by making the savings and debt payment money disappear before it became visibly spendable, it was a relatively painless process.

Oh, and we also made sure there was some money each month allocated to each of us personally that we could spend individually on our own. No fighting about a new toy or expensive entertainment if we each had some personal money to unilaterally indulge a whim or two. Helped us keep a focus as a couple on joint issues.

 

[Calgary_Girl]

I'm older than you, so I'll offer some advice in hindsight. The three things I did about your age that I'm most glad now that I did:

1. Work with spouse to be so we agreed on a plan for OUR money. Everything shared.
2. Saved in tax deferred (401k, IRA or 403b) up to max the plan allowed, usually 15%
3. Paid down debt aggressively and avoided taking on any new except a mortgage.

My experience was that no matter what our income(s) were, we thought about money and adjusted our lifestyle instinctively to whatever take home pay was. Plenty of people live just fine on incomes less than our (yours) so by making the savings and debt payment money disappear before it became visibly spendable, it was a relatively painless process.

Oh, and we also made sure there was some money each month allocated to each of us personally that we could spend individually on our own. No fighting about a new toy or expensive entertainment if we each had some personal money to unilaterally indulge a whim or two. Helped us keep a focus as a couple on joint issues.

Sounds like DH and I

 

[Sarah in SC]

i drive my wife nuts with all the questions and sharing, but i think she puts up with it because it gives her greater security knowing i'm not going to empty our emergency savings to go buy a boat.

Hey, now, hey now, not that there is anything wrong with that plan!

But yes, you and your bride-to-be need to be completely together on your goals and that requires a lot of conversation--evenly split between the dream retirement lifestyle talks and the nuts and bolts discussions of what you will do to get there. Foundations and dreams need equal time. Good luck to you -- my DH was 30 when we got married and he's nearing 50 now.

Time flies like an arrow, fruit flies like a banana.

 

[sailor]

Hey, now, hey now, not that there is anything wrong with that plan!

Sarah,
Has The Boat arrived yet?

 

[Sarah in SC]

As I hijack this poor man's thread with my boat stories....yes, Stella arrived on Sunday, the 4th of July!

 

[seabourne]

As one who grew up in Milwaukee 2 years ahead of you, I wonder if we know each other in some other venue.

That aside, paying down the credit debt was a great choice. You haven't given us some important information that you'll need to pull together a plan:

1. what is the interest rate on your student loan?

2. is you wife-to-be already funding a Roth for herself? and is her savings mobile (e.g. a saving account) or limited (e.g. 401k)?

3. are you two saving up for something large in the next few years, such as a house? Particularly in such a case, would either 401k plan allow a withdrawal for the downpayment (in some cases but far from all, this is an allowed option).

4.oddly enough - are you getting married this tax year or next and what effect will it have on your (both of your) taxable income? for instance, should you start a regular IRA this year, and convert it next year when your combined tax burden will change, and she should almost certainly contribute to a Roth and convert a standard IRA this year, while she is in a lower income bracket.

5. what other majoy expenses are you planning? new car in 3 years? have you accounted for that on top of emergency cash funds (3-6 months expenses)?

By no means should you feel you need to tell us these things, but be sure that you consider them in your planning process. The more information that you share here, the better people here can advise you. It may be worth a fee-based financial advisor consultation with both of you before you get married to help you put together a plan, and having expert advise may help smooth over what can other wise become a stressful set of conversations with wife-to-be.

I know of one attorney who did his (very complicated) taxes himself every year for about 25 years until his wife started doing landscaping/gardening consulting on the side. After a single year of trying to have her get accounts and receipts and ledgers together, he happily began paying a professional accountant every year and considered it money very well spent. Some debates are worth paying not to have.

 

[ronocnikral]

Hey, now, hey now, not that there is anything wrong with that plan!

agree. i want a boat really bad...but i want permission as well. i know about forgiveness and permission, but i'm still under 30 and my rope is quite short...

 

[Coderguy]

Hello again, maybe I can take the thread back... that's a pretty hard boat to contend with.

Well first, we have agreed to pay off my car; or the vast majority of it, and then I will have a few payments left to make.

The loans are 6.0%

The wedding is 95% paid for (August 29th). My savings is mostly for the extravagant honeymoon cruise in the Mediterranean.

Her savings is half mobile, half roth and 401k.

Should I focus more on the 15% into the 401k, building the emergency fund or

I hope the info allows more feedback; thanks to everyone for the input. The linked article earlier reminded me about things like insuring the rings that I totally forgot about.

Thanks again!

 

[Retch The Grate]

If you don't have at least a 6 month emergency fund, fill that first. You don't want to end up with credit card debt if you get a financial blow such as a job loss. Be ready to handle the acute setbacks first, IMO.

 

[haha]

agree. i want a boat really bad...but i want permission as well. i know about forgiveness and permission, but i'm still under 30 and my rope is quite short...

It only gets shorter. But don't worry, you will grow accustomed to lack of autonomy and before long you won't be able to remember that it was once different.

 

[sailor]

agree. i want a boat really bad...but i want permission as well. i know about forgiveness and permission, but i'm still under 30 and my rope is quite short...

How about using OPBs? (Other People's Boats)
There is a lot of people looking for crew/sailing buddies.

 

[Coderguy]

So, a bit of an update for anyone who reads this.

I have finished two books;

1) The Little Book of Common Sense Investing (Bogle)
2) The Four Pillars of Investing (Bernstein)

I just wanted to say thanks (the thread that suggests these books and others are locked). I have thoroughly enjoyed them and I have three more I'm planning on reading. I've already read more of about investing motivation or economics. It's great to be learning in a new area. I have also enjoyed keeping up with the discussions here (and trying not to barge in).

Thanks again!

Oh, and we've cashed on a CD to pay off the car. My 403(b) input is now 9%, I will continue to raise it 2% every six months; giving myself time to adjust to the changed income.