Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Spending Needlessly in Falls Church...
Old 10-27-2011, 08:36 AM   #1
Confused about dryer sheets
 
Join Date: Oct 2011
Posts: 2
Spending Needlessly in Falls Church...

Hi, I am 35yrs old. My husband and I have two children. I am the breadwinner and the one who handles the family finances. I would like to retire within 30years (age 65). My husband works part-time and goes to school, to graduate in 2014. I have no credit cards. I have 60K in student loans (@ 3.25% interest) and a car loan of $300/month. I have 5K in a traditional IRA that I have not been contributing to. Other than my employer sponsored retirement plan, we have no stocks/bonds or investments of any kind. I have 2.5% with employer matching contributions in the plan. I make approximately 89K/yr; after taxes my monthly income is $4,200/month(!?-and still can't save! wow...). I own a property which I have contracted to sell within the next 3 years and am receiving payments from the buyer to cover all the costs associated with it. We are now renting. Our expenses are approximately $2900/month. Our goal is to buy a home within the next 9months. Our goal is to save $1K/month until then. We do not have an emergency fund and cannot seem to budget--we spend what we make. We have thought about starting a business and have thought about flipping homes. (I used to be a real estate agent and have also worked within the legal field.) I want to educate myself so that I can improve the financial health of my family. I am reading "The Millionaire Next Door" and know that I need to decrease my realized income and increase my unrealized income. How do we create a budget we can stick to(cash only)? How much should we be saving? Where should we start?
PAW2011 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-27-2011, 08:57 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 17,203
Wow...

Well, I guess first off.... welcome...

I will let others answer you since you have a lot on your plate... I will only make a few comments.... take them or leave them...


First, I would NEVER leave a matching contribution sitting around... no matter what, I would figure out a way to put money into the 401(k) to get my matching.... if not, that is throwing good money down the toilet... heck, even if I had to put the money in and then borrow it.... I am ahead of the game...


Next... I would never get in the business of flipping houses without a lot of capital... you have to be able to hold onto a property for how ever long if you want to make money... I have watched a few flip shows and am amazed at the people who go in borrowing the money to flip and then having to keep lowering the price to get a quick sale... and today's market is not a place for quick sales...

Good luck...
Texas Proud is offline   Reply With Quote
Old 10-27-2011, 10:50 AM   #3
Thinks s/he gets paid by the post
GregLee's Avatar
 
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
Quote:
Originally Posted by PAW2011 View Post
Our goal is to buy a home within the next 9months. Our goal is to save $1K/month until then.
... How do we create a budget we can stick to(cash only)? How much should we be saving? Where should we start?
Saving for the down payment and buying that house will partly solve your problem. Then you'll have mortgage payments as part of your month-to-month expenses, and in effect you'll be saving for your future, even if you never get around to budgeting.

My wife and I were never able to keep a real budget, and when we bought our first and only house in 1994, I thought of it as an enforced savings plan, since I had been unhappy that our saving had ground to a halt around 1990. It worked. There were some difficult times, but we got through them.
__________________
Greg (retired in 2010 at age 68, state pension)
GregLee is offline   Reply With Quote
Old 10-27-2011, 12:24 PM   #4
Confused about dryer sheets
 
Join Date: Oct 2011
Posts: 2
Quote:
Originally Posted by Texas Proud View Post
Wow...

First, I would NEVER leave a matching contribution sitting around... no matter what, I would figure out a way to put money into the 401(k) to get my matching.... if not, that is throwing good money down the toilet... heck, even if I had to put the money in and then borrow it.... I am ahead of the game...

Good luck...
From my first day at work I put in the max allowable, 2.5%. I agree: matching contributions is FREE MONEY. : ) I am looking into possibly putting more but I think that I should probably invest in stocks/bonds/mutual funds.

Is there a good place to research where to invest? I have heard of Vanguard Funds but I am not sure where to start.
PAW2011 is offline   Reply With Quote
Old 10-27-2011, 12:36 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: No fixed abode
Posts: 8,764
I would recommend the bogleheads forums as a great starting place for learning about investing. They have book recommendations and tons of threads about various types of investments. It's a good place to start.

The only recommendation I'm going to make is that you develop an emergency fund. If you're the breadwinner and y'all live month to month, spend a little time thinking about what would happen if you lost your job or got hurt and couldn't work for a while. I recommend one year's worth of necessary costs (food, rent, insurance, taxes, things like that), especially since you don't have any credit cards to fall back on. I know a number of people that have been out of work that long or longer. Also, figuring out your necessary costs will help you see which parts of your budget are required and which parts are optional. That might help you tighten down a little if you want to increase your saving rate. Good luck finding a reasonably priced home in Falls Church. One of the most expensive cities in the country. I say this as a former Arlingtonian.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Anonymous (not Will Rogers or Sam Clemens)
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 10-27-2011, 12:44 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 17,203
Quote:
Originally Posted by PAW2011 View Post
From my first day at work I put in the max allowable, 2.5%. I agree: matching contributions is FREE MONEY. : ) I am looking into possibly putting more but I think that I should probably invest in stocks/bonds/mutual funds.

Is there a good place to research where to invest? I have heard of Vanguard Funds but I am not sure where to start.
Guess I misread your post... it made it appear that you were not putting money in the 401(k)... good for you that you are...

I would assume that your plan allows you to invest in stock mutual funds... never heard of one that did not....
Texas Proud is offline   Reply With Quote
Old 10-27-2011, 01:35 PM   #7
Recycles dryer sheets
 
Join Date: Jan 2008
Posts: 136
PAW2011, welcome to the board.

Step #1 your husband goes to work fulltime. Step #2 enroll in FPU at your local church.

Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan - daveramsey.com
serie1926 is offline   Reply With Quote
Old 10-27-2011, 07:28 PM   #8
Full time employment: Posting here.
lemming's Avatar
 
Join Date: May 2008
Posts: 597
You say you are a real estate professional. You have a property that is under a lease purchase? Are you betting against the NOVA market that much?

That property is going to be a problem when you try to buy another personal residence. And Falls Church is spendy territory.
lemming is online now   Reply With Quote
Reply

Tags
emergency fund, realized income, unrealized income


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 07:46 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.