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early_retirement_or_bust 10-27-2015 07:51 AM

Late 20s new mom :)
 
Hi everyone! I am a late 20s new mom who's engaged to be married. I just started back working, and did NOT taking saving seriously in my early 20s (I left sooo much money on the table that I could absolutely kick myself now). I started back work as a contractor for an automotive company to get serious about saving for the lifestyle I want. Realistically, I see I cannot retire young if I'm not putting in the necessary work now.
  • My projected income: Over 50k (after I work for a year; just started in August).
  • IRA (including rolling in a former 401k): $8,000
  • Current 401k (through my current job): $600 (I contribute 10% weekly in pre-tax dollars)
  • Simple IRA (from a former employer): $1,000
  • Emergency Savings: $2,000
  • Investments: $2,000
  • Own a home outright (only paid $7,000 though...where the rest of my savings went; plan to make this an income property and save $ for my son).

^^ Pretty paltry, I know. And you guys are gonna really kick me when you see my "debt."
  • Never had student loans (pretty book smart and earned a full scholarship)
  • Car: $24,000 (and still own another car that I could sell for $4k-$5k...just wanted something newer/safer for me and my son)
  • Credit Cards (collectively): $2,500
  • Other small debts: $600 (maybe...likely way less)

That's it. My guy pays everything else. Sooo I should be saving a heck of a lot more! I am open to any sound advice. For one, I realize I need to consolidate some of my accounts and get an investment strategy going. I have been trying a lot of things to see what works because I feel a little lost, honestly.

Thanks for reading my spiel! :greetings10::laugh:

howaldryan 10-27-2015 06:25 PM

Welcome! I love a lot of Dave Ramsey's personal finance strategies which is where my opinion will come from.

For your income, the car is a huge part of your yearly salary. You can get a very reliable car for 10k or less. I think that car debt will hold you back from accomplishing your savings/ER/other financial goals.

I would try to boost your emergency fund closer to 3-6 months and knock that other debt out.

Other than that, being in my 20's as well, I am glad others are planning for the future so young.


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rodi 10-27-2015 06:55 PM

I think a lot of us (including myself) did not take saving seriously when we were young. While I contributed to my 401k - I had no savings (and some debt) in my 20's. I didn't get serious about saving until my 30s.

Welcome to the forum. We'll be happy to be your cheering squad as you start the path to FI.

haha 10-27-2015 07:07 PM

Quote:

Originally Posted by early_retirement_or_bust (Post 1649286)
Hi everyone! I am a late 20s new mom who's engaged to be married.

Thanks for reading my spiel! :greetings10::laugh:

Congratulations on your baby and your marriage!

Ha

Bamaman 10-27-2015 07:57 PM

Congratulations on being in your 20's and having a desire to save. The best thing is that you have time as your ally.

I'm more of a believer in Suze Orman than Dave Ramsey. Save over the long term. Educate yourself on personal finance, and make good investment decisions. Take advantage of all matching 401K funds and invest all you can in Roth IRA's.

Always live below your means. If you can afford a new car, buy one that's used. If you can afford to buy a house, buy a much lesser house and fix it up.

But my best suggestion is to make sure your fiance has the same personal and financial goals that you do. It's a two person/income strategy that can get you to the point of early retirement. He must also do a mirror image of what you're doing.

Good luck on your future marriage.

Katiek 10-27-2015 08:19 PM

Welcome! The fact you're thinking about this puts you ahead of lots of people your age, so you're already doing better than you think.

I usually recommend this for pre-retirement,, but even at your age it will be helpful to really track your spending and see what you're spending on each category. See if you can identify careless spending that you can eliminate without really hurting your lifestyle. As already indicated, living below your means helps in lots of ways. Not only does it let you save more, but needing less to live on helps give you lots of options.

Try to increase your saving rate a little bit each year. Little steps are less painful.

You'll see a lot of people here are fans of low cost index funds for investing. Over the long term, fees add up and with a little research you'll find it's easy to manage your investments yourself. Be wary of investment advisers that sell complicated financial products that promise absolute security and top returns.

Lots of parents get caught up on spending for kids. It's natural to want to give them the best and make sure they have every opportunity. But some of the best things you can give them are examples of how to be financially responsible and the assurance that you can take care of yourself in the future.

Make sure you understand your fiance's spending and saving habits. If you have different approaches and he's more of a spender, make sure you independently pursue your financial goals and be active in your joint financial planning. Don't leave things to just one party in a marriage and then get hit by big surprises financially.

Stick around and you're like to learn a lot. Feel free to ask any questions you have - lots of helpful people here.

early_retirement_or_bust 10-27-2015 09:11 PM

Wow you guys are so insightful and non-judgmental. Thanks!

In hindsight, I should have bought a used version of my car. Luckily, I do have a zero percent interest rate.

My fiancÚ and I save separately and collectively. He invests way more than I do and also owns several properties. I'm trying now to work to get to where he is.

The reason I'm counting my income separately is that I feel I need to step my game up. And I don't want to rely on him for everything.

Also as far as my son's education: I am also saving to send him to specialized programs and good schools now (even as a toddler). I figure it'll pay off for him when it's time for college. I'd also like to start a very aggressive investment account for him as a baby to help him accumulate money in the long run. I don't feel it makes sense to try to save in a bank account or CD today's dollars for his college. Any suggestions are greatly appreciated here :)


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2017ish 10-28-2015 07:01 AM

Welcome, and congrats for starting to plan. Just one quick observation from your debt list:

Quote:

Originally Posted by early_retirement_or_bust (Post 1649286)
...
  • ... still own another car that I could sell for $4k-$5k...just wanted something newer/safer for me and my son)
  • Credit Cards (collectively): $2,500
  • Other small debts: $600 (maybe...likely way less)

...

Why not sell that other car (assuming it isn't appropriate for hauling the bambino around) and use the proceeds to erase all non-car debt? Plus, you remove the operating cost from your monthly expense.

[You've already bought the new car, so won't get into that.]

early_retirement_or_bust 10-28-2015 08:00 AM

Quote:

Originally Posted by 2017ish (Post 1649705)
Welcome, and congrats for starting to plan. Just one quick observation from your debt list:







Why not sell that other car (assuming it isn't appropriate for hauling the bambino around) and use the proceeds to erase all non-car debt? Plus, you remove the operating cost from your monthly expense.



[You've already bought the new car, so won't get into that.]


I thought about doing something nice and giving it to family. But I could do a lot with the extra $4k-$5k. ... I just can't decide.


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Katiek 10-28-2015 11:04 AM

For saving for your son's schooling, look into a 529 program. If your state's program isn't good, or doesn't have good investment options, you can consider another state's with better investment opportunity (although you may not get the same state tax break).

Glad that your future husband has good saving and financial habits. So much easier when people have a shared outlook on what they value.

jIMOh 10-28-2015 11:13 AM

Quote:

Originally Posted by early_retirement_or_bust (Post 1649286)
Hi everyone! I am a late 20s new mom who's engaged to be married. I just started back working, and did NOT taking saving seriously in my early 20s (I left sooo much money on the table that I could absolutely kick myself now). I started back work as a contractor for an automotive company to get serious about saving for the lifestyle I want. Realistically, I see I cannot retire young if I'm not putting in the necessary work now.
  • My projected income: Over 50k (after I work for a year; just started in August).
  • IRA (including rolling in a former 401k): $8,000
  • Current 401k (through my current job): $600 (I contribute 10% weekly in pre-tax dollars)
  • Simple IRA (from a former employer): $1,000
  • Emergency Savings: $2,000
  • Investments: $2,000
  • Own a home outright (only paid $7,000 though...where the rest of my savings went; plan to make this an income property and save $ for my son).

^^ Pretty paltry, I know. And you guys are gonna really kick me when you see my "debt."
  • Never had student loans (pretty book smart and earned a full scholarship)
  • Car: $24,000 (and still own another car that I could sell for $4k-$5k...just wanted something newer/safer for me and my son)
  • Credit Cards (collectively): $2,500
  • Other small debts: $600 (maybe...likely way less)

That's it. My guy pays everything else. Sooo I should be saving a heck of a lot more! I am open to any sound advice. For one, I realize I need to consolidate some of my accounts and get an investment strategy going. I have been trying a lot of things to see what works because I feel a little lost, honestly.

Thanks for reading my spiel! :greetings10::laugh:

Having your house paid off so young will make many more decisions going forward very efficient. I paid my house off at age 39 and envy you doing that 10 years younger. The peace of mind for you and your family is very valueable... turning it into an income source is also a different strategy which can help along the way.

Welcome

early_retirement_or_bust 10-28-2015 11:24 AM

Quote:

Originally Posted by Katiek (Post 1649871)
For saving for your son's schooling, look into a 529 program. If your state's program isn't good, or doesn't have good investment options, you can consider another state's with better investment opportunity (although you may not get the same state tax break).

Glad that your future husband has good saving and financial habits. So much easier when people have a shared outlook on what they value.


I'm looking into this. I thought it was limited to only my state (which has a crappy plan). Thanks!


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early_retirement_or_bust 10-28-2015 11:55 AM

Quote:

Originally Posted by jIMOh (Post 1649872)
Having your house paid off so young will make many more decisions going forward very efficient. I paid my house off at age 39 and envy you doing that 10 years younger. The peace of mind for you and your family is very valueable... turning it into an income source is also a different strategy which can help along the way.



Welcome


Thanks! Still plan to buy a better home for my family, but buying easy-to-rent properties for now.


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splitwdw 10-28-2015 02:10 PM

Quote:

Originally Posted by early_retirement_or_bust (Post 1649729)
I thought about doing something nice and giving it to family. But I could do a lot with the extra $4k-$5k. ... I just can't decide.


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This is an easy decision. Do not give this vehicle to a family member. You aren't in a position financially to do this. Get yourself out of debt and think about your child first.

Walt34 10-28-2015 02:37 PM

Quote:

Originally Posted by splitwdw (Post 1650025)
This is an easy decision. Do not give this vehicle to a family member. You aren't in a position financially to do this. Get yourself out of debt and think about your child first.

+1 on that.

Op, you're way ahead of the game even thinking about all this in your late 20's.

38Chevy454 10-28-2015 03:42 PM

Just being aware and making a small effort now is way ahead of most folks at your age.

As for the second car, I would agree good idea to sell that and pay off your non-car debts. Any leftover money you can use to start the 529 account for your son, so think of that as your helping a family member out!

Stick with the plan, good that your fiance has the similar financial sense as you. Given you are both younger, time is your best ally toward accumulating a nice savings and meeting your early retirement goals.

Standard Staples 10-28-2015 06:06 PM

I'm only a couple years older than you, and I also have a young son. I considered opening a 529 for him, but I saw a lot of drawbacks:

1) Performance. Based on my research, most 529 plans do not perform well. Compared to the broader market, I didn't see matching or better growth.
2) Fees. Many 529 plans have fees that eat away at the already underserved growth.
3) Flexibility. The money in a 529 is handcuffed for educational expenses, lest you pay taxes/penalties. What if he gets a full ride scholarship? What if he decides to join the military and take advantage of the GI Bill? Apart from saving for it, there are a wide variety of ways to fund college (loans, scholarships, etc.). I don't see the point in locking the money for one specific purpose, especially when there isn't a federal tax break on it. Some states offer tax incentives, but they aren't incredibly generous. Also, not everyone automatically goes to college. What if your child has an amazing idea for the next great startup, and he needs some seed money?

For my wife and I, it made more sense to simply start a standard brokerage account, earmark it as his college fund, and contribute regularly. I'm confident it will grow larger than a 529, I'll have more control over the money throughout the process and I'll have way more control over how the money is ultimately spent.

Your mileage may vary, but that's my opinion after a good bit of thought and research.

All that being said, one other piece of advice that someone gave me a long time ago, that I'm happy to pass along: you can't borrow in to your retirement. By this, I mean that you should get all retirement ducks in a row before you start thinking about college expenses. I don't say this to diminish the value of education or to put your son at the bottom of your priorities, but rather to say that you will be very well served to put your retirement goals first and let the other pieces fall in to place over time.

early_retirement_or_bust 10-29-2015 10:22 AM

Late 20s new mom :)
 
Quote:

Originally Posted by Standard Staples (Post 1650129)
I'm only a couple years older than you, and I also have a young son. I considered opening a 529 for him, but I saw a lot of drawbacks:

1) Performance. Based on my research, most 529 plans do not perform well. Compared to the broader market, I didn't see matching or better growth.
2) Fees. Many 529 plans have fees that eat away at the already underserved growth.
3) Flexibility. The money in a 529 is handcuffed for educational expenses, lest you pay taxes/penalties. What if he gets a full ride scholarship? What if he decides to join the military and take advantage of the GI Bill? Apart from saving for it, there are a wide variety of ways to fund college (loans, scholarships, etc.). I don't see the point in locking the money for one specific purpose, especially when there isn't a federal tax break on it. Some states offer tax incentives, but they aren't incredibly generous. Also, not everyone automatically goes to college. What if your child has an amazing idea for the next great startup, and he needs some seed money?

For my wife and I, it made more sense to simply start a standard brokerage account, earmark it as his college fund, and contribute regularly. I'm confident it will grow larger than a 529, I'll have more control over the money throughout the process and I'll have way more control over how the money is ultimately spent.

Your mileage may vary, but that's my opinion after a good bit of thought and research.

All that being said, one other piece of advice that someone gave me a long time ago, that I'm happy to pass along: you can't borrow in to your retirement. By this, I mean that you should get all retirement ducks in a row before you start thinking about college expenses. I don't say this to diminish the value of education or to put your son at the bottom of your priorities, but rather to say that you will be very well served to put your retirement goals first and let the other pieces fall in to place over time.


I currently have a standard brokerage account...should I convert this into his fund? It's with TD Ameritrade. I would want to choose ETFs wisely now though--no single-picking random stocks.


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early_retirement_or_bust 10-29-2015 10:25 AM

I will sell the second car--you guys are right: My son comes first.


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Katiek 10-29-2015 03:02 PM

Quote:

Originally Posted by early_retirement_or_bust (Post 1650337)
I currently have a standard brokerage account...should I convert this into his fund? It's with TD Ameritrade. I would want to choose ETFs wisely now though--no single-picking random stocks.


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I think one of the suggestions was to invest for your own retirement, and if at the time your son is ready for school, he needs money (doesn't get a scholarship) and you are on track for your own needs, then you can help him. But if there have been unexpected setbacks along the way, you can use the money for your retirement and rely on financial aide/work-study jobs etc. for college expenses.

Sine your son is still very young, you'd likely invest in a stock heavy portfolio for both purposes, so you don't really need a separate fund for school investments.

Standard Staples 10-29-2015 03:49 PM

Quote:

Originally Posted by Katiek (Post 1650480)
I think one of the suggestions was to invest for your own retirement, and if at the time your son is ready for school, he needs money (doesn't get a scholarship) and you are on track for your own needs, then you can help him. But if there have been unexpected setbacks along the way, you can use the money for your retirement and rely on financial aide/work-study jobs etc. for college expenses.

Sine your son is still very young, you'd likely invest in a stock heavy portfolio for both purposes, so you don't really need a separate fund for school investments.

+1. You can mentally earmark certain components for your son if you choose, but I wouldn't worry about making it "his" right now. There's just no need to do so.

early_retirement_or_bust 10-30-2015 01:01 PM

I have seriously been taking everything you guys have offered up into consideration. Immediate changes I've made:
--I upped my pre-tax 401(k) contributions from 10% to 15%. The agency offers a paltry 1% (but it counts!), bringing my total contribution to 16%.
--I am paying down my credit cards weekly. Goal is to be down to $1,000 collectively by the end of November.
--I have increased my IRA contributions to $200 monthly, with plans to increase this as time progresses.
--I have listed my car for sale.


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early_retirement_or_bust 10-30-2015 01:15 PM

I'm either going to go with a Roth IRA or ESA for my son. I'm going to defer starting one, however, until my own numbers are in order. I'm going to continue saving my dollars and invest in him later, once my own retirement is on steady ground.


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ReadyAimFIRE 10-30-2015 02:41 PM

I only have one thing to add...GOOD FOR YOU!! Having this attitude and drive to put the necessary steps in place is the majority of the battle. Then, as you bring down your debt you can put that money to work on your next set of plans.

Congrats on your progress and direction.

Walt34 10-30-2015 02:43 PM

Quote:

Originally Posted by early_retirement_or_bust (Post 1650910)
I have seriously been taking everything you guys have offered up into consideration. Immediate changes I've made:
--I upped my pre-tax 401(k) contributions from 10% to 15%. The agency offers a paltry 1% (but it counts!), bringing my total contribution to 16%.
--I am paying down my credit cards weekly. Goal is to be down to $1,000 collectively by the end of November.
--I have increased my IRA contributions to $200 monthly, with plans to increase this as time progresses.
--I have listed my car for sale.

That's great news!

REWahoo 10-30-2015 02:47 PM

Quote:

Originally Posted by early_retirement_or_bust (Post 1650910)
Immediate changes I've made:
--I upped my pre-tax 401(k) contributions from 10% to 15%. The agency offers a paltry 1% (but it counts!), bringing my total contribution to 16%.
--I am paying down my credit cards weekly. Goal is to be down to $1,000 collectively by the end of November.
--I have increased my IRA contributions to $200 monthly, with plans to increase this as time progresses.
--I have listed my car for sale.

That's huge! (Please mods, this isn't a political comment!!!!)

splitwdw 10-30-2015 03:26 PM

Yay, for you!
One other thing, if you celebrate any of the gift giving events (Christmas/Hanukkah) that are coming up. It's not what you spend it's the thought. You don't have to impress anyone. If your child is very small they don't need a lot of toys. My one younger sister buys her kids (2 & 4) tons of toys each year. Why?

Katiek 10-30-2015 07:22 PM

early retirement or bust, congrats! You're young and have time on your side. The steps you're taking now will have a big impact down the road. Since your fiance is also a saver, I think you'll be a great support for one another, It's important that you make sure to include some fun in your life and that it isn't all about future goals, but when spouses agree on approach, you'll likely find you can have as much fun with casual nights as more expensive dinners.

Closet_Gamer 10-31-2015 07:14 AM

Quote:

Originally Posted by early_retirement_or_bust (Post 1649656)
Wow you guys are so insightful and non-judgmental. Thanks!

In hindsight, I should have bought a used version of my car. Luckily, I do have a zero percent interest rate.

My fiancÚ and I save separately and collectively. He invests way more than I do and also owns several properties. I'm trying now to work to get to where he is.

The reason I'm counting my income separately is that I feel I need to step my game up. And I don't want to rely on him for everything.

Also as far as my son's education: I am also saving to send him to specialized programs and good schools now (even as a toddler). I figure it'll pay off for him when it's time for college. I'd also like to start a very aggressive investment account for him as a baby to help him accumulate money in the long run. I don't feel it makes sense to try to save in a bank account or CD today's dollars for his college. Any suggestions are greatly appreciated here :)


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IMHO, you're worrying about too many things at the same time. That's both discouraging (you'll feel behind on everything) and self-defeating as you try to accomplish too much.

I'd suggest worrying about things in order:

1). Get out of consumer debt, particularly the credit card. As noted by others, sell the 2nd car is the easy way
2). Ensure the emergency fund is up to snuff...6 mos of cash.

3). While doing 1&2, learn and read about investing. Don't expect a direct financial result, expect to be better prepared to take on the next steps. Ensure you know how much you're saving for college, retirement and target timelines. This will require you to put yourself into the future and work backwards from those needs. It will likely also scare the heck out of you. Don't panic, use your new knowledge to plan and focus your energy on LBYM.

4). Ensure you're in a good school district and jettison any ideas about private education for junior...outrageously expensive and not worth it if your ensure you're in a good district. You, your spouse and the values/discipline you impart will be a much greater determining factor in junior's future success.

5). Open both Roth IRA and 529 college accounts. Save per the plan you developed in #3. Do it religiously, don't blink and every time you see an opportunity to get ahead of the plan, take it.

You can do this. You just need to have goals, a plan and commitment.

Good luck.

MBAustin 10-31-2015 10:29 AM

Good for you, OP!

One reason I would consider opening a 529 is that you can ask family to contribute to it rather than giving extravagant gifts and they know it will go to your son's future education. If that's relevant in your family, it could add up over the years.

A strategy for increasing your savings (retirement or otherwise) is to put all of your pay increases towards savings rather than increasing your spending. Tracking your expenses in detail will help with that as well.

Keep us posted and keep asking the good questions - we're cheering you on!

early_retirement_or_bust 11-04-2015 02:56 PM

Hi guys! I'm back. Been reading through here and taking in a lot of your sage advice. I have gotten very aggressive and actually see some progress in my tiny portfolio already! I have started telling people "no" and am saving with the idea that helping myself helps my son later on.

My one weakness is that I suck at doing a budget/tracking my expenses. Now, I do have automatic deposits taken out pre- and post-tax for savings. But I need help establishing a set budget every month. For context, my monthly expenses are
1) Car note
2) Cell phone
3) Groceries
4) Stuff for baby
5) Misc (food at work, gas, etc.)
6) Medical (for baby and I--don't like my fiance's medical plan)

Again, I'm grossing a little over $50k annually, if that helps. I really want to do a solid budget so I can trim more fat and pay down the CCs faster and also save more once they're paid in full. Thanks!

Katiek 11-04-2015 07:30 PM

I think it's easier to budget if you track what you're actually spending for at least a few months. You may see some categories that surprise you and are easily identified as areas that you can cut back without really impacting your lifestyle.

early_retirement_or_bust 11-05-2015 12:01 AM

Quote:

Originally Posted by Katiek (Post 1653296)
I think it's easier to budget if you track what you're actually spending for at least a few months. You may see some categories that surprise you and are easily identified as areas that you can cut back without really impacting your lifestyle.


True. I was using Mint...it's okay but I want to do budget planning a little differently.


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hnzw_rui 11-05-2015 07:22 AM

Quote:

Originally Posted by early_retirement_or_bust (Post 1653350)
True. I was using Mint...it's okay but I want to do budget planning a little differently.

You could try using YNAB (You Need A Budget). You have to input expenditures manually which does, I find, make you more aware of where your money is going.

Ronstar 11-05-2015 07:35 AM

Congrats, OP! You're doing fine. Great advice from the posters and your plan sounds great to me. Just keep tracking expenses, develop a budget, and follow through on keeping spending as low as possible. And maximize 401k. I found that saving for ER was not a set it and forget it thing. All saving and spending plans need to change through life because stuff happens along the way. Good luck, and keep us posted on your progress!

retiredinnyc 11-05-2015 08:59 AM

I'm going to take the oposing view
 
I don't know your relationship with your man , but you have Zero net assets. He dumps you and where is your emergency fund? You bought a 24,000 car for your sons safety, where is his safety if Murphy's law strikes? If my daughter was relying on her man for everything else I would not sleep well at night. I don't want to sound harsh but baby Mamas get dumped all the time, I would think an emergency fund is the first order of business

early_retirement_or_bust 11-05-2015 02:32 PM

Quote:

Originally Posted by retiredinnyc (Post 1653450)
I don't know your relationship with your man , but you have Zero net assets. He dumps you and where is your emergency fund? You bought a 24,000 car for your sons safety, where is his safety if Murphy's law strikes? If my daughter was relying on her man for everything else I would not sleep well at night. I don't want to sound harsh but baby Mamas get dumped all the time, I would think an emergency fund is the first order of business

Hmm, well good for your daughter. I spent my 20s bailing people (including family) out, so I had to use my savings :)

I am here learning how to rebuild my savings/beef up my retirement. I bought an income property cash that I'm renting next month. I'm in an in-demand field. I think I'm doing ok for a "baby mama," but thanks. If you don't have anything constructive to say, then don't comment. But I do agree about the emergency fund.

retiredinnyc 11-05-2015 04:29 PM

I would sell the rental property too, with 2,000 in emergency fund how do you plan on fixing the boiler/roof/sewer line when they break. When the tenant tells you they saw mice ,the wires in the wall are shorting out, they tripped on the what ever that they will claim was your fault and they won't pay till you remedy the issue. Then they call the local building department to report violations wether real or imagined. They call the I.r.s on you because they think you not reporting the rent. Being a landlord can be a nightmare. As far as not being good making a written budget , you will get better with time. The first few are guesses, after a few months you will be real close

Rickt 11-05-2015 05:20 PM

Early_Retirement_or_bust, kudos to you for wanting to start saving for retirement at such a young age---you have a head start compared to other young people your age.

Lots of good advice from many members here. I too think you need to first focus on building stability in your personal life, build up an emergency fund, then pay off the debts one at a time and lastly increase your retirement savings in tax deferred/tax exempt accounts. In the meantime, stick around, read and learn about investing for the long term.

Good Luck. :)

Standard Staples 11-06-2015 09:11 AM

Quote:

Originally Posted by early_retirement_or_bust (Post 1653178)
Hi guys! I'm back. Been reading through here and taking in a lot of your sage advice. I have gotten very aggressive and actually see some progress in my tiny portfolio already! I have started telling people "no" and am saving with the idea that helping myself helps my son later on.

My one weakness is that I suck at doing a budget/tracking my expenses. Now, I do have automatic deposits taken out pre- and post-tax for savings. But I need help establishing a set budget every month. For context, my monthly expenses are
1) Car note
2) Cell phone
3) Groceries
4) Stuff for baby
5) Misc (food at work, gas, etc.)
6) Medical (for baby and I--don't like my fiance's medical plan)

Again, I'm grossing a little over $50k annually, if that helps. I really want to do a solid budget so I can trim more fat and pay down the CCs faster and also save more once they're paid in full. Thanks!

This actually opens up a good topic: don't let the $50K number dictate your budget. Too many people get stuck on the concept of "I have $X, I allocate/spend $X and I'll be okay," which leads to lifestyle creep. As your income goes up, so does your spending. Go ahead and find your rock bottom budget numbers over the course of a few months, adjust as needed and lock it in.

For me, Mint has always been the best/easiest way to budget and track. You have constant and real time access to all of your transactions in one place, and you get alerts if you go over budget on anything. It may be worth giving it one more shot.

early_retirement_or_bust 11-06-2015 09:47 AM

Quote:

Originally Posted by retiredinnyc (Post 1653749)
I would sell the rental property too, with 2,000 in emergency fund how do you plan on fixing the boiler/roof/sewer line when they break. When the tenant tells you they saw mice ,the wires in the wall are shorting out, they tripped on the what ever that they will claim was your fault and they won't pay till you remedy the issue. Then they call the local building department to report violations wether real or imagined. They call the I.r.s on you because they think you not reporting the rent. Being a landlord can be a nightmare. As far as not being good making a written budget , you will get better with time. The first few are guesses, after a few months you will be real close


Considering nothing was wrong with the place except carpet and painting, I'm keeping it. Just because I'm starting with $2,000 doesn't mean I am not actively saving way more now. Plus, I paid $7k; the house is projected to be worth $50k+ next year and is already valued at $30k. So I'm going to hold out and if worse comes to worse, then I'll sell as you suggested.


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retiredinnyc 11-06-2015 09:54 AM

I didn't mean to be a downer on you, for that I apologize,. I wS pointing out that things happen , I was pointing out what happens to landlords and it would be prudent to have a larger reserve when buying investment property. I wanted to give you an opposing view, everyone was telling you it was all roses, and I saw a potential downside and if it happened to you I wanted you to be alert the the very real possibility of problems, so that your not blind sided.

early_retirement_or_bust 11-06-2015 10:39 AM

Quote:

Originally Posted by retiredinnyc (Post 1654051)
I didn't mean to be a downer on you, for that I apologize,. I wS pointing out that things happen , I was pointing out what happens to landlords and it would be prudent to have a larger reserve when buying investment property. I wanted to give you an opposing view, everyone was telling you it was all roses, and I saw a potential downside and if it happened to you I wanted you to be alert the the very real possibility of problems, so that your not blind sided.


No I got a bit defensive because of the BM comment--I apologize as well. Truth hurts, I guess lol. I really joined to hear the cold, hard truth, so I need to hear all sides. You are right. I'm probably better off flipping the property for savings sake. That $ is what I need to build my nest egg.


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Walt34 11-06-2015 02:59 PM

Quote:

Originally Posted by Standard Staples (Post 1654008)
Too many people get stuck on the concept of "I have $X, I allocate/spend $X and I'll be okay," which leads to lifestyle creep. As your income goes up, so does your spending.

Another way is to use percentages or fractions of your income as it rises so you can have at least a little lifestyle creep. Ten years from now you're going to want to splurge a little once in a while and that's okay, you have to live a life too.

The important thing is to spend less that your income.

hnzw_rui 11-06-2015 03:27 PM

Quote:

Originally Posted by Walt34 (Post 1654269)
Another way is to use percentages or fractions of your income as it rises so you can have at least a little lifestyle creep. Ten years from now you're going to want to splurge a little once in a while and that's okay, you have to live a life too.

The important thing is to spend less that your income.

+1. Just don't let lifestyle creep up too much.

Alas, I'm guilty of splurging too much and just all around wasteful spending in my late 20s. Regular wages were flat and sometimes even declined but for a couple of years, we got a lot of overtime due to personnel attrition. The overtime wasn't part of my normal budget and I pretty much just spent it all. :nonono:

Thankfully, woke up after a 2-year spending spree. :blush:


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