Taxman59
Full time employment: Posting here.
- Joined
- Sep 15, 2014
- Messages
- 645
My son has been working about a year, and he is saving about 30% of his gross wages. This is on top of his 401K contribution (he isn't offering that info, but would share it if I asked, it is at least 4% as he knows to put in what it will take to get the match). He has built up a savings account equal to about 4 months of expenses, and his checking has another month or so. Given that he is being frugal, I expect that he will be at the 6 months of expenses in savings within the first quarter of the new year. I suggested that when he gets there, he take about 2 months expenses and put it in a 1 year CD to get better interest, and when he gets another 2 months, savings, do the same, building a ladder of CDs while keeping 3-5 months in cash. When he gets about a year's worth of expenses saved in a CD ladder, start a monthly mutual fund contribution (or two depending on the monthly $ he saves and the fund minimums).
Am I steering him wrong? Should I have him be more aggressive (like I was) or stick with the "slow and steady" plan?
Am I steering him wrong? Should I have him be more aggressive (like I was) or stick with the "slow and steady" plan?