Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Do you have
A retirement fund started? An emergency fund? I like to spend time on the Money Matters board and they are always pushing how important it is to have an emergency fund that would cover at least 6 months of bills in the event that something happens to you or your husband. Six months of bills for H and I is roughly $12,000 and for some reason that just seems like a crazy amount of money and it would take a long, long time for us to save that much.
We live in a low cost of living area (our mortage is only $470/month - that includes taxes and insurance) so I know that for us things are different because of our area and our income. What we make living around here is good money but I know it would be considered small pototoes to most living in bigger cities. I am just curious how you all go about saving. H and I have a hard time actually putting money away to save even though we talk about it all the time, we never actually do it. How much of your monthly income goes toward a savings/retirement/emergency account?
Re: Do you have
They say that you should be saving between 10-20% of your income for retirement, since it is unlikely that social security, pensions, or other things that retired people rely on now will be around for us as these programs aren't financially sustainable.
H and I work with a financial advisor through Northwestern Mutual. My uncle is also an accountant and helps advise us on certain things. I'd say H and I started initially saving around 6% of our income, and now we're up to about 10%.
One of the things our financial advisor stresses is that you should have multiple different avenues for saving, each with a different tax regulation - some that tax when you put it in, some that are tax deferred, etc. so that if things change heavily with the tax system you aren't losing as much money, or have all your eggs in a tax-heavy basket (that might have not been so tax-heavy you when started using it as a route of savings).
H and I both have 401(k)s, whole term life insurance, and a general savings account. We plan to eventually expand other routes of savings into buying a practice and possible real estate (but we'll see on that one). Once I don't need maternity coverage anymore, we'll probably start a HSA account, too. A lot of these things aren't considered "primary" routes of savings by some, but they can definitely be used to save. Our goal is to eventually have 4-5 routes of saving, instead of having just 1.
As far as an e-fund...We keep a decently large amount of money in our checkings/savings, mainly because we just aren't major spenders. Plus I have some stashed away in some mutual funds if I really needed it, and if we really got desperate we could withdraw from our whole term life insurance. Not to mention we have reliable family that we could borrow from if things got REALLY bad. H and I also have disability insurance (a must in our field) so that if we were unable to work, we'd still have income. If H or I died, we each have enough life insurance to take care of the spouse left. We'd be able to pay off all our student loan debt and our house with a considerable amount left over.
But the girls on money matters are correct. My SIL is struggling financially, and has been since our BIL passed away in April. No one ever thinks it is going to happen to them, but the harsh reality is that sh#t happens and you really need to be prepared.
My suggestion would be to meet with some type of financial advisor or accountant that you trust. They could look at all your income/debts and help you decide what routes of savings are best for you. It is hard to save, but start out small and then every year increase the amount you save. All our current routes of savings are set up to withdraw automatically either from our paycheck or our checking account, so that makes it a little easier not to have to actually write out the check.
Definitely good for you to be thinking about, though. We live in a society of massive debt and a lot of people who think they are entitled to things others work for. It makes me sad, but I have major, major concerns about the financial stability of this country. As a result, my attitude is that the government either can't or won't help out one once by the time I'm retired, so I try to plan for that. I hope I'm wrong, but if I'm not I'll be prepared. Plan for the worst, hope for the best, you know?
Good luck! Let us know if you have any other specific questions =]
We are not where we want to be on savings- The wedding dented my savings, and the ring and a collectable car dented H's prior to getting married. We've been trimming back a little but have been working on some stuff around the house the last 6 months like a washer/dryer and painting (plus grad school classes for me and medical expenses).
So while we don't have a great savings just yet... it is on the priority list. But all the cars are paid off, no school loans, and we both have decent retirement accounts. Oh and the mortgage is right now has less than 20 years left. Our retirement money just automatically gets deducted from paychecks- we never see it.
So not exactly where we'd like to be but not a bad situation. And while H would kill me if he knew I thought it... yeah if we hit financial hard times I'm thinking one of his 5 vehicles could go (3 are collector cars) BUT that's just me ;-)
We're doing a lot better than I thought we would be after the wedding. lol (we spent WAY too much)
Currently we're each putting back 15-20% of our income into our company's 401k, and DH has a roth IRA that he maxes every year. He also has money in stocks.
We have about 3 or 4 months worth of income (not expenses) saved up between the two of us.
We're also rocking the multiple bank accounts for different purposes, like some PPs said.
The only debt we have currently is my mortgage (which the renters are covering), and my student loans which we're paying 3x the minimum on.
PPs have a lot of good advice. I feel very comfortable with where we are financially, however, we both have very good paying jobs and low debt, so we've be able to save a lot of money.
My BFP Chart Danger Love Blog
My suggestion would be to meet with some type of financial advisor or accountant that you trust. They could look at all your income/debts and help you decide what routes of savings are best for you. It is hard to save, but start out small and then every year increase the amount you save. All our current routes of savings are set up to withdraw automatically either from our paycheck or our checking account, so that makes it a little easier not to have to actually write out the check.
Definitely good for you to be thinking about, though. We live in a society of massive debt and a lot of people who think they are entitled to things others work for. It makes me sad, but I have major, major concerns about the financial stability of this country. As a result, my attitude is that the government either can't or won't help out one once by the time I'm retired, so I try to plan for that. I hope I'm wrong, but if I'm not I'll be prepared. Plan for the worst, hope for the best, you know?
This...I work in a financial planning firm and to step up onto my soap box...please start somewhere. H has a retirement plan with his government job and also a side retirement account that he sets up on his own. I have a IRA and a retirement plan through my employer. We both contribute our max % that we can and for each employer this will be different. I then have a another investment account that I started when I was in college. I knew I needed to do something and to begin with all that I could afford was $25/paycheck, but it added up....slowly! We keep enough in our checking accounts for bills/mortgage/ and some spending and then put the bulk into a savings account. Our rationale is, it feels harder and crummier to pull out of that savings once we've already put it in there, rather than slowly dripping out of our checking accounts. It really just makes us think if we really need this or that rather than leaving it in our savings. Our savings we use as a "backup" in case something were to happen, but also for house projects that we every year figure out what we want to fix or fixup on our house and budget for it. We roughly put $1,000/month into savings: $600/month into our retirement plans and then we vary on what we put into our "spare" investment accounts yearly.
The best advice I can give you without knowing specifically your financial situation is go see someone who can and they will offer your best options. If your employer has a retirement plan, contribute to it. Most likely they also contribute to it and it's basically "free" money that they are giving you. If there is no plan....start your own and automatically monthly/weekly/biweekly contribute. It is so easy to start saving now with direct deposit/ACH plans that you don't have to write checks and send it in. It's all done for you. Start with whatever $ amount you can afford. This should be looked at annually to re-evaluate what you can/cannot afford. It's so important to do something.
HTH and if you need any other mind boggeling thoughts....you know where we're at!
H & I each have a 401k and contribute the max which our companies match. I also have an IRA which I contribute a small amount to.
We do not have an emergency fund
We could, however, if we needed to live (rather uncomfortably) on my salary. Now that we've paid off all of our credit card debt (woot!) we're starting to save again, which will ideally go towards a house. We're actually now thinking about purchasing a duplex which we will live in now (or forever) and have a rental income as well. Something we're just tossing around as we won't be purchasing for a while (unless they come back with that $8k first time homebuyers incentive!).
We also have a lot of different insurances through H's work. I know we definitely have life, disability, accidential death/dismemberment, and some others which I can't remember off the top of my head.
Before the wedding we sucked at this. Now we are doing pretty good with everything. Most of what MIL left has has been put into savings. We don't have a retirement fund or anything but if something major were to happen we would have enough money to cover us for a couple of months.
We also have multiple accounts most of them are savings that are used for all different things. Like we have a big savings for any major things and then a small one for trips/fun things. And then we have an account for H's truck and as we make payments on that we get the money back since he got a loan against his own money to help him build credit (I don't truely understand it.)
Anyways we only technically put money into 1 account which is when we do H's truck payments and then we always put more into it than what is owed for the month currently it says our next payment is not until April of 2015. His truck will be paid off soon and then we will continue to put that money into that account. We do use a credit union if that makes a difference and each month our checking account draws interest as well as all our savings.
I think all these ladies have great advice. I think savings is a great thing to have BUT it still needs to be within your limits. Some months are tighter with money than other months so for us we like using H's truck payments as our way to decide the amount we put up.
One piece of advice that has stuck with me through the years when it comes to savings is to always pay yourself first. Even if it's only a couple dollars a month, it's so very important to put something aside. The thought process is that you get more bang for your buck if you start investing now, rather than wait until that magical day when you have no debt left.
That said, H and I are extremely lucky in our financial situation. Our plan, once kids are involved, is for me to stay home with them until they are in school. H runs his father's company (his father is in NC, retired) so I will most likely end up keeping their books, doing payroll, something like that, part-time. We are preparing for that day by living on his income, for the most part. We used my income to pay off any credit card debt I had, so all we have left is my car payment and the mortgage, but they are both small enough interest rates, it makes more sense for us to make monthly payments, and put that extra money into savings instead. I'm trying to max out my 401k (to the IRS max, not just my company's match max), and his (small) company just implemented their 401k, so now he's also contributing.
Definitely find out what the 401k match policy is, and contribute to max out the match, at the very least.
The goal is to save us as much as we can while we have 2 incomes, and also get used to living on one so it won't be such a drastic adjustement. Obviously, three mouths intead of two (not to mention everything else a baby needs!) will be an adjustment, but at least this way we won't be adjusting to both at the same time.
In addition, H has an IRA, and a life insurance policy. I have a life insurance policy funded by my work, so as long as I'm working, there's that.
Here's hoping our planning will actually help us out someday
After 2 years of TTC, lots of tests, and a Hysteroscopy/Laparoscopy to remove several polyps,
Clomid/IUI #1 3/14: cancelled due to surprise BFP 3/8/14.
Beta 1 3/11: 398 Beta 2 3/13: 728 Beta 3 3/20: 11,482
Surprise BFP turns into Surprise Twins!
Zoey and Garrett born 10/24/14 at 36+3
We should have all three of the formentioned (emerg, savings, retirement)
BUT, we don't. Its been a difficult fall finantially and savings that we did have have been used ( SO I supposed we did have an emerg fund...we just hit an emerg and drained it).
Right now we are mostly concerned about getting our credit cards paid down. Once those are both paid off, then we plan on starting 2 seperate savings accounts, one for savings/emergencies until theres something we feel we actually need to save specifically to, and one for the suite, so that a percentage of every months rent can be set aside in case we need to do repairs etc down there, so it doesn't come out of our money....but right now the whole suite is on a line of credit, so that percentage plus a lot more, right now is going to the line of credit until it is paid off.
Living in canada a basic pension is deducted off our paychecks, while not much, at least I know I know SOMETHING is being set aside.
We hope to in a year from now (once I have had stable work for more then a month or so, and the suite starts being a positive not just paying itself off) really sit down and start working these things out, but we have said come January we will start putting something in savings, because I worry a lot about what happens when my contract ends in march....I want to have at least a little bit set aside.
My Blog:Through My Eyes