Money Matters
Dear Community,
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.
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.
Money saving help
I need ideas on how to save money so my boyfriend and I can move out of apartment living and buy a home. We both have credit card debit, but mine is mostly school related.we both have 401ks but I can't take out of mine. It seems like we make enough money but we never seem to have any. What can I do
Re: Money saving help
You need to know where your money is going. Start with how much comes in each month and then look at your expenses - rent, utilities, cars, gas, insurance, etc. Track every penny to see where you spend. Mint.com is helpful but you could start with something as simple as an excel spreadsheet.
And FWIW, you should never consider taking money out of a 401K.
Know what comes in and what goes out (and where).
Read Home Buying for Dummies.
Plan on your housing expenses being between 25-28% of your take home pay and to include a housing payment, home owner's insurance, property taxes, and utilities. Anything more expensive that this means you are buying too much house for your budget.
Ditto PP on not taking money from a 401(k). Due to the power of compounding interest and that the tendency of long-term investments, like retirement ones, is to increase over time, taking money out early vastly reduces the amount that that money can grow.
Your housing costs for a down payment, etc. should come from other savings.
Lastly, I will add that many/most regular MMers here don't advise buying a home with a person unless you are legally bound to them in marriage already. Or will be soon. The financial and legal ramifications couples face for buying without any sort of legal recourse between the two of them (that comes from marriage) if they split up can be pretty severe. If something went south in your relationship you have no legal protection as someone's girlfriend, but you would as someone's wife.
Ditto PP- make a budget and stick to it. I use Mint to track all my spending to see where all the money is going. Then sit down with your bf to create a budget and see what you could cut back on. While you create a budget, make savings goals as well. For example- say you want $30k for a downpayment. Give yourself a time frame, maybe 5 years, and work out how much that would be monthly. In this case, it's $500/month. Treat this like a bill and pay it to your savings every month. I've tried the other method (seeing how much left I have at the end of the month and putting that into savings), but there never seems to be as much as expected.
Also, I would aim to pay off, or at least down, your credit cards. When applying for a loan, your debt to credit and debt to income ratios are considered.
Don't take out of your 401k even to buy a house.
As you track your spending & we mean all of it -- every coffee, every drink after work, the afternoon snack you get out of the vending machine at work -- you will see the leaks in your budget.
Look at what you can do more cheaply:
Good luck.