Author Topic: Help me edit my budget! Am I on the right track?  (Read 1805 times)

VanteBoll

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Help me edit my budget! Am I on the right track?
« on: May 17, 2018, 05:33:56 PM »
Hello my money conscious freedom inspired people!

I feel like I am on the right track but I want to post my monthly expenses/savings budget on here and get some insight from people who have been where I am and who are where I want to be. If you were in my shoes, with the knowledge you have now... what would do you do? I am 25, no dependents, and minimal debt (credit cards that I pay off every month, and my mortgage).


To explain some of whats going on in the budget screenshot. The label of "Vanguard Invst" and "Opportunity Act" are going toward my saving up to $3,000 to invest in a Vanguard Index Fund. Afterwards The "Vanguard Invst" will go straight to the Index Fund and the "Opportunity Act" will be stacking up in a regular checking account.

Lastly, the "Real Estate Act" is for raising capital to go toward real estate investing and it will be in a regular checking account. The "Opportunity Invst Act" is going toward a Netlife investment account earning 4% return versus a regular checking/savings account also for real estate endeavors or other opportunities that arise.

MonkeyJenga

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Re: Help me edit my budget! Am I on the right track?
« Reply #1 on: May 17, 2018, 06:03:46 PM »
It's great that you're thinking about this already at 25. I would go hard and cut everything that's unnecessary, even if only temporarily to see how you handle it. The earlier you can save a dollar, the more time it has to grow. Look at your spending triggers and rework your daily routine to avoid them.

Phone, groceries, gas, haircut, clothes, and misc all seem high. I would also look into cheaper gyms or a home gym option. There are threads on here about cutting your own hair, finding cheaper cell plans, eating less expensively, basically all of it has been done by someone. Not sure if the housing cost is reasonable for your area, but I would examine that, too.

Good luck!

VanteBoll

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Re: Help me edit my budget! Am I on the right track?
« Reply #2 on: May 17, 2018, 06:09:16 PM »
It's great that you're thinking about this already at 25. I would go hard and cut everything that's unnecessary, even if only temporarily to see how you handle it. The earlier you can save a dollar, the more time it has to grow. Look at your spending triggers and rework your daily routine to avoid them.

Phone, groceries, gas, haircut, clothes, and misc all seem high. I would also look into cheaper gyms or a home gym option. There are threads on here about cutting your own hair, finding cheaper cell plans, eating less expensively, basically all of it has been done by someone. Not sure if the housing cost is reasonable for your area, but I would examine that, too.

Good luck!

Thank you for you input! You saying I should cut down on my more "chosen" expenses is something my gut has been telling me. I need to find my comfort zone and find muster up more discipline.

I am PATIENTLY waiting for the gym membership to expire.. Gold's Gym contract is like a cult or something, they do not let go easily. Thank you again!

xpauliber

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Re: Help me edit my budget! Am I on the right track?
« Reply #3 on: May 17, 2018, 07:42:47 PM »
Are one of those accounts earmarked for capital purchases that you know you're going to have to make in the future but not exactly sure when?  For instance, I know I'm going to have about $40,000 in capital purchases that I'm going to be making over the next 10 years.  I've divided $40,000/120 and put around $350 into my capital purchases account (which I have with an online money market account earning 1.75% interest) and when enough money has been built up to pay cash for the item I'm planning for, I move the cash and make the purchase.  My emergency fund is also in the money market account earning interest so it helps to build my capital account a bit faster.

Alf91

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Re: Help me edit my budget! Am I on the right track?
« Reply #4 on: May 17, 2018, 07:50:32 PM »
Nice work - you're saving a hefty chunk!

Phone: seems high! I pay 30/mth.

Gas: assuming the vehicle is paid off as there's no budget line for that? are you using it to commute? more details please!

Groceries: high! I pay half that for two people.

Haircut/clothes: quite high again! 250/m for clothes?? How many clothes do you need! Haircuts can be found for 20.

VanteBoll

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Re: Help me edit my budget! Am I on the right track?
« Reply #5 on: May 17, 2018, 10:15:02 PM »
Nice work - you're saving a hefty chunk!

Phone: seems high! I pay 30/mth.

Gas: assuming the vehicle is paid off as there's no budget line for that? are you using it to commute? more details please!

Groceries: high! I pay half that for two people.

Haircut/clothes: quite high again! 250/m for clothes?? How many clothes do you need! Haircuts can be found for 20.

I appreciate you and the motivation!

Phone: I've yet to look into that.. I'm sure I'm playing loosely there.

Gas: Vehicle is paid off, and yes I'm using it to commute

Groceries: Really?! Well, right after posting this I cut it down by 100$. Always for improvement honestly so I will try and edge my way to more savings on that as well.

Haircut/Clothes: Haha well since I've began this journey I haven't really treated myself in the manner of a wardrobe and want to for a short period. A cheaper haircut can always be found for less but I've had some bad haircuts for 20, even 25. Plus the barber is a friend so I like to support his business and the quality

Laura33

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Re: Help me edit my budget! Am I on the right track?
« Reply #6 on: May 18, 2018, 07:15:17 AM »
Have you read the investment order?  I am going to quote a big chunk from another thread here, because it is pure gold.

Differences of a few tenths of a percent are not important when applicable for only a few years (in other words, these are guidelines not rules).            
            
Current 10-year Treasury note yield is ~2.5%.  See            
   http://quotes.wsj.com/bond/BX/TMUBMUSD10Y         
            
WHAT            
0. Establish an emergency fund to your satisfaction            
1. Contribute to your 401k up to any company match            
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.            
3. Max HSA             
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level            
5. Max 401k (if 401k fees are lower than available in an IRA, or if you need the 401k deduction to be eligible for a tIRA deduction, swap #4 and #5)            
6. Fund a mega backdoor Roth if applicable.         
7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.            
8. Invest in a taxable account and/or fund a 529 with any extra.            
            
WHY            
0. Give yourself at least enough buffer to avoid worries about bouncing checks            
1. Company match rates are likely the highest percent return you can get on your money            
2. When the guaranteed return is this high, take it.
3. HSA funds are totally tax free when used for medical expenses, making the HSA better than either traditional or Roth IRAs for that purpose.
    At worst, the HSA behaves much the same as a tIRA after age 65.
4. Rule of thumb: traditional if current federal marginal rate is 22% or higher; Roth if 10% or lower, or if MAGI is too high to deduct a traditional IRA; flip a coin otherwise. 
   For those willing to expend a little more energy than it takes to flip a coin, consider comparing current marginal tax saving rate vs. predicted marginal withdrawal tax rate.
      If current > predicted, use traditional.  Otherwise use Roth.
   See Credits can make Traditional better than Roth for lower incomes and other posts in that thread about some exceptions to the rule.
   See Traditional versus Roth - Bogleheads for even more details and exceptions.  State tax (or lack thereof) should also be considered.
   The 'Calculations' tab in the Case Study Spreadsheet can show marginal rates for savings or withdrawals*.
5. See #4 for choice of traditional or Roth for 401k.  In a 401k there are no income-based limits for deductions or contributions.      
6. Applicability depends on the rules for the specific 401k            
7. Again, take the risk-free return if high enough.  Note that embedded in "high enough" is the assumption that your alternative is "all stocks" or a "fund of funds"
   (e.g., target retirement date) that provides a blend of stock and bond returns.  If you wish to consider separate bond funds, compare the yield on a fund
   with a duration similar to the time remaining on the loan, and put your money toward the one with the higher interest/yield.
8. Because taxable earnings will still help your FI journey.  If your own retirement is in good shape, and you choose to provide significant help for children's college costs,
   a 529 plan may be appropriate.  Similar to "put on your own oxygen mask before assisting others," do consider funding your own retirement before funding 529 plans for children's college costs.

Speaking of things to do first, see Getting started - Bogleheads if this is all new.  Working through that post and the links therein is also a good refresher, even if personal finance isn't completely new to you.

The emergency fund is your "no risk" money.  You might consider one of these online banks:            
   http://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001      
               
If your 401k options are poor (i.e., high fund fees) you can check            
   http://forum.mrmoneymustache.com/investor-alley/to-401k-or-not-to-401k-that-is-the-question-43459/         
for some thoughts on "how high is too high?"            
            
Priorities above apply when income is primarily through W-2 earnings.  For those running their own businesses (e.g., rental property owner, small business owner, etc.),            
   putting money into that business might come somewhere before, in parallel with, or after step 5.         
            
Why it is likely better to invest instead of paying a low interest rate mortgage early, if you have a long time until the mortgage is due:            
   http://allfinancialmatters.com/wp-content/uploads/2013/08/SandP500_5-Year_Rolling_Returns_with-CPI_calendar_year.pdf         
   http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html


*Estimating withdrawal tax rates is not an exact science, but here is one approach:
1) Include any guaranteed pension amount that you can't defer in return for higher payments when you do start
2) Take current traditional balance and predict value at retirement (e.g., with Excel's FV function) using a conservative real return, maybe 3% or so.  Take 4% of that value as an annual withdrawal.
3) Take current taxable balance and predict value at retirement (e.g., with Excel's FV function) using a conservative real return, maybe 3% or so.  Take 2% of that value as qualified dividends.
4a) Decide whether SS income should be considered, or whether you will be able to do enough traditional->Roth conversions before taking SS.
4b) Include SS income projections (using today's dollars) if needed from step 4a.
5) Calculate marginal rate using today's tax law on the numbers from step 1-4.
6) Make your traditional vs. Roth decision for this year's contribution
7) Repeat steps 1-6 every year until retirement

The steps above may look complicated at first, but you don't need great precision.  The answer will either be "obvious" or "difficult to choose".  If the latter, it likely won't make much difference which you pick anyway.

Note the possibility of self-defeating predictions:
a) predict high taxable retirement income > contribute to Roth > get low taxable retirement income
b) predict low taxable retirement income > contribute to traditional > get high taxable retirement income

Also, if you pick traditional and that ends up being wrong it will be because you have "too much money" - not the worst problem.
If you pick Roth and that ends up being wrong it will be because you have "too little money" - that can be a real problem.
Thus using traditional is a "safer" choice.

This investment order is really critical, because the money you can put away now will have the biggest impact on your future financial status.  The Rule of 72 says that if you average 7% returns, your money will double every decade.  So if you had $100K now to invest, in 30 years you'd have $800K.  OTOH, if you take that same $100K and wait 10 years to start, you will only have half that amount in 10 years, because you miss an entire doubling.  So start by putting as much in your 401(k) as you can, if you have one, or a tIRA, if you don't -- because the tax-deferred contributions for those accounts means you can sock more away for the same hit to your budget.  And that little bit of "more" now will turn into a lot more later.

Second:  I am not sure your budget includes everything.  Someone else mentioned saving for capital expenses, e.g., a replacement vehicle -- you need that.  But you also need some "oh shit" savings -- for things like a medical bill, a car repair, and other periodic expenses that tend to happen when things go wrong.  And they always go wrong at some point (I just had to replace a brand new tire, because I ran over a wrench literally two months after buying them).

In addition, why is your insurance so high?  Please tell me that's not just car insurance, because if it is, you have way too expensive a vehicle for you right now!

Raenia

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Re: Help me edit my budget! Am I on the right track?
« Reply #7 on: May 18, 2018, 07:37:42 AM »
Is this budget based on actual tracked data from at least several months, or is it an aspirational budget?  As others mentioned, you seem to be missing some categories.

First, the budget:
 - Phone bill is very high for one person, shop around to lower this
 - Grocery is insane!  Does this include eating out, alcohol, or household purchases like toilet paper, paper towels, etc?  Where do you live?  In most of the US, it's not too hard to feed a family of 4 on that amount.  Cut that down by at least half.
 - You don't need a $75 haircut EVERY MONTH.  A haircut that expensive should grow out well and be good for at least 2-3 months, even if you have fast-growing hair.  Better yet, learn to cut your own hair.
 - $3000/yr on clothing is incredibly high.  Shop secondhand, sales, and most importantly, don't buy new things unless they're replacing worn-out pieces you can't wear anymore.

Second, the savings plan:
 - What is the purpose of the "Opportunity Act?"  Is this intended to be your emergency fund, car replacement fund, etc?  Why is it being kept in a checking account rather than a higher interest savings account?
 - What is the difference between the "Real Estate Act" and the "Opportunity Invst Act?"  Why is the "Real Estate Act" being kept in a checking account rather than a savings account?

Personally, it looks like you're trying to do too many things at the same time.  Read the Investment Order that Laura posted.  If you really want to get into Real Estate, set aside a single account to use when the right opportunity comes along.  Once you have a robust emergency fund and are sure your budget includes ALL your spending, I'd divert the "opportunity act" money to Vanguard instead.  This is assuming that your budget is post-401k, or that you don't have access to one.  Otherwise, follow the Investment Order.

VanteBoll

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Re: Help me edit my budget! Am I on the right track?
« Reply #8 on: May 18, 2018, 09:53:43 AM »
Have you read the investment order?  I am going to quote a big chunk from another thread here, because it is pure gold.

Differences of a few tenths of a percent are not important when applicable for only a few years (in other words, these are guidelines not rules).            
            
Current 10-year Treasury note yield is ~2.5%.  See            
   http://quotes.wsj.com/bond/BX/TMUBMUSD10Y         
            
WHAT            
0. Establish an emergency fund to your satisfaction            
1. Contribute to your 401k up to any company match            
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.            
3. Max HSA             
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level            
5. Max 401k (if 401k fees are lower than available in an IRA, or if you need the 401k deduction to be eligible for a tIRA deduction, swap #4 and #5)            
6. Fund a mega backdoor Roth if applicable.         
7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.            
8. Invest in a taxable account and/or fund a 529 with any extra.            
            
WHY            
0. Give yourself at least enough buffer to avoid worries about bouncing checks            
1. Company match rates are likely the highest percent return you can get on your money            
2. When the guaranteed return is this high, take it.
3. HSA funds are totally tax free when used for medical expenses, making the HSA better than either traditional or Roth IRAs for that purpose.
    At worst, the HSA behaves much the same as a tIRA after age 65.
4. Rule of thumb: traditional if current federal marginal rate is 22% or higher; Roth if 10% or lower, or if MAGI is too high to deduct a traditional IRA; flip a coin otherwise. 
   For those willing to expend a little more energy than it takes to flip a coin, consider comparing current marginal tax saving rate vs. predicted marginal withdrawal tax rate.
      If current > predicted, use traditional.  Otherwise use Roth.
   See Credits can make Traditional better than Roth for lower incomes and other posts in that thread about some exceptions to the rule.
   See Traditional versus Roth - Bogleheads for even more details and exceptions.  State tax (or lack thereof) should also be considered.
   The 'Calculations' tab in the Case Study Spreadsheet can show marginal rates for savings or withdrawals*.
5. See #4 for choice of traditional or Roth for 401k.  In a 401k there are no income-based limits for deductions or contributions.      
6. Applicability depends on the rules for the specific 401k            
7. Again, take the risk-free return if high enough.  Note that embedded in "high enough" is the assumption that your alternative is "all stocks" or a "fund of funds"
   (e.g., target retirement date) that provides a blend of stock and bond returns.  If you wish to consider separate bond funds, compare the yield on a fund
   with a duration similar to the time remaining on the loan, and put your money toward the one with the higher interest/yield.
8. Because taxable earnings will still help your FI journey.  If your own retirement is in good shape, and you choose to provide significant help for children's college costs,
   a 529 plan may be appropriate.  Similar to "put on your own oxygen mask before assisting others," do consider funding your own retirement before funding 529 plans for children's college costs.

Speaking of things to do first, see Getting started - Bogleheads if this is all new.  Working through that post and the links therein is also a good refresher, even if personal finance isn't completely new to you.

The emergency fund is your "no risk" money.  You might consider one of these online banks:            
   http://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001      
               
If your 401k options are poor (i.e., high fund fees) you can check            
   http://forum.mrmoneymustache.com/investor-alley/to-401k-or-not-to-401k-that-is-the-question-43459/         
for some thoughts on "how high is too high?"            
            
Priorities above apply when income is primarily through W-2 earnings.  For those running their own businesses (e.g., rental property owner, small business owner, etc.),            
   putting money into that business might come somewhere before, in parallel with, or after step 5.         
            
Why it is likely better to invest instead of paying a low interest rate mortgage early, if you have a long time until the mortgage is due:            
   http://allfinancialmatters.com/wp-content/uploads/2013/08/SandP500_5-Year_Rolling_Returns_with-CPI_calendar_year.pdf         
   http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html


*Estimating withdrawal tax rates is not an exact science, but here is one approach:
1) Include any guaranteed pension amount that you can't defer in return for higher payments when you do start
2) Take current traditional balance and predict value at retirement (e.g., with Excel's FV function) using a conservative real return, maybe 3% or so.  Take 4% of that value as an annual withdrawal.
3) Take current taxable balance and predict value at retirement (e.g., with Excel's FV function) using a conservative real return, maybe 3% or so.  Take 2% of that value as qualified dividends.
4a) Decide whether SS income should be considered, or whether you will be able to do enough traditional->Roth conversions before taking SS.
4b) Include SS income projections (using today's dollars) if needed from step 4a.
5) Calculate marginal rate using today's tax law on the numbers from step 1-4.
6) Make your traditional vs. Roth decision for this year's contribution
7) Repeat steps 1-6 every year until retirement

The steps above may look complicated at first, but you don't need great precision.  The answer will either be "obvious" or "difficult to choose".  If the latter, it likely won't make much difference which you pick anyway.

Note the possibility of self-defeating predictions:
a) predict high taxable retirement income > contribute to Roth > get low taxable retirement income
b) predict low taxable retirement income > contribute to traditional > get high taxable retirement income

Also, if you pick traditional and that ends up being wrong it will be because you have "too much money" - not the worst problem.
If you pick Roth and that ends up being wrong it will be because you have "too little money" - that can be a real problem.
Thus using traditional is a "safer" choice.

This investment order is really critical, because the money you can put away now will have the biggest impact on your future financial status.  The Rule of 72 says that if you average 7% returns, your money will double every decade.  So if you had $100K now to invest, in 30 years you'd have $800K.  OTOH, if you take that same $100K and wait 10 years to start, you will only have half that amount in 10 years, because you miss an entire doubling.  So start by putting as much in your 401(k) as you can, if you have one, or a tIRA, if you don't -- because the tax-deferred contributions for those accounts means you can sock more away for the same hit to your budget.  And that little bit of "more" now will turn into a lot more later.

Second:  I am not sure your budget includes everything.  Someone else mentioned saving for capital expenses, e.g., a replacement vehicle -- you need that.  But you also need some "oh shit" savings -- for things like a medical bill, a car repair, and other periodic expenses that tend to happen when things go wrong.  And they always go wrong at some point (I just had to replace a brand new tire, because I ran over a wrench literally two months after buying them).

In addition, why is your insurance so high?  Please tell me that's not just car insurance, because if it is, you have way too expensive a vehicle for you right now!

Thank you for taking the time to read this over! I would say the Opportunity Act (Checkings) would be my saving for capital expenses. The "oh shit" savings is the Emergency Fund Account that I currently have 8k in.

I have my car insurance through USAA, I have heard they are pretty expensive compared to other companies.

VanteBoll

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Re: Help me edit my budget! Am I on the right track?
« Reply #9 on: May 18, 2018, 10:03:06 AM »
Is this budget based on actual tracked data from at least several months, or is it an aspirational budget?  As others mentioned, you seem to be missing some categories.

First, the budget:
 - Phone bill is very high for one person, shop around to lower this
 - Grocery is insane!  Does this include eating out, alcohol, or household purchases like toilet paper, paper towels, etc?  Where do you live?  In most of the US, it's not too hard to feed a family of 4 on that amount.  Cut that down by at least half.
 - You don't need a $75 haircut EVERY MONTH.  A haircut that expensive should grow out well and be good for at least 2-3 months, even if you have fast-growing hair.  Better yet, learn to cut your own hair.
 - $3000/yr on clothing is incredibly high.  Shop secondhand, sales, and most importantly, don't buy new things unless they're replacing worn-out pieces you can't wear anymore.

Second, the savings plan:
 - What is the purpose of the "Opportunity Act?"  Is this intended to be your emergency fund, car replacement fund, etc?  Why is it being kept in a checking account rather than a higher interest savings account?
 - What is the difference between the "Real Estate Act" and the "Opportunity Invst Act?"  Why is the "Real Estate Act" being kept in a checking account rather than a savings account?

Personally, it looks like you're trying to do too many things at the same time.  Read the Investment Order that Laura posted.  If you really want to get into Real Estate, set aside a single account to use when the right opportunity comes along.  Once you have a robust emergency fund and are sure your budget includes ALL your spending, I'd divert the "opportunity act" money to Vanguard instead.  This is assuming that your budget is post-401k, or that you don't have access to one.  Otherwise, follow the Investment Order.

I am going to cut down on the grocery expense, and it does include toiletries if needed but not eating out or alcohol. I live down in South Texas!

I don't plan on budgeting for clothes the whole year to equal 3k a month. I just want to upgrade the wardrobe a little bit for a little while since I have become debt free as was sacrificing before. Definitely will not be making clothing a habit expense. I feel as though the wealthy DO NOT do that.


The opportunity account is for a car replacement fund and possibly helping with money toward real estate ventures. You are suggesting I change the account into a savings account? Is this a regular savings account or are there other options you suggest?

Okay so the Real Estate Account should not be a checking account either.. I was viewing it as the account that would go toward repairs, holding cost, and other pop up expenses that go along with real estate. Lastly, the Opportunity Invst Account is going toward a CWL Metlife Investment Account earning 4% return. I'm currently working with a financial advisor on all the details of it but my understanding so far is that it is an investment account that invest in custom whole life with real estate and bonds wrapped inside.

Laura33

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Re: Help me edit my budget! Am I on the right track?
« Reply #10 on: May 18, 2018, 10:38:15 AM »
Quote from: VanteBoll link=topic=92206.msg2010686#msg2010686
Lastly, the Opportunity Invst Account is going toward a CWL Metlife Investment Account earning 4% return. I'm currently working with a financial advisor on all the details of it but my understanding so far is that it is an investment account that invest in custom whole life with real estate and bonds wrapped inside.

Oh good lord drop that immediately.  You will be paying massive fees and getting no better performance or security that you could get elsewhere.  Whole life is a complete and utter ripoff; if you need life insurance (which you don't, as you have no dependents), buy a term policy.  If you want to invest in real estate, buy a REIT; if you want bonds, buy a Vanguard bond fund.  I guarantee you will come out better-off in the end.

Raenia

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Re: Help me edit my budget! Am I on the right track?
« Reply #11 on: May 18, 2018, 11:01:07 AM »
Quote from: VanteBoll link=topic=92206.msg2010686#msg2010686
Lastly, the Opportunity Invst Account is going toward a CWL Metlife Investment Account earning 4% return. I'm currently working with a financial advisor on all the details of it but my understanding so far is that it is an investment account that invest in custom whole life with real estate and bonds wrapped inside.

Oh good lord drop that immediately.  You will be paying massive fees and getting no better performance or security that you could get elsewhere.  Whole life is a complete and utter ripoff; if you need life insurance (which you don't, as you have no dependents), buy a term policy.  If you want to invest in real estate, buy a REIT; if you want bonds, buy a Vanguard bond fund.  I guarantee you will come out better-off in the end.

Yikes, agreed!  Now that we know what that is, it's really not a good investment for you.  Direct that money toward Vanguard, and eventually you can pick up an REIT fund and a Total Bond fund in your Vanguard account.

The opportunity account is for a car replacement fund and possibly helping with money toward real estate ventures. You are suggesting I change the account into a savings account? Is this a regular savings account or are there other options you suggest?

Okay so the Real Estate Account should not be a checking account either.. I was viewing it as the account that would go toward repairs, holding cost, and other pop up expenses that go along with real estate.

Yes, I think these should be in savings accounts getting at least a few % interest instead of sitting in a checking account slowly bleeding away to inflation.  Ally bank generally gets the best reviews for high interest savings accounts, and if you need the money it'll be available very quickly.

VanteBoll

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Re: Help me edit my budget! Am I on the right track?
« Reply #12 on: May 18, 2018, 04:07:58 PM »
Quote from: VanteBoll link=topic=92206.msg2010686#msg2010686
Lastly, the Opportunity Invst Account is going toward a CWL Metlife Investment Account earning 4% return. I'm currently working with a financial advisor on all the details of it but my understanding so far is that it is an investment account that invest in custom whole life with real estate and bonds wrapped inside.

Oh good lord drop that immediately.  You will be paying massive fees and getting no better performance or security that you could get elsewhere.  Whole life is a complete and utter ripoff; if you need life insurance (which you don't, as you have no dependents), buy a term policy.  If you want to invest in real estate, buy a REIT; if you want bonds, buy a Vanguard bond fund.  I guarantee you will come out better-off in the end.

Luckily, I haven't opened the account with them yet. I really do appreciate you taking the time to drop some insight on me. It's helping a lot already. Just rearranged my budget for the better. 2019 is looking amazing. I hope for you as well.

VanteBoll

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Re: Help me edit my budget! Am I on the right track?
« Reply #13 on: May 18, 2018, 04:09:05 PM »
Quote from: VanteBoll link=topic=92206.msg2010686#msg2010686
Lastly, the Opportunity Invst Account is going toward a CWL Metlife Investment Account earning 4% return. I'm currently working with a financial advisor on all the details of it but my understanding so far is that it is an investment account that invest in custom whole life with real estate and bonds wrapped inside.

Oh good lord drop that immediately.  You will be paying massive fees and getting no better performance or security that you could get elsewhere.  Whole life is a complete and utter ripoff; if you need life insurance (which you don't, as you have no dependents), buy a term policy.  If you want to invest in real estate, buy a REIT; if you want bonds, buy a Vanguard bond fund.  I guarantee you will come out better-off in the end.

Yikes, agreed!  Now that we know what that is, it's really not a good investment for you.  Direct that money toward Vanguard, and eventually you can pick up an REIT fund and a Total Bond fund in your Vanguard account.

The opportunity account is for a car replacement fund and possibly helping with money toward real estate ventures. You are suggesting I change the account into a savings account? Is this a regular savings account or are there other options you suggest?

Okay so the Real Estate Account should not be a checking account either.. I was viewing it as the account that would go toward repairs, holding cost, and other pop up expenses that go along with real estate.

Yes, I think these should be in savings accounts getting at least a few % interest instead of sitting in a checking account slowly bleeding away to inflation.  Ally bank generally gets the best reviews for high interest savings accounts, and if you need the money it'll be available very quickly.

Understood. I will be making those changes ASAP. Thank you for the tips, it's greatly appreciated!