Author Topic: New with lots of questions (Update - climbing out of poverty)  (Read 17749 times)

mommymustachian

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Hi all. I've been lurking on MMM and have learned so much over the past 5 months. I started off in horrible financial shape but have finally paid off all my debts but I have a long way to go before I reach the badassity of you vets.

BACKGROUND:

26 years old
Married (might not be for much longer...that's a different story though)
Two kids under two
Working full time
Salary: roughly 65 - 70k per yr (varies with commissions)
Debts: 0
Assests: only about 700 in 401k (with company match, 100% up to 4% of salary)
EF 1300
Stocks + bonds 100

Monthly expenses:
Rent 2300 (live in HCOL city)
Bills 300
Travel 120
Groceries 200

I'm only including the expenses that I am responsible for. Should husband and I decide to split we will split all costs down the middle (works out well for me, I'd be paying just 2k a month).

I am way behind where I'd like to be thanks to DH's irresponsible spending but I am catching up.

Any advice is very welcome. Ideally i'd like to be in a position to buy a home and car as soon as possible. Id also like to start a college fund for my babies.
« Last Edit: May 01, 2019, 03:48:10 PM by mommymustachian »

Cheddar Stacker

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Re: New with lots of questions
« Reply #1 on: May 11, 2015, 10:34:21 PM »
So what are your questions?

26 Y/O with no debts is not a bad place to be financially.

I have a question for you. Do you have to pay for daycare, and if you split will that, rent, or any other expenses increase?

Without more guidance as to what you're looking for, I'd suggest:

1) Contribute 4% to your 401k for now to get the match.
2) Ignore the college fund for now. Take care of yourself first.
3) Look for a higher paying job and/or a lower cost apartment to increase savings.
4) Build a slightly bigger efund if you split since you would only have 1 income.
5) Find some cheap term-life insurance to make sure the kids will be taken care of if....
6) Once you're comfortable, increase 401k plan contributions as much as possible. Get familiar with the saver's credit and earned income credit. If you file your taxes as head of household, max a 401k and T.IRA you might have a shot at both. If you will really only spend $2k/month ($24k/yr) you should have no problem deferring the $23,500 into those 2 accounts.

mommymustachian

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Re: New with lots of questions
« Reply #2 on: May 12, 2015, 04:28:38 PM »
Thanks for your response. That's exactly the kind of advice I am looking for.

I currently contribute 6% towards 401k. Husband pays daycare for now but I will be proposing we split all expenses which means overall my expenses reduce to 2k. I currently contribute more than my fair share to household costs.


RexualChocolate

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Re: New with lots of questions
« Reply #3 on: May 12, 2015, 04:43:54 PM »
Your budget will be in a lot of turmoil until you know what you'll be getting for spousal support and child care post divorce. Do not exclude the possibility that if he makes significantly less than you, you could be paying him.

Any assets/contributions you make now will be split down the middle, so I wouldn't start ratcheting up the saving yet. You can dodge some of this by prepaying expenses like daycare, but too much of this means you can get in trouble.

Is 2300 dollars only part of the rent or all of it?

Without knowing his income we only get part of the picture.

Big picture takeaways:
1. Buying a house is not a beneficial financial decision (and often a devastating one) unless you are going to stay in the exact same house for 7 years. Essentially no one should be buying a house before 5 years in a career.

2. Ditch the college fund for now. You must make yourself financially secure before trying to pay for extravagant schooling. Not having to support you in old age > a reasonable amount of student debt

mommymustachian

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Re: New with lots of questions
« Reply #4 on: May 13, 2015, 03:36:18 PM »
Thanks for your input.

2300 is the entire rent. Husband pays entire daycare at present (1260 for two babies). Even if we separate we stay in the same home until at least Feb 2016.

His income is variable but should amount to 50k gross this year.

If we do separate it would be amicable. Nothing acrimonious. It's not in our interests to cause the kids any upheaval. We simply have differences in goals, financial and otherwise. So I don't anticipate paying alimony or receiving it.

Jeremy E.

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Re: New with lots of questions
« Reply #5 on: May 14, 2015, 10:37:12 AM »
I agree that you should definitely at least contribute enough to your 401k to get your match from your company.
In most HCOL areas, they have great transportation systems that make it easy to get by without a car, but if you really think you need one, you can start saving up for one. There are online savings accounts that give you pretty good interest, around .8% is pretty common, I would start one of these if you want to start saving for a car, It shouldn't take long to save up for something like a 5-10 year old Toyota Corolla or Honda Fit.
It sounds like it's probably not the best time for you to buy a house, I'd way for everything to settle, then do the math
http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/
and decide if you really want to buy a house. I agree you probably want to live there for a minimum of 7 years to not lose money on closing costs etc.
If you do decide to buy a house, I would recommend opening up a Vanguard account to start your saving, keeping the money in a bond fund(I like the vanguard long term bond index VBLTX). Once you have enough to put 20% down on a house you can go find a good one and buy it. I'm not an expert on buying houses, but I hear the good deals are gone within a day, so when you start looking you want to check everyday, and when you see something you like, look at it THAT DAY, and if you are SURE you want it, then make an offer. But like I said I'm no expert, so talk to someone who is more real estate savvy
After taking care of these things, I would start maxing your 401k and traditional IRA and if you are able to save more than this, put the rest into a vanguard trade account. I would put this money into index funds, either Total Stock market index funds or S&P 500 index funds, preferrably through vanguard but that might not be available in your 401k
Rather than start your babies a college fund, you should just save as much money as you can in your own accounts, and when the time comes, you can help them if it works out. If you start saving 60% of your income now, in 16 years when they go to college you will have more than enough to help them out.
Good Luck!

mommymustachian

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Re: New with lots of questions (Update)
« Reply #6 on: June 09, 2015, 01:51:04 PM »
Thanks for all the advice so far guys, you are all so helpful. Glad I found this forum.

Some minor updates. I got a raise and a promotion so income will likely be 70 to 75k now.

I also landed a consulting role that pays 55/hour. Hoping to get at least 10 hours a month.

Should I continue to contribute 5% to my 401k, drop it it 4 just to get the match or increase in light or my raise in income?

Cheddar Stacker

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Re: New with lots of questions (Update)
« Reply #7 on: June 09, 2015, 02:28:26 PM »
If you're meeting all your cash flow needs, covering expenses, kids are taken care of, and you have some extra incoming cash, then yes you would likely be best served by increasing your 401K contributions as much as possible to reduce your tax burden.

thedayisbrave

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Re: New with lots of questions (Update)
« Reply #8 on: June 09, 2015, 04:08:18 PM »
How are things going with the hubby?

Not trying to be nosy... mainly asking because I personally would feel uncomfortable having so little cash in an E-Fund with two babies and a potential separation/divorce looming.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #9 on: June 09, 2015, 04:45:19 PM »
Thedayisbrave, things are still looking like they are heading toward divorce. I actually took off my rings yesterday... considering selling them and putting the money in my EF.

EF is currently about 3k. Building it up slowly but surely.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #10 on: June 09, 2015, 04:56:29 PM »
Updated finances

Debts:0
401k: 1080
Betterment: 190 (90% stocks, 10% bonds)
EF: 3000

Expecting a moderate bonus at the end of the month which I'll put in EF. All consulting income will go toward EF as well once I figure out how much to withhold for taxes.

Expenses are still the same for now.

snuggler

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Re: New with lots of questions (Update)
« Reply #11 on: June 10, 2015, 08:54:07 AM »
Wow- looking good! I'm impressed with the new e-fund and improved 401k. Keep it up!

MustacheNY

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Re: New with lots of questions (Update)
« Reply #12 on: June 10, 2015, 10:29:31 AM »
Keep in mind that at somepoint soon you will be living separately.  Split expenses will also have to include a second apartment in a high cost of living area for the ex.  And, since you are making more than him, there is no guarantee you will receive child support.  Even if he does have to pay child support, it will be very little relative to your overall expenses.  Even if you downgraded your apartment a bit on your own to $2000, you will still have to cover all of your household expenses for you and the kids yourself, and these would only be offset by what your ex will pay.  So even if you keep your expenses under $3000 and receive a full $1000-$1500 from him (I would doubt courts would have him pay more given his lower salary), if you add the cost of daycare of at least $500 a month/kid, possibly a lot more or in a HCOL area, and you are looking at having expenses that will be closer to $3,000/month on the low side.

Also, keep in mind now that no matter how amicable things are right now with the separation and divorce, things can turn into an absolute ugly drawn out ugly war with no winners other than the attorneys.  And this sudden transformation from being amicable to being at war can happen in an instant.  So I hope for your sake that it will stay amicable, but when emotions of a divorce combine with the financial aspects of a divorce, the intentions to do the best for the kids can go out the window pretty quickly.

Also, with a 70-75K income, and your expenses as low as they are, you should be contributing even more to your 401K.
« Last Edit: June 10, 2015, 10:32:49 AM by MustacheNY »

formerlydivorcedmom

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Re: New with lots of questions (Update)
« Reply #13 on: June 10, 2015, 01:43:15 PM »
I don't think now is the right time to be thinking about a house.

I bought a house the month after my divorce was final - I had two kids, the oldest was about to start kindergarten, and I wanted to be settled.  That was one of the dumbest decisions I've made.

1.  The down payment ate up most of my available cash.  I was a single mom with kids who got sick and a car that needed repairs and a house that needed repairs.  Cash was useful.
2.  Two months after I bought the house, my xH moved an hour away.  I had assumed he'd been staying in the area where I purchased the house.  My kids were now pretty far from their dad, which meant they spent a lot of time in the car.
3.  In the weirdest twist of fate ever, I met my future husband the week that I closed on the house.  He lived an hour away (ironically, very close to my xH's new home).  We didn't start dating for a few months after that.

After I remarried, we decided to move closer to H's job, closer to his daughter's mother, closer to my kids' dad.  I lived in that house for only two years, which meant I lost money.

You don't know what the future is going to bring for you.  For now, work to get settled into a new life and look for what you will want when you are a single mom...not necessarily what you want now.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #14 on: June 10, 2015, 09:34:39 PM »
Thanks for the feedback, everyone. I will increase my 401k contributions once my raise come through (6/26/15).

Formerlydivorcedmom, thanks for sharing your story with me. I'm glad things have worked out well for you and your kids. Congrats on your upcoming nuptials, wishing you all thr best!

I agree with you all that the plans to buy a house need to be put aside for the forseeable future.

Husband and I are supposed to be sitting down to discuss finances tomorrow evening. I'll update here if there's anything worth sharing!

mommymustachian

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Re: New with lots of questions (Update)
« Reply #15 on: June 17, 2015, 01:46:33 PM »
Just updating for my own record keeping/progress tracking.


Debts:0
401k: 1300
Betterment: 240 (90% stocks, 10% bonds)
EF: 4060

I need to figure out how much to set aside from consulting income for taxes (I charge $50/hr) and where to park that money until tax time.

Jeremy E.

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Re: New with lots of questions (Update)
« Reply #16 on: June 17, 2015, 02:15:49 PM »
Just updating for my own record keeping/progress tracking.


Debts:0
401k: 1300
Betterment: 240 (90% stocks, 10% bonds)
EF: 4060

I need to figure out how much to set aside from consulting income for taxes (I charge $50/hr) and where to park that money until tax time.
If I were you, I would max my 401k rather than put money into Betterment, unless you plan on taking out that money during your working career.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #17 on: June 17, 2015, 02:24:16 PM »
Thanks Jeremy. I plan on using the money to purchase a house/car/maybe get a Ph.D somewhere down the line. I'm currently depositing just $100/month to my betterment account so it's not a huge chunk. Just need the liquidity.

Jeremy E.

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Re: New with lots of questions (Update)
« Reply #18 on: June 17, 2015, 02:42:58 PM »
Thanks Jeremy. I plan on using the money to purchase a house/car/maybe get a Ph.D somewhere down the line. I'm currently depositing just $100/month to my betterment account so it's not a huge chunk. Just need the liquidity.
That is a good place for it then, just try not to sell a large amount during a stock market crash if you can avoid it. Also for your other question, you'll be taxed on your additional consulting income at a rate of 25% based on your 65-70k/year income (assuming that you aren't filing jointly). So if you put $12.50/ consulting hr aside you should be set, it'll come from your taxes so if you normally get a significant amount back you might just get less back. I would just put a little extra money into your betterment account and you can withdraw it from there or your efund if you need to pay come tax time.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #19 on: June 17, 2015, 03:03:02 PM »
Thanks Jeremy. I plan on using the money to purchase a house/car/maybe get a Ph.D somewhere down the line. I'm currently depositing just $100/month to my betterment account so it's not a huge chunk. Just need the liquidity.
That is a good place for it then, just try not to sell a large amount during a stock market crash if you can avoid it. Also for your other question, you'll be taxed on your additional consulting income at a rate of 25% based on your 65-70k/year income (assuming that you aren't filing jointly). So if you put $12.50/ consulting hr aside you should be set, it'll come from your taxes so if you normally get a significant amount back you might just get less back. I would just put a little extra money into your betterment account and you can withdraw it from there or your efund if you need to pay come tax time.

Thank you, that's very helpful.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #20 on: December 30, 2015, 06:32:17 PM »
It's been a while since I updated this thread. Doing so more for my own personal record keeping than anything else.

I received a 10k raise as well as a 6k end of year bonus. Was able to invest 3k into the market and 4.2k into my 401k. So I am ending 2015 on a high note but still have a very long way to go.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #21 on: December 30, 2015, 06:57:10 PM »

Debts:0
401k: 4200
Betterment: 2680
EF: 6000

pompera_firpa

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Re: New with lots of questions (Update)
« Reply #22 on: December 31, 2015, 09:18:04 AM »
Proud of you! This is awesome work you're doing.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #23 on: January 02, 2016, 03:23:35 PM »
Proud of you! This is awesome work you're doing.

Thanks so much. Finding this community has honestly changed my life. I'm excited to see my stache grow.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #24 on: February 16, 2016, 10:57:56 AM »
Another update, stats are as follows:
Debts:0
401k: 5000
Betterment: 3200
EF: 5000 (Had to withdraw to pay for an expected big ticket item I had planned for)

I'm now thinking of diversifYing my investments. I currently contribute 4% to get employer match for 401k, and $500/month to Betterment. As well as divering $500/month to boost my EF.

Would it be a good idea to begin investing in Lending Club given the very poor returns the stock market has to offer for the forseeable future? Of course, I will continue investing as I'm getting stocks at rock bottom prices and it would be very silly to stop while I'm still in wealth accumulation phase. However, given the relatively short term goal of buying a house/car/getting a PhD it would be nice to see some quick gains.

Any thoughts or suggestions would be much appreciated.

2Birds1Stone

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Re: New with lots of questions (Update)
« Reply #25 on: February 16, 2016, 11:54:13 AM »
At your tax bracket I would dump more into the 401k.

Tax advantaged space should be maxed if possible.

ShoulderThingThatGoesUp

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Re: New with lots of questions (Update)
« Reply #26 on: February 16, 2016, 12:24:21 PM »
given the very poor returns the stock market has to offer for the forseeable future?

If anybody here was able to make predictions like that we would be too busy rolling around in piles of hundreds to post on this forum.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #27 on: February 16, 2016, 01:59:51 PM »
given the very poor returns the stock market has to offer for the forseeable future?

If anybody here was able to make predictions like that we would be too busy rolling around in piles of hundreds to post on this forum.

Haha, yes I guess so. What I'm trying to say is I want to park money in a vehicle that has more of a guarantee of short term profits and see that in Lending Club.

snuggler

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Re: New with lots of questions (Update)
« Reply #28 on: February 16, 2016, 03:48:43 PM »
I'd stick with 401K and stocks now, until you have a bigger portfolio. Remember that the best way to diversity your investment, especially when you have a small portfolio, is actually what you are already doing: investing in mutual funds that give you ownership in many different companies.

Also wanted to point out that most PhD programs do not cost money. Usually you study and work in exchange for a small stipend.

Jeremy E.

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Re: New with lots of questions (Update)
« Reply #29 on: February 16, 2016, 04:06:34 PM »
If you want to do short term investments, maybe check out this article,
http://www.mrmoneymustache.com/2011/06/07/where-should-i-invest-my-short-term-stash/

MMM also has lots of articles on lending club, and I think I remember that the returns are getting worse and worse, but I haven't researched it enough to comment on whether it would make a good short term investment or not.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #30 on: February 16, 2016, 06:20:53 PM »
Thanks for the advice guys. I will take your advice and stick to what I'm doing. I will be receiving a 10k bonus this year, unless my performance at work sucks and plan on dumping it straight into my 401k.

I'm in medicine (an MD in a related but non-clinical role currently) and there's no way I would be able to live and support two kids on the stipend that I would receive in the field I would be getting my PhD in. So if I go that route I will need a big stash to survive on until I return to the business world.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #31 on: June 05, 2016, 01:36:36 PM »
Just another update as it's been a while.

My income increased to $87,500 due to another promotion. I moved into my own place and rented out a spare room to my cousin slashing my monthly rent to $1535. Moved the kids to a cheaper daycare cutting that monthly cost to $400. My commute is shorter by about 30 mins each way.
My current 401k balance is $7.5k and I'm slowly replenishing my savings accounts following the expenses of moving/attorney fees for the divorce.
Overall I am so pleased with where I'm at. I left a toxic relationship and can see myself one day being financially independent even as a single mother.

Cannot Wait!

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Re: New with lots of questions (Update)
« Reply #32 on: June 05, 2016, 05:00:54 PM »
And so... is it still amicable?

mommymustachian

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Re: New with lots of questions (Update)
« Reply #33 on: June 10, 2016, 08:09:55 AM »
Congratulations on all these positive changes -- you are rockin' it!

There are several amazing women who have been through or are going through divorce with kids who are posting over on the journal section of the forums -- you might find lots of great support/suggestions over there about how to navigate this stuff. 

Also, think long and hard about the cost/benefit of pursuing the Ph.D.  Since you already have an MD it doesn't seem like the most cost-effective choice.  I'm glad I got mine, and did it without debt, but I was young and single and very frugal -- if I were making the decision now I wouldn't do it unless I had full (generous) funding.

Thanks, Ilhamo! I will definitely check out the journal section.

Regarding the PhD, I changed my mind and opted for an MPH instead. Between tuition assistance from my employer and two scholarships I should graduate debt free.

thedayisbrave

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Re: New with lots of questions (Update)
« Reply #34 on: June 10, 2016, 09:17:46 AM »
Congratulations on all these positive changes -- you are rockin' it!

There are several amazing women who have been through or are going through divorce with kids who are posting over on the journal section of the forums -- you might find lots of great support/suggestions over there about how to navigate this stuff. 

Also, think long and hard about the cost/benefit of pursuing the Ph.D.  Since you already have an MD it doesn't seem like the most cost-effective choice.  I'm glad I got mine, and did it without debt, but I was young and single and very frugal -- if I were making the decision now I wouldn't do it unless I had full (generous) funding.

Thanks, Ilhamo! I will definitely check out the journal section.

Regarding the PhD, I changed my mind and opted for an MPH instead. Between tuition assistance from my employer and two scholarships I should graduate debt free.

So happy things are going well for you.  Keep rocking it!

carlo319

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Re: New with lots of questions (Update)
« Reply #35 on: June 12, 2016, 09:06:09 AM »
I am a father of 2 kids aged 7 and 11.  In major financial decisions, whether to spend (buy something) or to invest, always keep in mind that our children needs our time more while they are young.  As they grow older (up to a certain point) they will need less time, but more money...

mommymustachian

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Re: New with lots of questions (Update)
« Reply #36 on: February 14, 2018, 10:00:15 PM »
I came here to look back on how far I've come since my first post. A lot has changed.
 
Debts:1,300 (One credit card that I'm using for points - pay off in full every month)
401k: 23,000 (contributing 5% w/ 4% company match)
Roth IRA: 300 (Just opened it!)
Betterment: 9,500
Cryptocurrency:1700 (just for fun)
EF: 10,000

My company partnered with a venture capital firm and I received stock as well as a big raise (87.5k base + 70k bonus). I moved in with my new partner which means my living costs are much lower than they were. Rent in now $1450 for my half and we split all other bills.

By the time I hit 30 in September, I'd like to have 30k in my EF. Whenever I feel like I'm far behind in my financial goals I come here and look at where I was at the beginning of this journey.

2Birds1Stone

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Re: New with lots of questions (Update)
« Reply #37 on: February 15, 2018, 05:00:32 AM »
With an income that high, I will echo my original statement from a few years back, you should be maxing out Tax advantaged space.

You could already have $20k in the Roth and much more in 401k if you prioritize that space.

The Roth Principal you can withdraw in an emergency situation at any time, penalty free. The growth on Roth is tax free forever.

You can still dump $5,500 of your EF in there for 2017 by April 14th I believe, and max it out for 2018 by end of year! If you end up not needing the EF, you will be very glad you took advantage of the tax free growth for life.

Once you have maxed the Roth, I would see if upping the 401k % is possible, even if you bump it by a few % a year it will make a huge impact.

Congratulations, you have come a long way!

ooeei

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Re: New with lots of questions (Update)
« Reply #38 on: February 15, 2018, 06:19:57 AM »
I came here to look back on how far I've come since my first post. A lot has changed.
 
Debts:1,300 (One credit card that I'm using for points - pay off in full every month)
401k: 23,000 (contributing 5% w/ 4% company match)
Roth IRA: 300 (Just opened it!)
Betterment: 9,500
Cryptocurrency:1700 (just for fun)
EF: 10,000

My company partnered with a venture capital firm and I received stock as well as a big raise (87.5k base + 70k bonus). I moved in with my new partner which means my living costs are much lower than they were. Rent in now $1450 for my half and we split all other bills.

By the time I hit 30 in September, I'd like to have 30k in my EF. Whenever I feel like I'm far behind in my financial goals I come here and look at where I was at the beginning of this journey.

Quite the turnaround, seems like you're in good shape.

With that being said, $1700 in crypto seems like a lot for the assets you have, especially when you acknowledge it as "just for fun".  Do you really want to spend $1700 on lottery tickets or slot machines right now?

I'd also echo 2birds1stone's advice and max out the IRA using your EF. You can leave it sitting in cash in the IRA and have it still function as an EF, but in the (likely) event that you don't need it for an emergency it will already be in a tax advantaged space ready to invest.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #39 on: February 15, 2018, 12:24:49 PM »
Thank you, both!

I will use the EF to max out my Roth and will stop contributing to betterment and divert those funds (currently 1k a month) into my 401k. I was just really afraid of not having liquid assets just in case. Due to my ex-husbands reckless spending I am still repairing ny own credit and don't have a credit card with a high balance to cover any disasters. Hence my desire to build a big EF. I am expecting an 8k tax refund this year - where should I park that??

You're totally right about the crypto. It's frivalous but a colleague of mine made a literal fortune as an early investor and I couldn't resist putting in some money (only about $500 - I've tripled my money). I'm well aware it could all disappear tomorrow and definitely prioritize my other investments.

ooeei

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Re: New with lots of questions (Update)
« Reply #40 on: February 16, 2018, 07:25:34 AM »
You're totally right about the crypto. It's frivalous but a colleague of mine made a literal fortune as an early investor and I couldn't resist putting in some money (only about $500 - I've tripled my money). I'm well aware it could all disappear tomorrow and definitely prioritize my other investments.

Why don't you pull out $1000 and let the rest ride then? You guarantee your investment is doubled, and if it does continue to go crazy you'll still get a good chunk of change.

mommymustachian

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Re: New with lots of questions (Update)
« Reply #41 on: February 16, 2018, 09:00:41 AM »
You're totally right about the crypto. It's frivalous but a colleague of mine made a literal fortune as an early investor and I couldn't resist putting in some money (only about $500 - I've tripled my money). I'm well aware it could all disappear tomorrow and definitely prioritize my other investments.

Why don't you pull out $1000 and let the rest ride then? You guarantee your investment is doubled, and if it does continue to go crazy you'll still get a good chunk of change.

Thanks!

mommymustachian

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Re: New with lots of questions (Update)
« Reply #42 on: February 16, 2018, 09:09:23 AM »
Based on the excellent advice here, my plan of action is as follows:

Upped my 401k contribution to 10% and will keep upping it until  I hit max.

Maxing out 2017 and 2018 Roth IRAs using the EF.

I will use my 2017 tax refund of 8k to replace my EF and will keep it in my money market account (1.5% interest rate)

Scheduled discussion with my company to see about raising my base salary since it's been a while.

Halting contributions to Betterment for now until I max 401k.


mommymustachian

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Re: New with lots of questions (Update)
« Reply #43 on: July 20, 2018, 01:26:01 PM »
Based on the excellent advice here, my plan of action is as follows:

Upped my 401k contribution to 10% and will keep upping it until  I hit max.

Maxing out 2017 and 2018 Roth IRAs using the EF.

I will use my 2017 tax refund of 8k to replace my EF and will keep it in my money market account (1.5% interest rate)

Scheduled discussion with my company to see about raising my base salary since it's been a while.

Halting contributions to Betterment for now until I max 401k.

Quick progress update!

I got my salary upped to 109k base and if I hit my targets at work I should get a 70k bonus over the next 6 months (it was previously 70k for the entire year). If I do REALLY well that bonus could be 94k - a long shot though.

I just received a 51k bonus for my Q2 performance which was 28.8k post tax. Some of that will go towards maxing my Roth IRA. Still deciding what to do with the rest.

I did spend some of it on an amazing vacation for my kids and partner. I feel so so blessed to be able to do so. When I first started this thread I was in no position to spend money on a trip. I was living paycheck to paycheck and felt really uncertain of my financial future. Home ownerahip and FIRE look so attainable to me now.

terran

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Re: New with lots of questions (Update)
« Reply #44 on: July 20, 2018, 01:38:28 PM »
Wow, you're killing it on the income front from where you were just 3 years ago! How are you balances doing?

You don't have to answer, I'm just being nosey, what kind of job do you have that you've been able to increase salary so much in such a short time? I skimmed your other posts in the thread and didn't catch it if you already posted.

CNM

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Re: New with lots of questions (Update)
« Reply #45 on: July 20, 2018, 01:43:15 PM »
What a great turnaround! Kudos!

mommymustachian

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Re: New with lots of questions (Update)
« Reply #46 on: July 20, 2018, 03:27:12 PM »
Wow, you're killing it on the income front from where you were just 3 years ago! How are you balances doing?

You don't have to answer, I'm just being nosey, what kind of job do you have that you've been able to increase salary so much in such a short time? I skimmed your other posts in the thread and didn't catch it if you already posted.

Thank you!

Debt: 0, I use my credit cards for everything to get max cashback and pay off balances in full
401k: 29k (contributing 10% with 4% match)
EF: 15k (in money market account earning 1.6% interest)
Betterment: 9.5k (stopped contributing when I upped my 401k but starting to put 500/month again as of this week)
Cash: 25k - will put 5k in my Roth


My line of work is so unique that I can't be too specific. I am a medical doctor but now work for a start up that just got a venture capital firm investment. I started when the company was just 7 employees and have seen and benefited from the exponential growth.
« Last Edit: July 21, 2018, 09:24:02 AM by mommymustachian »

mommymustachian

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Re: New with lots of questions (Update)
« Reply #47 on: November 17, 2018, 11:15:00 AM »
5 months since my last update and I'm reaching some great milestones.

My net worth is finally over $100k. My total earned income by end of year will be at least $215k, potentially a lot more based on performance this month and next. I'm being recruited by a firm that could lead to a substantial raise.

My credit score is 745 -750 depending on the scoring method (it was abysmal when i first posted thanks to ex-husband).

I know I still have a long way to go but it feel like financial independence is so attainable now.
« Last Edit: November 17, 2018, 11:17:38 AM by mommymustachian »

mommymustachian

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Re: New with lots of questions (Update)
« Reply #48 on: November 18, 2018, 07:22:56 AM »
Thank you! I will definitely check out his journal.

FIRE 20/20

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Re: New with lots of questions (Update)
« Reply #49 on: November 18, 2018, 07:45:50 AM »
5 months since my last update and I'm reaching some great milestones.

My net worth is finally over $100k. My total earned income by end of year will be at least $215k, potentially a lot more based on performance this month and next. I'm being recruited by a firm that could lead to a substantial raise.

My credit score is 745 -750 depending on the scoring method (it was abysmal when i first posted thanks to ex-husband).

I know I still have a long way to go but it feel like financial independence is so attainable now.

I'm incredibly impressed by what you've accomplished.  Thank you for posting - this thread is so inspirational!  My only suggestion is one that it appears you're already taking, but it's so important I'll mention it anyway.  As your income increases don't forget to flex your frugality muscles!  If you can keep your expenses anywhere close to where they were when you were making $70k then you will be able to put away so much with your high income that you'll be FI - maybe not FIRE, but with many years of expenses saved up - when your kids are entering and progressing through the pre-teen and teenage years.  Having either you or a potential partner make work decisions based on what's best for the kids rather than what you need to do to keep paying rising expenses can make those challenges easier to deal with.  But it all is predicated upon keeping your costs reasonable.  Even just 5 years of saving $100k each year - which at your income should be possible - will have you well on your way to two comma status.  I found that approaching and reaching that point really opened up my mind to options at work that dramatically improved my work/life balance and it didn't cost me a penny.  You're well on your way to that freedom.