Hi I’m new to the forum after discovering MMM a couple weeks ago. I’d like some advice on whether I’m investing intelligently and where I should be focusing on putting my money. Some background is I’m 30 years old and intrigued by FIRE but it’s all pretty new to me so I’m trying to learn as much as possible.
Life Situation
Single tax filer, no dependents but my girlfriend has a 10 yr old daughter that lives with us half of the time.
We keep our finances separate, so everything below is just for me.
Gross Salary/Wages: $47,756
Individual amounts of each Pre-tax deductions: monthly
Federal Income Tax Withholding 172.68
Kansas Income Tax Withholding 79.71
Medicare EE 28.30
Social Security EE 121.00
BASE HEALTH/RX EE - PT 37.41
DENTAL EE - PT 1.71
KPERS (KS state retirement fund) 119.39
Other Ordinary Income: Just small amounts from bank/savings account interest, credit card cash back, and occasional overtime
Qualified Dividends & Long Term Capital Gains: N/A not sure
Rental Income, Actual Expenses, and Depreciation: N/A
Adjusted Gross Income: 3,419.46/month, 41,033.60/yr.
Taxes: see above on deductions
Current expenses: (monthly) I split several things with my girlfriend. Only my portion is listed.
Rent $390
Home/Rent Insurance $10
Bicycle Maintenance $3
Car Insurance $48
Car Maintenance,Reg. etc $57
Christmas/Holidays $30
Clothing/Shoes $30
Dentist $12
Dining (Lunch/Dinner/Etc.) $160
Electricity $84
Entertainment $45
Fuel/Public Transport $150
Gas/Oil for heating $35
Groceries $150
Household; Maintenance $12
Internet $15
Medical (Doctor etc.) $10
Medicine (OTC + Prescription) $13
Miscellaneous $100 (Amazon/Walmart junk purchases mostly)
Personal Care $11
Pets $32
Phone (cell) $27.83
Travel/Vacation $220
Water/Sewer $32
Wine/Beer/Tobacco $22
Total $1698 / month
Assets:
- Roth IRA through Vanguard: $2100 (VGSTX - STAR fund) (another ~ $4500 is in process of being rolled over from a previous employer’s profit sharing plan that I had let sit idle for a couple years. I'm thinking I'll put this in the VTSMX total market fund once it transfers to my Vanguard account)
- $2500 Vanguard Total Stock Market ETF
- $5000 in Discover savings account (1.75% interest)
- $6000 in KPERS (Kansas government employee retirement) 6% of my check automatically goes into this.
- 2011 Subaru Forester that should hopefully last me many more years!
- $2500 in regular checking account
Liabilities: no debt, or loans. Paid off student loans! yesssss :)
Specific Question(s):
My main question is whether I should start putting money into a 457 plan offered by my employer (government)? Would it be wise to do this over putting money in the Roth IRA or vice versa? If I’m contributing to both, which should I prioritize and what would be a recommendation for the percentage to put in one vs. the other?
Edit: I would most likely put this in a Vanguard Targeted fund offered in the 457. Admin costs aside from Vanguard expense ratio (0.15%) are:
0.173% for annual service and recordkeeping
0.048% for annual KPERS oversight
Should these costs sway my decision at all?
I have $5000 in a savings account that I’m thinking of as an emergency fund/house down payment account. My girlfriend and I would like to purchase a house within the next couple years, so I don’t know if I need to be saving a significant amount in cash or is there something better to do? We make about 100k combined currently.
Finally, is there anything obvious in my spending that could be addressed? I used to budget religiously, but I haven’t paid as much attention as of late. I know that my restaurant spending could be reduced, so I’ll be working on that. I’ve also started taking the bus to work (which is free with my job!), so that should save some fuel and car maintenance costs.
Let me know if I need to clarify anything, and thanks for reading/commenting! This site is awesome!