#FinanceHelp #Budgeting #RetirementPlanning 🤔 Need help/ be brutally honest:
Hey there! So, I’m in my late 20s, married, with a bunch of little ones running around. Just started a new job that’s bringing in some decent cash, but now I’m kinda stuck on what to do with it all. Here’s the rundown:
– Bringing home $6100/month
– Bills around $2200/month
– Wife wants $600-800/month for groceries/kid stuff
– No retirement savings yet 😬
– Building up savings, but still have some debt
So, how do I tackle this situation and start setting myself up for the future? Here are a few ideas that might help me (and hopefully you too!):
– Consider setting up a strict budget to properly allocate funds
– Start contributing to a 401k/Roth IRA, even if it’s a small amount at first
– Focus on paying off that vehicle debt while avoiding new debts
– Look into financial planning services for personalized advice
Any other thoughts or advice? Let’s chat! 👍
Edit: How you are managing as a family of 6 on $36k is incredible. Even if you live in a low cost of living area, having 4 kids isn’t cheap. The good news is you are young and are thinking about retirement.
Most families can’t save a lot, there typically isn’t much left at the end of the month. As the kids age and you earn more or have dual income you can really start making meaningful progress towards retirement. Live on one salary save the other. There is a reason when you are in your 50’s you have catchup years when your limits to contribute to retirement accounts increases significantly.
It’s best to save early and often but unless you start a side hustle to fund retirement you are going to feel like you aren’t making meaningful progress.
Don’t sacrifice your standard of living too much. Your kids are young and you won’t get that time back. Me personally, I’d rather focus on my kids now and retire a few years later.
> bills only equate to $2200~ on average(should be slightly lower because we changed phone plans and cut out unnecessary subscriptions. That’s including rent which is $925 and our car is $752.
That car is waaay too expensive for your income.
> I guess I’m having issues on how to go about allocating more funds to a 401k/Roth IRA while also paying off debt fast which is only the vehicle. No credit cards at all.
You listed $2200 in bills and $800 in food. Where is the rest going? That leaves you with $3k a month… which despite the car seems impressive for 4 kids and one income.
> Be brutally honest
> guess I’m having issues on how to go about allocating more funds to a 401k/Roth IRA while also paying off debt fast which is only the vehicle
I don’t understand what the question is. Are you asking how to split up the 3k you have left?
Get the 401k match from your employer if there is one, funnel the rest to the car loan ..then put everything you can into your 401k.
Prioritize debt repayment, then max out 401k & Roth IRA contributions.
1. Is $752 just one car? If so, you cannot afford the car. Like, nowhere close. Unless you’re months from owning it, sell that thing and downgrade asap. You likely won’t, most people don’t, but it would be the smart thing to do. Like, your car payments alone are half a maxed out 401k…
2. Put a month’s expenses into your emergency fund.
3. Pay off all consumer and HI debt.
4. Add a few months to the emergency fund.
5. Slam the hell outof your 401k.
Does your wife work? Because with a family of 6 that’s spending $9,000/year on car payments….wowza.
Pay the debt off before allocating funds for retirement.
Almost 25% interest rate on the car?!?! How long is the loan term? Is your credit shot?
Are you sure your budget accounts for everything?
Housing, Utilities, Car, Insurance (medical and vehicle), Gas, subscriptions (tv, internet, phone), food, clothing, travel, entertainment, savings, retirement/investments.. and the list goes on. Credit card debt?
Does $752 represents loan + insurance + gas + routine maintenance expenses outside of warranty coverage?
I think you and your wife should research what an itemized budget looks like, how it performs and functions, make a list, and really sit down and crunch some numbers because even in a LCOL area, I hve a hard time believing that its $1675 for rent and car, and only $600 for EVERYTHING else for a family of 6.
If it is, look into refinancing that absurd car loan rate. Or just pay it off early if your credit is so bad that you cant refinance to a lower rate. That would be priority 1.
You need an emergency fund ASAP. 6 months of running expenses sitting in a HYSA for true emergencies only.
Then, also start saving. Separate bucket for everything.
I would open a 401k with your company and only invest enough to earn the match, while fully funding an emergency fund and paying off that car loan ASAP. Once the car is paid off, i would invest minimum 10% into 401k on my own, max out a roth IRA, and keep getting the company match