Review my budget and plan! Are we on track? What should we do differently?
Our situation 2 adults in our late 20s with a 1 year old Total household income $85k Monthly expenses $5k Monthly savings & investments $2.5k $50,000 liquid between cash accounts and a CD that stores our 6 month emergency fund We own a home that currently…
Our situation 2 adults in our late 20s with a 1 year old Total household income $85k Monthly expenses $5k Monthly savings & investments $2.5k $50,000 liquid between cash accounts and a CD that stores our 6 month emergency fund We own a home that currently holds around $250k in equity - we only owe $100,000 at 2% and there are only 10 years left on the loan, although it is not our “forever home” and we will be moving in the next few years. My Roth: $7,500 His Roth: $7,500 We just opened retirement accounts this year. Our 1 year old has $6,000 in a CD $2,000 in a 529 No debt! 1. Once we have maxed out our retirement for the year, where do we put excess income to invest it? 2. What happens if our kid doesn’t go to college and we have overfunded the 529? 3. Is there anything we should be doing differently?
Collected discussion
Here's a link to the PF Wiki for helpful guides and information. I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
I'd reduce your retirement savings to 15% of your gross income/salary. At that point, stop stressing about retirement and find ways to enjoy your money more. You have no debt. You should have a lot of monthly cash margin to just enjoy things. Put some savings every month in a sinking fund that will go towards future house and cars.
We are each putting $625/month into retirement to meet the annual limit of maxing out roths. $1,250 monthly. So in order to save for future home and cars we have to save the additional $1,250 in our CD which ends up being $2,500 total to retirement and savings monthly -- 30% of our income. Saving less money doesn’t feel like an option at the moment because we opened our retirement accounts “late”
Nowhere do you mention anything about a 401k, 403b or pension. Do your jobs have employer sponsored programs?
Yes
Some of the numbers don’t make sense. Is the 85k income after tax?
Follow the prime directive on the side bar. Your questions are answered there.
You guys are way too young to have a significant portion of your net worth in CDs. How can I say this politely: thank god I wasn't as conservative as you in my 20s, otherwise my net worth would be way more hampered than now for sure. Personally, if I were you, I would get rid of the CDs entirely, have 1-2 months of expenses in a HYSA, invest literally everything else. Also, sitting on a 2% loan is a gold mine assuming the house as at least livable for now.