- April 25, 2024
- Posted by: legaleseblogger
- Category: Related News
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## AI Legalese Decoder: Helping Navigate Financial Literacy
The Problem of Financial Inexperience
The title explains it all. Parents were crack addicts who taught me nothing about being an adult. I live a very (almost too) frugal life. Don’t know where to begin and feel so much shame about being 30 and asking for help.
AI Legalese Decoder can provide guidance and support to individuals who find themselves in situations similar to yours. By breaking down complex legal jargon into easy-to-understand language, the Decoder can help you make informed decisions about your financial future.
Current Financial Situation
30 y/o married with no kids.
No credit card debt. Very good credit score. I only have one credit card I put expenses on and pay off every two weeks to earn rewards and keep that credit score up. Paid off the first two years of undergrad bartending.
$4600 in spouse’s student loans. (Set to pay off next year)
I’m finishing both my Bachelors and Masters degree next year with $24000 in loans. (That’s for both degrees which I finished in one swoop and pay 1/3 out of pocket for)
The Decoder can offer insights and recommendations on how to manage your current debts while planning for future financial goals, such as homeownership and starting a family.
Seeking Financial Guidance
I’ve been trying to figure this shit out since my early twenties grinding and working my ass off trying to appear like I “have it ask together” and keep my head above water. Feel like I’ve been in survival mode for 12 years since moving out. We live a humble frugal life. Share an older paid off car. Rent really cheap. Give generously to our church. Take a humble vacation once every 3 years. But we want a house and kids one day and I’m paralyzed at the idea of what that could do to the paper mâché financial infrastructure I’ve managed to keep together with the little knowledge I have.
Reality is we have no clue what our next step is. We just started a Roth IRA last year. Spouse has something started in their work 401K.
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Moving Forward
I need a space that is shame-free where I can ask all the questions and get a gauge on what financial freedom looks like and what my first few steps should be.
Obviously, we are chipping away at student loans and just starting to put away for retirement. But we don’t know how much to put away for savings vs personal spending. Anyways… I’m open to all resources and personal advice.
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AI Legalese Decoder: Simplifying Legal Jargon for Everyone
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****** just grabbed a
You’re not financially illiterate.
What questions do you have? Seems like you’ve got the hardest parts figured out, you’re a few YouTube videos away from whatever else you need to learn
This is investment illiterate not financially illiterate which is ok.
You have the basic foundations down. Just watch a few money guy episodes and set up some automated investments into broad market or target date funds and re evaluate every few years.
Hey man, no shame in this at all. You’ll get where you’re headed, don’t worry about that.
Savings
Emergency Fund- typically 3-6 months expenses (this is different for everyone. Go with what makes you feel comfortable.)
401K/IRA/Retirement Accounts- invest as much as you can comfortably. You said Spouse started their work 401K, great. If there is matching, try your best to get that. (Some employers “match” your contributions up to a certain percentage. Always, ALWAYS take your match.) **Remember to actually invest in the funds available within your retirement account(s) that isn’t automatic in some cases. Double check lol.**
Sinking Funds— not a sinkhole! 😉 Sinking funds are savings accounts you have for specific expenditures/goals. Think vacation, car repair that you know is coming up, house, babies, etc.
High Yield Savings Accounts. This is a good place to put the bulk of your savings.
Personal Spending
It’s really important to save and plan for the future (as much as you can anyway) but remember to live your life NOW. Create a budget and give yourself room to have fun, however that looks for you.
Investing outside of retirement accounts? IMO, I do index funds. (Currently have FXAIX, plan on buying VTI & VOO.) I buy it and let it grow on its own.
You aren’t financially illiterate at all lol…you’re doing great. Not religious here so my only change to how you’re doing things is stop the church giving but to each their own.
Try to max out the savings opportunities that you are offered through your job, and max out Roths.
House and kids are expensive. You can live frugally and be ok. Consider living near family if they can offer childcare. Find friends willing to pass down kids clothes and toys.
I understand your anxiety about spending, when you don’t know the future.
No matter what your income, keep close tabs on your spending. Spend less.
Never buy something expensive with the only motivation being to show it off. No one else cares after 10 minutes. You’ll stop caring about the newness, too. Buy quality whenever you can, and maintain it so it lasts. Buy used quality and you’ll save thousands.
It sounds like you’re doing a lot of stuff right. The most important thing is avoiding debt as best you can, which you’ve been doing. Saving and investing come next.
[The Prime Directive](https://www.reddit.com/r/personalfinance/wiki/commontopics/) on r/personalfinance covers a lot of the most basic stuff. Beyond that you’ll want to look into index investing to learn how to invest in your Roth IRA and 401k. The simplest solution there is target retirement funds. They index the world market and bonds. Nice thing about target retirement funds is they’re set it and forget it. The down side is they tend to go heavy on bonds too early, reducing growth. However, it does reduce volatility when the market takes a tumble.
If you’re interested in books Ramit Sethi’s I Will Teach You to be Rich was practically written with you in mind. He teaches the personal finance basics but also talks about how you should spend money on things that matter to you to improve your life. His approach to budgeting is percentage-based and very straightforward. I’m a fan. He’s also got a Youtube channel by the same name where he’s gone over a lot of the aspects of [his approach.](https://www.youtube.com/watch?v=U16k8cWFEC8)
You have a pretty solid base started. With a little reading or watching of videos you can start to grasp some higher level concepts. To be clear, you are not illiterate on these topics! You have started some basic investing in IRA/401k and that puts you ahead of alot of people. And no credit card debt is fantastic! You may feel that you are behind, but saving and investing is something done over years. Financial knowledge is really just learning and implementing long term behaviors to get a desired result in the future.
The Money Guys: (my favorite)
Provide the Financial Order of Operations and have a videos on YouTube. TMG make suggestions on the order of how to use your money from emergency funds, to investing, saving for a house, buying a car, etc. They suggest investing 20-25% of gross income. They also have good advice on what to save for buying a home or a car.
Ramit Sethi: (just started watching)
He has a book and a podcast on YouTube. Created the conscious spending plan which I think you can grab and fill out. He wants fixed costs around 50-60% of your gross. The remainder is between wants and investing. I can’t remember the %.
I learned almost everything I know about finances on YouTube. We live in a world where we have access to all of human knowledge free of cost in the vast and unending ocean of the Internet. You could literally get a PhD in something just by using Google and obtaining information.
You’re doing great to finish those degrees and have so little debt.
The best advice I have is to always live a little below your means, so you’re always saving some money, because unexpected stuff always happens.
My 401k was the most painless saving and investing I ever did. You sign up and forget it. The money comes out automatically. You’re good.
So, now I’d think specific goals. Do you want to save for a house? Concentrate on paying off your loans? That’s your motivation — the why you’re saving.
Investments — the stock market over the long haul always wins. There likely will be a few crashes over your lifetime, but the stock market comes back. Look back five or ten years worth of returns for mutual funds, check the fees they charge and then pick three or four, to lower your risk. Never put all your money in the same place.
You will likely look around often and see people your age or who you work with or your kids’ friends’ parents and it will seem like they always have nicer cars and bigger houses, better vacations, but a lot of them will be spending every dime they make, plus putting more on their credit cards. You’ll be saving for your kids’ education and your retirement. Enjoy your life, but don’t chase a lifestyle of bigger/newer/better that so many people do.
Follow Dave Ramsey and his team. They have solid advice for people in your situation.
I don’t agree with everything in their plan, like I think reddit cards are worth it for the points of you use them like you do (for the points).
But he has great advice for budgeting, paying off loans, etc. for the average person or beginner.
Spend as little as possible
Do your own taxes. Go to IRS.gov.
Easy-you can do it.
Congrats on being a frugal educated adult! Growing up with crack addicted parents is not easy. You should give yourself more credit! I’m sure you’ll be just fine. 🙂
You should not be handing over your money to a tax exemption corporation when you’re in debt, renting, and unable to take a vacation more than every 3 years.