- April 16, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Evaluating Our Financial Standing
Just wanting to get some outside perspective on where my wife and I stand financially. We are 29 and 30 years old, with a 2-year-old son and another child on the way. Our household income is $120,000, and we live in the Midwest, which means our cost of living is relatively low. Despite this, after reading some posts here, it seems like we are way behind in terms of financial planning.
## Current Financial Portfolio and Goals
Currently, we have $30,000 in a High-Yield Savings Account (HYSA) earning 5.5%, which serves as our emergency fund. Additionally, we have $56,000 spread between Roth IRA’s and 401K’s. Both of us are contributing the full match to our 401K’s, and we are on track to max out our Roth IRA’s, aiming to contribute around $15,000 annually between the two of us. Furthermore, we have $5,500 in a Health Savings Account (HSA), which we started maxing out at $8,300 annually this past year.
## Breakdown of Expenses
– **Mortgage**: We pay $1,227 for our mortgage, which is on a 15-year fixed rate at 2.75%. We currently have $90,000 in equity.
– **Car Payment**: Our car payment is $329 per month, with 3 more years remaining on the loan.
– **Day Care**: We spend $600 a month on daycare expenses.
– **Other Expenses**: Various normal expenses of life also factor into our budget.
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****** just grabbed a
Dude, you are ahead of nearly 95% of the population, more so in your age bracket I assume. I didn’t catch your ages above.
Stop contributing to your HYSA for right now, you’ve got plenty in there at the moment.
Max your Roth IRA and 401ks, each. You said you’re maxing your HSA so keep doing that if you can.
If you’ve got a lot of liquid cash leftover after all of those, you can try and fully pay off your car debt. Most people would recommend doing that before any of the above but your payments are very low so it’s not the end of the world.
Alternatively, set up a brokerage with Fidelity or Vanguard and invest in whatever combo of VOO/VT/VTI you want. Check r/bogleheads for more info.
Anyways, you’re behind the recommended savings amount for your age, but you’re still ahead of most Americans in terms of saving for retirement, which also puts you ahead of most of the world.
If you curb spending a bit and aim to save a minimum of 20-25% of your income (and invest in smart funds and ETFs, not shitcoins and penny stocks) you and your family will be just fine.
A little bit behind the relative rule of “one year’s salary in retirement by 30”, but it sounds like you are on your way to catching up.
If you have room in your budget, you could up your 401k contributions, but glad you are getting the match. Most likely the most impactful thing you could do is explore things that could increase salary instead of pinching pennies.
I wouldn’t stress too much about it. Y’all’ll be alright
Shit, I’m 33 and not even close to that. Kids are expensive.
It’s “recommended” to have the equivalent of your annual salary saved in retirement by 30. You’re a bit behind on that for a $120k household. You need to contribute more to 401k/Roth IRA. If you live in a LCOL area, there isn’t really an excuse at your income level to not be contributing more to retirement to “catch-up,” or even get ahead. You account for only ~$2,200 in expenses. Where is the rest of the money going?
my dude most Americans literally cannot handle a surprise $500 bill. you’re good.
15 year mortgage at only 1200ish a month??? That’s amazing! Keep that house forever if you can. We are older than you and have similar savings—we have more in the retirement fund but not what we “should” have.
The best thing you can do at your age is avoid the lifestyle creep your peers and kids’ friends (as they age) will start to do. Buy a bigger or newer house or car if you NEED IT or truly can afford it and still afford to save well. That is what gets people. The expensive 50k SUV, or the mortgage that doubles, etc. Don’t do it. Our house isn’t perfect but our interest rate is 2.65 and we refuse to move ever. Your friends will start to buy bigger nicer houses soon (that ever elusive “forever” home?). Don’t give jn
You’re doing phenomenal. Don’t let the people that post they’re 23 and making 150k skew your thoughts.
Median net worth for 30yos is $35k.
Top ten percent for 30yos is $143k.
Behind what? If you are comparing to the average American then you can easily look that up.
If you want to compare to redditors, then yeah, you are behind by about 10-50 million at this age.
I skipped down to mortgage and knew the answer was instantly no.
Just having a mortgage at that interest rate is winning!
>mortgage: $1,227 (15 yr fixed, 2.75%) 90K in equity
**weeps in “I was still in school when such things were possible”**
For your ages, you’re doing great!
Lol nope. You guys are actually doing swimmingly. My partner and I are the same age as you with the same income bracket and everything, one kid planning on another. Mortgage is $1900 at the same rate but are still yet to get our 401k’s maxed out. You are not behind.
You’re way ahead in life.
Seems like you’re doing fine. The raising kids phase is expensive but you have a good handle on the basics.
Yea you’re well ahead of a lot of people
Well done!
My wife and I were not even close to this at your age. Do not compare yourself to any other person, or social norm.
Can you get rid of the car payment faster?
I mean this in the kindest way, I think you might be consuming content that has distorted your view of where you should be. Comparison is the thief of joy. If your family is comfortable and you are saving and financially secure, you are not behind in life.
You’re not upper middle class, everyone else commenting is just poor or lower working / lower class
Who do you feel you are behind?
You are incredibly similar to our situation, only difference is you have 2 jobs and we’re a 1 income household so no child care cost or car payments Which is probably the difference. All the rest is a mirror image.
You want to be at 1x your gross income at age 30 and 3x by age 40. We’re at $200k in 401k/IRA/HSA and $70k in HYSA. Definitely figure out where your money is going, cut some unnecessary costs (do you need 4 steaming services, do you need to eat out so much, so you need the card you have, shop your insurance, etc). You need to be contributing 40% or so for the next 10 years so you can catch up. I’m guessing you’re at 28% right now (including employer match).
You are doing very well.
What kind of budgeting tool do you use. I find that It’s helpful to use a spreadsheet to allocate your income to your needs and then the leftovers to your wants. So if you have A vacation you want to plan for, slip some money in a spot in your budget and track your monthly income & expenses to see how things are going.
Good luck to you! Awesome job!
I think you’d be worth on average like a 50 year old if going by stats.
With how youd probably not want to be avg because avg kinda sucks. You’re pretty on point overall for most people’s goals.
30, parents of two, household earnings 120k, net worth only 100k. Reasonable housing, auto and child care expenses. Topping up retirement every year. How fucked are we?
Hard to say without knowing how much equity you have in your house.
Seriously though, don’t forget that 529 to save on taxes for educational expenses.
Way ahead of me
Daycare expense only $600 makes me jealous. How that happen?
Get the workbook called “Automatic millionaire “ work through it and BAMM your on track, all this crap on social media about folks making boat loads of money is pure crap.
You’re definitely not behind, but I would track you finances a LOT more than just “normal expenses with life.” You will never really know where you’re money goes with that!
Also, I would look into 529 accounts for the kids. Again, you are doing much better than most people here, but even then, you shouldn’t aim for better than paycheck to paycheck.
No you’re not behind
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I think you’re both doing well. You definitely need to start saving more toward retirement though. $56k for two people is pretty low at your ages
You’re on track to have around 2.6M between HSA and all other retirement vehicles at 60 if you continue to contribute $23.5M annually. Is that good? I think so.
This sub makes me feel bad for buying a new car lol 😂
You’re joking, right? 60% of Americans can’t afford a $500 emergancy and you come here with “we’re behind” and have $30k stacked… get a grip
LOL. Is this post for real? You guys are totally fine.
Only thing I’d say is that the rule of thumb is to have 1x income invested by the time you hit 30. You’re only slightly behind in that regard but otherwise, great job!