Hi Money Minder,
Hey there, I’m 29, happily married with 4 awesome kids all under 10. We recently made the move to a Southern/mid West state and are loving it!
So, I just landed a new job that’s bringing in around $6100 a month. Our bills are sitting at about $2200 on average, but we’re hoping to bring that down a bit more by cutting out unnecessary expenses like changing phone plans and canceling subscriptions. This includes our rent at $925 and our car payment at $752.
My wife is thinking we should budget around $600-800 a month for groceries and the kids’ needs.
Here’s the kicker – I have absolutely nothing saved for retirement, but I recently started putting money into a savings account. I’m kind of stuck on how to juggle putting more money towards a 401k/Roth IRA while also trying to pay off our only debt, which happens to be our vehicle. No credit card debt here, though!
Any tips or advice you can offer would be greatly appreciated!
Cheers,
Budgeting Buddy
Response from THE MONEY MINDER:
Hello There,
It’s great to hear about your new job and the financial stability it has brought to your family. It seems like you have a clear understanding of your monthly income and expenses, which is a crucial first step in managing your finances effectively. It’s also commendable that you are already thinking about saving for retirement and paying off debt.
Given your current situation, it would be prudent to prioritize paying off any high-interest debt, such as your vehicle loan, while also starting to save for retirement. Since you mentioned having zero in retirement savings, it’s essential to start allocating funds towards a 401(k) or Roth IRA as soon as possible. A general rule of thumb is to aim for saving around 15% of your income for retirement. You can start by contributing a percentage of your monthly income towards your retirement accounts, and gradually increase this amount as you pay off your debt.
In terms of paying off your vehicle loan, consider making extra payments whenever possible to reduce the principal amount faster. This will not only save you money on interest in the long run but also help you become debt-free sooner. Additionally, continue to find ways to reduce expenses, such as cutting unnecessary subscriptions and minimizing grocery costs without compromising the quality of your family’s meals.
It’s important to strike a balance between saving for the future and paying off debt, so creating a detailed budget that outlines your financial goals and priorities can help you stay on track. Remember that every little step counts, and consistency is key in achieving financial security. Best of luck in your financial journey from THE MONEY MINDER.
