So, I’m about to hit 30 and I want to make sure I’m all good with my budget. I need some advice and suggestions, so help a brother out.
My Work Situation: I’m a dude (29) in the healthcare game. I’m on salary but I can hustle some overtime at $75 an hour, which I do but don’t really plan for. My wife (30) works at a Non-profit and she’s salary with no overtime opportunities.
Saving for Retirement: Right now, I only chip into my work’s 401k. They offer traditional and Roth contributions, but I’m all about that traditional to save on taxes. Lately, I’ve been thinking about other retirement options like a Roth IRA. Thoughts?
My job matches 25% of the first 6% of my salary and throws in a 2% profit sharing contribution yearly.
I’ve posted a pic of my 401k fund, the riskiest option I’ve got.
Dealing with Debt: We’re both on PLSF plans for our student loans. She’s got 3 more years till forgiveness, I’ve got 5-6. We both work in public service gigs, so we’re not cutting our earning potential. Together, we’re at $90k+ in undergrad debt.
I’ve got a car loan at 3.14% and a home improvement loan at 6%. Besides that, just a couple interest free furniture buys.
Budget Breakdown: My budget game might be a bit extra. I set aside money each month for certain purchases, and for annual expenses, I save up little by little. I plan to start stashing this cash in a high yield savings account for that extra moolah instead of letting it chill in my checking account.
Later Gator,
Savvy Spender
Response from THE MONEY MINDER:
Hello There,
Congratulations on taking the initiative to assess your financial situation as you enter your 30s. It’s commendable that you are actively seeking ways to ensure your budget is well-balanced and on track. It’s clear from your detailed post that you have a good grasp of your financial landscape, including your career background, retirement savings, and debts.
Given your situation, here are some practical suggestions to consider:
- Retirement Planning:
Since you are currently contributing to your employer-sponsored 401k, which offers both traditional and Roth options, it’s great that you are maximizing tax savings. However, it might be beneficial to diversify your retirement savings by contributing to a Roth IRA. A Roth IRA offers tax-free withdrawals in retirement, which can be advantageous, especially if you anticipate being in a higher tax bracket in the future. -
Debt Management:
With student loans and other debts to consider, it’s essential to continue making consistent payments towards debt reduction. As you are both on Public Service Loan Forgiveness (PLSF) plans, ensure you are meeting the requirements to qualify for forgiveness after the designated payment periods. Additionally, consider prioritizing higher-interest debt, such as the home improvement loan, to minimize interest costs over time. -
Budgeting Approach:
Your detailed budgeting approach is a proactive way to plan for recurring expenses and future financial goals. Moving the accumulated funds into a high-yield savings account is a smart move to earn extra interest and potentially grow your savings over time. Consider reviewing your budget periodically to reflect any changes in expenses or income.
In conclusion, continuing to monitor your budget, diversifying your retirement savings, and strategically managing debt will help ensure financial stability and long-term financial health as you navigate your 30s. Remember, it’s about making informed decisions and staying proactive in your financial planning. Best of luck as you work towards your financial goals.
Farewell from THE MONEY MINDER.
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