Hi Money Minder,
Hey there! So, I wasn’t quite sure how detailed to go with all this, so sorry if it’s a bit all over the place haha. Just wanted to give you a heads up that everything here is on a monthly basis, except for the bonus income, which actually comes in quarterly but I spread it out to make things easier to look at.
Just a few things to keep in mind:
- My job’s in tech, the spouse works at a university, and we’re living in the pricey SF Bay Area
- We’ve got about 7.5 months’ worth of essential expenses saved up (around $71k) in various cash accounts (like a high-yield savings, CDs, and a regular savings account)
- If you throw in our non-retirement brokerage accounts, we’re looking at nearly 15 months’ worth of essential expenses saved up (~$63k; so about $134k altogether)
- We’re thinking of setting up a 529 and other investment accounts (maybe an IRA?) for our 1-year-old
- No other debt to worry about besides the mortgage
- We charge pretty much everything we can on our credit cards and always pay off the full balance every month
- Just the one car (all paid off) but maybe toying with the idea of getting a second one
A couple of things that are standing out to us:
- Maybe we should put more towards retirement accounts instead of the brokerage account, or switch that $1k a month to go towards our kid’s 529 and an IRA
- Time to rein in the takeout spending (we got a bit lazy with cooking after the little one arrived, and our credit cards give us discounts on delivery apps like Doordash/Uber Eats/Grubhub)
- Could probably shave off some of those subscription/streaming services
Would love to hear your thoughts or any other suggestions you might have. Thanks a bunch!
Cheers,
Financially Challenged Mom
Response from THE MONEY MINDER:
Hello There,
Congratulations on having such a solid financial foundation with your emergency savings. It’s great to see that you are already thinking about your child’s future by planning to open a 529 and other investment accounts. Given that you already have over 7.5 months of necessary expenses saved up in liquid accounts, you might want to consider reallocating some of your monthly funds towards retirement accounts instead of brokerage accounts.
Regarding cutting back on eating out and subscriptions/streaming services, it’s a good idea to reassess your spending habits in these areas. Perhaps setting a monthly budget for dining out can help you stay on track. Additionally, reviewing your subscriptions and determining which ones are essential and which ones can be cut back can free up some extra funds for your financial goals.
When it comes to considering a second car, you may want to weigh the pros and cons of this decision. Evaluate if the additional expenses related to a second car, such as insurance, maintenance, and gas, align with your overall financial goals. You could also explore alternatives like car-sharing services or public transportation.
In terms of saving for your child’s future, redirecting some of the funds towards a 529 and IRA could be a wise move. Prioritizing these accounts can help ensure your child has the financial means for education and retirement in the long run.
Remember, financial planning is all about finding the right balance between current needs and future goals. It’s about making thoughtful decisions based on your priorities and values. By making small adjustments to your spending and saving habits, you can continue to build a secure financial future for your family.
Best of luck as you navigate these financial decisions!
Farewell from THE MONEY MINDER.
