Help us make our future happy.
October 14, 2010 11:03 AM Subscribe
Mid-twenties couple living in a big city trying to save up for the future. How the heck to people do it? Help us figure out what we're doing wrong and how to fix it.
posted by your mom's a sock puppet to Work & Money (71 answers total) 38 users marked this as a favorite
How do people do this savings thing? We are totally clueless. Here's what our life looks like now:
Getting married early next year. Both sets of parents are chipping in and paying for the (great) majority of the wedding. Saving up for that isn't a huge deal, but we are attempting to shovel away some money for that every month. We really only have little things left to pay for.
I (female wife) have completed my associates degree in a creative field and am unsure as to whether it's worth more money/time to continue. I have a decent paying job which is tolerable. However, I doubt I would easily find a job like this again. I have less than $1k on credit cards, and I'm paying them off. I have over $13k in a 401k. I will start paying off my student loans (about $15k) in January.
Future Husband (FH) has a bachelors degree and currently works in academia. He is currently weighing two options: go to grad school, or leave academia. If he were to go to grad school, our income would go down, but we're not sure by how much. If he leaves academia, he could easily make twice what he makes now. He has less than $5k total on credit cards, which he is paying off. He has a good amount in a 401k, as well. He has no student loans.
We would like to buy a house in 5-10 (sooner rather than later) years, preferably within the city limits, but not in a crazy ritzy neighborhood. We'd also love to have cash in the bank for our future (or emergencies!). We think we might like to have the babies within 5-10 years, but we're unsure. We have absolutely no savings to speak of, individually, or as a couple.
What our monthly budget looks like right now:
Combined (net) income: Approximately $4k (split evenly)
Utilities (internet, electric, gas): $150-200
Cellphones (both have iphone 4s): ~$160
Groceries: $700 (we are actively working to lower this amount, but this has been what we've been spending on average for the last year)
Entertainment (going out, netflix, etc): $300
Currently we have about $200 a month budgeted for "savings" but rarely does it actually get saved.
We also have a safety buffer on our over all budget of 10%.
As stated, we realize that our grocery habits are expensive, and we're actively working to reduce them.
We also realize that our going out expenses could be lower. However, we live in a city, and going out for a beer and dinner can easily add up to $40+, so we need to have a realistic budget for this part of our lives. We don't go out more than once a week normally.
I use mint.com to track our spending, but it really doesn't seem like we are spending on unnecessary things. It just always seems like there's something coming up that needs paying for.
Should we be allotting more money into savings? Are we living above our means? How can we start saving for our future? We absolutely love our house, so moving would be really hard for us (emotionally and financially). I feel like I've been a little anal about our spending habits lately, and it hasn't helped.
Should we speak to a financial adviser? Should we continue with our education and be broke for years and years, or man up and just make money? Are we really being idiots about something? Bring us down to reality. Be the bad guy. We don't even care. We need to make this happen. If you have questions, I can answer them.
Just as a note, I have Suze Orman's "Young, Fabulous & Broke" book, but it all seems pretty obvious and/or easier-said-than-done.