How do I prioritize between emergency savings, retirement, and student loan payments in a new marriage?
November 7, 2012 7:01 PM Subscribe
Newly married, and trying to figure out emergency savings vs. retirement vs. paying off debt vs. saving for a family. Please help me prioritize.
posted by anonymous to Work & Money (22 answers total) 20 users marked this as a favorite
Hello! I'm early 30s, female, and married. My savings account dwindled down to zero after we paid for our wedding and I unexpectedly lost my job in the same year. Now I'm gainfully employed again and trying to figure out how to rebuild from zero.
My husband and I split expenses down the middle (he brings in about $1000 more than me monthly, but that's just how we do it), and after rent, utilities, groceries, modest entertainment expenses, car-related things, and student loan payments are made, I have about $500 left over each month. My husband definitely has more left over monthly because he makes more and because he has no student debt.
I have no savings right now and no retirement account. My husband, also early 30s, also has no retirement account, but I know he has a decent nest egg saved up for emergencies. I have talked him into starting a Roth for himself and he is going to soon.
What I'm trying to figure out is what to do with this extra $500 a month. My instinct is to just stash it in a savings account until I have at least $5K or so saved up, just to have a cushion. However, I also really want to start a retirement account for myself, given my age. Currently, I pay $600 monthly towards my $40K in student loans on the standard plan - I know I could lower this by using income-based repayment or by consolidating, but the idea of paying more in interest makes me mad. I also hate having $40K in debt hanging over my head - though it used to be a lot more, I feel like it's never going to go away.
We also are probably going to try to have kids in a few years, so we want to be adequately financially prepared for that. For the record, I have no credit card debt - I hate being in debt more than I need to be. When I try to think about the prospect of buying a house someday, it just makes me want to cry - we live in a very high COL area and a starter home costs around $500-600K. If we ever moved, it would be to an equally high COL area due to our fields of work.
So my two main questions are this - what should I be doing with that $500 a month? And is it weird that a) my husband and I split all expenses 50/50 even though he makes a bit more and b) that I don't know how much he has in savings? We were together for a long time before marrying and have always kept our finances relatively separate (though we do have a joint account for the things we share.) We definitely aren't a "my money is your money" type of couple. I almost feel like if I asked I'd be being nosy, though I'm sure he would tell me.
Thanks in advance for any advice!