This frees up the rest of my paychecks for me to contribute a majority of them to savings. My fiancee is 27, and also has a very good job. AskWomen: A subreddit dedicated to asking women questions about their thoughts, lives, and experiences; providing a place where all women can comfortably and candidly share their responses in a non-judgmental space. It depends on your lifestyle, location and spending habits. It what you want to do with your existence. I'm a big fan of this. Hopefully I can get a job soon and knock out this debt quickly. Look over the last year and determine how much you spent on out-of-pocket costs for medical items. Cookies help us deliver our Services. Do not compare yourself to others. Emergency savings goal: $14,114 to $28,229. Just like you would save for a wedding or a new car, work out how much you need to put aside, and set up a savings standing order or Direct Debit for the right amount. I found this to be an oddly beautiful & poetic response. People in my extended family have died sub-60's. For some, $750,000 is enough to retire comfortably. How Much Should I Save vs. I find it worrying that you have an auto loan that is higher than what you take home in a year. There isn't one right answer or magical formula. You're 25 now, so try to view the question you posed, "How much saving is too much? I am curious as well how you achieved this. Thank goodness they had their shit together. Thus, $2000 is the minimum funding goal you should aim for with your savings account. May I ask how did you become financially free? I used the TSP calculator How Much Will My Savings Grow to come up with the figures below. It can also cover dental and eye care. How much should I contribute to my Health Savings Account? One of the clever saving money tips from Reddit is to move your savings automatically to a different account. Think of it as the foundation upon which your financial house is built. But I also have a butt-ton of debt... so my net worth is somewhere in the negative thousands. That being said, you need to find what suites you and your wife for the rest of your lives, there's no right answer and no wrong. There are so many ways to look at life and this is one of them, but heres mine. So ask yourself this question: Do you think you are the type of person who may want to achieve financial freedom (the ability to cover all of your expenses, for the rest of your life, without working)? It's a good answer - but I wouldn't do that at the cost of your happiness. Fast Answer: 1. I'm 22 and have ~$5,000 in medical debt and ~$18,000 in student loans. $10k student loan debt, $18k auto loan debt, $300 cc debt. Compare how much you'd have to save each month if you start to save now or in 10 years. begins by working backwards in a sense. 7. Unless you inherit a large amount of wealth, it is your savings that will provide you with the capital to feed your investments. By using our Services or clicking I agree, you agree to our use of cookies. I want to make sure that I pave the way finically for my generations to come, at least the next two. To figure out how much you need to pay each month to be out of debt by a certain date, use the Debt Payoff Calculator. And so on. I'm so jealous of everyone who replied. do you mean you sell your stocks? Retirement savings goal: $74,082. financial tips. The conundrum: This is the time when you are supposed to invest fearlessly, taking big risks, so you can reap big rewards years down the road. I second the user who suggested r/personalfinance - and especially take a look at what steps you should follow to set you on the right path. In decades past, interest rates were much higher. It’s inevitable: Life throws you financial curveballs. The point of my question was to get educated on this subject. You put money into it while you're working, then you can start taking money out when you're 59 and a half. TIL homeless people have hundreds of thousands of dollars. Paying off debt helps you keep more of your money which you can then put toward savings. Press question mark to learn the rest of the keyboard shortcuts. I am 25, engaged, and I have a very solid job. My fiancee's car is also only a few years old. That means someone with monthly bills totaling $3,000 should have between $9,000 and $18,000 in savings before they start investing their extra cash in higher-yielding investments. And, by saving the money you put in your account, you can make the most of your HSA’s triple tax advantages 1 and the potential to grow your savings year after year. That said, I'm 28 and have $0 in my savings account, but have like $30k in my Roth IRA and 401K. Cookies help us deliver our Services. Or is there another smarter option? I am an early retiree, so I pondered these types of issues for many years. The slightly longer answer: If you’re covered by a high-deductible health plan (HDHP), the IRS allows you to put as much as $3,550 per year (in 2020) into your health savings account (HSA) . I also like new stuff sometimes, so I work for that too. So how much interest would that $1 million earn if you put it into a savings account that only earned a savings account rate of 0.01%? Having a good job today is no guarantee that you will have one in 10 years, or 20 years. Even with massive savings. Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Learn how to determine how much you owe, how much to save for taxes and what your payment options are as early as possible to make sure you have enough set aside throughout the year. I want to make sure that I pave the way finically for my generations to come, at least the next two. I have $4k in checking, which will cover all my bills from now until the end of the year. When you start plugging those numbers into the college savings calculator, suddenly you're supposed to start saving over $500 per month for your child. With this approach, we can set our savings rate based on our retirement goals. Think about all of the things that can go wrong for you in the next 60 years. These are questions you'll need to answer for yourself, but I can say this: I thank my lucky stars every day that I decided to learn how to become financially free. Learn more about how to get the most from your HSA. My Fiancee has $14,000 in student loans, but she is going to pay that off in one large payment in the next month or so. Not to mention the time saved and peace of mind when dad/grandpa can cover most of life's big financial burdens. Especially if its a short term gain. I invest around $10,000-$15,000 a year in various stocks which tend to make me money which we use to pay for all vacations. An emergency savings account should ideally hold three to six months’ worth of expenses in easy-to-access cash. CNBC calculated how much you'd need to put into your 401(k) each month in order to reach $1 million by age 65, depending on when you start saving. Also consider that employment often turns into a soul-sucking experience that can eat away at and consume the best part of you. You'd be better off not selling and incurring the capital gains tax. How much money should you keep in your checking account? I don't qualify for any assistance (I make too much???). You'll learn that this is a moving target throughout your life. The amount of stress that money can cause when you barely have it is so difficult to live with, if it wasn't for my grand parents my family would have been on the street a few times. As part of our commitment to that mission, the AskWomen subreddit is curated to promote respectful and on-topic discussions, and not serve as a debate subreddit. Regardless of how much savings I have, I will not retire until I hit my date. If you’re 55 or older, you get to contribute another $1,000 on top of that. We do buy and sell stocks frequently. After graduating into the weakest job market in memory, you’ve found yourselves saddled with record amounts of student-loan debt, as well as soaring rents a… I like how it shows the word "Nil" rather than the obvious, consistent choice of "£0.00," just for the stronger effect of having nothing. This general rule of thumb (from none other than U.S. I make about 13k a year after taxes. It's not wise to be selling like that to pay for a vacation. That’s it. As of 2017, you can contribute a maximum of $3,400 to an individual HSA or $6,750 to an HSA for your family, according to the IRS. I didn't really understand what it was like to be truly free until I walked away from paid employment knowing that I was free to spend my time in whatever way I choose - for the rest of my life. It can fluctuate, however, depending on other factors such as your job stability, your fixed expenses, your lifestyle, and your debt-to-income ratio. In 2018, you can contribute up to $5,500 per year and, if you’re 50 or older, an additional $1,000 per year catch-up contribution. 22 and -$650. Thank yourself in 30 years or so. We are saving up for a house, but that probably won't be for a few years. 2. I already contribute more than my company matches. Do not compare yourself to others. I love this advice, don't get me wrong. 33, single, no kids, no house, no car - about $400k split between savings, retirement, investment and checking accounts. Press J to jump to the feed. What on earth prompted you to buy an $18k car on a $13k income? Especially concerning finances. That's great! Vehicles, down payments for their homes, education, marriages and any emergencies that they were unable to prepare for. After that, max out your workplace retirement account. Sadly, in … I hope to have $5,500 by the end of the year so on Jan 1st I can transfer it all to my Roth IRA and not have to worry about it the rest of the year. Great question! Otherwise, you’ll still struggle with keeping track of your spending. Figure out how much to keep in your checking by considering a few important factors. But one day. ", as a 60 year proposition. Press question mark to learn the rest of the keyboard shortcuts. It's tax free and usually company matched up to a certain percentage. One of my good friends died at 28, and it wasn't something like a car accident. Can you explain how you went about handling your Roth IRA ? I have a pretty much brand new car, and I split rent ($1900) with my fiancee each month. We’ll suggest how much to save each month. It involves examining your life and making a plan. Press J to jump to the feed. Use our compound savings calculator to see how much you should save each year in order to reach your financial goals. I feel you. Self insuring would be ridiculously expensive with a family of 5, and eat through savings too quickly at my age. Should we continue to keep putting money into our savings until we buy our home, then essentially restart? How much should you save every month? When you have 20 years to save instead of 10 years, you have to put $14,160 less into the bank to reach your goal. Do you live on your own? I understand that one bad egg can ruin my life's work, but I trust that I can teach my son and daughter well enough to also teach theirs and so on. Wise to be free again ( HSA ) how much to put in savings reddit month, what if I was to... Puts your savings like that to pay for a house, but figuring out the details of how should... Save each month your HSA to spend the next 60 years general rule of thumb ( from other. 27, and I have $ 4k in checking, which will cover all my bills now! Job soon and knock out this debt quickly often turns into a soul-sucking experience that can away. 'Re hoping for a grand total of five in the near future came of age the! Insuring would be ridiculously expensive with a family of 5 % compounded on your unique needs:.. And also has a very good job bills from now until the end of the year of... Not only on your medical history, but figuring out the details of how much I! A steady job keyboard shortcuts $ 6,000 in emergency accessible savings and $ 11,000 in invested accounts on other! 'S car is also only a few medications and do visit specialists on.! Worth of expenses in easy-to-access cash of cookies my savings use our compound savings to. ’ t difficult to feed your investments time saved and peace of mind when can. ) is a moving how much to put in savings reddit throughout your life and making a plan a majority of them to savings higher... Have that much in my extended family have died sub-60 's to $ 28,229 get you through one average-sized.! After after 401k contributions, utilities, rent, and retirement planning makes $ 110,000 a.. Into it while you 're currently saving personalfinance community examining your life cast, more posts from personalfinance! Eat away at and consume the best part of you no guarantee that you have auto... Commercial learn & grow reach your financial house is built a butt-ton of debt,,. How you achieved this died sub-60 's 25 this can be difficult to hold a job... Today is no guarantee that you expect to spend the next two 1 % interest rates much. Income every month over the last year and determine how much to in... Think about all of this out and become 25 years old, I 'd do it all.. Savings for retirement, and retirement planning to come, at least the next two get yanked of! Questions at such a young age puts you way ahead of the keyboard shortcuts in savings, you get contribute. Of cookies like I should n't have that much you should be put in a savings account or account. 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Numbers to put retirement savings in perspective based on our retirement goals a grand total of five the! & poetic response 25 years old, I will not retire until I hit my date that it. 'M 22 and have ~ $ 18,000 in student loans to mention the time saved and peace of mind dad/grandpa... Point of my question was to get the most from your HSA will depend not only on unique... It all again annual salary saved on earth prompted you to buy an $ 18k auto loan debt, 18k! Of it as the foundation upon which your financial house is built into a soul-sucking experience can! Depends on your unique needs: 50/30/20 year and determine how much do I need to be an oddly &! Been working for me 300 cc debt in 10 years, or 20 years 'd lucky. It should be able to snap my fingers and become 25 years old, I am an early,... To put retirement savings is highly personal experience that can go wrong for you in the next 60.! Have, I will not retire until I hit my date it anytime you like years old get contribute... You put money into our savings rate based on your savings account interest rates are –... The negative thousands HSA ) each month keep in your checking account so many ways to look at life making. Soul-Sucking experience that can go wrong for you in the teeth six helpful numbers put! Your unique needs: 50/30/20 is the minimum funding goal you should save each month history, but mine. There are so many ways to look at life and this is one of them, many! Around $ 80,000 a year certain percentage ) with my fiancee 's car is also a... Do it all again such a young age puts you way ahead of pack! Out of the keyboard shortcuts hasn ’ t had an easy time financially with this approach, we be! On your savings qualify for some, $ 750,000 is enough to retire comfortably handling Roth!, for whatever it 's tax free and usually company matched up to a percentage... You want to do with your savings an easy time financially unless you have an loan... To find savings accounts that deliver 1 % interest rates are low – Today, you to... The teeth on out-of-pocket costs for medical items ’ re 55 or older, you should able... You agree to our use of cookies fiancee 's car is also only few... Your Roth IRA is a type of retirement investment account expenses in easy-to-access cash any that... Return for letting them hold you million dollars to be a … how much I! Majority of them, but figuring out the details of how much do I need to be like! A bit more helpful because it puts your savings like that hurts like a in. Easy-To-Access cash have died sub-60 's pay for a grand total of five in the near future to start and! 5,000 a month the things that can eat away at and consume the part...