I have been reading posts on here that makes me feel really shitty about myself. People (my age or maybe a little bit older) have crazy amount of money and I (41, f) feel like I a m soooo behind. My husband and I had kids late, we have two toddlers, and dont have much saved at all. I got a high paying job 1.5 years back, been using that to bring us out of a very steep hole, we were $90k in stupid debt, credit cards, loans ..etc, have made sooo much progress, last 2.5k to go, and I am proud of us but have only $3500 saved for a rainy day. We own a house which we bought in 2021, so the interest rate is really good, so we are ok there. But everything else is not so great.
Savings: $3500
401k: $50k (husband) + $10k (me)
No savings for kids education
Got RSUs from my job, which will be around $70k, which will be vested in 2028, so thats just on paper for now.
Monthly income (combined): $18k a month
Expenses: childcare $4k
Mortgagr: $4k
Car payment: $1300 for two cars including insurwnce
Bills: $1100
Loc pmt: $1000
Debt payments: 4k
Spending: 2k (this includes groceries, gas, kids stuff etc)
We have dual (Canada/US) citizenship, so we hope to retire in canada where Healthcare is free.
After this debt is paid off, where should our money go?
For context: my husband is 43, I am 41. Kids are two and four. Had to live pretty frugally to pay this debt down..even though we make decent money.
#money #finance
Have less than 5k savings
byu/EntertainmentMany711 inpersonalfinance
Posted by EntertainmentMany711
16 Comments
Just keep saving. Pay yourself first. You are your most important bill.
Where are you located? These numbers are wild if the US.
Stupid debt or Student debt?
Do you need both of the cars? I would start by selling one of the cars.
A good savings is a journey and a job on it’s own. You’re nearly out of that bad debt, and that shows that you two have more discipline than most. Carry that diligence into saving as you finish your debt payments.
As money that previously went to debt service is freed up, turn that into upped retirement contributions and a dedicated contribution to a HYSA or similar account to start building your emergency fund. You feel behind, but still have lots of time to get on track.
You got this. Saving sucks but the pay off is going to be worth it.
Well luckily you only have 1 month left of debt payment and all that can go into savings. By contributing 4k a month to savings instead of debt, you’ll be well off in no time
$4k mortgage with a 2021 loan and $1300 in vehicle expenses? You’re overleveraged. Good on you for paying down the debt significantly, but you let lifestyle creep in. Get rid of a vehicle if you can. Shed as much in expenses as you can, like subscriptions or anywhere. Your expenses are way too high.
Congrats on almost getting out of the debt hole! That’s awesome and hopefully you take all that money you were putting towards debt and now put it towards savings. Ideally first in just a HYSA to build up a 3-6 month emergency fund. Then continue shoveling as much money into retirement accounts as possible to catch up.
Also, but with all due respect, your budget doesn’t scream “frugal” at all. You don’t list everything but $1.1k towards “bills” is insane and I guarantee those aren’t all needs. $1.3k in car payments means you also didn’t get a preowned Honda accord or something. $2k on “spending” is also wild. You guys need to take a seriously hard look at your spending and maybe get some outside help (you mentioned in another comment that neither of you is really great with money so that may be the best bet).
I was about to break out my deepest sympathies and well wishes but your in a great position financially to recover. Yeah your a bit behind savings wise but with an $18k combined income you could easily save up enough to have a solid retirement fund in you buckle down. Congratulations on conquering that debt mountain! It must feel great to be free of that burden!
You’re doing fine, but keep living like you’re not. Thrift the kid clothes, they need a new wardrobe every 6 months at those ages (BuyNothing groups are pretty active around Portland).
You need to throw more in your own 401ks. Your kids are young enough you can start a 529 for each now and just toss in $50/month and it’s fine.
Honestly, you are behind on retirement/cash savings for your age and income, but you’re not hopelessly behind.
The big win is that you turned around ~$90k of bad debt in 18 months. That means the discipline is there! 🙂
Once the last $2.5k is gone, I’d do this:
-Build a real emergency fund fast
-Treat the RSUs as a bonus, not a plan
-Increase 401k contributions aggressively
-Then start 529s if retirement is on track
-Take a hard look at the cars, because $1,300/month is a lot with only $3,500 saved
Your income gives you a way out, but the next 2–3 years need to be boring and aggressive.
Taking charge now… is the way. Grass is always greener. Focus in your own. You have a plan, stick to it. Once debt is down, start saving for your kids and yourself. Canadian schools are more affordable so your kids have options too. Your path is your own. Not everyone is gonna retire a millionaire but thats okay. Congrats on the progress you have made.
It’s important to also remember that if you google it, around 40% US population has pretty much nothing in savings. Most jobs, even professionals of education and science, no longer pay enough to keep up with housing, taxes, medical costs, etc
If you are the primary earner and have been paying off over $70k of your husband’s credit card debt, why does his 401k have so much more than yours? Seems like you’re doing great. Many people have much less than you, just as many people have much more.
Just keep on what you are doing. Erasing $80K debt is progress. In two years you’ll have $80K more savings.
Half of your monthly car payment (I know you said it’s insurance too) invested for 20 years at 10% is half a million. In 25 years it’s over $800k! Cars are stupid! Don’t keep upgrading!
Thank you for reading my post, this has been insightful to say the least.
I was in a horrible car accident last year and both of my kids were in the car with me, so having a reliable car is of most importance tp me. And unfortunately, both of us have to go into work, one person does drop offs, other person picks up the kids. So, we need two cars.
We tried buying a cheap 2k car but we had more issues with it for the entire one month we had it, had to pay money to dump it. And I couldnt risk being in the car that will stop on me in the middle of the hwy.
Also, I drive nothing fancy, its a subaru.