I’m trying to create a game plan for husband and my future. I’m 29 and he’s 30. We are both investing the minimum amount to obtain our employer match into our 401K. Mid-December is when our last credit card will be paid off. So I’m trying to plan ahead.
Next steps include:
1) Up savings from 1K to 6 months emergency.
2) After savings reach 6 month emergency fund, open and max out Roth IRAs for both of us.
3) Contribute 15% of income to 401K.
I have a few questions:
A) Does this plan make sense?
B) where should we add saving for a house into this?
C) should we pay off student loans before any of these steps/before buying a house? Aside from the credit cards, those are the only other lines of credit that we have.
ETA: We have a high deductible health plan through my job and are maxing out the HSA contribution.
Are we financially planning correctly?
byu/swagachu11 inpersonalfinance
Posted by swagachu11
6 Comments
It looks good. The only thing I would do it max 401k contributions into a Roth account before maxing other Roth accounts.
If you happen to get a HSA, make sure to max it out, invest it as any other investment account, and don’t spend it until after retirement.
This plan makes sense. Emergency fund comes first. Build it up so you never have CC debt again. Roth is a great idea, you could also use Roth 401k (if available) instead. I would say 15% total across all savings buckets is sufficient. Hard to say if you should save for a house without knowing more. How much student loans? What are the interest rates?
All are great steps and I would rather you have retirement savings than a house.
How much in SL do you have? Are they federal or private? What’s the interest rates? Do either of you qualify for pslf?
Just follow the Flowchart in the wiki on this sub.
Congrats on paying down the CC debt!
This looks like a good plan to me. Make sure to get your emergency fund in a HYSA (or similar account).
I would start saving for a house downpayment once you have 15% of gross income going into retirement accounts, including 401k and Roth IRAs.
As far as student loans go, I would let the interest rate guide that decision. The flowchart in the wiki on this sub separates high (10%+), medium (5-10%) and low (sub 5%) interest debt. I would follow [the flowchart](https://www.reddit.com/r/personalfinance/wiki/commontopics/) for when to pay various student loans off. If you really hate debt, I think it’s reasonable to pay off low interest loans before you start saving for a house, but it’s probably not “optimal.”
Lastly, emergencies happen. This is a long running plan, and you should expect setbacks along the way. You’ll need to use and replenish the emergency fund, and that will eat into other financial goals. That’s okay, and it’s how this is meant to work.
Good luck!
I don’t think you’re planning incorrectly at all. I’ll give you some suggestions, but they are suggestions:
1) I would consider for December till April 2026, add your emergency savings into your Roth IRA, have it invested in a money market fund. The reason being is this lets you make use of your 2025 Roth IRA limit (you have to specifically allocate it, but that’s easy), and you can take out contributions whenever you want. You could then keep your emergency funds split, or slowly transition throughout 2026. (If you choose to keep some of your emergency fund in the IRA, I would try to keep the 1k or 1 paycheck worth in your bank account for instant access, since moving funds from Roth IRA to personal could take a few days).
2) Paying off student loans and saving for a house totally depends on your student loan rates and amounts, if you’re eligible for some form of loan forgiveness, and house budget, and how important owning a house is. I will say, owning a house is often NOT a financially savvy decision compared to other options, but it gives you other benefits, so think of it holistically.
Personally, I thought I’d try owning a spot to avoid moving due to potential rent increases (which luckily have been minimal for me so far), and to accomplish one of my goals, but running the numbers I am almost certainly spending to accomplish a goal. That said, I pay my student loans at the minimum amount (eligible for PSLF), and saved for a down payment (combo of bonuses and monthly savings, saved up enough for 5% down).
3) This is 100% a personal decision. I find I save better if my money is out of sight, out of mind. So I had my house/mid term savings go into a separate bank account straight from my paycheck. Same for most of my emergency savings, except I like to keep 1 months worth at my main credit union for quick access. The other benefit is it lets me keep my credit union that I like for checking, but earn a higher savings rate on the bigger pile of money elsewhere.
4) I’m sure you’ve already done it, but if not, making a budget, even if its a rough one, helps a lot. I made a budget and pre-allocate money to help.