We set several financial goals for this year.
1. Top off Emergency Fund(EF) with 6 months expenses
2. Save 15% towards retirement
3. Save more for both boys college expenses
We topped off the EF in February and are currently saving 6% for retirement. We have room in the budget to increase this to 15%, but haven't yet made it "official". We have $$ in the boys college account, but currently are not adding to it on a routine basis. (i.e. only birthday checks from grandparents designated for college are going into it.)
We met with a financial advisor a couple of weeks ago and he suggested a few things.
One, decrease our EF to about 3 months and put rest of that money in our retirement account. The next suggestion was to save 16-17% of our income each month for retirement to get us to our goal of what we wish to have when we retire. So, that I was pleased with...it was just about $150 more each month that I've been wanting to do. Moving onto college savings, he ran the #s on what it will probably cost for our darlings to go to in-state public school (about $120,000 for 4-years) and what it would cost to go out-of-state public school (about $220,000 for 4-years). The suggested amount to help cover the cost of this is $500/month from now until the youngest graduates in (hopefully) May of 2024. And, with the $500/month, that will cover about 1/2 of the bill.
So - We've got some things to think about. We worked so hard to get our EF to 6 months and I'm hesitant to move the money around. BUT...my husband's job is more secure now than it was when we chose to save 6 months expenses rather than a smaller amount. Next, it's more important to both me and to my husband to have our retirement savings at a comfortable amount than it is to 100% fund our kid's college expenses. We hope and pray that we can pay the majority of it for them, but they will probably need to work and pay for a lot of it themselves.
We live rather frugally and when we do "splurge" it's usually on things that will make memories, like weekend trips and vacations...not on lots of new clothes, new cars and other "toys". We could give up a lot of things and make it easier to meet our financial goals, but I'm not sure we're ready to do that at this point. We really need to sit down and take a good hard look at it.
I'm curious about you. If you are meeting all of your financial goals, is it because you've made lots of sacrifices in order to do so? And what are day-to-day things that you sacrifice to meet your goals? Just curious...
2 comments:
Hi,
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We only keep 3 months living expenses in our emergency fund, because that would provide us with enough time to access other accounts if it were truly an emergency.
Saving for retirement is one of our biggest priorities (we put in 16 % each payday). We both have longetivity genes in our family tree and we feel one of the greatest gifts we can give our children is freedom from worrying about how they will care for us.
My oldest is a junior in college now. Here is a post I wrote on saving money on college expenses: http://www.premeditatedleftovers.com/2010/02/wfmw-saving-on-college.html
I think some of the things we do that save money might look like sacrifices to others, but I think it is part of a larger lifestyle choice. We don't have cable and we only have one t.v. and it is old! We repair and maintain our own vehicles, we garden, and we don't buy much new. We don't do it because we have to, we do it because we choose to; we're just weird like that. We still splurge on fun, memory making activites, but the excess I am putting in a special house fund, because I have a wild dream of paying cash for a house by 8/2017.
P.S. Sorry for the book.
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