I am thinking about quitting my job and staying at home with our first baby. I am nervous about not having enough money going towards savings.
After all our bills are paid and we have used a little money for fun, we will be putting $700 to $1000 a month into our savings account for unexpected bills, emergencies, etc.
How much do you put in savings every month? Do you think $700-$1000 is plenty for savings for a family with one income??
BTW: I plan to go back to work in 5 years or so and I have a bachelor’s degree.
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You don’t mention your income or expenses, which is very relevant to an answer. You also don’t say whether you contribute to a retirement fund at work in addition to that $700-$1000 in cash savings (which you absolutely should do first).
You and your husband should be saving 10% of your gross household income NO MATTER WHAT. Of course if you quit your job then your income will be lower. I recommend you save 10% in retirement accounts and an additional 5% in cash for short term expenses, emergencies, etc.
I manage to save about 25% of my income but I’m young, single, and can live on cheap eats. I also walk to work which helps since the average American spends ~6% of their income on transportation getting to work.
If you can put that much into savings every month, that is great. After a few months you will have enough to live on, if you should lose your one income. I save at least $500.00 a month in my 401K but it is strictly for retirement.
You can do it, it depends on the interest rates use this formula to figure out where you would stand If a principal of P dollars is deposited in an account paying an annual rate of interest r(expressed in decimals) compounded (paid) n times per years, then after t years the account will contain A dollars where
A=P(1+r/n)^n*t
P= principal
Rate = interest rate in deciamal form (ex. 50% =.50)
N=length
T=time
hope that helps