After we pay all our bills (mortgage, car payment, credit card, utilities, insurance, food and gas for the month) we have 2,000 dollars left over. We live a somewhat frugal life, we don’t go to clubs or bars, we don’t drink or smoke. We love the outdoors, so we spend alot of time doing things outside. We are a family of 3..if it matters. But I was thinking we should be putting about half into savings, right now we are only putting 300 in. Any opinions?
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The answer really depends on what your priorities are. You have a child. Is your priority saving for college? Or is is funding your retirement. Either way, you are in really good shape. I would not use a savings account for either though. Use the dedicated investment vehicles that exist for each. Use a ROTH IRA or traditional IRA for retirement savings. Use a 529 plan for college savings. You’re in great shape.
2K seems like a lot to be left over each month after everything – If only we were all so lucky! You should max out your IRA (about $416/month), put some into a brokerage account, and then a few hundred into an emergency fund.
We put 433 into regular savings (from which we pay some of our credit card bills with), 250 into IRA, 250 into stocks, and 325 into an online savings account for emergencies each month. That’s about 30% of our total after tax income into savings and it works out well for us! Good luck.
On thing you didn’t mention was retirement savings. If you are already contributing a good amount into your company retirement plans then a good rule of thumb is about 10-15%. If the $2000 is more than this amount then maybe set up two money market accounts and in one put your savings that you don’t plan on touching (the 10-15%) and get that up to about 6 months of living expenses. The use the other account to save money for short and mid term things. Money you can access easily, but no so easy that you are tempted to use it for daily things. Use that to do things with the family.
have you started IRA’s? if no, then you should try to max them out each yr for both of you. you should also continue to build an emergency savings – eventually getting to 6 months worth of expenses and it’s never too early to start saving for kid’s college fund
I’d say $500-$1000.
If you like the outdoors you can take hikes with the family, which is a pretty decently priced activity (just go to a national park, probably costs about $12) or something.
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