How much should my husband and I save a year? I don't work (going to school) and he's in the military. He has a TSP account through the Army that he saves 5% of his pay in. We have no 401ks or retirement accounts although we do have a $5500 cd. He makes about $42000 gross pay/yearly. What amount should we be saving?
Also, is it wiser to save as much as we can now and get subsidized student loans for my education or should we save less but not get student loans?
2007-09-25 16:40:47 · 3 answers · asked by moira77 4 in Business & Finance ➔ Personal Finance
avoid the loan route for school as long as possible. Search out grants and scholarships and work study oppurtunities first. And if you can't avoid loans for school, take into consideration the amount of the loan vs. your income earning potential after you graduate. If your expected income in your chosen field is not a high earning career, you don't want to take out massive loans.
As to what you should be saving, usually 6 months income for emergencies and 10% or more as you can afford for retirement. But if you are in school or horribly in debt, it is a good idea to spend the money there before saving for retirement--the idea being by eliminating debt, you are not being forced to pay massive amounts of interest for long periods of time and that saves you money.
Go to the library and look up books on financing and budgeting and search out other sites that talk about budgeting. find a budget that you understand and stick with it. You'll be surprised how fast the savings snowball.
One plan I used that worked for me, was the 60/40 plan. You live on 60% of your income and then break the final 40% into the following catagories: 1/4 to savings/investing, 1/4 to emergency fund, 1/4 to retirement, and 1/4 to an entertainment fund. Or if you are dealing with debt 1/4 to emergency fund, 1/2 to debt repayment, and 1/4 to entertainment fund. (remember to budget you fun stuff so you won't feel deprived and won't be tempted to overspend)
Good Luck.
2007-09-25 17:00:31 · answer #1 · answered by Invisigoth 7 · 0⤊ 0⤋
there is a company called primeamerica. they offer a lot of things (family financial education) and one of the things they offer is asset management. here's the website: http://ww3.primerica.com/public/asset.html
i have never used them. but my sister and her husband were in a similar situation and didn't know how to go about planning for the future, how to manage debts, etc. and primeamerica helped them. my sister says they are in a much better place now and have learned a lot, enough to even make some of their own decisions now. primeamerica would be able to answer your question about whether to save & get subsidized loans or not, i'm pretty sure. i also know a lady who works for primeamerica and she is a really nice and ethical lady. as i mentioned before, i have not used the company but it sounds like it may be able to help you. good luck!
2007-09-25 16:59:41 · answer #2 · answered by itsjustme 4 · 0⤊ 1⤋
At your income a regular IRA sounds best.
2007-09-25 16:44:02 · answer #3 · answered by Anonymous · 0⤊ 0⤋