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Originally Posted by DudeImBetter
1. How much should my wife and I contribute to our 401k / IRA?
2. How much should we have in a regular savings account?
3. Home ownership seems to have vexxed me, just not sure how to know if it's financially preferable for ppl in our situation financially to buy or rent.
4. How much of extra money each month should be saved versus put towards debt?
Any advice about the above or otherwise would be appreciated. TIA
1. Put in the minimum amount needed into the 401k to get the company match. Putting more in the 401k depends on the fund selections available. If all you have is high cost options then you don't want to put any more in the 401k.
2. Conventional wisdom is 3-6 months of expenses in a readily available cash fund. The more solid your jobs, the lower that can be. I'd say in your case, with no house to provide an emergency expense, I'd settle for 1 or 2 months until the loans are payed off.
3. Home ownership is a great inflation hedge, as rents don't increase over the years and you build ownership equity. A lot depends where you live, the lifestyle you want, etc. If you don't want a house with yard work and other maintenance chores, then don't get one. If you think you might move to a different location in 5 years or less, then don't get one.
4. It's all about increasing your net worth. If the interest rates are really low, say 2% or less, then save as much as you can while paying the minimum. If they are higher than about 6%, then I would pay down the loans as much as possible while saving less. It's tough to beat a 6% or greater guaranteed return.