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Thread: The Personal Finances Thread

  1. #1
    Cyburbian
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    The Personal Finances Thread

    Hopefully this thread can be of some help or comfort to others and that people feel comfortable about talking about this issue. I don't feel we discuss these issues enough in our society.

    I am 29 and my wife is 27. As someone who is in a pension system, I often feel "behind" my peers with 401(k)s because I don't have a "set amount" of money in an account just sitting there. I like to look at account averages by ages/incomes/etc and with a pension it's very difficult to do. Not only that, I worry the pension won't be there when I retire in a few decades. So when I see the average person my age has $33,000 in their 401(k) I get a bit depressed. I have $14,000 in my Roth but the pension is up-in-the-air.

    On the plus side, my wife and I are both working full time in good jobs so we have some money to play with. Even though we make more than the national average I never feel like we are saving enough. We max out ($5,000) my Roth IRA and put $3000/year into a cash emergency fund. We put $400/month into our brokerage account.

    We have one car loan with $5,000 remaining and are looking to purchase another used car with cash. This terrifies me because I don't want to see $10,000 come out of my savings for a car but I do need a new one soon.

    Do you feel behind your peers money-wise, do you own a home and how much did you put down? Do you have student loans or did you pay them off? How about car loans? Are you a saver or a spender? Do you expect some inheritance from your family? Are you stressed about money even though you have enough? Do you think about it a lot or just "let it be"?

  2. #2
    Cyburbian wahday's avatar
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    Well, firstly I would say that from what I read, the MEDIAN (a better statistic for this topic than average) 401(k) savings for ALL working people (ie 65 and below) is only $17,000. And that figure comes from 2006! I'm not sure I buy the $33k stat, but again, this is an average, so you need to take that into account. Just a few people with a lot of money in a retirement account will skew that figure. I also noted that that larger figure was for individuals earning $60-80k. Not households, individuals. So, factor that into your assessment.

    Personally, I think you are in excellent financial shape for a person of your age.

    As to your other Q's, we own a house (and its still worth more than we owe on it) and I have student loan payments. But, no credit card debt, equity loans or car payments. We are frugal and savers and worked hard to get the debt load we do have under control, though with two children, cash flow is a constant challenge.

    Yes, I stress about finances a good bit, but over time I have come to calm down a bit about it. Things ebb and flow. We are making headway on paying down the student loan now. We just ended a period of two decent incomes, though that is changing again now. Money comes and it goes. Sometimes we can pay more into the retirement accounts, sometimes not at all. I think that is perfectly normal, especially for younger folks (I include myself) who are not working at one emplyer for 40 years.

    The last of our parents is in the latter stages of Alzheimer's so we do expect some inheritance in the next, say, 5-7 years, but I don't like to count on that beyond hoping it will help pay for the kids' college tuition. Still, a little bundle to invest and grow, for our future and theirs, is likely how it will be used.

    But overall, it sounds like you really don't have anything to be concerned about financially. You definitely have less cause to fret than I do...
    The purpose of life is a life of purpose

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    OH....IO Hink's avatar
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