The following is a post from staff writer Crystal from Budgeting in the Fun Stuff, where she writes about finding the balance between paying your bills, saving for your future, and budgeting for the fun stuff along the way.
I was reading this article, 15 Ways to Never Run Out of Money, and was wondering how my husband and I are stacking up so far at age 27 and 28.
The article is broken up into 4 sections – the Beginning Years, the Middle Years, the Pre-Retirement Years, and the Retirement Years. Today I’ll be covering the first two parts and tomorrow I’ll cover the last two parts:
The Beginning Years
1. Live Modestly
We have fun money, but overall, I believe my husband and I have this covered. We basically live on his salary as a public school librarian and save my salary as an office worker.
2. Keep to a Budget
This gets a HUGE check. I enjoy budgeting since it shows us where our money is going.
3. Start Saving Early
We have this one covered too. I started contributing the minimum to get the maximum company match (6%) to my 401(k) as soon as I got my first “real” job at age 22. My husband has been building his pension ever since he started teaching at 23. We also have been fully contributing to a Roth IRA since that year too. Those retirement accounts plus our emergency fund and stock contributions should cover us and then some in retirement.
The Middle Years
4. Diversify Your Holdings
We’re already doing this as well just to cover our bases. Granted, we do have about 70% of all our savings in stocks or mutual funds, but they are diversified too. We’ll switch to less risky investments little by little until we only have about 10%-15% stocks in our late 40’s since we are planning to retire at 52.
5. Prioritize Retirement Over College
If we have kids, we will definitely only help them with college with money that we don’t need to save for retirement. I figure that my kids can get loans for college but it’s harder to find funding for retirement.
So far, we seem to be off to a great start! Remember to check back in tomorrow to see if we have a plan for the Pre-Retirement Years and Retirement Years too.
Do you have the first parts covered?