The balance: saving too little vs saving too much. AND Tesla
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Anonymous
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My parents saved very little (good income, good life, generous with others but very little left). My in-laws save too much (in the last couple of years, they gave their kids 28K each due to estate planning but argue about taking a few hundred dollars flight because it is too expensive).
I am hoping to strike a balance. Enjoy our life now, save enough to enjoy retirement. My husband is more like his parents (he keeps adding oil to his 10 year old dented Civic, sticking two kids back there despite the two doors model and claims it is fine). Our finance: We are both mid thirties 240K HHI 200K equity in our 900K house 80K equity in our 230k condo rental 760K in our 401K/roth IRAs (we contribute 47K to these accounts each year) 20K in 529 for 1 and 3 year old (we contribute 10K to these accounts each year) 100K in saving/bonds/general-investing for Emg/whatever cars are paid but oldish (10 and 9 year old). My husband is wonderful and he is not into worldly goods/or cars. But he keep talking about how nice the Tesla "concept" is (he did not say he wants one because "the Civic is good for at least another 2 years!"). He commutes 45 min-1 hr each way. I think he will enjoy the Tesla and financial we can take it (80K!) but close.What say you DCUM, should I talk him into it? or am I veering toward spending too much? |
Anonymous
| Your home equity is LOW. |
Anonymous
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Nope, as Suzie Orman would say, "DENIED!"
You need to bump your net worth before you start spending on depreciating assets and boy toys. Aren't the Teslas all two door? |
Anonymous
| Your net worth looks good, but your equity is all tied up in retirement accounts and real estate. You do not have a high enough emergency fund to buy a toy like that. Maybe reassess in a few years. |
Anonymous
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Buy a Tesla when you can pay cash without dipping into retirement savings or your emergency fund. It's an expensive toy that isn't getting very good reviews for quality.
There are retirement calculators on the web where you can enter how much income you want to have in retirement, and it will figure out how much you should be saving now. |
Anonymous
I disagree. What kind of emergency is more than 20k? And if it's more than 20k (meaning it's a huge emergency) is 100k going to really get you very far? Probably not. I think it depends on the monthly fixed expenses and what they can cover out of the monthly cashflow. For example we bring home around 14k a month and our fixed rxpenses are around 4K. We can easily cover minor emergencies and repairs out of our paychecks. We also receive a good 100k plus each spring in the form of a bonus and another 15-20k around year end. I just don't believe in having 100k sitting around unless you have an unstable job. We can cover our fixed expenses from one spouse's paycheck. If we both lose our rather secure jobs than we have a huge problem on our hands and we have bigger. problems than a 100k emergency fund will help cure. Op figure out your monthly expenses. Also see if you can move to a 15 year mortgage or at least pay like its a 15 year to build up equity. |
Anonymous
PP quoted, to clarify, I would want more liquid investments than the 100k minus 80k for the tesla. Not sitting in cash, but in a regular brokerage account instead of a retirement account. That way it's accessible for emergencies or non emergencies like a huge vacation or starting a business or whatever. |
Anonymous
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Wow, that is pretty bold to buy a million dollar house on that income. We have a similar income and could not even imagine that.
Our HVAC system was $10,000, same with our roof and other major repairs....... |
Anonymous
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Rule of thumb - every home repair is $5000! Last summer - repaired flagstone paths - $5000; rebuilt chimney - $5000; replaced roof on our porch - $5000; etc, etc. Your savings can get eaten up very quickly!
Why does DH like the Tesla? If it is for energy efficiency reasons, it is actually not getting the greatest reviews. Hybrids are better for the environment. |
Anonymous
| Sorry you spent it on the house! Agree you can't afford it now. |
Anonymous
| I don't think someone who's good with a 10-year-old civic is going to enjoy a very expensive car. he'd probably feel guilty every time he drives it. |
Anonymous
| Your mortgage is too high to make a Tesla affordable. |
Anonymous
| Surely there is a middle ground. The new Accords are sporty... |
Anonymous
| As usual, DCUM folks spend no money. You can afford this car if you want it. |
Anonymous
| OP here. Since many are wondering about our mortgage I will clarify. Our PITI is $4250 with 27 year left. I do not intend to pay the 3.9% loan sooner. My general rule is 1/4 of our income for each of the 4 category: taxes, house, saving and other (food, daycare cost, vacation, etc ..). Our house was brand new so I do not expect any of the big ticket item for at least another 5-7 years. I know most of you like to own your house free and clear but I like leverage. None of this in defense of buying the car by the way. |