Reply to What would you do with a greatly increased HHI?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]1) pay off the student loans

2) make sure emergency savings cover 3-6 months of expenses

3) max out retirement savings

4) bump up college savings [/quote]

+1 [/quote]

Max the retirement savings and consider, after other priorities, whether you can do even more in a Roth IRA, or nondeductible IRA. Graduate school means you have less time to take advantage of long term tax advantaged retirement savings, though of course you are still doing more than the great majority. We have been practicing this for 20 years for me (right out of college) and 15 years for dh who has a phd, and I just ran our numbers this week and we are in good shape. We could even scale back, but it is working for us so we won't. After all, you never know.

For purposes of comparison, right now we are saving $400 a month per child for college (kids are 3 and 6) and I think we should bump it up. That said when they get to college age I also want them to work and make intelligent education decisions.

Fairly recently we went back to church and find that nowadays you can tithe online and even pick and choose the monthly amounts and among a menu of purposes for the funds. I like how I can budget for the year that way. From that baseline then all year long charitable opportunities come up and I contribute as the spirit moves, so to speak.

One other important thing is to review your insurance. We have insurance through work, and also bought term life policies to cover our children's growing up years. We know we should also look into disability insurance, but we haven't made it happen yet.

Otherwise it sounds like you have good habits and great attitude. Our earning years are a great opportunity and us green eyeshade types really like to maximize it and make the money work.

Oh, and do read the Millionaire Next Door. It is invaluable for understanding the lifestyle and habits that lead to financial security and also for understanding the problems of the big hat no cattle folks.[/quote]

+1[/quote]

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