Thanks PP's for all of the great feedback and questions.

10:50- You make a great point about the savings and house funds being backed by the FDIC so that I dont lose immediate access to the money or lose the money alltogether. Thank you for pointing this out.

11:14 and 11:23- This is great advice. I agree that my first choice should be the option with the company match. Doesnt make sense to leave that money on the table. I have not yet started contributing to my retirement fund but I do plan to start this year. In fact Im kind of kicking myself in the butt that I didnt start contributing sooner. I started working here 3 years ago so I could have potentially been receiving the company match for the past three years. I forget what the exact match is but I heard my coworker talking about it one day and apparently its pretty good.

11:34 - I am not contributing anything for retirement just yet and I also claim several exemptions. I think this is why my take home may be more. Normally at the end of the year I end up owing the govt anywhere from $900-$1500 when I do my taxes. Last year however I did not owe anything and I think this is bc of the birth of my child. I havent done my taxes for this year yet but I am curious whether as to whether or not I will owe.

11:38 - This is a very good question. I have been saving up for the past 4 months, so technically I should have $12K saved up, but I only have $11K. You'll notice that there $1K missing. The reason why is bc I keep the $1K in my checking account to serve as a cushion. Since my commission check varies each my by a few hundred I needed to make sure that I would have enough of a cushion in my checking to not go into the negative in my checking. Obviously I know that I have money in my savings but the goal is for me not to have to touch that savings $$ at all. Also, if there is any extra money left on the 15th I leave it in my checking account and it rolls over to the next month. So my checking account will sometimes increase from month to month, but not by much though.

For the most part my other monthly expenses are pretty low. My commuting costs are roughly $110 per month. Food costs roughly $100 per month. I really dont have any entertaining costs since I am always rushing to work or rushing home afterwards to be with DC. I don't eat out at restaurants and I dont do HH at bars, etc. I am able to keep my food costs down too bc my office frequently has conferences/meetings with catered food. There's usually tons of leftover food at least 3 x's per week. Since I'm in good with the receptionist she lets me know right before she is about to put the leftovers out in the kitchen so I can get first pick before the good food disappears. So this is where the majority of my lunches come from. Other than food and commuting I really cant think of any other expenses recurring monthly expenses.

I dont get my hair done, or my nails. I dont wear make up. I dont spend on a lot of money on unneccessary grooming products. Dont get me wrong I'm always well put together and presentable but I use just the basic essentials: toothpaste, deoderant, face wash, body wash, hair mousse, olive oil as lotion) so my personal care and toiltetry expenses are pretty low every month. I also try to use natural/home made personal care products when possible. I have this weird phobia of using too much processed anything bc of all of the chemicals/preservatives that are used these days.

11:39 and 11:44: I have the least amount of taxes witheld and I dont contribute to retirement at this point so this is why my take home is so high. This will definately change this year however once I start crontributing to my retirement account and Im also thinking about enrolling in a flex spending account. Between starting retirement contributions and flex spending contributions my take home pay will be lowered soon and I will probably only be able to save about $2,200- $2,500 per month as opposed to the $3,000 that Im currently doing.

Anonymous wrote:Also, I make just under $90k a month and don't have $4800 take home. Are you having enough taxes withheld?

I'm thinking she makes more than 70k since the $1300-1900 sounds like after tax money. Also, since it doesn't sound like she contributes to retirement just yet, thats more take home as well.

Also, I make just under $90k a month and don't have $4800 take home. Are you having enough taxes withheld?

Anonymous wrote:

Anonymous wrote:How are you able to save that much per month? I make about the same as you and usually bring home about $1650 every two weeks. We're the same age also. Are you married?

PP, thanks for the question. I am a single mom. The key for me has been a) pay off my debt b) to live as simply as possible.

I am including below a list of my fixed monthly expenses:

RENT $900: I rent a 2 BR condo in close in NOVA. It takes me about 35 minutes to commute each way to my job in DC. Monthly rent is $1,800 and I have a roommate so we split the rent and utilities in half.

UTILITIES $100: This includes gas, electric and cable. The monthly utility bills run about $200 and I split this with the roommate.

PUBLIC STORAGE $100: I rent a storage unit for $100 per month.

CELL PHONE $40: I dont have a home phone. I only have a cell phone and have been with the same provider on the same $40 plan for years. I've had the same cell phone for the past 6 years. People are constantly telling me I should upgrade to the latest, newest phon on the market but I dont see why when my currently cell phone works perfectly fine.

CAR INSURANCE $80: I love Geico what more can I say.

CHILDCARE $400:Total childcare cost is $800 per mo. DC's father pays $400 per month in child support so his $400 goes towards half of the childcare costs.

So, my monthly fixed expenses are around $1,620.

My base salary is $50K plus I earn approx. $20K in commissions annually.

I receive 3 paychecks each month:
1st: $1667 base salary
15th:$1667 base salary
15th: ranges from $1300-$1900 commission check

So, each month I can count on receiving approximately in $4,800 take home pay. $4,800 take home - $1,620 fixed expenses = $3,180 leftover. On the 15th of every month I transfer $3,000 of the leftover from my checking into my savings account.

Before I paid off all my debt aggresively saving like this would not have been possible.

The key is to a) pay off all or most of your debt b)to get and keep your fixed expenses down. The lower your fixed expenses are each month the more money you will have leftover to save.

I also live a rather simple/frugal life. I grocery shop at Aldi, which is arguably the cheapest grocery store out, and I buy DC's clothing from baby consignment stores and sales. These are just a few examples.

This is impressive, but are you really only spending $180 a month on food, travel, clothing, medical and any other essentials that you might need?

Anonymous wrote:

Anonymous wrote:How are you able to save that much per month? I make about the same as you and usually bring home about $1650 every two weeks. We're the same age also. Are you married?

PP, thanks for the question. I am a single mom. The key for me has been a) pay off my debt b) to live as simply as possible.

I am including below a list of my fixed monthly expenses:

RENT $900: I rent a 2 BR condo in close in NOVA. It takes me about 35 minutes to commute each way to my job in DC. Monthly rent is $1,800 and I have a roommate so we split the rent and utilities in half.

UTILITIES $100: This includes gas, electric and cable. The monthly utility bills run about $200 and I split this with the roommate.

PUBLIC STORAGE $100: I rent a storage unit for $100 per month.

CELL PHONE $40: I dont have a home phone. I only have a cell phone and have been with the same provider on the same $40 plan for years. I've had the same cell phone for the past 6 years. People are constantly telling me I should upgrade to the latest, newest phon on the market but I dont see why when my currently cell phone works perfectly fine.

CAR INSURANCE $80: I love Geico what more can I say.

CHILDCARE $400:Total childcare cost is $800 per mo. DC's father pays $400 per month in child support so his $400 goes towards half of the childcare costs.

So, my monthly fixed expenses are around $1,620.

My base salary is $50K plus I earn approx. $20K in commissions annually.

I receive 3 paychecks each month:
1st: $1667 base salary
15th:$1667 base salary
15th: ranges from $1300-$1900 commission check

So, each month I can count on receiving approximately in $4,800 take home pay. $4,800 take home - $1,620 fixed expenses = $3,180 leftover. On the 15th of every month I transfer $3,000 of the leftover from my checking into my savings account.

Before I paid off all my debt aggresively saving like this would not have been possible.

The key is to a) pay off all or most of your debt b)to get and keep your fixed expenses down. The lower your fixed expenses are each month the more money you will have leftover to save.

I also live a rather simple/frugal life. I grocery shop at Aldi, which is arguably the cheapest grocery store out, and I buy DC's clothing from baby consignment stores and sales. These are just a few examples.

Ahh makes sense. You are awesome! I still have debt that I'm paying off, which comes out of my check plus I save about 20% for retirement. So that's why our take home pay is so off from each other. I'm a single mom too.

21:42 here.

Once you have your $50K or so, you absolutely should make the 401K your first and foremost goal. Especially if you have a company match - you are literally leaving money on the table if you dont participate. It can really really add up depending on the company (My firm adds nearly $13,000 a year to my 401K!).

Your first choice for retirement savings should always be the vehicle with a company match, if that is available, and then max out the match.

Roth IRAs are great if you expect to be paying a higher rate when you retire than you are now. Otherwise, you can consider a normal IRA, or just save more in your 401K.

Anonymous wrote:How are you able to save that much per month? I make about the same as you and usually bring home about $1650 every two weeks. We're the same age also. Are you married?

PP, thanks for the question. I am a single mom. The key for me has been a) pay off my debt b) to live as simply as possible.

I am including below a list of my fixed monthly expenses:

RENT $900: I rent a 2 BR condo in close in NOVA. It takes me about 35 minutes to commute each way to my job in DC. Monthly rent is $1,800 and I have a roommate so we split the rent and utilities in half.

UTILITIES $100: This includes gas, electric and cable. The monthly utility bills run about $200 and I split this with the roommate.

PUBLIC STORAGE $100: I rent a storage unit for $100 per month.

CELL PHONE $40: I dont have a home phone. I only have a cell phone and have been with the same provider on the same $40 plan for years. I've had the same cell phone for the past 6 years. People are constantly telling me I should upgrade to the latest, newest phon on the market but I dont see why when my currently cell phone works perfectly fine.

CAR INSURANCE $80: I love Geico what more can I say.

CHILDCARE $400:Total childcare cost is $800 per mo. DC's father pays $400 per month in child support so his $400 goes towards half of the childcare costs.

So, my monthly fixed expenses are around $1,620.

My base salary is $50K plus I earn approx. $20K in commissions annually.

I receive 3 paychecks each month:
1st: $1667 base salary
15th:$1667 base salary
15th: ranges from $1300-$1900 commission check

So, each month I can count on receiving approximately in $4,800 take home pay. $4,800 take home - $1,620 fixed expenses = $3,180 leftover. On the 15th of every month I transfer $3,000 of the leftover from my checking into my savings account.

Before I paid off all my debt aggresively saving like this would not have been possible.

The key is to a) pay off all or most of your debt b)to get and keep your fixed expenses down. The lower your fixed expenses are each month the more money you will have leftover to save.

I also live a rather simple/frugal life. I grocery shop at Aldi, which is arguably the cheapest grocery store out, and I buy DC's clothing from baby consignment stores and sales. These are just a few examples.

You're doing great!

Your emergency fund and your house savings fund should be in FDIC-insured (or federal credit union-insured) accounts, like savings accounts or CDs. You don't want to put this money in stocks or bonds only to find that the market has taken a nose-dive right when you need the money.

Look into whether your employer matches your 401k contributions in any way, and then make sure you put in enough to get the match. Otherwise, see if a Roth IRA would be a good retirment account. Vanguard is one of the many investment firms that you could use for a Roth IRA account. Get a basic personal finance book to learn a little more.

Oh PP's! OP here. You all are awesome. Thanks for the excellent advice.

17:29 - Thanks for giving me a good framework to follow. It seems that I currently have my 6 month emergency fund on hand so I'll probably save up for another month or two, just to be on the safe side. I think $15K would be a good number for me to have as an emerg fund. Once I reach $15K, in a month and a half, I will begin to save for a house as well as retirement. For # 2 (house fund) do you have any suggestions on safe investment vehicles besides the Vanguard brokerage account mentioned by the 21:39 pp? (Just looking for a few options so that I can compare). For # 3 (retirement fund) I think I'll start by joining my company's 401K so that I can benefit from the company match. Vanguard sounds interesting too. I do have a question about Vanguard- It is neccessary to have 2 retirement savings accounts? Ie. 401K from my company + Vanguard fund?

21:39 - Thanks for providing the framework but also for providing the very specific steps that I can take. You were spot on with the emerg fund estimate...I'm going to aim for $15K. So that is 1 and 1/2 months more of saving before I can switch gears and start saving for house and retirement. I really appreciate your advice about transfering money once savings hits that certain number and then continuing to replenish. I also appreciate the advice about the brokerage account and that fact that I wont receive a penalty if I need the funds for a house. For this reason I think that the brokerage fund would be a good option for me to consider for the house fund and possibly later on down the line for DC's college fund. I dont plan to buy a new car any time soon. I drive a 2004 (paid off. yay ) and I plan to drive this thing until the wheels fall off.

21:42 - What can I say. You are simply amazing! I love love love the link that you provided to networthiq. I was on there looking around and I think this site will serve as a motivation tool for me as well as help me take a pulse on where I'm at from time to time. Just to clarify...I'm not at $50K yet but hope to be there soon. You have given me some great ideas of what I can do with this money that I'm saving...opening a CD, 401K as well as investing in stocks. This is exactly the info I was looking for; any other option as opposed to having the money just sit in the bank. Thanks for sharing with us a snapshot of your savings habits too! The fact that you will be able to save $8K-$9K per month within the next couple of years is like music to my ears. Hopefully one day I can to be right there with you!

How are you able to save that much per month? I make about the same as you and usually bring home about $1650 every two weeks. We're the same age also. Are you married?

Anonymous wrote:As soon as I found out I was pregnant 2 years ago I decided to aggressively pay off my debt.

DC is now 15 months old and I'm proud to report that very recently I paid off all of my debt.

Now I have begun to aggressively save. My salary is $70K and I am able to save about $3,000 per month. I just started a few months back and now have $11K in my saving account.

I will turn 30 this year and this is the most money that I've ever had. I grew up poor so this is a vast difference.

I just transferred $3K into my saving account today in fact. I'm scared though because let's say that I stick to the plan and continue to put away $3000 per month. At what point do I stop? Once I've amassed a sizeable chunk...let's say $50K for example what do I do with this money? It just feels weird that I am aggressively saving this money and that I DON'T want to spend it. It's kind of like a statue sitting in the foyer looking pretty. I love checking my bank account and seeing this money there.

Do you have any suggestions on ways that I can invest this money or other things that I can do with it as opposed to just leaving it in the savings account sitting pretty?

I am with you 100%. I check my accounts monthly and religiously update what I've got. There's nothing "odd" about watching the $50K, although now that youve got that much, I'd start looking at other options: open a CD ladder (although rates suck), maximize 401k, begin investing your money with sharebuilder or etrade or something of that sort.

And I'm going to feed your addiction. You are either going to love me for showing you this, or hate me:

https://www.networthiq.com/explore/

Click around - you can find other profiles of people, or create your own and track your own progress. It can be a bit discouraging to see how much some people seem to have amassed, but I found it an incredible tool in actually driving my savings behavior. Your savings rate is exceptional, and especially for your salary level, thats absurdly good. I was not very aggressive when I first found the site, but have since made a LOT of changes in our household and I'm now seeing BIG results, saving close to $5K a month - and and expect that in the next 2-3 years I can hit $8 to 9K a month in savings which is kind of nuts, but also awesome. Whatever your number, it gets exciting to watch. Plus, it lets you pat yourself on the back equally for reduction in debt, which I think people often forget to do, or at least people tend to think of saving in terms of either saving OR paying off debt, not as both. It helped me realize that I'm not only saving ~$5K/mo but I'm also reducing my debts by about $1,000 a month just by paying our mortgage.

Stick with it.

Congratulations! Keep it up! It's nice to have a safety net. And as PP mentioned, there will likely be more uses for your pretty pile of money.

It sounds like you already have a checking and savings account. Great. Get the balance of that savings account to that 3-6 months of living expenses (maybe that's about $15k-25k for you?)

Once you have that, go to Vanguard.com. Give a call to the number there and talk to a representative if that makes you more comfortable. Open a retirement account (IRA), and a brokerage account. Put $5,500 in the IRA in the fund called "Target Retirement 2045." Keep contributing every year to that account and fund. Put another $10,000 into something like the "life strategy moderate growth" fund. Keep adding to your savings, and when the savings balance gets to $15,000 again, transfer another $10,000 into the Vanguard brokerage account.

You will have access to the Vanguard brokerage account without a withdrawal penalty when you buy a car, house, pay for college, etc. You will have penalty-free access to the IRA when you are 59 1/2, so don't dip into that until you are ready to retire, and even then it's best to wait until you are 70.

Enjoy watching your child grow, knowing that you will be able to support a college education, and that your baby won't be supporting you when you retire.

1. Emergency Fund. Stop saving once this covers 3- 6 months' expenses (depending on how secure your job is etc).
2. House downpayment
3. Retirement.

For 2 you want to keep it in fairly safe investments. For 3, a tax-efficient vehicle of some kind, and at your age I would invest something like 70 percent stocks, 30 percent bonds. Find a very low fee investment vehicle - Vanguard is excellent.

As soon as I found out I was pregnant 2 years ago I decided to aggressively pay off my debt.

DC is now 15 months old and I'm proud to report that very recently I paid off all of my debt.

Now I have begun to aggressively save. My salary is $70K and I am able to save about $3,000 per month. I just started a few months back and now have $11K in my saving account.

I will turn 30 this year and this is the most money that I've ever had. I grew up poor so this is a vast difference.

I just transferred $3K into my saving account today in fact. I'm scared though because let's say that I stick to the plan and continue to put away $3000 per month. At what point do I stop? Once I've amassed a sizeable chunk...let's say $50K for example what do I do with this money? It just feels weird that I am aggressively saving this money and that I DON'T want to spend it. It's kind of like a statue sitting in the foyer looking pretty. I love checking my bank account and seeing this money there.

Do you have any suggestions on ways that I can invest this money or other things that I can do with it as opposed to just leaving it in the savings account sitting pretty?