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Neither my spouse nor I graduated in four years, maybe there's something to be said for not working in college. Looking into it I do think we will fund 529's, but with some loose strings (apparently one of them is state school unless it's a top notch private).
If nature and nurture both hold true the kids should do well (good genes and we've pumped a whole lot of time and money exposing these kids to an enriching environment).
The growing money just because thing is my hang up. What do I need it for? I guess just to save for something I don't know I need yet.
We've got life insurance, disability insurance, and careers that we love and can do until we kick the bucket, but have no real use for the money now.
I really just wish we could cut back on hours, spend more time as a family, but it is what it is I guess. Do you think getting a maid, and maybe some of those semi-prepared meals would be a good use of this money? In theory it would give us more time together as we wouldn't be spending our free time doing chores.
Ex puts money in 529s for the kids, but I also fully fund my Roths whenever possible. You can tap that money for educational expenses for anyone, not just the kids, and it can also be used for health care expenses for any family member and for a down payment on a home. No penalties involved for any of those uses. IMHO it just has more options for use than a 529.
However, I do admit to being totallly unknowledgable about the rate of return, so there's that.
And heck, yeah, pay for some help around the house!
My income is going to double soon also...I'm paying off my small debt, boosting my retirement to the max, paying down the principal on the house, taking a better than crappy vacation for a change, saving for a newer car, and springing for some long neglected home repairs. Livin' large!
From the description of the take home income, I suspect OP will be bumping up against the income limits for Roth IRAs in 5 yrs or so.
If Congress hasn't changed the law by then, the OP may still be able to contribute to a Roth IRA via the back door method. (The back door only works, though, if he doesn't have any money already invested in a traditional IRA.)
If I were you, I'd upgrade the car, hire a cleaning person to come once a week for the inside of your home, hire occasional help for the outside, splurge on an additional vacation each year (probably longer or farther away than you usually do), upgrade any technology that needs it, buy yourself and your wife some nice jewelry/watch, etc., pay off some debt, and earmark a percentage for charities you believe in. Have a date night and enjoy a lovely dinner together every week at a nice restaurant. Then sock away/invest the rest.
I disagree with the notion that parents have to foot the entire bill for their children's college educations. A kid may want to go to technical school, travel right after high school, or work right away, and that's fine. When a kid turns 18, they should strive to make it on their own and not mooch off their parents. If they want to go to college, they can apply for scholarships and work-study, take advantage of state schools, work, or take out loans.
It's a good problem to have, but all the information out there seems to be about getting out of debt, or percentage based living, and it just doesn't fit my new reality.
Sorry, I wasn't sure if actual numbers would be seen as a quote "humble brag."
Rent and Health Insurance are covered outside the take home, ownership isn't an option as we move too frequently to break even on the transaction costs of buying and selling.
We are doubling from $5,000/month take home to $10,000/ month take home (and it'll double again in a couple of years).
Our two young kids have zero college savings (I guess that's a starting point, although my partner and I were given nothing by our parents for college so we aren't sure we want to help our kids, we can afford to, but we just aren't sure how that will affect their path).
Savings outside of 401(k) makes up a years expenses, and we are vested in a defined benefit retirement plan that if it remains solvent would provide more than we take home now.
I'd definitely recommend the college funds. My parents helped me and I'm immensely grateful I graduated with only $13,500 in debt instead of much, much more. I plan to do everything I can to make sure my daughter has to take out minimal loans for college. I know it won't affect her path any (other than making sure she doesn't start life saddled with immense debt) because I'm raising her to appreciate stuff like that.
I totally understand it's a good problem to have, but it's still foreign to me.
In just a few months my take home household income will double. This is after putting 20% into a 401(k).
My family lives modestly, but comfortably, and we live on just 75% of our take home now, putting that other 25% towards who knows what in the future and everything was working out just fine.
But now we will be living on just 37.5% of our take home and I figured you guys would have the best insight on what to do with such large savings.
Early Retirement isn't in the cards, the spouse and I both love our careers and although that could change its not likely. Can't cut back on hours either (salary).
On our current income we go on vacations, drive safe and reliable cars, live in a great area, and eat healthy food (natural vice organic if that makes sense). There's really no further utility for us, so what do you guys do.
According to one political party, your achievement now makes you total scum. You must give what you have for the lower class and then join them to atone for your sins.
We're in a similar position. We paid off our mortgage a few months back and just reduced our living expenses to 30% of take home pay. My husband just accepted a new job that doubles his income and sends us abroad.
We will keep mostly keep our lifestyle, but probably with the following changes:
1) More travel. We will likely add one additional international trip to take advantage of our new global position or at least travel within our host country each winter holiday (my preference).
2) More help. I haven't decided if I will accept a maid (TBD), but I will hire subject matter tutors for my children and probably a language tutor for myself.
3) More retirement/legacy funds. My husband loves to work so retirement isn't in the cards for him, but nonetheless he wants financial freedom so we will aggressively save and invest as if we were looking for early retirement.
4) More charity. Once the college and retirement funds are secure I will be a lot more generous with the causes we are passionate about. I will also be open to helping other family members who may be dealing with the consequences of poor financial decisions.
What we won't do:
1) We won't upscale our clothing or cars (we won't even have a car).
2) We won't take on new expensive hobbies.
3) We won't live in a larger space.
If I were you, I'd upgrade the car, hire a cleaning person to come once a week for the inside of your home, hire occasional help for the outside, splurge on an additional vacation each year (probably longer or farther away than you usually do), upgrade any technology that needs it, buy yourself and your wife some nice jewelry/watch, etc., pay off some debt, and earmark a percentage for charities you believe in. Have a date night and enjoy a lovely dinner together every week at a nice restaurant. Then sock away/invest the rest.
I disagree with the notion that parents have to foot the entire bill for their children's college educations. A kid may want to go to technical school, travel right after high school, or work right away, and that's fine. When a kid turns 18, they should strive to make it on their own and not mooch off their parents. If they want to go to college, they can apply for scholarships and work-study, take advantage of state schools, work, or take out loans.
The problem is that this puts kids from middle and upper income families at a disadvantage because the government snatches grant money away due to family income. Why should someone be deprived of aid due to money that is unavailable to them? Isn't that a bit like taking benefits away from one ex-spouse due to the other's income in the absence of alimony? How is this possibly fair?
I did this last year on a much smaller scale. 36 to 72k. I also moved to a cheaper home. I paid off my credit card and my truck which was nice. Not much has changed really I did get cable back
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