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Financial Tips

October 27th, 2006 at 02:33 am

Just wanted to sum up Jane Bryant Quinn's money tips. This is the order she says to do things in:

1. Retirement: must put away 10 or 15% of your income

2. Reduce, then eliminate CC debt

3. Create a Cushion Fund (Emergency Fund). If still in CC debt start with a cushion to cover expenses for 1 month.

4. College savings for kids. This is optional and should not come before saving for your own retirement. She says the kids can always get student loans but you can't get retirement loans.

5. Prepay your mortgage. This should come last on your priority list.

She says that you should count any contribution that your employer makes toward your retirement fund in the 10-15% that you should be saving off the top.

I guess we're doing well with that because both of us have 5% withheld from our paychecks and both of our employers match that.

We're working on #2, but at the same time that we're also working on #3. I'll be happy just to get to $1,000 let alone one month's worth of expenses.

2 Responses to “Financial Tips”

  1. LuxLiving Says:

    rduell, thanks for posting these. I'd just suggest that AS SOON AS POSSIBLE that ya'll up your contributions to retirement to the 15%. Not easy I know - especially with 5 kids (got the same number here). I'd just make that be one of my long-term goals right after getting the EF up to a decent amount and the CCs paid off - say in 2-4 years time.

    I know you feel as you are pedaling as fast as you can! Smile But look how far you've been able to pedal in just the short time you've been running with this crazy crowd!! That FOCUS and DRIVE of yours is what is going to take you'uns all the way to debt freedom and financial independence!!

  2. rduell Says:

    Thanks Lux! You are absolutely right! I want to sock away as much as possible towards retirement. DH drags his feet a bit. He sees all we could be using the money for now, like getting the house up to a decent condition. (It's an old Victorian that we are slowly remodeling). In fact, every now and then he dares to mention borrowing from his 401k!!! He knows that always meets with great disapproval from me. ;-)

    We both put in what our employers will match but as soon as the CCs are paid off and the EF is up to snuff, I'm going to contribute the max I can to my IRA each year and hope to convince him to do the same with the 401k.

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