Topic: Finance, retirement, college fund- please help me improve
Message posted by cookie1wood on Sep.30.2006 at 5:23am - IP Logged
cookie1wood
Standard Member
Sep.30.2006
4 Posts
Hi,
I am 34 and married with one child and my wife is 30yrs old. 10 yrs of marriage under our belt(thought this information might be important for any help offered)
I am trying to improve my overall finances and credit and retirement as well as start a college fund for my 6 yr old. I am interested in any help any one is willing to give me to point me in the right direction. Here are some details about where I am at right now. Thank you all so much for all your help, expertise and intelligence.
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My debt information:
I was in major credit card debt 5 yrs ago and went to a nonprofit consumer credit counseling service sponsered by united way and they will all be paid off come december after being in the program for 5 yrs.
I do not own a house, however I would like to be in one by the end of 2007. Right now I live in a Mobile Home in a Mobile home park and owe $16,128 on it. I have been trying to sell it but no luck so far. I rent the land the mobile home is on.
I have a car loan that will be paid off in july 2007. The payments on this are 378.41 a month
I have a personal loan through the same bank which is 107.41 a month
I also have a loan through a company called beneficial that I pay 227.42 a month
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Savings
I have two open savings accounts however there is no balance in them.
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Retirement
I am putting 5% my conpanies 401k and my compnay matches to 4%. I was invested very aggrerssively and just called my companies finacial advisor and reallolcated my funds per her advice. My rate of return up to now has been between 7 and 8%. I also have a pension which I am fully vested in.
My wife also has a 403b with her company that she invests 4% in aggressive stocks.
My Son's College Fund
As of right now I do not have a college fund for my son.
Message posted by ilovetiger2381 on Oct.03.2006 at 9:11am - IP Logged
ilovetiger2381
Standard Member
Apr.11.2005
106 Posts
1st of all, be sure that you make all your credit card/loan payments on time. i'm sure they already told you this at credit counceling, but just wanted to remind you again. late payments on your credit report will make it more difficult to get a loan and when you do get one, your interest rate will be highter.
next, i would pay off balances with the highest interest rates first. in the business/financial section of the newspaper, people often write in to ask about which debts to pay off, where/when to save, etc. this is the advice they always give. one lady compares paying off something with a 10% interest rate like having a savings account with a 10% interest rate. plus, showing that all these are paid off on your credit report helps a lot too.
third, i would keep the car as long as you possibly can. i used to sell cars, and it seems like one of the silliest financial decisions people would make is trading in a perfectly good car because they were tired of it or they wanted the newest model with the newest features. its almost paid off, and as one of my bosses used to say, a car that is paid off is a beautiful thing. i would get rid of the car in one of these scenarios:
1. the car gets too small. more kids, etc.
2. the car is an SUV or has a giant engine and you dont want to pay for gas anymore. depending on how much gas costs, it may be better to lose money on the car (ie, you owe $8,000 on it and the dealership gives you $5,000 on trade) with the money you save on gas. (but that would really depend on going from something like a ford expidition to a honda civic, among other factors)
3. the car just isnt worth it to fix anymore. this is a big one. when it starts to nickel and dime you, its time to go. some things i see as just regular maintenance, like oil changes, brakes, tires, belts, muffler, because those things are designed to wear out. but when you're replacing an alternator one month, a fuel pump the next, etc, then its time to get something newer and more reliable.
about the house, i would start looking now for one. you'll be able to get a better deal with less competetion over the winter because nobody wants to move over the winter unless they have to. get a copy of your credit report and score and be sure that its accurate. talk to a financial advisor and ask him/her when the best time to purchase would be. (maybe your advisor from the united way can help.) there may be something negative that will drop off your credit report in a few months and will help you get a better rate. talk to a real estate agent and start looking for houses in your price range and the area you would like to live in. and see if there's something different you could do to sell your mobile home. maybe a fresh coat of paint or planting some flowers in the front of it will give it the curb appeal it needs to sell. figure out how much money you will need for a down payment on a house. look into programs designed specifically for new home buyers. (some may have special rates, various grants, etc.)
as for the college fund, i dont know much about the best banks or mutual funds and the like. sounds like you have a good relationship with your bank, so you may want to talk to one of the bankers to get an idea of how much you can start saving and how. my mom would put all money that i got as gifts into my college savings account. everything for birthdays, christmas, 1st communion, you name it, it went into the bank and i only saw it when opening the card. i hated this when i was growing up, but having to borrow less in student loans was a wonderful thing. talk to the banker about how having this money in your and your son's name when he goes to college may effect his financial aid package. my grandparents started a college fund for my daughter and put it in my father's name (since they probably wont be around in 16 years when she goes to college) because their banker told them if it was in my name, i would have to show it as one of my assets and my saving for her tuition would then go against us when colleges figure out how much in loans, grants, etc to award you.
Message posted by FunkyChicken on Jul.15.2009 at 9:56am - IP Logged
FunkyChicken
Standard Member
USA - Virginia
Apr.03.2005
143 Posts
It is great that you are saving towards your retirement in a 401(k) - but one additional thing to consider is to save 5% of your income in a savings account...for emergencies, future unexpected purchases, etc.
The 5% challenge from Feed The Pig helps to put this into perspective: http://feedthepig.org/fivepercent
(you can really see how 5% adds up over the years)
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Topic: Finance, retirement, college fund- please help me improve
