Savings

Discussion in 'Teacher Time Out' started by NewTeacher2016, Sep 11, 2017.

  1. NewTeacher2016

    NewTeacher2016 Companion

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    How much are you contributing to your IRA, 529 plan, HSA, emergency fund each month? My district automatically withheld 9% of each paycheck for state pension contribution.

    I don't know how people can do all that and try to save up money for a house downpayment. My food budget is only $200 for each month right now.
     
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  3. mathmagic

    mathmagic Connoisseur

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    I really, really need to get on the whole IRA thing...I keep meaning to do it but never end up doing it. Eventually though, I want to put in the full $5,500/yr and have my wife do the same. We're saving up a ton each month right now, but housing here is quite expensive!

    And in terms of the downpayment, how close are you to the amount you need for your particular "budget" for buying a house? If you want to send me your budget (generalized / without any personal info), I wouldn't mind looking at it and helping give any advice I can.
     
  4. Caesar753

    Caesar753 Multitudinous

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    My district makes my full contribution to my state retirement account--one of the last remaining perks of the job. I make a flat deposit of like $100/paycheck to my personal retirement account. I try to put away between $500 and $1,500 each month into my savings account.
     
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  5. viola_x_wittrockiana

    viola_x_wittrockiana Companion

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    Managing money is about discipline and smart planning. You're doing better than many that you're even worried about having enough in HSA etc. If you need help motivating yourself to put in the funds on optional accounts, run the math. There's all kinds of downloadable templates if you aren't familiar with finance math. Plug in numbers for different scenarios and you'll find the motivation to put in that extra $15. Every dollar counts when you're young, then not so much when you're closing in on retirement.

    If it's just you eating on that $200, you can eat well on less if you're willing to make a few changes. Shopping loss leaders, using coupons, and planning meals ahead all help. I buy the "family pack" of chicken, then freeze whatever I can't use right away.
     
  6. Ima Teacher

    Ima Teacher Phenom

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    I put $150 a month into a retirement account. I know nothing of the stock market, so it's best just to leave that up to someone else. I have a percentage automatically deducted and put I t the state retirement account, too. As far as other savings, it varies. Soemtimes it's a good chunk. Other times not.

    I bought my house when I was 28. Houses aren't as expensive here, so I bought it myself. It has been a good investment. I did an addition last year, so my savings took a hit with construction. Still a good investment.
     
  7. waterfall

    waterfall Maven

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    My district requires us to put 9% of our pay check into our retirement account; I don't put in anything extra. My district contributes about $120 per month to our HSA accounts. I don't put in any of my own money...I've used my HSA extremely rarely (I pretty much only go to the Dr. for preventative stuff, which is free) and currently have several thousand in there just from my district contributions over the years.

    As far as savings, up until a few years ago all I did was work summer school and put the entire extra paycheck (usually about $4500) in savings. My district got rid of summer school and none of the other districts around here will hire "outsiders" for summer school, so that killed that plan.

    Two years ago I took a really hard look at my budget and got rid of any unnecessary costs per month. For example, I got rid of my cable and my gym membership and started working out at home (and yes, I did stick to that and actually do workout at home :)). I also realized I was spending a ton of money on eating out and taking Ubers when I went out downtown (way faster and more convenient than public transit, but about $25-35 one way vs. $4 on the light rail). I am very fortunate to not have student loans or a car payment, so that helps a lot. If I had to pay what some of my friends do for both of those expenses, I'd be pretty much living paycheck to paycheck.

    I have a set budget of $200 per week for absolutely everything that's not a regular monthly bill. For example, this includes groceries, gas, clothes, "fun" money, emergencies (car needs repair, cat needs the vet, etc.), infrequent expenses like hair cuts, and basically anything else I spend money on that's not rent/phone bill/internet bill/utilities bill/insurance. By doing that I can get about $400-600 in my savings account each month. I keep a running google doc of what I spend, and I keep track of any extra that I have leftover from my $200 per month as kind of a separate "savings." If any big unexpected expense comes up or I want to make a bigger "fun" purchase, it comes out of that leftover money that I've kept track of from my weekly budget.

    I am not anywhere close to being able to purchase a house (both being able to afford the down payment as well as having a large amount of savings for unexpected things like repairs) as houses around here cost about $400K on the low end. I figure you have to start somewhere though!
     
    Last edited: Sep 11, 2017
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  8. bella84

    bella84 Fanatic

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    My state requires that teachers contribute 14.5% towards our pension system. I rolled over funds from other retirement accounts into an IRA, and I earn interest on that and dividends towards the reinvestments. I don't contribute any of my paycheck towards it right now, though. I don't have a 529 or an HSA. I wish I could contribute towards an emergency fund, but I don't usually have much left over at the end of the month.
     
  9. NewTeacher2016

    NewTeacher2016 Companion

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    I am currently saving 5% for a house worth ~130K, the cost of living here is pretty low. There is a state program for teachers with 3.0% fixed mortgage rate and a forgivable down payment assistant up to 10K for a brand new house or 6K for a used one. I have student loans, so 10% of my check goes to that, and I give 10% of my check to my parents as they are retired.

    My rent is pretty high though (a solid 35% of income) and that is the main reason why I want to get a house instead. My goal of the year is to max out IRA contribution and really take advantage of the compounding power, I've been making a monthly contribution for the past 8 years and definitely noticed the importance of it.
     
  10. NewTeacher2016

    NewTeacher2016 Companion

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    You are allowed to have both pension and an IRA account and that's why I wanted to keep them separated. I don't think pension alone is enough for the cost of living in the future. It is very hard to do them all, I just hope I don't get sick nor need to get a new car anytime soon, couldn't afford either.
     
  11. NewTeacher2016

    NewTeacher2016 Companion

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    What kind of addition was it? a colleague of mine installed solar panels last year and he bought the house with zero down.
     
  12. NewTeacher2016

    NewTeacher2016 Companion

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    Yes I've noticed automatic transfer works really well. I also limited myself to use only one credit card so I can track all the expenses more easily.
     
  13. bella84

    bella84 Fanatic

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    Yes, I have a separate pension and IRA. I do think that my pension will be enough, but I want an IRA just in case the need for one arises. My state has one of the best teacher pension systems in the country. So, as long as I stay in teaching, I'll be good. The IRA is my backup in case I don't make it another 20+ years.
     
  14. NewTeacher2016

    NewTeacher2016 Companion

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    Kids are very expensive and I want 3 eventually, and that's why I felt like opening up a 529 plan right now is a good idea. You are allowed to set yourself as the beneficiary right now and transfer to your future kids once they are born. or I could just tell them join the military and pay their own college tuition. hmm
     
  15. shoreline02

    shoreline02 Cohort

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    I have $150 automatically taken out each month. I can't really comment on the house down payment issue, town homes here are $300,000+! I won't be buying a home anytime soon.
     
  16. Ima Teacher

    Ima Teacher Phenom

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    I added a master suite, two-car attached garage, and breezeway. I also fenced the back yard and converted a bedroom to a theater room. The summer before that I turned a screened porch into a carport and a smaller screened area. I also painted the exterior and installed a drainage system.
     
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  17. Ima Teacher

    Ima Teacher Phenom

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    I bought my house for $82,000 in 2000! After my addition, it appraised for $142,000 after the addition. It's a four bedroom, two bath brick ranch on 1.5 acres. I've got a detached single car garage, storage building, and attached two-car garage. Plus, my back yard is fenced.

    I don't know how people afford houses some places. I watch house buying shows, and I'm amazed by prices.
     
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  18. TrademarkTer

    TrademarkTer Companion

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    This is why I consider moving all the time....If I look at houses online and select the price range under 200k, it's sad what's available here in NJ.
     
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  19. waterfall

    waterfall Maven

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    I moved from an area with costs like yours to an area where the cheapest houses in questionable neighborhoods are around $400K. My mom (who still hasn't gotten over the fact that I moved away) pointed out the other day that had I stayed in my hometown, I could have paid off a house in full before age 30 and had extra money left over with the amount I've spent in rent over the 8 years I lived here. The craziest part is that teachers make more in my hometown!
     
  20. Backroads

    Backroads Enthusiast

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    We roughly put 500$ into a few accounts each month.
     

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