Hi All,
Hoping for some whole finance guidance here.
I am recently 40 and my current situation is as follows (USD):
$76.1k salary IT job + 2-4k bonus annually. I have been at this job for just about 2 years. Annual raises 2-3% except my last pay raise (by request) which was a 6.5% boost (previously ~71k).
Bi-weekly paycheck take home net after deductions/401k/taxes: ~$2200
20% of which goes directly into savings, $440 per paycheck, $1760 into checking.
Current Savings: ~$6700 in 4.5% high-yield account. Previously had ~12k but paid off my remaining $5k car loan in whole (previously $350 monthly payments) just recently.
Current checking: ~$4500 (usually roll off any checking amounts over $2k into savings every couple weeks).
Retirement situation:
I only have $8k in my 401k, which I started contributing to only a couple years ago. Combination of life factors and me just being uneducated and inactive about investment and planning. Definitely kicking myself that I didn't take advantage of a ton of free money matching from my previous employer I was with for 8 years, but as I said...dumb. My retirement funds are in BlackRock LifePath Index 2050 Fund Class K Shares (LIPKX) which is comprised of~ 60% US Stocks, 35% Non-US, 3% US Bonds, 1% Cash. YTD performance is +9.36% (previously around +13% due to market dip). I was previously contributing 3% of my pay, just recently updated to 10% after paying off my car loan which should route the previous $350 I was paying to the loan into the 401k. My employer matches half up to 3%.
Other investments:
$3450 in a Fidelity HSA (rolled over from my previous employer's HSA). I had $3600 sitting in the old HSA uninvested so rolled it over to Fidelity and invested the whole amount a few weeks ago as follows:
54% VTI, 16% VXUS, 20% BND, 10% VGT. Of course, the market sank a couple days after I invested and I suppose I should have trickled the funds in to DCA instead of putting the whole amount in at once, but it is what it is. This is a long-term investment section for me, treating it like a secondary retirement account since I dont want to take out the HSA funds and get taxed if I can leave it in there and invest it.
$3500 in Bitcoin and other crypto (nearly all Bitcoin at this point). I lost a decent amount on the Voyager bankruptcy and holding hope that some more funds will be recovered but I've accepted it being gone at this point. In any case, I have a few years worth of maxing out my capital gains loss write offs ahead of me.
~$3k in silver bullion and other US coinage. More of a hobby, I pick up a few hundred dollars worth of silver a couple times in the year.
Bills, debts:
I currently live with a roommate, my friend, who I pay rent to. I have not lived alone before. Rent is $550. My utilities split with him usually ranges from $150-200 monthly, sometimes near $300 in winter (gas heat).
I have $2k in student loans that were defaulted and in collections. It's been decades though and they haven't come for me yet. I was holding off paying these until the Biden forgiveness shook out but doubt this will ever happen so probably should just pay it off at some point.
$1300 every 6 months for car insurance
$150 every 3 months gym membership
$65 monthly for phone bill
Credit situation:
Rating 742, previously 760, impact due to new hard pulls and balances reported (paid off before cc statement close but bank reported balance). I have 2 hard pulls on account currently, average credit age about 2 years (oldest acct 4 years). I have 5 accounts on record, soon to be 4 once my car loan drops off).
I have 4 cards, Chase Sapphire Reserve, Chase Freedom Unlimited, Chase Freedom Flex, and Capital One unsecured card. The Sapphire Reserve has a $550 annual fee with a $300 travel credit annually which I recover easily with parking which my company pays for and the remainder of the fee is covered by the membership bonuses for Instacart, Lyft, etc the card provides (at least for the first year or two). My company also has me travel (reimbursed) a couple times a year which I am able to put on the card and recoup more value from points.
Other spending:
~$400 in groceries monthly
~$120 in car gas monthly
Eat out/delivery a couple times a week. Occasionally go to bars/clubs/dinner with friends on the weekend but not a regular thing. Prices vary on where we go, maybe something more pricey once or twice a month.
Travel a couple times a year to see friends and an annual big event in May. This will start to get covered in part by credit card points as I now have a rewards card.
Questions and situations:
My roommate is having me move out next year. I'd like to buy a house but don't know if my current situation will allow for it. I've seen loans and assistance programs for down payments which I'll probably have to rely on. Houses in the area are 230-300k. Rental properties in decent areas are in the 1200-1800 range. I'm not sure what to do here as mortgage payments would probably be the same as rent.
After paying $500 for living situation, it will be a big adaptation for me to begin paying 2-3x this. Having never lived alone, I don't have much furniture and worry if I get a house it will be bare of furniture and essentials (I need to buy my own tools, kitchenware, etc) for who knows how long as I adjust my budget and spending.
Obviously, my main concern is my retirement account being so far behind and how trying to catch up on this will balance with my increased budget for living expenses.
As well, my mom is aging and doing fine now, but I'm aware that at some point I'll need to assist her living situation in some way or possible hospital costs in the future. I don't think she has a lot saved up in retirement as well, but I'm not sure.
Questions:
So, what should I be working on next? I figure I should prioritize re-build my savings up to about ~$12k+ again for a 6-month emergency fund based on my future expenses next year but let me know if this is wrong.
I also have a bunch of clothes, video games, and some other stuff I can sell off for a couple grand. Should this go into savings?
Should I reduce my 401k contributions for a bit to speed up reaching that savings goal or should I actually increase my contributions from 10% to something more? Should I contribute to an IRA instead?
What's the feasibility of me getting a house I can actually get furniture in? Should I rent for a while instead even though rent is pretty much the same as my goal mortgage range? The housing market only seems to be getting worse and rents along with it. I'm not sure if it will ease up by the time I need to move next year.
Any changes to investments? With the stock market looking shaky, I'm wondering if I should pull out my recent batch HSA investment and start trickling funds back in to DCA any volatility. Not that its a lot, but any extra amount that I don't lose helps.
Any other guidance or anything else to recommend?
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