I don’t have grandiose needs. I don’t need a million dollars in the bank to consider myself “good” in the “retirement” game. I have more simple ideas wrapped mostly around buying real estate for my kids to live in when they go off to college.
But to achieve those goals I’ll need to restructure how I spend and how I save. And I read this nifty little guideline online:
1. Don’t buy a house that costs more than 2.5 years of your income. And if the costs of buying is more monthly than the costs of renting in the same area, don’t buy.
2. You should save 10% of your income into retirement
3. That 6 months of Emergency Fund savings can be difficult. Try setting up 1 month in a 6 month CD, then when you can add another month that comes due 3 month after the 1st CD. Keep building until you have 6 CD’s rolling due every over month.
4. Of your income: 33% = house, 14% = food & drink, Health care = 6%, Transportation = 19%, Apparel & Services = 4%, Investment/Pension = 9%, Cash = 4%, Misc = 4%
Crunching the number of how I ACTUALLY spend and wow. I need a pay raise!