Sorry I haven't read all the posts, but in terms of savings conventional wisdom says you should first create a 3-6 month emergency fund (to cover 3-6 months of living expenses if you are laid off or sick or have a large uncovered medical bill). It should be relatively liquid. I'd recommend something like Ing or CapitalOne. Maybe one of the TRPrice money market funds. YOU DON'T WANT THIS IN A CD and will probably get better rates at one of the above than a local bank. I'd go with whichever is giving the best rate. They all will automatically take money out of a checking account on a monthly basis. You really want to shoot for at least $100 per month into this if you can. $200 per month would be better.
Once you have that I think conventional wisdom says to split the savings 50-50 between a 401k / 403b (whatever the non-profit equiv of a 401k is) and something more liquid but not as liquid as the 3-6 month safety net. I'd recommend one of the Vanguard Index Funds or Vanguard Wellington. Once again they will automatically take money out of a checking account on a monthly basis. I'd recommend shooting for at least $100 a month into each. 3% to start is also a magic number into the 401k as that is what a lot of employers will match.
Once you have that it is said that it is a good idea to take 1/2 of every raise and use that to increase the amount you are saving until you get to the max on your 401k / 403b and an equivalent into more liquid savings.
I hope this helps.
As an aside, a plan similar to the above meant that when I was laid off and the unemployment and severance ended after a year (yeah, I know I was lucky), we were able to take the mid term savings (Vanguard) and use it to pay off the mortgage. Of course we had been saving for like 15 years and paying the mortgage for like 15 years.
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ninetydegrees
no subject
on 2011-03-22 02:47 pm (UTC)Once you have that I think conventional wisdom says to split the savings 50-50 between a 401k / 403b (whatever the non-profit equiv of a 401k is) and something more liquid but not as liquid as the 3-6 month safety net. I'd recommend one of the Vanguard Index Funds or Vanguard Wellington. Once again they will automatically take money out of a checking account on a monthly basis. I'd recommend shooting for at least $100 a month into each. 3% to start is also a magic number into the 401k as that is what a lot of employers will match.
Once you have that it is said that it is a good idea to take 1/2 of every raise and use that to increase the amount you are saving until you get to the max on your 401k / 403b and an equivalent into more liquid savings.
I hope this helps.
As an aside, a plan similar to the above meant that when I was laid off and the unemployment and severance ended after a year (yeah, I know I was lucky), we were able to take the mid term savings (Vanguard) and use it to pay off the mortgage. Of course we had been saving for like 15 years and paying the mortgage for like 15 years.