What to do with rest of income

[outofdebt]

Outgoing Monthly:

Cell Phone 150.00
Cable/Internet 140.00
Braces 144.00
Riding 320.00
OnStar 39.00
Food 200.00

Grand Total of 993.00

Incoming Monthy: 2,770.63

Above are all the bills I have monthly, the braces will be paid off at the end of September. My daughter equestrian rides (320.00) which will not change. I have no debt, no car payment, no mortgage (dh pays that). My question is where should I put the rest of my money. I am just learning about finances, I'm 42 yo and would really like to start saving for the future. I have 18,000 in retirement (from another job) and will be setting up my Fidelity account again soon (I'm not sure what the right amount to put in that bi-weekly should be).

I know I have to start the emergency fund, all suggestions will be helpful.

[Xin Lu]

Wow, you're doing really well. I think you should fund a Roth IRA if your income level combined with the hubby allows it. I recommend Vanguard and if you are lazy about investing you can pick one of their target retirement funds. It's automatically balanced for you depending on your age. Since Roth IRAs have a limit of $5000 a year you can open a regular investment account, too and invest regularly into a fund.

Besides that, put your emergency fund in an easily accessible account. I think 6 to 12 months of expenses is enough, but some people recommend more.

[purplefdu]

Make the kid start mucking to bring that down, lol. My mom sure as heck did. I mucked a half lease plus an extra day of riding for years and she paid for one group lesson a week.

Definitely get an IRA started. We have one (although it doesn't get near the amount it should). 3-6 months emergency used to be the norm but about double would be prudent these days with people stayign out of work much longer after layoffs or changing jobs.

[The Zoo]

I would start your safety fund first and get that taken care of before I worried about retirement. If something happens and you need cash, it's better to have it in an account than having to take it out of your IRA.
I'd sign up for an account at ING or HSBC and have the maximum amount put in to a money market account till you get at least 6 months living expenses. You can always sign up for an IRA later and put the entire yearly allowable amount in at once. When you have the safety net in place then think about looking to invest for retirement.

[*bbj*]

I don't disagree with the zoo, you want to stay liquid, but it's important to keep putting SOMEthing away for the future. (retirement, next project/big purchase, whatever). I was reading on getrichslowly.org about how much better it is to put money away for a specific purpuse, rather than just having it around.

I also agree that you could set up a HYSA, but don't forget to check out shorebank while you're shopping. Their acct has a good rate, but they also focus on environmental and community development. It don't just feel good about where my money is, I feel good about what my money does.

[72Tiger]

finding a good charity to support with a little of it can be rewarding. especially if it is local and you can see your money in action for a good cause.

[singleguymoney]

I think a good place to start would be to setup an emergency fund with some of the surplus. I would also look to lower the cell phone bill if possible.

[cashing_in]

Originally Posted by Xin Lu

Wow, you're doing really well. I think you should fund a Roth IRA if your income level combined with the hubby allows it. I recommend Vanguard and if you are lazy about investing you can pick one of their target retirement funds. It's automatically balanced for you depending on your age. Since Roth IRAs have a limit of $5000 a year you can open a regular investment account, too and invest regularly into a fund.

Besides that, put your emergency fund in an easily accessible account. I think 6 to 12 months of expenses is enough, but some people recommend more.

I completely agree with you Lu and also I would add that investing in some popular funds will be a great option too.

[jdp]

Well, you could revert to what I have my son doing with his money.

http://www.msgen.com/assembled/money_savvy_pig.html

You are only 10% heavy on the "spend" aspect but could adjust accordingly. Of course a piggy bank won't hold yours but no reason you couldn't set up a bank system the same way esp with the ease of online banking.

[Xin Lu]

Well, in response to peoples' concerns about liquidity. Roth IRAs are great because you can take out what you contributed at any time you want. So if you put in $5000, and it grew to $6000, you can take out $5000 anytime penalty free because you already paid taxes on it. You only get hit with a penalty when you withdraw the earnings early.