M$D: 6/23/2030
Meet Ron
Age: 27
Ron’s main concerns, in his words:
My wife and I are both 27 years old. I am a math teacher while she is a physician assistant. Our adjusted gross income is about $145,000. Right now we each have about $15,000 in student loans. We are putting just over $2000 dollars a month towards her loans while I am just paying the minimum on mine. My student loans should be forgiven after this year as I am teaching in a low income district. Her loans should be done by the end of this year and mine will be forgiven upon the completion of my fifth year of teaching. Right now we have $86,000 saved with $63,000 being in investments with the rest in money market savings accounts.
Here’s the situation I have a question/need help with. My wife is going to need a new car soon; the current one has been nothing but problems since we bought it used. On top of that we would like to have a child, move to a new city and buy a house, hopefully all within the next three years. I have no idea how to go about prioritizing my savings for each one of these major events. Here’s the kicker. When we move, she will most likely take a paycut and will lose the profit sharing from her company which is currently contributing about $1100 a month into her 401(k). I want to make sure we are secure in retirement while also being able to afford a house, child and move. Finally, I would also like to get into some real estate investing in the future, specifically owning single family homes to rent out.
I should also add that we come from totally different backgrounds in terms of money. Her parents are great with money, they have plenty of savings and have retired successfully on salaries much less than ours. As for myself, my parents made a ton of money yet always seemed to be short at the end of the month. I love them dearly but they have not been the best role models money wise. I have a ton of anxiety when it comes to money because I don’t want to have these constant money emergencies like my parents did. As you would guess, this difference in background has caused its share of disagreements when discussing money. She has a very laid back attitude while I am constantly stressing about saving for the future and making sure we are financially secure.
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Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.