Meet Ernie
Age: 33
Salary: $4,000 month (net)
Employment: Accountant
Savings and Investments:
- Savings $0
- Retirement $120,000
- College fund $1,000
Debt:
- Credit cards: $2,000
- Furnace $5,000
- Student loans $7,000
- Debt from parents $15,000
Ernie’s main concerns, in his own words:
I make $95k a year + potential bonus (up from $75k just 2 years ago), I put 15% towards my 401k, in the last 5 years I’ve suffered a brain injury and missed 6 months of work and gotten divorced, both of which weren’t cheap and I’m just now getting those paid off.
I have 2k in credit card debt (likely gone in 2 months), 5k in interest free payments (for next 11 months) for a new furnace, $91k in mortgage, $7k in student loans, $0 in an emergency fund, $120k in retirement savings (excluding 11k I still owe in a 401k loan, terrible idea I know), $3k in HSA, $1k in a 529
I have a 14 year old daughter. Should I be saving more for her college? Build up an emergency fund? I’ve always been anti-emergency fund because I’ve had debt, I’ve always though I should not have money there doing nothing when I’m paying interest.
Podcast: Play in new window | Download | Embed
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.