Episode 16: Ernie

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.

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