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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 750338  
Subject: Re: Just starting to save Date: 5/17/2004 5:44 PM
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2FoolsInLuv asks,

After all these expenses, I estimate that we'll have between $800 and $1000 left at the end of each month. It's this amount that I'm not sure what to do with.

Our savings goals include:
* $30,000 for the downpayment on a home in 3 to 4 years,
* one full year's living expenses in cash or accessible savings
* to start saving for a car for her that we will buy in two years.
* Some sort of individual stock buy-and hold plan like a DRIP plan.
* Also, I want to plan for a best-case scenario of retiring when I am 57, or 30 years from now.

So what should I do with this $800? Should I put it directly towards the car and the down payment? Should we aggresively pay our student loans down, even with our interest rates so low? Should we pay down loans now with our cash savings, and then work to rebuild our cash? Is retirement at age 57 even conceivable at our income levels? I will add that I can probably expect an income of about $40,000 a year when I'm about 55 from other sources not mentioned, but I'd prefer not to factor those into any plans just incase those other sources go to hell.

I'd prioritize the savings this way.

1) First, build up 6 months of livings expenses as an emergency fund. ($2,300 x 6 = $13,800)

2) Then start saving for a down payment ($30,000) for a home.

3) Then I'd start investing in stocks (either low cost index funds or individual stocks if you believe that you are among the small minoroty of investors that can beat the S&P500 index.)

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