YNAB BLOG

Seeking Feedback on My Top 6 Savings Goals

piggy bank

I’ve spent the morning reading budgets sent to me after the open invitation in yesterday’s post.

I think we’re all going to love reviewing and discussing a different budget every week (or so).

I’ve had budgets from a single person with two dogs, some Aussie DINKs (dual income, no kids), an Aussie couple with kids, a German family, a military family, a young couple wrestling with debt after a business failure, a high-earning couple of Baby Boomers with two kids at private universities, and a couple of families with kids here in the US. All generously shared the details of their budgets, and some even laid out the details of their incomes.

But…

Many conspicuously failed to mention any goals.

I’m still pretty new to the budgeting game, but it seems like one of the biggest benefits of using a budget is how it helps you set and accelerate the achievement of goals.

Now that I’m living within my means I’ve stopped worrying about keeping the lights on and shifted focus to my (and my wife’s) short, mid, and long-term financial targets.

Let me share my top six financial goals with you, then ask for your feedback.

1. 1-month buffer: $5,100 lets me live on last month’s income.

2. 3-month emergency fund: ~$15,000 to give us peace of mind in the event of home, car, and non-catastrophic medical emergencies.

3. Pay off all debt, other than primary mortgage on the house: roughly $72,000.

4. Finish my basement and make other home improvements: ~$40,000 to $50,000, depending on how much work I do myself and how much labor I can get by bartering copywriting and web work.

5. Save for kids’ college: I don’t know whether we’ll want to help the kids with school, but we want to be able to. $100,000 to get three or four kids through college?

6. Save for retirement: I’m also fuzzy on this number. $1,500,000 seems like a reasonable target, based on previous discussions.

I feel firm on the amounts and order of goals 1-3, less so on goals 4-6.

I welcome your comments and feedback, and I’m looking for discussion on one key point:

Is it smart to work on these goals in strict sequence? In other words, am I savvy or silly to hold off on retirement savings until goals 1-5 are handled? What about the sequence of the rest of the goals?

You’ll notice I left time frames out of the discussion. The rate at which I accomplish these goals will depend completely on my income growth. My brain is hard-wired to seek an income in the $200,000 per year range. If all went according to plan, I’d be earning at that level again with about three years. If all didn’t go according to plan, I’d still be living within my means and chipping away at these goals, however slowly.

50 Responses to “Seeking Feedback on My Top 6 Savings Goals”

  1. Becky

    I am very very curious about the replies you get. This is where I’m at. What is more important (gets first, second, third priority) between buffer, emergency fund, and paying off debt?

    Reply
  2. Brenna

    My thought is to have retirement as the first goal. I’m young enough (although not that young anymore…) that I have absolutely no expectation of receiving any social security, and am planning accordingly. To me, that takes precedence over everything else, including college for the kids. If I’m flat broke and my kids have to take me in when I’m 85, I’m not sure how much of a favor I’ve really done them by putting them through college. And the earlier you start saving for retirement, the easier it is to get your target amount saved up.

    Reply
    • LBeam

      My mom sent me The Total Money Makeover when I got married. This is one of the things he stresses in his book. I like that I am reading it on here too

      Reply
      • Mikhaela Reid

        I think retirement could perhaps be a higher priority than kids’ college or home improvements (unless these home improvements are urgent for some reason). But emergency fund and paying off debt are tops!

        Reply
  3. racheldb

    My wild money whisperer, Luna Jaffe, has a pdf about just this. . . a hint, the order is a little different then you’d think. It’s her opt-in at lunajaffe.com, and I did many of the illustrations!

    Reply
  4. Angela H

    I like all your priorities, though some financial gurus would argue that goal 3 would come before goal 2. I would also argue that your retirement should come before your kids’ educations. I have friends who are nearing retirement age and got hit by the recession and lost jobs and businesses. They scrapped and scraped to help their kids get through college before the recession hit and without jobs now, their retirements are uncertain. Their kids all have bright futures, but aren’t really thinking of having to help their parents. And I’m sure their parents wouldn’t want to accept help from them. I firmly believe that a couple’s retirement should come before the kids college. Put the oxygen mask on yourself, before helping others.

    Reply
  5. Michael

    I would do it in this order:

    1. Having the buffer gives peace and makes budgeting easier at the beginning of the month.

    3. Paying off debt gives you freedom to do the other goals

    2. 3 month comes after debt so that you have less worry about things (IMO)

    6. Save for retirement is before college so that you are not broke when you get there and having to rely on your kids.

    5. Save for kids’ college is later as they can work or get scholarships.

    4. Finish my basement and make other home improvements this can be done while you do 6 and 5.

    Reply
    • Amanda

      I agree with Michael’s line up here and reasons. You might could do less than a full month’s buffer for #1 just so you could speed up #3. If you wait until the end to start saving for retirement, you will miss out on a lot of compound interest. Time is an asset when saving for retirement.

      Reply
    • ynablover

      I tend to agree with this lineup.

      I’d question though on the “saving for kids education”. I fully support you helping them out, I want to pay for >90% of my kids’ education when they’re off to college.
      But it doesn’t mean you need to have all that money saved up – if you intend to earn $200K/year then surely you’ll be able to afford $50K/year to fund their education? (particularly if you’re out of a mortgage).
      So I’d argue to put your money to the best use, and retirement and home improvements could easily trump the value of a ‘college fund’..

      Reply
  6. KayJayUU

    If you don’t have an emergency fund first, then an emergency will occur and set you back.

    Emergency fund is my first priority in goal-setting.

    Reply
  7. passagesbrink

    I’d begin working on retirement now – you can do this automatically while you knock out the other goals. Otherwise you’re losing a significant amount of investing time.

    Reply
  8. kinaida

    Question: do you count the buffer as part of your emergency funds?

    Reply
    • Christian

      No. The buffer just keeps you one step ahead of non-emergency expenses.

      Reply
  9. Julie Hart Davis

    I would reorder your goals a little bit (but at the same time, still put a little money into each category):

    1. Retirement
    2. College
    3. 1-month buffer
    4. Debts
    5. Emergency fund
    6. Home improvements.

    The earlier you start with your retirement goals, the less you have to invest each month to meet that goal (this applies to 1 & 2). I would put that in the budget even before you have built your buffer. We fully expect our kids to receive scholarships and/or the Hope Grant for their undergrad degrees, but what about grad school?

    I am in between #3 and #4 in my list above (working on a debt snowball on about $30,000 CC & auto), although I am still working on adding funds to #5 and #6 as well. Our basement is fairly low priority right now, but I would like to have it finished within the next year. I like the idea of bartering for work. There is a lot that we can do ourselves (most, in fact), but at this point, the expense of a HVAC unit for the basement is holding us back. The only reason I would think that the basement should move up in the list is if you are planning on putting your house on the market soon. If you aren’t selling, I would think that the basement is a luxury item and definitely shouldn’t be above any of these other categories.

    Also, if this were my list I would add:

    7. Beach house

    Because that is definitely in the 15 year plan. ;-)

    Reply
    • Winifred

      I’m pretty sure Beach House should be priority number 1…

      Joking aside, I am single, without children, and I rent. My first goal is to pay off my debt in 4 years (over 80K). This is pretty aggressive.
      Once I get debt out of the way, (because let’s face it, the yields on my retirement accounts are way less than the interest accruing on my debt) then I start rolling a large chunk of that money I was using on my debt snowball for my retirement.
      I am working a second job already that automatically dumps money into a separate account, which will first become my buffer, secondly become my emergency fund or… what I refer to as my BIG buffer. Both the buffer and emergency funds are the same thing, IMHO. This second job is temporary, however.
      I’ve decided not to pay for college for my kids, if I have any. I paid for my college, and they can learn to save their money in high school and get scholarships just like I did.
      Because I rent, I have no large home expenses. I am totally fine with that. I see owning property as a ball/chain, and I like the flexibility of moving around. I live modestly and spend less on rent than I would on a mortgage.

      Reply
      • Julie Hart Davis

        Honestly, I agree with you about the college fund. My husband set it up and he thinks its a good idea, so we are doing it. :-) Ultimately, I’m okay with it, because it will only pay for maybe two semesters at the rate it is at now, so it’s not a lot per month. Also, I feel that you are more devoted to school when you have something invested in it, so paying for it yourself is a good idea (and may prompt you to work harder for an assistanship).

        I still like having the retirement at the top, but we are only putting about $250/month into it right now, so that’s manageable.

        So, maybe reorder my list like this:

        1. Retirement
        2. 1-month buffer
        3. Debts
        4. Emergency fund
        5. Home improvements
        6. Beach House

        and add:

        7. Wedding fund for my daughter! (and forget the college fund, lol).

        Reply
  10. Richard

    Working on financial goals is a good time to take stock of one’s life, to go beyond numbers and dates and think about values. Asking why each goal is important and then pondering one’s answer might help shape the entire exercise and even our lives. What a tragedy if we think money is what will produce contentment and happiness. If there is more to life (and there is!) we would do well to frame our financial goals within that larger framework. Otherwise we may end up doing good things for bad reason, often at the cost of relationships and serving ourselves more than others.

    So yes, push the numbers and debate the priorities. But behind the scenes, don’t forget the really important stuff either. It’s seldom found in the numbers.

    Now back to your regularly scheduled YNAB work session!

    Reply
  11. Kenneth

    From a Mister Money Mustache perspective, your DEBT is your emergency. This is money that is working against you very hard, every day.

    My priorities for you would be:
    Retirement basic – if your employer offers a 401k with a match, contribute up to the percent necessary for the maximum match. If this is not available, skip retirement contributions until the bottom of this list.
    Buffer
    HECL shame debt
    3 months emergency fund
    Home improvements
    Retirement funding of IRA yearly

    The heck with the kids. If you read far and wide like I do, there is quite a bit of controversy these days whether a 4 year degree is worthwhile or not any more. What you could do is provide shelter and food for them, while they start out at a community college on the cheap. They should help pay for tuition/books by taking part time jobs.

    Reply
    • Finally Seeing Progress

      I have to agree with “to heck with the kids”. They can find financial aid, grants, scholarships, and work their way through school. You can’t find financial aid for retirement.

      However, I will say that a degree is still valuable despite the controversy. But I won’t digress into that given that’s not the focus of this discussion!

      Reply
  12. heather

    I think if you have $72k in debt you should do the $15k ER fund first, like you have it. Mainly because it’s going to take you awhile (probably) to pay it all off, and life happens in between. If you don’t have the ER fund saved, you’ll take two steps forward and one step back on paying down the debt. You’ll feel better when you get the ER fund finished.

    The other place I disagree with Ramsey is about the retirement fund. Do it now. Years and years of good intentions go by, and I think you’ll regret the lost time.

    Unless you’re extremely good at the “gazelle-like intensity” that Ramsey promotes about working on one goal at a time, then I’d suggest…

    1a. ER Fund (consider part of that your buffer — no matter what the rules say — and you’ll get done $5k faster)
    1b. If it’s going to take you more than 6 months to start retirement, then go ahead and start depositing some now for retirement and put the rest into ER fund until it’s funded.
    2. After ER fund is done, talk to your financial advisor about your personal situation — and do some combination of debt payoff and more going to retirement.

    I have never regretted saving money… cash is king. Once you have a chunk of it saved, it’s so much easier to live on cash and pay off debt. Plus, the more you have, the more it’s working for you and earning you more.

    Reply
    • mark

      No – but that’s where I hope to be within two or three years. If I were already there, this savings schedule would be a breeze. :-)

      Reply
  13. Lu

    I think saving and paying off debt at the same time is ok. Start saving. It is hard and it is important. I did them at the same time because I would never save if I just didn’t start.

    Also, start a college fund. I am from corporate America and cannot tell you enough about how people are held back when they do not have at least a 4 year degree. In some jobs, post grad is required. A community college 2 year degree is a foot in the door but the promotions will go to others with more education from better schools. This is a little secret but the name and reputation of the college counts.

    Kids come away from school with a mountain of debt and it is crippling. Loans are not easy to come by and are quite expensive. Saving money in a 529 is easy and the interest is tax free to the kid when they go to college and is an easy way for them to get ahead. Even a year or 2 of college paid for is a great gift we give our kids (if we can).

    The only non-priority would be the remodel. Do what you can on your own until you feel like you are well ahead of the curve on the other items.

    Reply
  14. Bea

    I’m 60 and didn’t start saving for retirement in earnest until a couple of years ago. My younger self didn’t plan very well to take care of my future self. Now I will most likely have to work years longer in order to have enough money to retire

    My advice is to save for retirement while you are knocking out goals 1-5. Don’t make them mutually exclusive. Your future self will thank you for taking advantage of those years of earning compounded interest. And your future self will thank you for making retirement a time of financial comfort by making saving for it a habit today.

    If you hold off saving for retirement until goals 1-5 are met (and replaced by new goals), you will lose a lot of opportunity to grow that 1.5 million. Believe me, when you are 60-65, you will be THRILLED to have that much money!

    Wish you the best.

    Reply
  15. Jim Davies

    These sound awesome. Especially the first three. We’re still working on our buffer which is our main goal since we started back in January. So far we’re on track to hit that goal Sept 1. :) After that we’ve not made any real plans other than the obvious of getting the debt paid off. I think we’ll use your goals. I could use a new basement. lol

    Reply
  16. Justin Miller

    I’m going to go with a modified version of Dave Ramsey here. This is what I currently do for my savings goals:
    1a. $100 Buffer in your checking account (Complete)
    1b. $1000 in a basic emergency fund. (Complete)
    2. Pay off all debt (Hopefully by next spring)
    3a. Complete YNAB Rule 4
    3b. Three month emergency fund
    3c. Home down payment
    3d. Six month emergency fund
    4. Retirement
    5. College
    6. Mortgage
    7. Financial Bliss

    Reply
  17. Emlyn

    Kids can borrow for college; you can’t borrow for retirement. Switch those.

    Reply
  18. Emlyn

    (Not that I actually advocate borrowing for college… I worked myself through a Bachelor’s and Graduate Certificate and graduated from both completely debt free. But you get my point. There are no retirement loans out there!)

    Reply
  19. Micro

    Top 3 right now are paying off my student loans, saving for retirement, and saving for a house. Based on how I’m going now, I should be done with the loans in about 4 years. That could change if my monthly rent dramatically increases for some reason.

    Reply
  20. Dianelynn

    Totally agree with emyln. You can’t borrow for retirement. Except for a reverse mortgage, but we won’t go there. Save for retirement/college in a 2/3 1/3 split at the same time you’re knocking out your other goals.

    Reply
  21. C

    Any feedback on rental property mortgage? Where should this fall on the priority list?

    Thanks

    Reply
  22. Elizabeth

    A few thoughts in pretty random order:

    College: Sending 3 to college > $100,000. If you’re making $200,000 per year by then, the only “aid” options open to them will be loans or merit aid; the only “aid” options open to you will be loans. In other words, they (or you) will pay full-freight. That’s not to say that splitting that $100k three ways to help each wouldn’t be a generous and integrity-filled gesture. I’m not talking about full-ride Ivy-league schools, either. Our state’s “teacher’s college” cost calculator estimates ~$22,000/year. Multiply that by 5 years (research the chances of graduating a state college in 4 years) times 3 children. And respectfully to anyone, including myself, who love to harken back to the days when we could work to pay for our own way through college — “yeah, and I remember when a stamp cost $0.20 and a gallon of milk was $2.00.” Those days are gone and they’re coming back. [Personal expense priority: #2]

    Home Improvements: I hope the housing bubble has straightened out anyone who was just sure that real estate was a can’t-lose sure bet. I feel that money put into a house is an expense; if the improvements will significantly improve your quality of life or are determined to be a large family priority, then make this savings a priority. I’m not saying that money put into a house will never pay off; some improvements have a better rate of return than others but there a tons of less risky gambles if you’re trying for a payoff on invested funds. We bought a 30-yo house that desperately needed some work; we had the kitchen and 2 bathrooms done. I did the landscaping myself. Other things, such as upgraded windows and insulation; adding solar and grey-water; finishing rooms in the basement — these are all on indefinite hold. [Personal expense priority: #3]

    Debt Reduction/elimination: The only debt we carry is our mortgage (we have about 6 months left on a 2-yr car loan that we could pay off in an instant; we financed because it was “free” money so I don’t count it). [If we had debt, this would be Personal expense priority: #1]

    Buffer, Emergency Fund, Retirement: Personally, I don’t understand why these are separated. Aren’t they just called different things depending on the amount saved? Sure some of it might be in savings, some in CDs, some in investment accounts, etc, but does it really have to be in separate piles? If you have your $1.5M for retirement are you really going to quibble about whether or not you have a “buffer”? To my thinking, then, until your savings covers a month’s worth of expenses, you’re working on your buffer. The first dollar saved over your buffer is your EF. Any money not spent on emergencies is Retirement. Therefore, savings isn’t prioritized, it just IS.

    My order would be: Buffer, Debt, Emergency Fund, College, Retirement, Home

    Reply
    • Strabo

      My view:
      Retirement money is something you usually put into long-term methods of financial money duplication magic. Usually not easy to get hold of before the due-date, especially in an emergancy (it would take me months and huge, huge hits on the capital invested to get my money out of my retirement investment vehicles for example).

      Emergency Fund money should be invested somewhere you can easily get hold of it inside of a few days – a separate savings account for example.

      The buffer ideally resides in your checking account/short-term savings account. You can operate it with ‘virtual” buffer money (ie the money in your long-term savings), but I rather see it as a second, short-short term EF.

      So I would separate them too, simply because they have a different level of accessibility (and generate different amount of money).

      Reply
      • Elizabeth

        Strabo — I completely agree that the vehicle for these saved funds differs vastly depending on the length of time expected before access is necessary. You’ll see in my original comment that I list the options: savings, CDs, investment accounts, etc. My personal opinion is that anything that’s not FDIC is, in reality, a gamble. Odds are that, over enough time, stocks/bonds/funds will show a gain, but it’s not guaranteed. I’d never “invest” my grocery money. My point was, while I’ve chosen different vehicles for my savings — from highly liquid to much less liquid — I make those allocations based on how much I have saved overall instead of saying specifically these particular $$ are my buffer and these specific $$ are my EF, etc.

        But perhaps I’m just too far removed from my early days. Establishing a buffer came long before YNAB or the term “buffer.” To me it was all “just in case” money that got too big for a savings account.

        Reply
  23. Jennifer K

    We have generally followed Dave Ramsey’s advice for a few years now and his 7 steps for financial freedom have been a good guideline for us. While we’ve bounced around between debt payoff, savings, and home improvements (your numbers 1-4), we have always steadfastly believed in his mantra to save for retirement (15%) first before saving for college. Your kids can always get a loan for college – you can’t get a loan for retirement.

    Reply
  24. The Rev's Wife

    Hi Mark, my husband and I love your blogs and your transparency. Being in Christian paid ministry however seems like a challenge to grow our Income muscle. For example, we would never dream of asking a church to pay us 200K! Does this mean our retirement funds are doomed? Perhaps we need to be nicer to the kids? I would love to hear any thoughts from people who might work in non-profit organisations and how they look at their financial goals.

    Reply
  25. Mike

    Whatever your goals, you MUST start saving for retirement as early as possible; let that money compound and grow over time. I started saving 20% of my income to a 401k in 2008 and exactly 5 years later, I’ve got $80k in the account. A lot of this has to do with the stock market and how it’s doing, but a lot of it also has to do with how much you put in and when you start. You’ve got to get it going now before it’s too late. When’s it too late to start? Tomorrow. So start today.

    Reply
    • Mike

      Forgot to mention that saving for retirement is not a linear goal which you must “knock out” like the goal of saving 100K for kids college. Saving for retirement should be treated like a monthly “expense” that happens every month in perpetuity. The easiest way to do this is of course have it automatically deducted from your paycheck. If you don’t have that luxury–say you’re a contractor or something–then you need to make it a habit of contributing 20% of your income (or the highest you can handle) to that 401k or retirement vehicle of choice. It’s just as critical as making the rent on time; your future out-of-work self/life depends on it.

      Reply
  26. Christie

    I have a question – does your buffer have to include the amount you put towards savings each month or is it only your expenses?

    Reply
  27. JayBee

    It’s really amazing to do these evaluation processes.

    Our goals are very much the same, but we’ve prioritized them as follows:

    1. one month buffer (we are half-way there);

    2. emergency fund (we are half-way there);

    3. retirement savings (this is where we are maxing out to the max because we are putting all extra income that we shave from our expenses; we have been maxing out 401k since 2000, so we are doing well here);

    4. saving for a “forever” home (we want to pay cash; when we have 1 and 2 sorted, then we’ll bundle this money each month to save for the home’s down payment);

    5. income properties (after 4, we want to use the money saved to pay for the house — for which we hope to pay cash outright — to work on purchasing income properties).

    Reply
    • JayBee

      Ah, and emergency fund is only half way there because we did have an emergency, so thankfully we paid cash for such madness. :)

      Reply
  28. Christian

    There are many good replies here. Here’s mine – more granular and detailed, but in making the goals smaller, you will be seeing progress faster.

    0. If you have kids: Open a 529b (I like Utah’s .. no miminum monthly contribution). Just put $5/month in there, but more importantly, tell your family and friends that instead of expensive toys, you would prefer that they put $$$ in there instead.

    1. One month buffer- for your sanity.

    2. Start saving for retirement – whatever the minimum you will need to maximize any matching $$$’s from your employer. Or at least try to put $1k into a Roth IRA. Just get the ball rolling.

    3. One month emergency fund … just so you have *something* in case you need it.

    4. Pay down non-mortgage debt. You’ll get a better return on not paying 6-25% interest than what you’ll get with investments – and once this debt is gone you can really start stashing $$$ away.

    5. Two month emergency fund.

    6. Increase your retirement savings to maximize tax advantages. Max out your Roth IRA ($5500) if your income is low; max out your 401k ($17500) if your income is high .. or do both if you can.

    7. Three month emergency fund.

    8. Figure out how much you REALLY need to save for retirement. You may need to save much more than 401k’s and Roths’ allow …

    9. Six month emergency fund.

    10. Split additional funds three ways: Mortgage, Emergency Fund, 529b.

    ———————
    y all means, prioritize your own financial stability over your kids’ education. There will always be ways for smart kids to afford school. Consider that your kids don’t have to go to Harvard or Stanford to have a good life; the local community and state colleges (which you already subsidize through taxes) usually have very good programs too. Also consider that, if you are secure in your retirement, you may be able to help a little at that time.
    ———————–
    Don’t forget your own education, if that’s an investment which help you earn more income and thus accelerate reaching your goals.

    Reply
  29. Dean

    Your goals seem reasonable enough and mine are similar, except my credit card debt comes before the buffer.

    Having said that, if I was earning $200,000 (£132K) a year my budgeting would be much easier! I doubt I’d be worrying about a buffer, or pretty much anything else. That sounds like an obscene amount of money to me.

    Maybe I’m just jealous!

    Reply
  30. Sim

    Hello,

    I think 1 & 2 is short term goal, you need to focus on those 2 goals first. For goal no. 3, it is depend on your annual interest on your loan package, if the interest is low then no point to rushing on finish paying the loan. If saving on retirement and kids college fund will give you higher % of annual return than your interested charged by your mortgage, then you definitely need to focus on retirement and kids college fund. Kids college is medium goal and retirement is long term goal, so i think it is good if you can work out a plan on consistently contribute money into these 2 goals.

    For goal no. 4, you may think of reduce the figure a bit.

    Reply
  31. Randall Huleva

    It’s very difficult for others to give you the proper order for the savings goals in your budget because so much of it really depends on your life and your circumstances. In general, goals 1 – 3 are great, although some may reverse 2 and 3. If you can afford to, I would work on both of them at the same time, but again it depends. How much interest on you paying on your debt? If you have some ridiculously low interest rate debt, then that isn’t as much of a priority as the emergency fund. On the other hand, if you are paying 25 – 30%, it may be a much higher priority!

    With respect to retirement, my take on that is that it has a way of sneaking up on you. The greatest asset you have in saving for retirement is TIME. The earlier you start, the more TIME will work for you rather than against you. The later you start, you either have to save much more each month or make much riskier investments to achieve the high returns necessary to meet your goals. Neither is a great way to go. The best way is to start as early as possible. Remember, there are no loans to pay for your retirement so you MUST make sure you fund that appropriately. In my opinion, this should be done all the way through your financial life, even while working on your other goals. If you save that way, the savings amounts will be much smaller per month and you can invest in less risky investments.

    College savings for your children is an individual value. If that is important to you I would again give you similar advice to your retirement savings, although remember that children can work, get scholarships or other financial aid or even student loans if necessary. Remember that this is THEIR education and future…not yours. You don’t owe them a free ride through life…and in fact, that can even hinder their own financial maturity. DO NOT SACRIFICE SAVING FOR YOUR RETIREMENT TO ACHIEVE THIS GOAL!

    Any home improvements have to be evaluated based on their need. Obviously if this is an important, must do repair…then it has to be done and you’ll have to find the money in other categories. However, if this is simply a want that you want to do so the house will be nicer, this probably should be your lowest priority. And don’t fall for the argument that “we are going to sell and it will help us get a better price”. That practically NEVER works out profitably with indoor improvements. Add some color to your yard and have more curb appeal and you’ll be surprised how much more you can sell for while keeping the investment very minimal.

    Good luck.

    Reply
    • H

      “Remember that this is THEIR education and future…not yours. You don’t owe them a free ride through life…and in fact, that can even hinder their own financial maturity.”

      I’m generally very good at maintaining a “to each his own” attitude but the apparent prevalence of this “don’t give your kids a free ride” attitude around here is surprising and, frankly, dismaying.

      Could someone please define a “free ride” to me? If you’re not interested in providing for your children, why have them? My children got music lessons, swim lessons, allowances, clothes, cell-phones, and, yes, college. Full-ride college. Through the years, did I expect things in return? Of course. Housework; yardwork; snow shoveling; self-discipline; hard work in school; courtesy. Are they perfect? Not even close! But they are hard-working, appreciative, non-assuming, informed, generous, cost-conscious, responsible budgeters.

      Reply
      • Randall Huleva

        I would like to sincerely apologize for any offense my suggestion may have caused. My intent is to be helpful (at your request I may add)…certainly not to offend or appear a “know-it-all”.

        With respect to funding your children’s college education, I think this is probably one of the more controversial portions of personal financial planning because there are such a wide an varied set of personal opinions around that issue.

        Of course, more than anything else, it depends on whether or not this is something that is even a feasibility for you. For some parents, they simply do not have the money and can not do it no matter how much they may want to. My comment about needing to prepare for retirement prior to funding a child’s college education is largely aimed at that type of situation.

        ALL of us, regardless of income, are one day going to face our golden years and retirement. Whether we had children or not, that day is coming for all of us barring sickness or illness earlier in life.

        My point is simply that we all need to be sure that we have some sort of a plan to take care of ourselves in our retirement. Most of us do not want to be a burden to our children and banks don’t loan seniors money to pay for retirement costs.

        If you have been blessed with the financial good fortune to both put your children through college as well as plan adequately for your retirement, then the choice is entirely up to you.
        -
        But remember, household chores and such really have nothing to do with paying for college. That is more a shared responsibility that all of the people who live in a home together partake in together. That goes from the youngest to the oldest….there is always something that needs to be done!

        If it worked out well in your situation to pay for your children’s education, I’m truly very happy for you and your children. But remember, people are unique and some respond much better to using financial gifts well than others do.

        While I realize that this is an exceptional case, the case of Arizona Diamondbacks all-star first-baseman, Paul Goldschmidt, who continued working on his business degree during the season and finally graduated this year while meeting the rigors of a 162 game professional baseball season where he has put up MVP numbers not only proves that some students not only survive working while going to school, but actually thrive at it…and in this unusual case managed to set a remarkable example for many others as well!

        Again, please forgive any unintentional misunderstanding!

        Reply
  32. Jason M. Acker (@pbjacker)

    Mark I read through the comments and was surprised to find so much emphasis on your priorities rather than amounts. I want to re-sound the alarm Elizabeth expressed at your estimation of $100k for multiple children. Unless that is a convenient round number that you have decided is appropriate for you to provide to them regardless of actual expense I must recommend you further research education costs. $100k will not cover a 4yr degree at most public/state schools, and of course the cost is not going DOWN!

    Reply
  33. Brandon Walowitz

    I don’t understand how people could put retirement before the piece of mind and stress reduction of the one month buffer and the debt elimination.

    Reply

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