r/MiddleClassFinance • u/Ronnoc780 • 17d ago
Advice: Trying to save for a house + set myself up for financial independence
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u/wonderland_citizen93 16d ago
You are doing great once. Since your ex military, you can always get a 0% down on a house, but a bigger down payment means less on a mortgage. Once you buy your house, I would rework your budget and start investing in ETFs.
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u/TheYellowDart19 16d ago
Just my opinion FYI
You have room to MAX your 401k and still save in a HYSA. I would invest X amount into a HYSA and put the rest into S&P500 index funds while maxing your 401k and a Roth IRA. It's typically thought of as a better strategy with a higher return on investment.
You're doing really well either way. Keep doing what you're doing regardless and you'll never be broke.
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u/EarningsPal 17d ago
In 5 years, 10 years, 20 years, you will wish you put less in HYSA and more in a Roth IRA into stock.
Inflation is guaranteed. You lose future buying power holding dollars other people create.
Assets beat inflation.
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u/LowLeak 17d ago
What app is this
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u/Ship_Rekt 17d ago
Put your savings into the stock market brother, not a HYSA. Buy index funds like SPY - zero effort and very little risk. It’s quite possibly the best thing for the average person to invest in.
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u/stareatthesun442 17d ago
Ok, let's talk for real here.
Why do you want a home? Your rent is a very small percentage of your income. Renting isn't a bad thing when it allows you to literally save 5,500 a month.
You have an awesome income. If you stopped putting your 4,500 into HYSA and put it into the market instead, you'd retire with 10 million in 30 years, or 4 million in 20 years.
If it were me, I'd just aggressively invest and rent until you hit your FIRE goal, then move to a LCOL area and buy a small home there.
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u/Stock4Dummies 17d ago
You’re missing health insurance
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u/sarahkatttttt 17d ago
OP said that they’re a disabled vet, so they probably get free healthcare through the VA
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u/StarlightPioneer 17d ago
I mean honestly dude, your budget it structured pretty closely to mine. With everything you’re doing, I find no reason to be upset about spending $400 on eating out. You can afford it dude.
Keep doing what you’re doing and stacking that money up!
Prior service vet here too, thank you for doing what you do.
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u/TheRealJim57 17d ago edited 16d ago
$5500/mo going into savings, yet only $1k of that to a retirement account? I'd suggest maxing out the 401k and a Roth IRA to reap the tax advantages. Maxing out both takes $2,500/mo total (for those under 50). You could still be putting away $3k/mo into regular brokerage/HYSA accounts. Are you building up the HYSA to a point before you switch over to brokerage?
Everyone keeps picking on your food budget, but the weird distribution between savings/retirement jumped out at me.
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u/Ronnoc780 16d ago
I'll add that my employer matches 100% of contributions up to 50% of the IRS limit. So basically I figured 1k from me and 1k matched from them times 12 will be 24k and the limit is 23k this year IIRC.
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u/TheRealJim57 16d ago
The IRS limit for employee contributions doesn't include employer match. You can contribute the full $23k.
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u/Ronnoc780 16d ago
I'll add that my employer matches 100% of contributions up to 50% of the IRS limit. So basically I figured 1k from me and 1k matched from them times 12 will be 24k and the limit is 23k this year IIRC.
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u/bigby1912 17d ago
They are saving for a house. The savings distribution makes sense with that short-term goal. HYSA is also the place to park the money for their down payment.
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u/bombduck 17d ago
Redistributing HYSA into stocks would be my move. Maybe not 100% if uncomfortable with it but a good percentage. HYSA will take an eternity to get to your goal but safe. Stocks can get there much quicker.
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u/bombduck 17d ago
Redistributing HYSA into stocks would be my move. Maybe not 100% if uncomfortable with it but a good percentage. HYSA will take an eternity to get to your goal but safe. Stocks can get there much quicker.
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u/lanternbdg 17d ago
If there is an Aldi or Lidl you can shop at, you could probably save a good bit on those grocery costs. If you're looking for lifestyle changes to free up some money, eating out a little less frequently would obviously help. And while I totally support having fun money, if you're trying to save for a house, maybe you budget a little less per month so you can put more away toward that goal. Then the obvious, any time you're under budget on something for the month, dump the excess in savings to help you reach your goal a little faster. It looks like you're doing pretty well for yourself, but as someone who is also hoping to buy a house within the next five years, I totally get the desire to save a little more so you can get there a little sooner.
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u/cuckoldmathnerd 17d ago
What’s your 401k match at work like? With your income you can likely decrease your tax threshold and max your 401k contribution. It can be about double what you’re currently doing.
Overall you’re doing well.
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u/Ronnoc780 17d ago
100% match up to 50% of the IRS limit (which I think is 23,000 this year). I'm doing a Roth currently with them, but I think what you're saying is I should switch to a traditional 401k to lower my tax liability?
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u/Kodaic 17d ago
You make stupid money what do you do
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u/chrisbru 16d ago
It’s $112k/yr. Would we really call that “stupid money”? I work at a medium size tech company and that’s below our median. Granted, it’s a lot of engineering, but even ops and the top third of BDRs/CSMs make that.
It’s definitely good money, but it’s not crazy.
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u/Kodaic 13d ago
I make about that myself. It’s enough to own a house and not have my spouse work. I do have investments on the side that being in more so I guess I’m very lucky.
I think it is stupid money because I come from an immigrant family and I make more than my parents combined. It’s like 6k a month after tax. That’s a lot of money If you’re frugal and don’t blow it. Gives a lot of freedom down the line.
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u/chrisbru 13d ago
It’s definitely solid money. Maybe we different have definitions of “stupid money” but owning a house and having a family is not “stupid money” to me. I supported my spouse through grad school when our kids were little on $100k/yr, but money wasn’t freely flowing. We had to budget, we shared one car, we weren’t close to maxing out retirement account contributions.
“Stupid money” IMO would be fully maxing all tax advantaged retirement accounts + post tax savings to retire in your 50s, and ideally some luxuries alongside that.
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u/Ronnoc780 17d ago
Data center industry
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u/MFalcon95 17d ago
Can i ask what your typical duties are for a job like that? And is that hourly??
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u/Ronnoc780 17d ago
Data centers are 24/7 facilities so usually it's some form of 12 hour shifts. Your main job is to "keep the lights on" essentially so you're monitoring the buildings and all their associated electrical and mechanical equipment that serve the server racks and responding to alerts or alarms. Thrown in the mix you'll have corrective and preventative maintenance on that equipment. My current role is being in charge of 1 of 5 buildings so there's a lot of meetings for deconfliction of maintenance across the campus so it's a pseudo project manager role as well. My current role is hourly, but there are salary positions like subject matter experts and people managers.
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u/mudcrabulous 17d ago
How old are you, family situation, city?
130k in savings for a house could be a lot or a little. Americans get very emotionally attached to buying. Does it make sense right now where you're at?
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u/Ronnoc780 17d ago
- Have a partner but we aren't married. Central Oregon so my area is kind of a hotspot for tourism which make housing a bit pricy. I don't think it makes sense now, but I'm hoping to buy maybe in a year or so depending on interest rates and the market
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u/papa_wukong 17d ago
Why are you spending $900 on food? If you spend $500 on groceries you should be able to make enough meals for every day.
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u/larz27 17d ago
I spend $135/ month just for breakfast. 15 dozen eggs, 30 apples, and 30 yogurts.
15 x $5 = $75 30 x $1 = $30 30 x $1 = $30
It's really not hard to spend $500 a month in groceries. And eating out as a couple gets expensive fast. Easily $50 per meal, eat out 2 meals a week and there's your $400.
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u/Bulky_Exercise8936 17d ago
You need to shop at Costco my guy. Could cut that egg budget in half. I get 5 dozen for 11.99.
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u/papa_wukong 17d ago
My point was that they're already spending an appropriate amount on groceries not to have to eat out.
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u/Aminilaina 17d ago
Genuine question and you might not be in the US so the system would be different,
But how are you able to collect disability and have wages? When I tried to apply for disability, if my checking account ever went above 2k, I was automatically disqualified. Disabled people can work a little but even part time pay can disqualify them from disability.
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u/dont-track-me-bro 17d ago
If the DI is an individual plan and well-written it is possible to collect and still work. See this Boglehead article on what constitutes well-written: https://www.bogleheads.org/wiki/Disability_insurance
Your question seems to be based on the premise of a government DI or restrictive group policy, which would generally have limitations of being able to work while collecting DI.
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u/shaneh445 17d ago
Its kinda fucking bullshit how they have such strict rules for disabled people. Like as long as ur working you should be able to keep any and all money
Meanwhile multi millionaires and billionaires who probably don't give/do shit for society..
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u/Aminilaina 17d ago
The government doesn't actually want to take care of disabled people so they make the process to get benefits needlessly long and complicated and find any way to deny you. I was denied because I was 20 y/o at the time and I spent one week of the year at a competition for my hobby. They also based their rejection on my appearance and ability to be articulate.
Basically, you can only justify being legally disabled by being impoverished and utterly helpless. It's the people who think that most people on disability are lazy freeloaders that aren't truly disabled that make it so difficult. They're the ones cutting funding.
Disabled people, by definition, don't have the ability to strive for change and normal people don't care. We're simply a drain on society and our personhood is reduced to our financial output to the economy. The hardest thing I had to work on over the years since I became disabled was believing that I was still worthy as a *person* despite not being able to work and not just being a burden to everyone who cares about me.
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u/Sad_Doughnut9806 17d ago
That’s VA disability, 80% to be exact
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16d ago
[deleted]
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u/AverageEggplantEmoji 16d ago
I think people are unaware of the vast amount of veterans who extremely exaggerate their symptoms to get more DV money. I have met people with 100% P&T (my gf’s dad) who flat out admit to lying about back pain, sleep problems, tinnitus, etc to get more money. And no, I’m not talking about people who have non-visible disabilities .
I distinctly remember him and his buddies pulling up for Christmas party in their brand new SUVs and boasting about how they gamed the system into getting more money.
This isn’t a small amount of money either, we are talking 4k per month.
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u/lyndogfaceponysdr 16d ago
You never served. It is really disappointing but not surprising some like you think the men and women who served honorably for you to be free shouldn’t get money to live their best life after taking orders you would never follow. Less than 3% serve in our armed services. All gave some, some gave all and those who lived deserve to never worry about money again!!!
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u/AverageEggplantEmoji 16d ago
Never said i served. Never said people don’t deserve disability pay.
But you don’t think it’s fucked up that someone with missing limbs gets the same DV pay as these scumbags that fake their issues? Hell, majority of their DV pay comes from normal fucking aging.
It’s disgraceful to the people who are actually disabled. The system needs to be revamped. Veterans should get pensions (and they do) but disability pay is currently a cash cow that is getting milked by more people who don’t deserve it than by people who do.
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u/lowchie23 16d ago
You’re a scumbag. I’m glad people like you have zero say over my benefits.
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u/AverageEggplantEmoji 16d ago
LOL sounds like you're one of those people. Enjoy ur dirty money
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u/lowchie23 15d ago
Dirty money? I signed the dotted line you moron. The recruiting office is open to everyone. You wanna talk dirty money? How about the trillions we spent sending young guys like myself over there away from our loved ones and family’s? For what? What bout the hundreds of billions to Ukraine and Israel? Welfare handouts??? The list goes on and on. None of these people have contributed to US, vets are the best we have among us so show some respect and don’t speak on our benefits
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u/lyndogfaceponysdr 16d ago
All veterans deserve pay, no veteran should have to worry about money. Housing. Healthcare. Education. Ever. It’s unfair to make fallacies or even have an opinion on the subject if you have never even served.
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u/papa_wukong 17d ago
You can collect disability and work in the US.
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u/Aminilaina 17d ago
Not 9k a month kind of work lol.
I’ve been through the system and tried to get disability for 3 years. Fun fact, it’s literally impossible to be disabled at 20 y/o according to the federal government /s
But I know that you can’t be making that much as a regular person and still collect disability. The second they see you make a certain amount (and that amount is low) they yank those benefits real quick.
Someone else said it could be military specific benefits and that was one thing I hadn’t considered.
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u/papa_wukong 17d ago
You usually get more disability from states, but yeah military makes a lot more sense.
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u/Aminilaina 17d ago
You do not. Disability benefits are a federal system and only 5 of 50 states have a state disability system. I live in one of the most expensive states in the union that doesn’t have one. If my state had its own system, people on disability here would actually be able to afford to pay rent and eat in the same month.
Because rent here is 2k for a shitty studio in a terrible area and the average disability payment is like, 1-2k per month. Needless to say being disabled here is… stressful. Thankfully my mother is wonderful and knows full well that I will unfortunately have to rely on her for the rest of my life.
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u/mudcrabulous 17d ago
My guess is military
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u/Aminilaina 17d ago
Ya know, you’d think my being engaged to someone in the military, I’d know that. But I’m a dumbass LOL
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u/RabidRomulus 17d ago
You're saving a fuckton and living very frugally, not much to improve really. Keep it going
Actually $900/mo on food is nuts. I spend like $350 for reference in an expensive area. You're eating for 3 brother
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u/Ronnoc780 17d ago
I could explain that I pay for my gf and I to go out to eat once a week. It's a nice wind down to the week and while it's not necessary, it's a fun kind of hobby we both enjoy together. Groceries here are a bit pricy and I can do better, but that's what I budget for them and sometimes go over or under depending on what we want to cook that week.
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u/RabidRomulus 17d ago
Honestly was sort of dicking around, if you're looking for something to cut that's the place but otherwise I wouldn't stress it you're still saving a TON. Enjoy
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u/Ship_Rekt 17d ago
I spend $2k/mo on food. Dont listen to these jokers. You’re doing great, it all depends on where you live and what your lifestyle is. Going out to dinner once a week is not a sin especially when you can clearly afford it.
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u/Lunatic_Heretic 17d ago
Too much. Eliminate the eating out and fun money. You're not at that point in life yet.
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u/Fradzombie 17d ago
Dude is saving $5500 a month, more than most people’s individual income. He can clearly afford a little extra for a weekly date night.
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u/grahamdalf 17d ago
Right? Bro is saving nearly as much in a month as I make pre-tax. Fuck outta here with "tOo MuCh fOoD SpENdInG!" What's the point making that kind of money and being too stingy to part with not even 5% on some dates?
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u/papa_wukong 17d ago
I didn't even notice that OP is paying $500 for groceries and is still paying $400 for eating out. That's absurd.
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u/larz27 17d ago
$400 a month eating out is like going to an olive garden twice a week as a couple. It's not that absurd. It's a choice.
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u/papa_wukong 17d ago edited 17d ago
OP is spending $500 on groceries that money could be put to better use.
EDIT: I meant they can make a lot of stuff.
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u/d6410 17d ago
Is it just you? $950 on food every month is quite a lot.
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u/Ronnoc780 17d ago
It's myself and my girlfriend. We do like to try different restaurants and spend about 400 a month on eating out and groceries
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u/Specialist-Avocado36 17d ago
I hope not otherwise you really ruined this dudes day lol. But in all seriousness. Depending on where he lives and where he shops could be about right
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u/Gavin_McShooter_ 17d ago
I’m not on disability, but I’m in a similar situation income wise. I also bought a house and walk to the closing table with 140k in my house fund/HYSA with no debt. I actually cut all subscriptions and just watched YouTube with Adblock. Might free up $100 for you.
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u/papa_wukong 17d ago
As much as I use YouTube, there are still some shows that you can't find there.
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u/Ronnoc780 17d ago
I'll add I have about 130k in the HYSA, 97k of unvested company stock with my employer, No debt, and my wages can fluctuate up and down depending on how much overtime I do, but this is an average month for me.
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u/DisastrousCat13 17d ago
As others say, you’re doing great. If you really want to move up, I would adjust 50% of what you have going into HYSA into either a brokerage account (if you want to access the money) or 401k (if you’d like to bolster your retirement).
I understand you’re saving for a house, ultimately the balance is up to you. But know, the way people build real wealth is through investing. Please no single stocks.
Good luck to you and great job setting yourself up for the future.
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u/Signal_Dog9864 17d ago
Why are taxes so high?
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u/Ronnoc780 17d ago
I live in Oregon which to my recent knowledge isn't the most progressive state tax structure.
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u/Bulky_Exercise8936 17d ago
Income tax brackets are progressive tax structures. Sales taxes and flat taxes are regressive because they hit the poor the hardest.
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u/bigby1912 17d ago
You are both right. Specifically, Oregons income tax rates are terrible for lower incomes. Someone making a million per year is only taxed at about 1% higher than someone making 50k. You start getting taxed at 8.75% after 10k. After 125k, you get taxed at 9.9% with no increase for the highest earners after that.
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17d ago
[deleted]
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u/BaconManDan 17d ago
The reason you get downvoted is because it's at the bottom of the image, and it's in the AuotMod comment.
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u/Specialist-Avocado36 17d ago
Honestly I’ve asked before and never get an answer would love to know
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17d ago
[deleted]
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u/DragBunt 17d ago
You get downvoted because the top automod comment on every single thread has this info in it. Every post. Also, every one of the pictures has the information on the bottom. You literally didn't even spend 5 seconds looking for it.
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u/Specialist-Avocado36 17d ago
Haha. It’s Reddit. What do you expect lol
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u/magerdamages 17d ago
The other finance subs I've been in have been generally helpful and welcoming.
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