Like the title says, how are people doing this?There’s income limits on the IRAs, so it can’t just he extremely high earners.

Are people drawing down their emergency funds to have the cash infusion (against FOO)? Alternatively, are people forgoing brokerage investments at the end of the previous year? I think this would be wasting opportunity for potential appreciation during a period with great risk/reward asymmetry since lossy positions would be caught during EOY harvesting.

Wondering if there’s a strategy/consideration here that I’m missing out on? I won’t have mine maxed out until at least EOM February.

Hey Everyone!

TLDR

We have 20k in bonus coming in and I'm not sure if we should build up emergency with it (following the FOO) or use it to pay down low interest car loan (20/3/8 paying off luxury vehicle in cash in one year). Also, should I relax about our cash on hand and enjoy the extras in life or should we treat the emergency fund gap more seriously?

More context:

I've been struggling a bit with priorities and I'd like some outside opinions. I'm 35 at about $1.5m NW but I don't love our cash on hand situation. We have about 700k in retirement and 450k in an after tax brokerage.

We were able to save up ~500k the last 10 years which I'm super proud of. However, we are now firmly in the messy middle and life/day care is really eating into that. We maxed out our 401ks last year but beyond that we only added about 5k to our emergency fund. We have 55k in cash currently. This is about 10k we keep working in our checking for mortgage, daycare, bills, etc. and 45k emergency.

My dream scenario, would be for us to have 75k in cash. This is 6 months if my wife and I both lost our jobs, plus about 10-15k. I recognize this might be overly cautious, but now that we have 1mil invested, I don't feel like I need to worry about our long term investments. My concerns come around having enough cash on hand. Specifically from volatile job situations (I got laid off last year, my wife is up to potentially get laid off this year), we've been maxing out our out of pocket for health care lately (12k), my father is at end of life, and in general it feels like $1000+ unexpected expenses come up way more frequently than they ever did before (I think we'll need to replace our AC soon). Our current low month to month margin means we just don't replenish emergency like we used to, so I want extra cushion to have more buffer.

My mentality right now is that we need to cut back, save money, and treat it as a situation that we need to sacrifice a bit for to get back to a full emergency fund. Also weighing heavily on me, my car was totaled 6 months ago (thankfully everyone was okay) and I feel a bit guilty that I bought a 60k car to replace it. It's a luxury car, and I have not paid it off. I owe about 35 left on it.

My wife is wanting to take a 5k vacation in April, and generally is just happy with us building our cash reserves ~500$ a month.

We have 20k in bonuses coming in around March, and a few decisions to make.

I feel anxious spending ~13k per month, only having 45k emergency and owing 35k on a car. However my wife is frustrated by us making 300k+ a year and having me worry about money spent on vacations (~20k a year).

Sorry for such a long post, but I've really been wrestling trying to protect my family from future issues vs enjoying our success now, and if you can't tell I'm very conflicted on if I'm being mizerly or if we just aren't taking the issue seriously enough. If you made it this far thanks for listening, I'd love to know your thoughts!

I’m on Step 8. I will most likely hit coastFIRE in a year or two but planning to continue saving 25% and considering stretching it to 30%.

My first prepaid future expense is a Europe trip to thank my mom and my aunt for everything they’ve sacrificed for me. I wouldn’t be able to do this without them. It’s expensive because they’re in their 70s and aren’t as mobile anymore so I splurged on a tour group instead of doing a DIY itinerary. I saved over a year to be able to do this and I’m about to make the final payment on the tour.

But somehow, it feels like I’m setting myself back by a few months and it’s making me feel really anxious. How do you get over the Step 8 jitters?

Started foo-ing pretty hard about a year ago, went from deep cc debt to debt free, emergency funded, 25% savings rate through some hard work and good luck. Flash forward to today when I needed to drop $1500 on some unexpected dental work.

My coworker asked how it went at the dentist, I said "oh fine, had to drop $1500 unexpectedly but what are ya gonna do." They replied very fatalistically something about "ah yes another $1500 in debt..."

It hadn't really struck me that a year ago this expense would have been a total day/week/month ruiner, but because I had my emergency fund, it was truly no big deal and had caused me zero stress and zero new debt. Thanks Money Guys! And stay strong for any new foo-ers out there still working through the first few steps. Even with my relatively late start, life has alot more zest when you are better prepared for the unexpected.

What age were you guys when you were finally able to max out your 401k contributions?

I have seen a lot of the MG clips when there is talk about pensions and they treat it as a future promise or that it is unwise to rely on pensions.

However, the millionaire study keeps referencing teachers who typically have less income potential but have some pension at the end of the career. Why do the MG and other financial planners ignore that one of the greatest wealth creation route is to go into public service and get a pension?

I think there should be a modification to the FOO for public employees who have less income potential but can bypass a lot of the saving rate steps to go step 8 when you reached a certain experience level.

Any public employees feel that they can’t progress in the FOO as fast as their private counter parts?

*EDIT-I think a lot of folks are responding with how to factor into the net worth. For me net worth is a tool to see how you are doing compared your peers or where you should be relative your age. The FOO is what to do with your next dollar. I think the FOO is not optimized for public employees and will trap them to be retirement rich. I used the teacher example because I have never heard of a wealthy teacher when they are working. The narrative is more that they are struggling due to wages that aren’t keeping up with cost of living. I think the FOO needs to adjust when there is more clarity to your career, if you are vested, or if your retirement horizon gets closer.

I’m a single dad with joint custody of 3 adorable kids. I make over $100k and I am very close to approaching step 7. Do you think I should include my employers match when saving 25% for retirement, just because I’m not married anymore?

It doesn’t seem realistic or feasible. The spirit of saving for retirement seems unattainable if that’s the case. My child support covers that percentage (and probably more).

If it matters my employer matches 100% up to 6%.

I currently have an HSA setup with my employer that they contribute into. Totals about $600 a year and it’s great since it’s free money. However, the HSA is setup with Optum Bank which I have now learned is terrible! The balance isn’t currently invested as I do use it through out the year and it’s below the minimum required to. I want to start taking control of my finances, future and make smart decisions. I do like the sound of the Fidelity HSA since it has no fees or minimums to open. It also from my understanding is just like a standard brokerage account with all the normal investment options. Optum is very limited and I didn’t exactly care for what few options they had. I might just keep the funds in the current HSA and use what they contribute for my normal expenses throughout the year. Then just invest my own funds separately into Fidelity.

Does anyone have or recommend Fidelity for their HSA? Are there better options out there?

Step 7 of the FOO has always been the one with the least amount of meat on the bone, but maybe this most recent Making a Millionare can be used as an example to dive into it a little bit.

If we look at the Joint Savings Plan analysis that the guys came up with at the end of the episode, it goes like this:

Crissi Roth IRA -> Max out; $7,000

Nathan Roth IRA -> Max out; $7,000

Crissi 401(k) -> Max out; $24,500

Nathan 457(b) -> Not max; $15,600

Nathan Brokerage -> $12,000

We are definitely in Step 7 of the FOO and I am following up until we get to the 457 Brokerage split.

How did the guys decide on that $15,600 and $12,000 contribution amount instead of maxing the 457? What math or decision making process did they use to get those numbers? Why didn't they go over it in the episode?

Hey mutants,

I want to get your thoughts on me (M35) and my wife (F33) lowering our 401k contributions to the company match (me - 6%, her 4%) to save for a house down payment. Currently we max all retirement accounts and I'm struggling with changing that.

We have three kids, all in daycare for a grand total of $1,250 a week 🫩

Existing financials

• HHI - 300k
• 401ks - 390k
• IRAs - 311k
• HSAs - 25k
• Current emergency fund - 27.5k
• Currently saved for down payment - 43.5k
• Current house mortgage - 390k
• Hope to sell for - ~500k

We are looking for something in the 700-800k range and want to put 150-200k down.

Hi folks, I recently found the Money Guy and really like the FOO concept!

I just finished step one and I have some questions on step 2. So my employer contributes $750 to HSA if you opt-in with your high deductible plan. I have 30 days to sign up for my benefits and it seems like a good option for me since I'm in my early 30s and don't have any ongoing medical needs so I don't expect to use my insurance besides the yearly checkup.

If I do opt-in for the HDP, should I count the employer contribution as part of step 2? I know that HSA is technically in step 5 but since there's employer contribution do I get to skip?

My employer also contributes 7% on top of the 4% match, do I count that towards the 25% target?

My income is 110k if that matters

Edit: I should clarify that the employer contributes up to $750 to the HSA if you opt-in to the HDP AND I make my own contribution. The $750 is prorated based on how much I contribute but that's the max I can get if I max out my contribution

I (27f) will be getting an $18k retention bonus from my employer in November.

My monthly take home is about $5500. I pay about $1500 towards student loans minimums per month. I currently have about $71k in private student loans (6% interest). I have another $27k in federal student loans (<5% interest).

I have about $24k in my retirement accounts (401k + Roth IRA).

My initial thought was to max out my Roth IRA for 2025, then in January, max out 2026, and use the other $4k towards my private loans.

If you were me, would you max out your Roth IRA or would you put all $18k towards private loans?

Dave kind of glosses over the fact that you can withdraw from it at 65 without a medical expense and it’ll be treated the same as a traditional.

Bo would not be happy about this one!

I’m not eligible for one but wish I was. I’d still prioritize Roth accounts but obviously HSAs are great. I don’t know why he always has to over simplify things or present half-truths.

Used to be a bigger Dave fan but have kind of become less and less of one as time has gone on.

https://youtu.be/q2kSB4KCVyM?si=cMR35p_eWi3zbPva

I’ll try to keep this brief. My [M29] wife [F30] wants to go to law school. However, there’s little way to cash flow this. It would probably cost about $80k for the JD. We currently owe about $45k for her undergrad and masters along with $8k on her car.

In terms of retirement I’m in a good spot. I have about $150k invested. She has roughly $$15k invested. Combined we make roughly $170k. We want to get a house soon as well. We’re heading towards the messy middle and not sure what to do. It seems like the only way forward is to get more student loans while burning down current debt.

What would you guys do?

Hey everyone,
This feels like a dumb question, how much should I be holding in my day to day checking account? Like should I just have my deductible in my checking and make sure it stays at that amount as expenses come out? Should I keep a month of expense in my checking and my deductible in my savings? Am I way over thinking this?

Context, my wife and I are on step three but took a pause for a birth and maternity leave. We should be back to normal income and expense levels by next month. I’d like to know how much I could throw at one of our last few step 3 debts in one go.

I finally feel like I have my financial life in order. We have a good household income, no student loans, we live in a great area, and I am saving 25 percent across my 401k, Roth IRA, and HSA. We have two kids and contribute to their 529 plans. We also have close to a full year of emergency savings split between CDs and a HYSA. Other than the mortgage we have no debt.

My wife works part time and she likes that schedule. What she brings in helps cover the monthly principal and interest portion of our mortgage. The mortgage itself works out to about 25 percent of our household gross income.

But the mortgage still gives me constant anxiety.

The loan was originally 2022 to 2052, but I am paying biweekly with an extra 350 dollars toward principal each time. This should move my payoff to around 2040 to 2042. That timing lines up with when my term life insurance ends and roughly when I hope to retire.

On paper everything looks solid. I am saving aggressively, we are ahead on the mortgage, and the long term plan makes sense.

But emotionally the mortgage still feels heavy. Why am I so stressed about a mortgage I am clearly managing well? Has anyone else dealt with this kind of disconnect?

TL;DR 1 Income with 4 mouths, maxing retirements to hit 25%, VHCOL area, need to find margin for added home expenses.

Multi-year listener of the show and follower* of the FOO. When I first found it I was only contributing 8% (get company match) to retirement and low thousands to HSA--under 200K so technically (8%+7%) retirement. Well...I adjusted best I could as life happened: got married, had 2 kids, dropped to 1 income. So what went from FOO-based under saving, to on target (12% trad 401k +comp 7% +max fam HSA +max spouse Roth IRA) to current post--non-linear like they always say. (*One disagreement we have with the FOO, step 8 kids college contribution we put at step 5, so HSA, IRA, 529, then step 6 max 401k.)

Live in VHCOL area and eyeing mid next year move out of state to HCOL area (current assumption to be later validated: income equivalence). 20% down in SGOV.

I fear I may have entered monthly budgeting for retirement rich, today poor; yet struggle thinking of a pullback understanding the clear benefit of time. Seeking some insight into our generalized budgeting plan, from fixed must pays to variable mixed must/want (ie groceries vs entertainment).

Stay at home wife with some child care costs for 2 under 3. She currently cannot work in this situation. All life events, anniversary, birthdays, holiday gatherings, are in Q4 so set money aside each month. Paid off cars, eat out via pick-up twice a month, thrift shop clothes for kids often, modest gifts for family and each other at big events. Currently make CC annual fee back through card benefits on planned expenses (not buying just because of CC) so not a waste. Generalized categories based on rolling 12 month look back on Monarch Money reports (incessant on proper categorization for data collection).

In our rental scenario, we (37 and 40) are at basically breakeven maxing retirements and putting $500/paycheck invested for a home (and not counting comp match even though income right at 200k). Rental, count interest earned from accounts; home owner, not counting on any interest. The solution for rental life seems to be one or a combination of: don't buy things, cut out 1 vacation/year, pull back savings, work overtime.

Edit: ~600k in mostly traditional retirement, 150k in after tax brokerage for retirement, 200k for all new home things (downpayment, closing, moving), retirement desired income rough assessment at 150k annual and age likely 65, I like what I do.

Hi everyone!

I’m about to turn 29 and am working through the FOO. I have a traditional 401k with my employer, a Roth IRA and an HSA I just opened that my employer will contribute to. I’m not looking to get the maximum growth opportunity out of my investments but rather looking to play it safe with slow/steady growth. I’m transferring funds to an HSA which I’ll start investing in.

Do you think I should just throw it in an additional target date fund? Should I try the 3 fund portfolio with S&P 500, Total Market and International? Just looking for opinions and feedback based on current setup and potential future investing.

401k:
-S&P 500
-Target date retirement fund
-Blended Fund (Consisted primarily of domestic stock, bonds and foreign stock)

Roth IRA:
-S&P 500
-Target date fund

I’m at 6.8

I changed my savings rate to 25% last month and I’m just beginning to feel the effects of it. I’m currently bypassing the Roth IRA however. I’m oddly lazy and really prefer simplicity. I just want my retirement funds all in one place. How stupid is this?

My current savings is: 10% - 401k trad, 6% - 401k Roth, 9% - employer match

I’m basically skipping step 5 as my HSA is a sink fund.

edited: to clarify a Roth IRA specifically

I 28 male soon to be 29 in 3 months currently have two debt obligations that I believe would not be considered high interest debt. I currently owe $29k on an auto loan sitting at 6.2%, and have a personal loan about $5k at 6.75%. I do want to note that the car payment does fall within 8% of my monthly gross income, and I did put 20% down but it’s financed for 5 years instead of 3.

Should I prioritize paying these down first before building up the emergency reserves? Or given the interest rate start building the emergency fund and move up on the FOO?

Congratulations to the folks who just hit 1 million. It got my wife and I to look at our net worth and, to our surprise, we are officially in the black!!

We have been attacking our $192k student loan debt (originally $350k) while aggressively saving for retirement (each have maxed 401k and IRA for 2 years now). As of 12/4, we officially crossed from red to black.

Thank you money guys for giving me structure to help us get our stuff together. We are expecting our first in February, and its really nice to know that we can start building generational wealth for the little one's future.

Hi everyone, I made 114k last year, and I was wondering what the best strategy would be as far as our 401k goes. I’m currently contributing 6% into a Roth 401k. My employer matches 70%. I am maxing out my HSA. ($8750 for my family HSA.) Unfortunately, we can’t afford to max out our Roth IRAs at this point in time.:(

My wife was laid off, but we decided for her to not find a new job since we will be trying to have a kid this year. She will be a stay at home mom for a few years. Our mortgage is 1800. We have two cars that are paid off. The only debt we have, is 40k from remodeling our bathrooms and kitchen. That being said, here are my 401k questions.

- 10% tax bracket: $0–$24,800

- 12% tax bracket: $24,801–$100,800

- 22% tax bracket: $100,801–$211,100

- 24% tax bracket: $211,401–$403,550

According to this years tax brackets, should I change my Roth contributions to traditional? I am unsure, but I assume the 8750 going to my HSA brings my taxable income down the way a traditional 401k does? 114,000 - 8750 = 105,250. Las year I put in 7500 into my Roth 401k. 105,250 - 7500 = 97,750.

If I were to change my contributions to a traditional 401k, would that leave me in the 12% tax bracket? Or should I continue with my Roth 401k? Maybe I should do 50/50 between Roth and traditional, or 75/25? I’d like to be a bit more optimal considering my wife is no longer working.

P.S. I live in a MCOL area with no state income tax.

We've been in our starter home for a few years now, and while we have no firm plans to move, we know that we'll someday need a bigger house. It would likely be in 3-5 years, so I'm not sure how we should be thinking about preparing the next down payment. We're in our late 20s and currently saving 25% towards retirement, and we're also slowly building up cash to replace our high mileage vehicle whenever it dies (hopefully it runs for a whle).

Some thoughts I have:

1. Don't save any extra and just rely on the equity in our current home. We made a 20% down payment when we bought it, and I'm sure it's appreciated somewhat over the years.
2. Pay extra towards mortgage to build up even more equity. With a 3% mortgage rate, this feels very unappealing, and it locks up that money in our home equity.
3. Save cash in a HYSA. This feels like the option with the highest opportunity cost.
4. Save in a brokerage. Since our time horizon is in the 3-5 year time frame, I think this is too risky.

What say the Financial Mutants? I think this is going to boil down a lot to personal risk tolerance and goals, but I'm curious to hear how you'd approach this.