After a 6 month deployment and spending a lot of money the past few weeks I've been back in the USA, I want to tighten down on my spending and be smarter with my saving/investing. I have no debt. Here's the monthly budget (broken by month):
- $9,565.08 gross pay (includes BAH)
- $1,374.96 TSP contribution (23% of base pay)
- $6,252.05 net pay after taxes
Expenses
- Rent: $2095
- Utilities (electricity, internet): $90
- Auto + renters insurance: $76.68
- Cell phone: $50
- ROTH IRA: $583.33 (to maximize $7k/yr)
- Grocery: $400
- Gas: $300
- Car repairs: $100 ($1200/yr)
- Clothes: $100 ($1200/yr)
- Vacation savings: $250 ($3000/yr)
- Fun money (includes eating out): $500
After all these, assuming I stick to the budget strictly, I'm left with $1,707.05/mo or about $20500/yr. Are there expenses I could probably cut or expenses I neglected to include? What can I do with all the money I'm saving?
On a separate note, I have about $70k just sitting in my checking account. I know, this is a stupidly high amount to have in a checking account. What should I be doing with this magnitude of money? Maybe it's more of a mental thing, but there's just something gut wrenching about moving that magnitude of money into a savings account or other investment vehicle.. I'm willing to hear any suggestions to make this money work for me.
Thank you all for your help!
Need feedback on my single O-2 budget.. also wtf do I do with $70k in my checking account??
byu/swedishmatthew inMilitaryFinance
Posted by swedishmatthew
3 Comments
Where’s the taxable investment account?
It doesn’t appear that you’re maxing your TSP to the 23k limit, despite having disposal funds.
Also, lump sum for your Roth IRA on January 1st of each year will usually beat DCA (which is what you’re doing currently.)
An upcoming home purchase would be the only reason I’d have more than 20k in a checking account.
https://www.reddit.com/r/financialindependence/comments/16xymii/fire_flow_chart_version_43/?
The 70k in checking…start with an hysa e-fund of 10-15k at 4.25%+. Then open a fidelity account. Push cash to the fidelity money market and set up weekly buys from that cash to VOO or a similar index ETF. I’d assume it would kill you if you bought all in and the market dipped, so dollar cost averaging would likely better fit your risk tolerance and the money market is yielding about 4.9% right now.
Also, I don’t see that you’re hitting the TSP limit and it didn’t mention if it’s ROTH or not. I’d ensure it’s ROTH and up it to max, then excess cash to fidelity. If you use the E fund, then excess cash to replenish it.
I’d max out your Roth IRA and the TSP. That’s 30K per year there.
Another option is to look into other investments like real estate (house hacking/duplex, etc.) or buying a business/side hustle. Maybe open up a taxable brokerage account. It’s easy to get one through the company that has your Roth IRA.
Start learning about individual stocks versus indexing.