â€śThey need to figure out the maximum they can contribute to each, and get it done,â€ť says Chesney. She suggests setting up a plan that will allow them to replicate the income they now earn, a combined $86,000 annually, when they reach age 65.
The next step is to inject some frugality into the family budget, which is being stretched to the limit by vacations, luxuries like designer clothing, and a son who isnâ€™t contributing financially. â€śYou give your kids the best advantage when you teach them how to earn their own money at a young age,â€ť says Chesney.
Unless there is an immediate need to replace Reginaâ€™s car, Chesney says the DeMosses should forgo the new car goal and instead funnel the money into their retirement accounts and college savings (the latter of which could also get a boost if their son were to get a part-time job). â€śThereâ€™s nothing that says parents have to pay for college,â€ť Chesney points out. â€śThey should encourage their son to start researching grants, loans, and scholarships, or attending a more affordable community college first. If he does well and saves some of his own money, he could transfer after two years.â€ť
Location: Brooklyn, NY
Family status: Engaged
Primary budgetary goals: â€śI would love to have a solid plan in place, and to relieve myself of the constant anxiety I feel regarding my finances.â€ť
Ideal Budget for Chanel:
Based on her current income, hereâ€™s what Chanel Graham should ideally be spending, maximum, on each expense:
After-tax monthly income: $3,250
Housing costs: $1,225
Debt/credit card payments: $700
Food, transportation, and other expenses: $700
Monthly savings: $325
Monthly surplus: $300
Key suggestions: Continue to pay down debt; approach wedding savings realistically; budget for emergency expenses.