Good morning Jeremy,
I just started my Roth 457 and Roth 401k with my job.
I make about $5400 before taxes and $3900 after.
My monthly contribution is
457: $100
401k: $50
I want to increase my monthly contribution, but my monthly expense require at minimum $3500 a month to make ends meet.
Do you have any advice as how I can go about achieving my goal while still making enough to live each month?
I’m also a full time single father with a 6 year old little girl.
Hey Oppa!
Well, you’re really getting at the heart of wealth building. There’s what you make and what you spend. The difference is what you can save or invest. The bigger that difference, the faster and more wealth you build! With a $64K income, I would really want you to be investing more than $1,800/year.
There’s basically two ways you can increase that gap:
Earn More Money: Seems obvious, but is there any way to increase your income? Pick up extra hours, side hustle, grow your career, switch jobs, start a business, second job, etc. If you can work a couple nights/week and make $100/night that’s $800/month you could dump toward investing! That’s over 5x what you’re currently doing.
Spend Less Money: Also seems obvious, but it might be worth taking a look at your big expenses. Housing, car, debt, etc. Do you have debt? Just getting a used car instead of a new car can often open several hundred dollars a month in car expenses.
There really is no magic answer. Earn more. Spend less. Invest the difference. That’s how people get rich.
Hi Oppa,
I hope you don’t mind me giving you advice. I am fascinated by finances so here is what I would do in your situation. Do you have a budget and a 6 month emergency fund? For example if you have a budget with needs (mortgage/rent, utilities, groceries, internet, phone, transportation) and wants (TV subscriptions, recreation, eating out), you can always reduce your wants rather than your needs.
I am also trying to reduce my expenses and contribute more. I have capped out at earning more, so I am focusing on reducing my wants, not so much that I am miserable but I definitely want to ask myself twice before I make an emotional purchase. It has helped me, I hope it helps you.
Thank you both for you insight. I’ll have to rebook at my finances to see how I can spend less.
I’m unable to currently make more funds due to also being a part time university student on top of a f/t single dad. Well, to be more precise, my plate is pretty full so just juggling what I have at the moment takes up my time. I do believe I can cut back on spending each month.
I don’t have a large emergency fund and I do have debt that I’m paying off each month.
What would be the target amount of investment per year? Or ball park figure? If I have a target mark it would help me look more intensely into the areas I can cut back to invest more.
Also my income after taxes is closer to $48K
Hey Oppa!
How much debt do you have? What are you studying? Do you expect your income to change when you graduate? When and how much?
I’ll have about $20k in student when I finish. My income will increase yearly based on annual raises. In 3yrs when I graduate, my income will rise another $1k per month altogether. I’m majoring in Communication.
Well… there’s no secret here. You gotta pay off the debt, then use those debt payments you were making to invest. The harder and faster you do that, the more wealth you will build.
I would actually pause any investing not being matched by an employer and set a goal of graduating with your degree with ZERO debt. You plan to have $20K, but what can you do over the next three years to make that number zero? Seek out scholarships, tuition reimbursement, throw every dollar at the loans and cash flow future college expenses? $20K in 3 years is less than $7K/year or about $500/month. What can you do to lower expenses or increase income to get there. If you can do THAT, then the day you graduate and get your $1,000/month raise you’ll have $1,500/month of free cash flow! Investing that will make you a millionaire in about 20 years, and a multi-millionaire in 30 years! 
That’s the kind of plan I would shoot for!