Please answer the following question I have never had any credit card debt -- I
ID: 2808980 • Letter: P
Question
Please answer the following question
I have never had any credit card debt -- I was taught early on that I should never charge anything I didn't have the cash to pay for on the spot. I save a chunk of my paycheck every month in a savings account for emergencies, put 10% in my 401(k), and another 3.5% in a Roth IRA. My husband and I could afford a bigger apartment here in New York, two cars instead of one, and to eat out three or four times a week. But instead we live in a one bedroom, I ride a bike to get around, and we eat out once or twice a week. My husband brought a sizable credit card debt to our marriage, and living as we do has allowed us to aggressively pay it down -- it will be completely gone in the next 60 days -- without a late payment. I know it's a radical notion to live below one's means -- but it is how we've managed to maintain our lifestyle in this time which seems to be so challenging for so many. We are lucky in that we are both employed doing jobs we enjoy, and we have our health. But we've also made smart decisions about living within our means, and these decisions are paying dividends right now. And when the credit card debt is gone, we might even reward ourselves with our first ever vacation!
Based on the above scenario, list two things that the couple is doing right.
Explanation / Answer
The following are the highlights of the given question: 1 10% in 401(K) 2 3.5% in ROT IRA 3 bigger apartment in newyork 4 2 cars 5 eat our 3 or 4 times in a week 6 one bike 7 one or twice in a week 8 credit card debt on marriage. It will completely gone in next 60 days 9 Both are employed 10 Another smart investments with periodlical dividend 11 Planning a vacation once credit card debt is gone There are two types of invesmnets and savings is there. One is risk and risk free. For every type of investments depend upon your lifestyle and your past financial position you need split your investments into risk and risk free Here since both wife and husbands are salaried complyee. So they are havings fixed income so then can take risk and go for more risk investments than risk free investments. In the above options purchasing house and ivesting in 10% in 401 (k) and 3.5 % ROT IRA is the better options