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What Does It Mean To Be Vested?

Last Sunday, I hit a major milestone at my company. I have officially been working here for 2 years. In some ways, it feels like I’m just starting but in others I feel like a seasoned veteran. This is especially true since the average job tenure of people my age is just 3 years (should I be looking for a new job already?). The anniversary date came and went without any fanfare. I didn’t get to chose an anniversary gift out of a magazine, or even receive a card from my company. I actually got something much, much better: I vested.

What is Vesting?

Vesting is a term used to describe how much of your 401k you are allowed to take with you if you leave the company. You may be thinking “Wait, I don’t get to keep my entire 401k?” Before you overreact, I want to be clear that vesting only applies to the portion that your company contributes. If you invest $5,000 in your 401k, and your company contributes $1,000, vesting only applies to the $1,000. You get to keep your $5,000 plus whatever you’ve earned in the market when you leave. read more

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Spending Report: August 2017

Having a strong understanding of where your money is going is the first step on any financial journey. In Managing Our Finances with Mint, I talk about how Mrs. NFF and I use Mint to track all of our financial expenses and which categories we use to segment our spending. At the end of the month, I find it useful to go through our monthly expenses to how we did, and how to respond to unexpected changes to our spending. I hope by sharing my assessment with you, can you take a similar approach with your own spending self-assessment.

August 2017 Overview: Total Spending – $7,199 read more

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Managing Our Finances as a Couple

Before my wife and I got married, we had a long conversation about how we wanted to handle our finances as a married couple. Previously, we were using a shared checking account for shared expenses like rent and utilities when we were living together, but marriage was an entirely new ball game. There were very different levels of student loans to pay off at various interest rates, as well as vastly different salaries with which to pay them. We needed to find an approach that allowed us to share in our financial successes and failures that also helped to control some of our worst financial habits.

It should be noted that our approach has worked for us, but that is not to say it will work perfectly for everyone else. People have different attitudes about money, financial situations, and financial goals, all of which should be factored in when decided on your own approach. read more

My Money Mistakes: Holding Onto a Bad Stock for Tax Reasons

While I hope to fill this blog with tips and tricks I’ve learned from my successes in achieving my goals, I know that I will inevitably make mistakes along the way. My hope is that by telling you about them, I can learn from them and hopefully help you to avoid them in your own journey to financial independence and early retirement.

“A man must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them.” – John C. Maxwell read more

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Net Worth Tracker: August 2017

First off, I must apologize for the late net worth posting, but I promise that I do have a good excuse. A little more than a week ago, our family grew by one as we welcomed NFF Jr. into the world. It has been an amazing, if thoroughly exhausting, couple of weeks for my wife and me. But I find myself now with some extra time to update you on our financial happenings since last month.

August 2017 was another up month for the New Father Finance family, though I have to admit it is our worst month for spending this year. Some extra costs related to the birth of our son played a major part of that. In a later post, I’ll go into a bit more detail about our actual spending this month, and perhaps go into a little detail about some of our larger baby purchases. read more

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What is a Target Date Fund

My sister recently graduated from graduate school and for the first time in her life has had a full-time job with a steady paycheck and benefits. Last weekend, she asked for my help because she gets a 401k but she didn’t have any idea of how to invest it. After setting up her account and reviewing what her investment options were, I thought that the best option was to sign her up for a target date fund. Specifically, Vanguard’s Target Date 2060 Fund.

What is a target date index fund?

A target date index fund is an index fund that invests in a mix of stocks and bonds (domestic and international) that is designed with specific date in mind of when you will need your money. The weighting of how much is invested in each asset class is meant to grow with the stock markets when you are far away from your target date, and get more conservative as you get closer to retirement. My sister, for example, won’t hit 65 until around the year 2060, so her target date fund is heavily weighted towards stocks, with only a small percentage invested in stocks. As she gets older, the fund will gradually move to be invested more heavily in bonds to preserve capital and reduce the risk of her losing a big portion of her savings right when she needs it. read more

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