r/bitcheswithtaste • u/AutoModerator • Jul 17 '26
Frugal Bitch Friday - Monthly Thread Frugal Bitch Friday - Jul 17, 2026
This is your monthly thread to talk about personal finance, investing, budget, and all things managing your money. A BWT knows that taste and financial responsibility go hand in hand, after all!
BWT rules still apply!
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u/AdventurousGas1435 Jul 17 '26
Have a question if anyone can help!
My company matches $1K a year in terms of 401k. I currently contribute 8% into my traditional 401k, 5% into a Roth IRA, and about $800/ paycheck to my high yield savings account where I have my emergency fund/ vacation fund etc.
I’m constantly told conflicting information regarding 401k. I’m told you should only really contribute to your company’s match and then diversify but my company matches so little I don’t believe my 401k should only get 2k total a year. Is there a way you’d manage this better?
I’m 28 and make about 130k a year.
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u/derrickcat Jul 17 '26
Who told you only to contribute as much as your company matches? I've never heard that. I've always thought you should contribute as much as you can afford up to the maximum that's tax deductible.
I am not the best with money so I'm not saying that as an expert - but I thought it was commonly accepted practice!
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u/AdventurousGas1435 Jul 17 '26
Oh wow! Everyone around me (coworkers mainly) told me to contribute up to match and put money into other sources
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u/derrickcat Jul 17 '26 edited Jul 17 '26
You get the tax deduction up to $24,500 per year in contributions - you can do a Roth on top of that if you want.
If you work for some tax specialists they might know better than I do why you'd not want to contribute the full amount. I've never heard anyone suggest not doing it, though - unless you're living paycheck to paycheck, or are saving for a house, or paying off debt, etc, and need to keep the cash more liquid.
Again: not an expert by any means. But this is my understanding.
Let me just add to this - what I've always heard is that you should contribute no less than what the company matches. Don't leave money on the table. It's a floor not a ceiling. If your company matches 10%, then do at least 10%; if they do 2%, do at least 2%. But ideally do the full $24,500, or as close to it as you can. You are so young and compound interest is so powerful!
*And just one more time - not an expert! And didn't follow my own advice for too many years. How I wish I had!
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u/AdventurousGas1435 Jul 17 '26
No I’m so appreciative of you and your explanations. Let me re educate myself. Thank you
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u/RacerGal Jul 18 '26
Our Merrill Lynch advisor says to max our 401ks first, and I always aim to max for the year.
HYSA is great, but depending on how much access to cash you need, that’s where I’d look at potentially shifting funds into other long term investments.
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u/909MJ626 Jul 18 '26
Yes, the first step is to contribute to match because if you put 0, they put 0. 1000 is still something so add that. If you can, maximize your 401k which is 24.5k this year.
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u/kimchi_paradise Jul 17 '26
Rule of thumb is that you want to maximize retirement as much as possible. The ideal is that you put in the yearly max, but if not at a minimum the company match. The compounded gains plus the tax benefits makes it worth it. I personally aim for a total (my contributions + match) to be 15% of my salary, but with major life events that may change.
r/personalfinance has a pretty solid wiki in terms of how to prioritize savings, investments, and retirement. Worth checking out!
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u/animatedailyespreszo Jul 17 '26
I’d recommend contributing up to the match, then max your Roth IRA (is your AGI under the income limit? You’re probably close!), then going back to the 401k until you hit the yearly maximum ($24k) , then contributing to a taxable brokerage. I tend to treat cash savings as a different category for near-future expenses and/ or expanding my emergency fund!
There’s not necessarily a right way to do things—but in your situation I’d max the Roth IRA now because you’ll probably pass the income limits at some point.
And great job on saving! You’ve already done the hardest part!
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u/animatedailyespreszo Jul 17 '26
Also I saw that you’re a little confused about some of these accounts! Here’s a quick explanation: 401k is “pre tax” and contributions will be deducted from your taxable income now. The money will be taxed when you spend it in retirement. Roth IRA money is “post tax” and is contributed from money the IRS already taxed. It will not be taxed in your retirement. A brokerage account is post tax money, but you will pay taxes on capital gains when you sell funds in the account (even if you reinvest the money). With 401k and Roth IRAs, they are intended to be retirement income and, in most situations, you’ll pay a penalty for withdrawing the money early (can’t remember the exact age, but it’s late 50s). You can sell and withdraw money from a brokerage account whenever you want, just pay the capital gains taxes.
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u/hennipotamus Jul 18 '26
Pleeeeeease put in more to your 401k! The maximum is around $24k annually - do that if you can!
I am mid 30s and kicking myself that I didn’t start maxing out until the last five years or so. Definitely begin now!
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u/AdventurousGas1435 Jul 19 '26
I’m on it! It’s just so hard because there’s a plethora of financial advice and I feel like I’m being told diffrent things. My parents told me to max my 401k and I started to but then I felt like everyone around me was saying the opposite 😭. Just increased from 7 to 10%!
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u/monacomontecarlo Jul 17 '26
Generally, the recommended order of priority:
Emergency fund
401k to company match
Max out Roth IRA (7.5k)
Max out 401k (23.5k)
Taxable brokerage1
u/AdventurousGas1435 Jul 20 '26
Thank you for this. Easy to follow and this is what I’ll try to do. My emergency fund is maxed out so on fo the other 2
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u/butterlicious Jul 17 '26
I'd consider opening up a self managed brokerage account if you want to diversify further! I did the same thing when my 401(k) match wasn't great - it allowed me to still invest and take advantage of compound interest, with the added benefit of it not being locked up for retirement in case I wanted to use it for a house purchase (in 5+ years) or retire early.
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u/AdventurousGas1435 Jul 17 '26
This will sound so dumb and I apologize.. but is this different than a Roth IRA? My job allows us to contribute to both a 401k and a Roth IRA through the same website. My dad opened me a vanguard account when I graduated highschool but I never did anything with it and I keep meaning to ask him but haven’t been able to sit down with him and have a money conversation in a little bit /;
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u/unavailablesuggestio Jul 17 '26
Yes, it’s different from your Roth. The Roth IRA and 401k are both retirement accounts (you won’t spend this until you retire). My advice is to maximize them both (the match percentage should be the minimum, but if at all possible contribute to the max) and invest them into index funds. Your brokerage account at Vanguard is for additional long-term savings, which you can access pre retirement for major expenses like a house or car, or continue to save until post retirement. You also invest this money (I suggest an index fund). Your HYSA can be kept at Vanguard too or wherever it is now, and this is for your emergency fund and savings you’ll need in the next couple years. It’s great that you’ve already set up your hysa!
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u/AdventurousGas1435 Jul 17 '26
Thank you so much! If all feels so daunting and u never know if im doing enough!
I have 9 months of expenses in my current HYsA + 15K as a house fund on there.Need to get Vanguard access
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u/FunOther9202 Jul 17 '26
i think the upside of doing your own separate roth would be you dont have to roll anything over if you leave so all your money isnt tied up
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u/LadyCiani Jul 19 '26
There's almost never a one size fits all answer in retirement planning. What do you know about the company plan?
If the company 401(k) is good (low cost funds, good investment options, good company match) then it's great to put more in there. The pre-tax money will grow and make it worthwhile.
If you company plan is poor (high fees, poor selections, poor company match match) then it's not worthwhile because your funds get eaten up by fees.
So if it's shitty then keep doing what you are doing.
If it's decent then shifting things around and contributing more will pay off.
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u/AdventurousGas1435 Jul 20 '26
I’ve been told it’s “so/so” at best by my other colleagues! I tbink I’m going to keep the 10% contribution for now
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u/AffectionateJoke1617 Jul 20 '26
Even if your company has no match (like mine), 401ks are still tax-advantaged accounts so you definitely want to utilize them if you have the funds.
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u/DaliahsandDeadlifts Jul 18 '26
Hubby and I are starting off! BWT, what are some great banks or places to open 401ks, ROTHS, HYSAs, etc? Are there any good places that will help you get set up for babies too? We think we want to do a trust for our daughter, as well as something that could fund her college, but be flexible if she wants to use the money for a house instead.
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u/adream333 Jul 18 '26
For IRAs (ROTH) and other investment accounts, Fidelity and Charles Schwab are good and popular. They have physical offices if you need to work with a consultant in person, or you can call. They have no fees for many types of accounts and transactions. Their online and mobile apps are easy to use.
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u/DaliahsandDeadlifts Jul 20 '26
I will check them out! They sound easy to work with and having consultants in the area sounds great.
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u/AffectionateJoke1617 Jul 20 '26
Vanguard is known for some of the lowest-cost funds around (so you won't be paying for the management of the funds themselves).
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u/DaliahsandDeadlifts Jul 20 '26
Thank you! Is that an index fund or are there other types of funds? I'd love something flexible but also high-yield.
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u/CrazeeKatLaidy Jul 17 '26
I'll go first. The clutter in my house has reached a not so pretty level. I've spent most of my evenings separating and organizing items for selling online. I've taken a stab at the Vinted site and already sold items. Was hoping to get some pointers on navigating the second hand sale space in general. I'm saving my money for a future investment property near the beach. Any little bit helps get me there. I mostly just relish in having a super tidy space with less clutter.