My wife and I make $170K per year — but we can’t afford to save for retirement. How do we get back on track?

Core Insights - The article discusses the financial challenges faced by a couple, Katie and Brad, who earn a combined income of $170,000 but struggle with high living costs in San Francisco, leading to a monthly shortfall despite their income [4][5]. Financial Situation - Katie and Brad have approximately $50,000 saved for retirement but have halted regular contributions to their 401(k) due to debt concerns [3]. - Their monthly expenses include $2,500 in rent, childcare costs, and $30,000 in combined student loan and credit card debt, making it difficult to save for future goals [3][4]. Financial Goals - The couple aims to save for a down payment on a home and contribute at least 15% of their income to retirement accounts [2][4]. - They are advised to establish an emergency fund and prioritize debt repayment before focusing on retirement savings [5][12]. Recommended Strategies - The article suggests using Dave Ramsey's 7 Baby Steps approach, which includes paying off debt using the debt snowball method, saving for an emergency fund, and eventually investing in retirement accounts [1][10][12]. - Establishing a realistic budget is emphasized as a crucial first step to understand spending habits and allocate funds for savings and debt repayment [7][8]. Emergency Fund Guidelines - Financial experts recommend saving three to six months' worth of expenses for an emergency fund, with three months being a minimum for those with stable incomes [9][12]. - Once debts are cleared, the couple can redirect funds to enhance their emergency savings and retirement contributions [11].