Just 10 years of aggressive saving can help you sock away enough money for a comfortable retirement.
As painful as it can be sometimes, I’m a big fan of the aggressive savings approach, especially while we are DINKs (Dual Income No Kids.) Maybe that makes me a Scrooge, but to do the things I want in life, money kind of helps. Plus, I am all too familiar with those unexpected hurdles that pop out of nowhere. And when the time for getting kids through college comes – all I can say is Lord have mercy!
I’m reading about the mystery Powerball winner from Florida, and the amount of money this person won is just mind boggling. I really don’t know what I would do with that much money!!
I think I would:
– Travel the world (duh)
– Buy a beach house on the Coast, a mountain cabin in the West, and a villa in the South of France
– Earn/buy my way into some esoteric but practically useless advanced degree from Oxford (in Classics or Philosophy or something)
– Donate to anything having to do with animals, mental health, and medical research. I’d open and fund my own animal sanctuary for any unwanted or abused or homeless critters!
– Pay off my sister’s school loans; help my dad/in-laws retire some place awesome.
– Get the most fun job I can think of (since I would go crazy if I didn’t work). I think I’d open my cupcake shop and do photography and writing on the side!
– Get my eyes lasered.
Sigh. A girl can dream 🙂
Not that our finances or my purchase decisions are any of your business, but for any of my legit/civil readers who may be wondering the same thing: I actually bought that purse with the money I make from my own job. In fact, all of our “dumbass” frivolous purchases are made with my paycheck – from new shoes, to weekend getaways, to electronics, to workout equipment. So, Chuck’s raise only indirectly affects my spending. To add to the irony, I actually bought the purse before he even got promoted AND he was the first I sent a picture to.
It was a poorly worded and misleading joke on my part, I guess! Chuck knows I’m proud of him as a man and as a Marine – but we are both happy about making a more comfortable living too, and I am not ashamed of that. We earn together, and we spend together!
Oh yeah and we save a lot, too 🙂
It’s time to give our financial plan a revamp sesh, because after paying for the bulk of our wedding, honeymoon, furniture, finishing off loans, etc, we – well… didn’t have really have one. Instead, we took a rather “laissez-faire” approach to spending and saving, which hasn’t particularly done us any favors.
So, I wrote out a little fact/observations sheet in order to guide our new plan. I even printed it out on nice paper (along with our red and green budget!) so Chuck and I can both have a copy – like a contract! Mild disagreement on hard numbers aside, we seem to be in agreement that:
1) Our records to date demonstrate that the laissez-faire approach has led to a static (and even shrinking) checking account and no real savings account or 401(k). Plus, I haven’t been able to contribute much to my IRA since I became virtually unemployed…
2) As it turns out, living really isn’t all that cheap here in cozy coastal NC. We are paying more in rent than either of us ever has (almost) combined, on one relatively modest salary (USMC keeps us humble!) Our bills are comparable, if not more, to what we’ve ever paid because we live in a 3 bedroom house. I’m not sure the cost of electricity varies much from place to place anyway. Gas may be slightly cheaper down here, but we are both driving many more miles every day…
3) The future is looming, and unfortunately, “adult” life means preparing for it. In the next few years, I anticipate a significant probability for two new cars (that’s inevitable), a Master’s degree (I imagine I’ll eventually need or really want one), and babies (bleh.) The fact is that we are really poorly prepared for any of those things, especially if we get unlucky and cars/babies happen before we plan them. Plus, I really do want to travel some before we become parents!
4) Experts say that we should have enough saved up so that if we were to miss a month’s pay, we won’t be screwed. We are definitely out of that hole (yay!), but not by much. If we ever encounter a true emergency or unpredicted needs (knock on hardcore wood), we are screwed!
5) We are only ever guaranteed one income – Chuck’s. Until further notice, we can never count on me making significant money, so we have to plan for just one paycheck to work with.
Ultimately, I came to the realization that humans are naturally inclined to spend whatever is in their piggy bank. Thus, we need to control what’s in that piggy bank to keep us from needlessly overspending, keeping handy only what we need by minimizing what’s in our proverbial wallet. I’m affectionately calling it the “Living paycheck to paycheck by choice approach.”
I worked up our monthly expenses and came up with a number. Now, we are just trying to decide if the better approach is to cap our checking account at a number around that total and save the rest, or if we should settle on a safe but aggressive number to set aside every month and let the checking account fluctuate from there.
In the meantime, we’re trying to curb our entertainment spending by just using my money, which is pretty much what I’ve been doing already. It’s the perfect amount to cover dinners, movies, and other miscellaneous fluff (technical term) that we may want. I’m also paying for our trip to Savannah with that. Of course, I lose my temp job at the end of September, so depending on how things go, that could change drastically one way or the other! Blah.
Anyways… I just want to save super aggressively – almost over aggressively – till we reach our goal, so we have a reasonable cushion. Then we can relax the approach to a more typical savings rate. Even though the number we agreed to save was less than I originally budgeted, I’m hoping to reach our goal by early next spring!
We should have time to catch up once Chuck deploys, too. More pay + fewer expenses (funny how much cheaper my grocery bill is with him gone!!) = more to save. I can also cut out useless bills like Xbox and HBO when he’s gone 😉 We’ll also have one less cell phone to pay for and one less car to keep pumped! And, one can still hope for a nice tax refund in April…
Anyhoo. I needed to ramble that through. Guess we will see how it goes! I think we can totally do it 🙂