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I concur... track every dime for three months, then analyze. You're going to shock yourself.
This.
We did it for a year prior to pulling the plug. We knew how much we spent at a macro-level but wanted the detail so we knew how much (and where) potential fat was if it came to that. Of course we concluded that if needed we could stop eating while continuing to drink beer.
Haven't read the whole thread, but if it's like 40% of Americans, stop relying too much on credit (car loans, credit cards, etc). Consumer credit is the bane of all W2 earners from the $30,000'ers, to the high six digit earners. They never manage to dig themselves out of the credit hole.
I make 41K, my husband makes 65K. I mean we have some savings (about 20K which friends tell me is a lot but it’s not. Maybe for them it is) but we are always concerned about spending too much.
Need more information. How old are you two? Where do you live?
I make 65K in one of the most expensive cities in the world. 106K for two people in my city means jack squat. I live below my means. Some people wouldn't consider it living.
Ummm...being able to do things you enjoy while you are healthy...is why many of us want to retire in the first place. Has that thought honestly never occurred to you?? Retiring does NOT mean stopping all activity and sitting idle. It also does not mean that it was a voluntary choice. Many people have NO choice due to medical issues. I don’t think you have a very good grasp on reality if you’ve not given a single thought or action towards planning for retirement.
- OR -
Maybe when you know you absolutely cannot do something, you find a way to be happy with what you CAN do; e.g. since I know I cannot save enough to retire at 52 and travel the world like maybe I would have liked to, I have to now find happiness in some other situation. I do stand by the fact that, although my dad plays golf almost every day, not having to be at work and deal with that stress, he cannot seem to deal with ANYTHING at all, and it is aging him quickly
Without boring everyone with the details, I have never had the possibility of having a retirement account. I once did with a former employer, but had to use the money for down payment on a house, which I still think was the right thing to do- can't be a great idea to rent forever, right?
Maybe when you know you absolutely cannot do something, you find a way to be happy with what you CAN do; e.g. since I know I cannot save enough to retire at 52 and travel the world like maybe I would have liked to, I have to now find happiness in some other situation. I do stand by the fact that, although my dad plays golf almost every day, not having to be at work and deal with that stress, he cannot seem to deal with ANYTHING at all, and it is aging him quickly
Without boring everyone with the details, I have never had the possibility of having a retirement account. I once did with a former employer, but had to use the money for down payment on a house, which I still think was the right thing to do- can't be a great idea to rent forever, right?
Saving enough to retire at 52 is beyond MOST people’s reach. But saving SOMETHING...that should be possible for most.
- OR -Maybe when you know you absolutely cannot do something, you find a way to be happy with what you CAN do; e.g. since I know I cannot save enough to retire at 52 and travel the world like maybe I would have liked to, I have to now find happiness in some other situation
Well, this is a valid point. I think that's the whole point of personal finance, really. The trick it to learn to do this proactively instead of reactively. Most people take on way too many financial obligations that they don't really need to take on (but think they do, or assume they can't be happy without). But if they thought about those obligations in advance, making the hard decisions up front, instead of waiting for life to force them into making the hard decisions, then they'd have a lot more control and freedom over their lives.
Quote:
Originally Posted by MarshaBrady1968
I do stand by the fact that, although my dad plays golf almost every day, not having to be at work and deal with that stress, he cannot seem to deal with ANYTHING at all, and it is aging him quickly
This is also a valid point. But it's also overly black and white. It's true. People need a certain amount of purpose and responsibility to be happy. A life that's only recreation really doesn't do it for most of us. We're not wired that way. That said, once again, it's about proactively taking on new responsibilities and challenges vs. having them forced on you. It's true, you DO need to take on some challenges--and it's important to do so. But I'd say (not always, but generally speaking) it's better to choose your challenges rather than have them foisted upon you. It's better to have choices and options that money provides vs. not having those choices and options.
Quote:
Originally Posted by MarshaBrady1968
Without boring everyone with the details, I have never had the possibility of having a retirement account.
None of us know the details of your life, and you're certainly under no obligation to share. However, in my experience, most people can afford to open up a retirement account if they really want to. I know a guy who makes 35k a year working at a retail store here in the high cost SF Bay Area who has a retirement account with 24K in it. He took care of his elderly mother for years, both of them living in a 1BR apartment. Of course, he's an immigrant from Latin America; so he knows how to do without stuff other people think are 'must haves'.
I know a former coworker who was a single mom for years working 2 part time jobs. She's 44 and has 75K in retirement accounts. (Yes, employer matches helped, but most of it was her own savings). Granted, both of these folks have/had employer plans. But I see lots of people (including people in my own family) who make a lot more than these people (and who are also just generally better situated in life) and they have less saved.
And pretty much anyone can open up a retirement account these days. Lots of mutual fund companies / brokerages let you open up an IRA with $1000.
Quote:
Originally Posted by MarshaBrady1968
I once did with a former employer, but had to use the money for down payment on a house, which I still think was the right thing to do
Most of us would disagree that this was a good idea. We'd probably also question whether it was really a 'have to'.
Quote:
Originally Posted by MarshaBrady1968
can't be a great idea to rent forever, right?
Not necessarily. It depends. I'd never make an absolute statement like that. As I've said many times on these boards. It's really about total housing cost as a percentage of your income that matters. Renters have it easy in the sense that number is easy to calculate because they typically don't have to pay maintenance costs. Homeowners tend to forget about or underestimate the cost of regular maintenance and repairs. The other factor is the place you own is typically not the same as the place you'd rent (i.e. the place you rent is often smaller and has lower utility bills). If you keep your rental costs low as a percentage of income and save/invest the difference, renting can make financial sense. The key is you can't just assume renting is a bad idea without actually doing the math for your situation. Granted, there are always unknowns you can't account for. But a lot of people just believe renting's bad and owning's good because that's what's repeated most often.
I make 41K, my husband makes 65K. So together we bring in 6 figures. Our mortgage with taxes escrowed in is $1535 a month. Our house is small and our heat and electric bills are low. We don’t have kids. We have 2 dogs but they are definitely less expensive than kids. We have the normal bills (car payments, cable, internet, groceries, credit cards). We don’t spend much. Most spending is eating out. But we’ve cut down. Wouldn’t you think a couple making 2 somewhat decent salaries and no kids would able to go on vacations etc? I mean we have some savings (about 20K which friends tell me is a lot but it’s not. Maybe for them it is) but we are always concerned about spending too much.
Work backwards:
You are starting at 106K gross pay. You easily lose 25%+ right there in federal taxes. So best case you area at 79.5K (less if state taxes, health insurance premiums, etc are deducted).
$6625 a month is best case monthly income
1535 mtg
5K a month left (only 1250 a week)
Car payments/utilities/groceries could easily cut that in half
Credit cards- depending on balances could take the other 1/2
No wonder the OP does not understand personal finance. She complained but never bothered to check back for any input that would help.
OR doesnt like what shes been told.
Some people complain but dont want to hear how to correct their complaints.
All it will require is a little WORK, that she might not be willing to do:
Track every penny spent;
Develop a budget;
Stop buying on credit or worse yet, leases;
Make saving a priority;
Set up and save for retirement and invest;
Work backwards:
You are starting at 106K gross pay.
You easily lose 25%+ right there in federal taxes.
So best case you area at 79.5K (less if state taxes, health insurance premiums, etc are deducted).
$6625 a month is best case monthly income
Then comes saving/investing accounts (pay yourself first!
$106 - ~15% save/invest - ~20% tax/payroll = $5742 net income per month.
That comes out to $1335 net per week (÷4.3)...
which is a reasonable target for the monthly housing costs (incl util).
$1335 - property tax - insurance - utilities - upkeep allowanvce... doesn't leave all that much for P&I.
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