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Old 12-22-2007, 07:59 AM
 
Location: DC Area, for now
3,517 posts, read 12,048,324 times
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If you do a little math you can see how much you are paying for little things. I was spending almost $800 a year on Starbucks coffee at work. Another $2500 a year just on lunches and breakfasts bought out. I stopped doing that and started bringing my lunches and baking a much healthier breakfast bread to grab and go. I got a coffee maker and started making my own coffee at work - much better tasting than Starbucks and way cheaper. It's amazing how long my ready cash lasts now and excess gets saved. That's what budgeting is all about. Look at what you are spending your money on and find ways to shave that down. My diet is healthier because I once again have control over what goes into the food I make. I make big batches of whatever, put the excess into meal size containers and bring those to work. A quick nuke and I've got a cheap, tasty, and healthy meal with less effort than going out every day to buy my lunch. Another savings is the food I make actually gets eaten up instead of languishing for way too long and then being thrown out. Little savings add up.

And the big things matter too. Do you need the maid? Do you really need a big ostentatious house when you don't have anything left over to save up for retirement? It is crazy to buy a house with those no principle loans. You will never build up equity. The old rule to pay yourself first, then see how much money you have left for wants does work.
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Old 12-22-2007, 09:19 AM
 
10,319 posts, read 9,369,968 times
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Default Watch Your Spending!

I agree with those who are being frugal...same here! I cannot justify blowing money on needless 'things' and then when it's retirement time, have a 'pity party' and whine about being broke.
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Old 12-22-2007, 03:27 PM
 
Location: Marietta, GA
857 posts, read 4,471,497 times
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One of the things I did in order to save for retirement is, over the last twenty years, as my income increased I never altered my lifestyle to go with it. I live a fairly simple life and I take all of the increases and put them into savings.
T.Rowe Price and Vanguard have Target date funds that are more aggressive the farther you are from retirement and become more conservative as you get closer. For instance, Retirement 2010 has a lower % of Stocks than Retirement 2030. The closer you get the more the mix changes to something more conservative. I like it because I don't have to think about selling some stock and replacing it with bonds. They do it for me.
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Old 12-22-2007, 04:11 PM
 
Location: Florida
384 posts, read 219,750 times
Reputation: 43
Quote:
Originally Posted by mccarley View Post
Buy stock in good, major companies, that pay good dividends and have dividend reinvestment plans (DRIPS).For example, EXXON, Bank of America. There are many.

But always remember to diversify, ANY money put into stocks,mutual funds is a risk..remember that.
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Old 12-23-2007, 06:07 AM
 
1,831 posts, read 4,795,223 times
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Quote:
Originally Posted by Tesaje View Post
I was spending almost $800 a year on Starbucks coffee at work. Another $2500 a year just on lunches and breakfasts bought out.
All of this is well and good but ... it does get to the point that I just can't nickle and dime everything to death. I rarely eat out for lunch or breakfast ... and we've cut down going out to dinner to just once a month instead of 2-4 times a month

HOWEVER ... I am a hopeless Starbucks addict ... especially since I've quit smoking ...

As I leave work at 3:30 a.m. every morning and work OT to save for my retirement ... Starbucks is one thing I just can't live without.

It's the little things in life that keep me going ...

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Old 12-23-2007, 06:27 AM
 
Location: DC Area, for now
3,517 posts, read 12,048,324 times
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Of course each person must weigh their choices. My point was that I'm not really sacrificing little pleasures - I just substituted a choice that took slightly more effort but actually yielded more pleasure at much lower cost. No way am I doing without delicious coffee! (and I know you have to wait until 6-630a to get your Starbucks so you are probably doing what I do - coffee when I get to work.) But when I meet someone for a social coffee or lunch, I do buy it. In that case, the pleasure of sharing a coffee out is worth it to me but it isn't the day in day out habit that adds up.

I have a friend who whines constantly how she can't afford to retire on time and has to work more years. At the same time, she has an expensive cleaning lady and a dozen other expensive habits that she could cut back on. She doesn't enjoy her job but actually makes a significant amount more than I do. This makes no sense to me.
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Old 12-23-2007, 06:48 AM
 
1,831 posts, read 4,795,223 times
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Quote:
Originally Posted by Tesaje View Post
(and I know you have to wait until 6-630a to get your Starbucks so you are probably doing what I do - coffee when I get to work.)
Actually ... ours opens at 5 a.m. but now I'm hopelessly addicted to Starbucks frappuccinos ... which I stock in my car and bring to work.

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Old 12-23-2007, 01:18 PM
 
Location: Monterey Bay, California -- watching the sea lions, whales and otters! :D
1,916 posts, read 6,238,888 times
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I frivolously moved around the country, had many youthful adventures, and traveled a lot - on very little. Unfortunately, I did not stay at any one job long enough to get a retirement package, so ten years ago I started working at a County job, and now will have a small (but useful) pension, plus a reduced payment health plan to carry me over until Medicare.

I did buy a house and owe a lot on the mortgage, but hope that getting equity from the house will allow me to relocate to a less expensive area with a minimal mortgage.

I do many of the cost-saving actions already, such as cooking my own food, taking my lunches to work, rarely eating out, shopping carefully, looking for bargains, etc. Ironically, I feel that although I live carefully and on a smaller salary than people I know, that I'm in a better position in some ways. I won't feel the disappointment of cutting off certain services (such as a cleaning lady), or not having Starbucks daily, living in a smaller house, and I'm used to hunting for discounts.

I am most grateful for the job I have right now, which is giving me that small pension that will really help me. Although it is only ten years' worth, what I make in California is significantly more than I made back east for the same kind of work, so I feel like it evens out -- ten years here, equals about what I'd get for 20 years back there.

If anyone is in their late 40s, or 50s, and do not have a pension or a good investment plan, I'd highly advise the government sector, too. It is one of the last few places that actually still offer a pension. As a single parent, I can't afford deferred comp or other savings, so my pension is it, but it is still something for which I am grateful. I know that our County is often looking for new employees -- in all fields -- and although the cost of living is high here, county jobs are worthwhile for the pensions. If it wasn't for this small pension, I'd be pretty worried about making it later. Something is definitely better than nothing.

This is a good and worthwhile thread!
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Old 12-23-2007, 05:22 PM
 
29,764 posts, read 34,851,819 times
Reputation: 11675
Default It is very difficult to stay even

Quote:
Originally Posted by daveyjones View Post
But always remember to diversify, ANY money put into stocks,mutual funds is a risk..remember that.
It is very difficult to stay even much less catch up if you don't invest in stocks or mutuals. Safe funds will barely stay up with inflation if they even do that. Virtually every advisor will tell you that you need risk in your balanced portfolio in order to outpace inflation
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Old 12-24-2007, 04:45 AM
 
1,831 posts, read 4,795,223 times
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Quote:
Originally Posted by TuborgP View Post
It is very difficult to stay even much less catch up if you don't invest in stocks or mutuals. Safe funds will barely stay up with inflation if they even do that. Virtually every advisor will tell you that you need risk in your balanced portfolio in order to outpace inflation
True but, I'm not invested in any stocks now. I'm waiting for the market to crash ... then I'll get into stocks again.

No use watching the market go down and having to wait for prices to recover. I think we're heading for a bear market and I'd much rather buy closer to the bottom.

Last edited by sheri257; 12-24-2007 at 05:36 AM..
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