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I learned when I was in University how to be cheap and have only gotten better at it as time has gone by. My wife has always lived this way. As we get closer to retirement and have an empty nest we are finding that our savings are around 50% of our earnings. Not going out for coffee doesn't mean you can't have good coffee. I have a commercial espresso machine and grinders as well as my own 1lb roaster all paid for by about a year or two of not going out for coffee and buying used. It's a good thing our savings are strong because we got hit hard by the crashes in the stock market in 2008 and 2014. Made and lost hundreds of thousands on the market playing it aggressively. Good thing we have defined benefit pensions and strong savings because we may never make up for those losses.
We probably go out for dinner less than we did in University. We are both good cooks as a result and we control how healthy our meals are. We do buy popcorn and drinks at the movie, but we stay home and watch movies there much more regularly and only go out for special nights. We have in the last half dozen years started to go on tropical vacations to get out of the miserable winter weather. It barely slows down the rate of savings. I buy most of my toys (bikes, paddle boards, kayaks, etc.) second hand. We buy most of our cars used and I do all of the work on them myself. We are both handy with doing renovations and maintenance on our home ourselves. We invested well in real estate over the years and used the proceeds to be mortgage free. Pay off credit cards at the end of the month religiously. I'm looking forward to having the option to retire at 55.
I never thought of myself as being frugal. I lived well enough and tried to keep a little put back for emergencies...... new tires, trip to dentist. Same as I do now that I am living on my SS. Seems to work
No change in living standard. I grew up well off, or so I thought, then went to large state college and learned I was middle class. Majored in Chemical Engineering and got a job with a company who made it so attractive to save, you were nuts not to do so. My starting pay was much more than I grew up living well upon with my parents and three siblings.
Worked 38 years, saved 13% of my annual salary between my contribution and my companies matching. Retired at age 60. Moved to another city near family and been retired for 10 years. The formula of start saving early and strong is hard to beat. Putting the half the savings into a successful company's stock was good fortune, the balance went into equities in nice choices inside my 401k.
Key choices were the major and the employer. Some luck involved but the formula of start saving with your first paycheck and never stop, learn to live on what you make less a nice chunk going to savings.
I figured out if we had not stopped going to Starbucks 20 years ago and kept spending $20 a day there, we would have $340,000 less in our retirement account!
($20 a day 365 days a year for 20 years put in a mutual fund mirroring the S&P 500 = $340,000.00)
Add the savings by doing the other things on my list (in the first post) and you are talking about some serious money!
Hmm.... I don't think I spend $20/day on anything in my budget. And not sure what you were buying at Starbucks for $20/day 20 years ago ($600/month). Something else to consider, if you were to have invested that same $600/month in Starbucks stock I imagine you would have done even better than $340K
I’ve never been what I considered frugal but have always been careful with my money. Several examples that the OP gives are things that I never spent money on anyway (e.g., Starbucks, soda in restaurants, that movie theatre popcorn with too much butter, a car every few years) although I do not skimp on grocery stores. The nightclub scene dried up once our state cracked down on DUIs years ago and I get my fill of eating at restaurants during business travel.
Early in my career, I spent a lot paying off student loans, buying and furnishing a home, and on work clothes. I overspent on my first credit card and it took a year or more to pay it off but I never did that again. One regret is that I bought too large of a home and overhead has been high. I plan to sell it when I retire and not make that mistake again. My biggest mistake was not handling my 401k properly. I was not able to start my 401k until the late 1980’s and was not aggressive enough in the amount saved or the asset allocation during the roaring 90’s.
So in my late 40’s, I found that I was behind in my retirement savings and started catchup contributions at 50, extra house payments, a Roth IRA, an HSA and an emergency fund. I’ve spent a lot of time since then using the internet to improve my knowledge of personal finance and investing. Even though my salary has increased significantly since age 50, much of that extra money has gone into retirement. And I’m 61 and have never been out of the country except for Canada and border towns and most vacations are to see family or in conjunction with business trips. So I have made some sacrifices for retirement.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by bobandsherry
Hmm.... I don't think I spend $20/day on anything in my budget. ...
$47.12 / day for Property Taxes
$73.20 / day for HC insurance (should I be able to afford it, (which we choose not to) so currently $10/day on medical cost sharing network)
Both these expenses skyrocketed AFTER retirement planning.
add other fixed costs... utilities / cell / internet / house insurance / transportation (<$20 / day)
Food and entertainment = $3/day...
grand total ~$150 w/ HC, $77 / without HC
Highest earning yr during employment ~ $68k = $186/day (last few yrs)
starting wages = <$10/day
Average for first 8-10 yrs = $35/day
'mean wage / day' according to 45 yrs SS statements = Dismal
Looking forward to 40+ yrs in retirement.
That would not be possible if I would have relied on "SAVINGS" from my $4/hour employment.
My parents used to tell me that when you are talking about money saving a little bit at a time can be big money at the end. Translation: If we looked at how we spent our money on little things through the years and saved a few dollars at a time, in the end that would be lots of money.
Here are some examples:
We stopped going to Starbucks 20 years ago after finding out each of us were spending $10 a day on their over priced coffee drinks.
We did not get drinks and popcorn at the movie theatre.
Stayed at Comfort Inn's or used Priceline (Name your own price) instead of paying for a full service hotel when traveling.
Bought a car every 10 years instead of every 5 years, like my friends.
We ordered water vs soda when we went out to eat.
Stopped going to bars to spend money on booze.
Split meals at restaurants.
Used coupons every time we could for anything and everything.
Shopped at Walmart even if we found the stores dirty and nasty.
---------------
I could go on and on but you get the idea.
All these savings were invested in the stock market and now we have a great retirement.
Did you do the same or think it was too much hassle to worry about savings.
We always "paid ourselves first", out of the paychecks, so to speak, by having savings, IRA and other investment funds taken out of our paychecks before we saw thrm. We also lived within our means, paid off our mortgages and other bills as time went on with the idea of living as debt free as we could when we retired.
My husband and I also had jobs with government agencies (mine for the last 15 of the 40 yrs I worked) that had defined pension plans, so our retirement income comes mainly from these, and social security. We have not yet had to touch the savings.
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