Second homes typically add up to at least the same amount of money (if not more money) as exotic vacations, so imo those two things amount to the same thing. We had one for 11 years, and I don’t regret a single day of owning it. I could “go on vacation” every weekend-it was wonderful.
After the kids left, however, we realized we weren’t using it often enough to justify the expense, so we did let go of it, and now will begin seeing other parts of the country/world more often.
@rosered – Yes oh yes. Been there and got the scars to show for it. We were cruising along with three little children, I had a larger retirement account since I’m more frugal, my husband made almost 3x what I made. Then life hit us in the face with a sledgehammer, several time. His job was gone and we had to use 100% of the income from his replacement job for the next year and all (yes ALL) my retirement and most of his retirement to deal with the sledgehammers, creating a big tax sledgehammer. Great! One child had a pitiful college account, since we though we had time and the income. I didn’t sleep, I counted coins and got really good at couponing.
We are coming back and I’m much more mercenary than I used to be. I direct the family money and over time have had the siding replaced on our 20+ year old home and a hurricane gave us a new roof. We will have the first mortgage on the house paid off in about 9 months and a very small 2nd will wait until the children are gone. I wanted to be sure DH and I have a structurally sound home as older parents and the children always have a place to go. I worry about not having enough in retirement. I’m frugal with most purchases but the children’s EC add up when there are three. We are not brand label folks, other than my wanna be diva DD#1.
If our income doubled, I’d pay off all debt, set aside enough for education and take vacations to see my family out of state. I wouldn’t buy a fancier car or move since we have the best neighbors.
I might work a few years, saving all of it, and open a deli/bar: small library/reading room, cigar parlor (if legal), full bar, sandwiches/salads/soup/pie/coffee, open mic poetry/comedy MWF, open mic music TuThSat. Something for everyone whether you want to relax and read, have a smoke, have some coffee, a bite to eat, a drink, and/or to be entertained or try out your entertaining material.
It would be like a refined Dave & Buster’s. hehe
That would be cool.
I’d visit, @prezbucky, if there was no cigar smoke! 
Could you make sure there is a nice courtyard with tables and umbrellas in the back or a patio up front for some alfresco dining options, please.
I’d also be happy to visit IF there is no smoke or other odors from tobacco (very sensitive to strong scents). I’d prefer to be inside A/C, please.
Sorry, did not read the posts. After finishing our educations we had large incomes. Never spent much of what we earned. Lived a lifestyle that meant the savings added up. Meant easy early retirement and no worries for the future.
The best bet is to know the difference between needs and wants. Not buying because you can afford things but because they are worth the price. An example- you need a new car, but you buy a good one that is comfortable, suits your needs and will last but not a luxury one. Likewise your housing does not need to be what you can afford but what works. Clothing as well.
Maybe the cigar parlor would be outside… or its own separate little room inside, with great ventilation. “Close the bloody door, sir, post haste!” (of course the cigar parlor clerk/butler would have to be old-school British. haha)
And of course, there’d be a patio out back for some fresh air.
I often tell people that we were able to send our kids to private colleges relatively debt free only because I DIDN’T work outside the home when they were younger. I was lucky enough to work here and there part time starting when my oldest was in middle school, and fall back into full time just before she started college. So our spending habits never had time to adjust to being dual income, and everything I earned went to tuition. Had I worked full time all those years, I’m sure we would have found a way to use up all the extra income.
Now that they are both out though… Feels like quite a raise. Got some long postponed updates done, and now we’re building some savings.
My spending would increase somewhat–I would feel free to do some modest travelling and would undertake some much needed home maintenance and renovation, but at least half of the increase after taxes would go into retirement savings.
Because there is now another related thread asking how you’d live on half your income, I’ll respond to both here. We’ve lived on one income and banked the other for the past twenty years. Until recently, both incomes were about even, so we’ve basically been living on half our income for a long time. The other income rose dramatically a few years ago when DH became a partner. We’ve banked it all with an eye to a comfortable retirement. My last day of work is 4/28. DH’s will not exceed 6/30. We’ve lived very frugally for a very long time. Retirement for us will be time to loosen up a bit and start to enjoy the gratification we’ve so long deferred.
Corollary: Our 20-year-old son has been privy to all of our financial decisions and strategies since he was a tyke. He always saves half of whatever money he receives or earns. He opened a Roth IRA when he entered college two years ago. He’s well on his way to planning his own sound retirement.
@JustaMom5465, not on topic, but I toy with the idea of working. I’ve been a stay-at-home, homeschooling mom since we had kids. My income could pay all of the boy’s tuition/r&b. But, I still have a 15 year old homeschooling, (don’t wanna rip him off) and I can not imagine this house running itself with the housr my husband works. AND do I really want to work just so the boy can choose “that school” over “the other school”? I don’t know…if I go back to work, it’s for retirement savings and income creep!
@jesse’sgirl, what skill set(s) do you have? How else could your 15 year old complete his education? How would the house be run while you work? What would you want to do to earn money? Are there employers hiring in your area? Is there any way to acquire and/or polish your skills while homeschooling your son? Can you work part time and share homeschooling with others so you can “test the waters”? How do you know how much you would earn? Gross? Net after the additional expenses associated with two workers in your household?
(Still OT) All good questions @HImom Yes, one of the things I thought about as I was writing the above post is that I could see maybe my husband making some changes if I were working. What’s the opposite of income creep? He would have to help out more with our younger son, and maybe he would want to work less if he felt he could, not being the sole breadwinner. How much of my income would be chewed up from those kinds of changes? And I would for sure need to get out of my running shorts and leggings, and spend some money on professional clothes. We might need to upgrade one of our cars.
I think, despite almost 19 years years out of my field, I could go back, probably even to my old job (and do it even better). I think part-time would be good, but it would be harder to come by with what I’d want to do. I am a Social Worker…or was.
Anyway, lots to think about. It would be really hard to give up the privilege of being a full-time mom, and the privilege of my kids having a full-time mom.
@surfcity the quote reminds me of the short story by D.H.Lawrence “The Rocking Horse Winner” where the house was whispering “There must be more money” and when more money appeared it then cried out “Oh we need more money, oh yes now more than ever!!”
My income went up quite a bit over the last 10 or so years. We have been very good at saving (fully funded 429 plans plus a Defined Benefit Plan that enabled us to save $150K to $200K tax-deferred and then a trust that has participated in some significant profits). So, we have saved most of our increase.
We were relatively frugal. Living in a less affluent neighborhood than you can afford is a good way to spend less. I probably earn twice to 5 times what our neighbors earn and our kids were spending less on clothes and we kept our cars longer. For years, like our neighbors, we did most of the work on yards and snow removal ourselves. But, I see our spending creeping up. After 12 and 14 years, we upgraded to luxury version of our cars when they died. We are living in the winter in a lovely place in California to avoid East Coast winters. While some of the expense is business related and tax deductible, it definitely had added significant cost. We are eating more regularly at fancier restaurants (again, these are usually partially tax deductible). We are now paying for others to handle the landscaping and snow removal. As Andrew Tobias says in The Only Investment Guide You’ll Ever Need, “A luxury once sampled becomes a necessity.”
I have thought about how we would reorganize our lives if our income declined.