Living for Today vs Saving for Tomorrow

Parent Cafe
21

I feel as though this is all I write about on this forum lately.

If the worst thing you can imagine happened tomorrow morning, would you be OK?

That cancer thing? Would your family be OK if it was you or your spouse?

Life turns on a dime. It turned on us last fall.

Thank God we have a military pension, plus our own retirement accounts, plus some inheritances that we stashed and never touched. Our mortgage will be paid off this summer, the last year of our youngest kids’ college is paid for with the last year of DH’s GI Bill. As of August we will be completely debt free, and our three kids have no college debt.

That possible kitchen reno? Completely meaningless at this point.

Those trips we’ve taken through the years with family and kids? Priceless.

Enjoy every day you have, take every trip you can, pay off your debts, and save for retirement.

My parents used to say it’s pretty easy to be young, married and “poor” but it is hell to be old and poor.

(Very rare, very unexpected cancer diagnosis came out of nowhere. My husband had no symptoms. It was discovered as an incidental finding on a CT scan for an unrelated, minor problem. Luckily, as an active duty person all of my husband’s care has been free, including a referral to a nearby major medical center where the 14 hour surgery to treat it was pioneered. After that surgery and inpatient HIPEC and EPIC chemo, a 25 day stay, recovery at home and some adjuvant chemo he is halfway through, he hopes ot finish out his last couple years of active duty (physician) to make it to 30 years. If that isn’t in the cards, we are financially OK. )

Thankful every single day we bought the little house instead of stretching for the big house, that we live where my kids could go to excellent public schools instead of privates, that we paid cash for our cars, trips and home improvements, and that we took the 15 year fixed mortgage.

22

Yes, we bought a house we could raise our kids in AND be comfortable living in with just two of us. It has worked well. We lived on a meager budget most of the time because H’s salary was small and mine was very volatile. We stayed away from credit and loans and it has worked well for us. We and our kids have no debt.

I’ve already exceeded my doc’s expectations as to how long I will live and how good my health will be. We count our blessings and see our kids whenever we can mesh our schedules.

23

I do believe balance is the key. When the kids were young we bought a tent and camping gear and we went on all kinds of vacations. We would pack picnic lunches and take them to the park on our adventures. One of the places we tent camped was Key West last year. Fraction of the price of staying in a hotel. People used to say “must be nice to be rich” as your always traveling. My reply was get a tent and you can go places too!!

We now have a A frame travel trailer and we continue to travel to many places. Traveling and spending time with my family is much more important to us the our 25 year old counters and cabinets in the kitchen. Another way we save is we love going to plays at the theater. I always book the nose bleed tickets. Get to see the plays at low prices. This way we can pay for college and save money too :slight_smile:

24

Dave Ramsey’s “Total Money Makeover”.
H gave a copy to all his associates and both kids. It’s just good solid advice. It includes the “when do we STOP saving and have some fun?” Answer: You don’t stop saving, but you DO budget fun so you can do it worry-free. With guidelines.
It is a very practical guide to money management and savings.
It lays out a great budget and savings plan and provides some very concrete step-by-step instruction.

25

When I married my husband, he thought he would use his retirement account to pay for his daughter’s college. I informed him quickly of the error in his thinking. We sort of impoverished ourselves for several years to give them debt free undergrad experiences, while saving for retirement at the same time.
I have always contributed enough to get employer match for retirement, and started with first job at 22. I “make” my husband contribute the max we can at this point, but we didn’t always have that luxury. When our kids were young, our idea of vacation was to send them to visit my mom (while I worked long hours) or go to the beach for a couple of days. Then we started taking week long vacations, in addition to the short or family trips. We decided a couple of years ago that we would rather take nice vacations now, and work a couple of years extra, rather than wait to have fun until retirement. We aren’t getting any younger or more fit.
We live in a nice house in a nice neighborhood, but household improvements almost always get neglected for experiences.

26

We were very frugal until we finished paying college tuition. S was able to graduate debt free. Since then, not so much. But we have no debt and never moved up so our mortgage is cheaper than dirt and our monthly expenses are now a wee bit of our income. We are fortunate that H’s income increased substantially just as S was graduating, plus he will have a very lucrative pension after retirement with all our health insurance premiums covered, in addition to our retirement accounts.

I waited 26 years before doing both my 60 yr old bathrooms and the money spent was so worth it. My bathroom is now my happy place. We also bought our first new car in 30 years after only buying used. I love my new car. We are taking more trips staying at only the nicest hotels and splurging for nice dinners. We have also become subscribers to a theatre series and on show nights go out for nice dinner before hand.

27

Since I’m divorced, I can decide for myself. A few years ago I decided I’d been too much of an ant and not enough of a grasshopper. Once I was confident I could pay the remaining semesters of college tuition, I made some changes in my life that cost some money. I didn’t skip away throwing money around with abandon, but I moved to a more expensive city I wanted to live in (vs where I’d moved out of college because ex-H lives there). I’ve been spending more freely on vacations with my kids — only one fairly pricey one, but more short visits and more time taken off work (when I don’t get paid) with them. I have decent retirement savings, but couldn’t retire today. I still penny pinch in a lot of spots (got in the habit as single parent with kids in college!). But I’m happy with the areas I’ve decided to spend more on.

Oh, and since downsizing, I know I spend less on “stuff”. So that frees up more for tickets, dinners out, ski passes, etc.

28

@rebeccar listen to the folks that say you should put more money away now.

DH has worked for the same company for nearly 31 years. About 28-29ish years ago, the company started up a 401k option after ending a pension option. DH has always put the max allowed in his 401k each year. Even when our household income was $60k and the max was maybe $16k, it was never a question.

Now, the stock market burps and depending on his allocations, his 401k could plummet by 6-figures. That’s obviously more than he can put in each year, but it’s a great demonstration of the time value of money. The little pain along the way has paid off and he can retire soon.

We took camping vacations with the kids and bought used cars and deferred major remodeling projects. Those were choices we made to make sure we can retire DH earlier than 65. He has a back issue that likely will limit his mobility at some point so he needs to retire while he can enjoy it. We’ve still taken a few fancy vacations along the way but not every year. (We expect to take a month long trip to New Zealand next year but last year and this year we didn’t/won’t really travel.)

We sit down with our advisor now and then (lately it’s been annually) to see where we are at and what the future looks like. As of now, it looks like I’ll maintain my standard of living to the end, with perhaps a bit left over for the kids to inherit.

Also, 15 year fixed mortgages are great if you can work those in- on of our best decisions.

29

ummm. . . . so neither for us really.

with 4 kids & being a SHM for 17 yrs we havent been able to save much at all, nor have we done anything exciting like “living for today.” our biggest treats have been spending money on kids’ lessons & activities and watching them develop talents and interests. We have done our share of road trips; 6 of us crammed into a vehicle traveling across country. Yep, that’s a treat!

30

I’d love to be able to put money away (we are putting some away in retirement accounts) but stupid things keep getting in the way like student loans, a new car loan, etc.

Getting sick and having student debt for both my husband & me has been a real PITA for future planning.

31

We did a bunch of camping. S loves camping and hiking to this day. D can tolerate a wider range of lodging than some of her friends and we all love national parks.

32

“Seeing a reputable fee-only financial planner when you are just starting out is the wisest investment you will ever make.”

Honestly, I don’t think it is necessarily needed at 24. Just save your money. If you have a 401K account at work, fund it. If not or in addition, fund a Roth or traditional IRA. With so much time on your side, go for equities. A no-load broad based index fund through either Fidelity or Vanguard will do just fine. It doesn’t need to be complicated at this stage of the game. Just keeping contributing.

33

I certainly agree that younger people (like my kids and posters here who are wondering) should focus a lot on saving. Even my grad student has a 6 month emergency fund and is putting over 10% of her gross income into a retirement fund. We saved a lot for our kid’s educations and retirement early on, which gives a little more freedom now.

If you get a match on a 401K at work, fund at least to the match. You can invest in a fund indexed to the market or an age banded fund that is targeted for what year you will retire (assume in your 60s). If you want to learn more about how to manage your money, there are podcasts like Marketplace Weekend or Motley Fool Answers that can help you learn more about finances and investing. Listen regularly, and you will learn a lot about investing, insurance, etc. I learned a ton over the years from the old Sound Money NPR radio show that I listened to on weekends while tooling around doing errands on Saturdays (Marketplace Weekend is a descendent of that original show as it evolved over the years).

34

It’s a hard line but we’ve settled on driving old cars (which doesn’t bother us at all!) and not spending any money on clothes, etc BUT we have taken amazing hiking/outdoor trips with our kids throughout the world and i am flush with happiness every time I think of those trips. Yes, we would have saved money without those journeys but, honestly, I’ll take the experience now.

35

It’s a tough choice, trying to figure out the balance. I think we might finally be there.

We have finished paying for college, and have finally paid off all our debts (except the mortgage). We bought four short sale/foreclosure condos, and have felt like we were massively in debt for several years. Finally paid off!

So now, after maxing out our retirement, we are splitting up the money every month into different funds. 5K for taxes, 2K for a vehicle, and the rest is split 3 ways…my husband’s account, my account, and miscellaneous. It’s kind of exciting. We’ve never had a his and hers account, in 30 years of marriage, all financial decisions have been made with regard to the other person. But now we both have equal accounts in which we can spend on anything we want. It’s fun, and kind of weird. Haven’t spent much of it yet!

I guess our philosophy has been to max the retirement, pay the college off completely, then do what you want with the extra (though we haven’t penny pinched greatly throughout this).

36

@emilybee - I think you are my future. Or I should say that I hope you are my future! Enjoy that bathroom and nice hotels!

37

Once you have allocated money towards retirement and college funding, I say spend your money on what makes YOU happy, not what makes other people happy. That new kitchen isn’t meaningless if you don’t like to travel or go very far when you do. If a shiny new kitchen for someone who loves to spend time in the kitchen is in your grasp without neglecting your retirement fund and other savings, then go for it.

38

I’ve been dirt poor, I’ve had a high income and everything in between. Once we stabilized our income with our business we followed Dave Ramsey’s plan as well. We both agreed that the kids education was our number 1 priority. They attended private schools k - 12 as well. So we just got used to not really having tons extra as we also were saving for their college as well. I would take our paychecks and automatically deposit money into 529’s and to a savings account for their private school tuition. I hardly brought home anything after that, since I had my 401k deducted as well.

I am paying my last semester of my youngest. Once things started loosening up we made sure to do something for just the two of us once a year. Usually it was vacations, one year it was new bedroom furniture.

There is a list a mile long of things we want to do. Just a few weeks ago we each wrote our list of what we each wanted over the next year - I tend to want to fix up the inside, he wants to fix up the outside. We prioritized it and have started working on it.

That being said - make things automatic and set a limit. We agreed on an emergency fund total, once we hit that we stopped. We also max out retirement. Then we agreed on a split of the “extra” - part to paying off the house, part to projects, part to vacations. We don’t fight, it’s not frantic, it is what we agreed to do.

39

It’s a matter of priorities. 50 year old cabinets that are falling apart are a priority. We had to replace the flooring in our house just last summer. I tried to install some of it myself, but I quit after one bedroom and called a professional. Ugh! That wasn’t even half of it. We had to completely replace our roof and build a new backyard fence. Life really sucks sometimes. Sometimes elaborate vacations have to wait, but there’s always time for smaller trips.

40

Growing up my father was very frugal, we shopped at thrift stores and went camping a lot. I have to say 'til this day I won’t go camping and I like to have clothes that I want. My parents also thought any money spent on ECs were a waste and that included music lessons.
I think I probably went overboard when it came to my children and what we spent on entertainment. While kids were growing up we took a lot of great vacations all over the world. I don’t regret any of it because it is something we can’t do now. My focus has always been about making more money instead of saving more money. My kids education always came first. The years when my bonuses were lean, their private school’s tuitions were always paid first. My 401k was always funded because I always viewed it as part of my taxes.
My father actually had an interesting perspective about any remodeling around the house. He used to say if you had the money, why not do it now rather than later. If you do it now you could have much longer time of enjoying it.
Balance is key. I think it is a great thing to write down all the wants and figure out what you could afford. I like nice cars if I am going to drive one (I don’t have one any more), good quality clothing/accessories and nice vacations. My resident is quite nice. I would rather not go on a vacation if I had to stay at a dumpy hotel, I will not go under 4 stars when on vacation. I would eat at home rather than going to a mediocre restaurant. Same with clothing.
D1 and I talked a lot about finances. I told her to have at minimum 6 months contingent fund in case they should lose their jobs. Be prudent about their home purchase: don’t be house poor and make sure it is a good investment. I also told her to always have some fun money because life is more than just saving for the future. Both D1 and her fiance get a sizable bonus every year, they do not spend it, both of them try to live on their base pay. D1 received no cash bonus last year, everything was deferred. She was able to live comfortably without having to dip into her savings. This year D1 had a huge pay out.