Three steps forward, two back with saving

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Topic Author
Calico
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Joined: Thu Jan 01, 2015 4:45 pm

Three steps forward, two back with saving

Post by Calico »

I was wondering if anyone had any tips or tricks they use for saving. I am asking because, as the thread title says, I feel like I keep taking three steps forward and two back (at least I am one ahead I guess). Haha

My retirement saving is on track and never gets touched. I also have a 6 months worth of expenses emergency fund that I've never tapped either... except once, for a medical emergency, and I paid myself back.

I am talking about my other savings, the one I have for "whatever" but am mainly saving for a car (I will need to get another one in about two years, most likely. My car will be 16 years old then and even if it still runs, it's going to my daughter to drive). I hope to save $15,000 in two years. But I feel like I am not going to make it. The way things are going, I will fall short.

I am putting away $1,000 a month in a savings account for this "short term savings" and it seems like every month I've had to tap into it for something. I had to pay a lawyer to draw up estate documents for me. All $1000 of that month's deposit was gone. Another month, the dog got really sick (with a bad infection) and cost $700 total for all the vet visits. So just $300 saved. Now I have a notice from my HoA that they want me to clean my roof and repaint the trim (I don't understand why. My roof is okay and I just painted two years ago, it's not faded or chipping). But assuming they have a point and I am just missing something, I will have to hire someone for both (sorry, I am terrified of heights. I will fix most everything else on my own, I am not afraid to get my hands dirty, but I can barely stand on a step stood let alone a three story ladder and climb on my roof).

While I am slowly getting ahead, there are just too many setbacks. My savings account balance (for this short term savings) was $4,600 on January 1 and putting $1,000 a month in for five months and taking out for these things that keep popping up, I only have $6,200.

I've cut cable to save money, I've complete cut any and all eating out (I used to treat myself at least once a week), I've stopped going to the movies. I got a freezer and pantry and buy in bulk to cut food costs (the freezer and shelves were free from someone who was moving). And I think the dog needs a job to pay her bills, haha.

I am thinking of maybe playing a game on my mind and opening yet another savings account. Kind of like my money market account that my 6 months living expenses is in. That one could just be for the car and I never take money out of it. Maybe just put $3000 in it now and add $500 a month. I will have my $15,000 in two years. I'll put the other $500 a month in the "whatever" account and not worry about it going up and down.

Does anyone have any other ideas. Tips or tricks that worked for them?
I am a mere Boglehead apprentice... even after all these years.
bloom2708
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Re: Three steps forward, two back with saving

Post by bloom2708 »

Potential options may help trick yourself.

We have a checking account, savings account, emergency fund, car fund, taxes fund and vacation fund.

Money is fungible, so these accounts only server to segregate and give each dollar a purpose. With a transfer click I can move from Car to Taxes.

If I put money in the car fund, it is for a car. I try to stick to that. In your examples, the estate documents would come out of our "unnamed savings". The pet issues may be an emergency. In the end that doesn't matter either. If you take it from emergency, then that fund is short and some of your next dollars need to go to prop that back up. Instead of car fund.

Maybe you need to pull back on retirement a little to get some more cushion on your checking/savings/non-emergency fund.

We can spend it far faster than we can save it. If something strange happens I can sell from our taxable account. I don't like to do that, but unexpected expenses it has happened a couple times.
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bligh
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Re: Three steps forward, two back with saving

Post by bligh »

bloom2708 wrote: Tue May 22, 2018 11:49 am Potential options may help trick yourself.

We have a checking account, savings account, emergency fund, car fund, taxes fund and vacation fund.

Money is fungible, so these accounts only server to segregate and give each dollar a purpose. With a transfer click I can move from Car to Taxes.

If I put money in the car fund, it is for a car. I try to stick to that. In your examples, the estate documents would come out of our "unnamed savings". The pet issues may be an emergency. In the end that doesn't matter either. If you take it from emergency, then that fund is short and some of your next dollars need to go to prop that back up. Instead of car fund.

Maybe you need to pull back on retirement a little to get some more cushion on your checking/savings/non-emergency fund.

We can spend it far faster than we can save it. If something strange happens I can sell from our taxable account. I don't like to do that, but unexpected expenses it has happened a couple times.
+1. Also really cool to see someone else on here follow an approach to bucketing that is identical to mine.

I often hear it mentioned on here that the bucketing approach is sub optimal, but it works great for me. Perhaps it is because I dont understand the disadvantages.


Anyway back to OP, What it sounds like is that you need to revise and plan your budget better. You need to smooth out the spikes that come from routine one time expenses so they are not as disruptive. You have your normal living expenses (utilities, rent/mortgage, gas, food, etc.) and then your routine erratic expenses (car & house insurance/maintenance, medical, vet, vacations, gifts, etc.) . You cannot budget for your erratic expenses exactly of course, but a good approach is to look at your erratic expenses last year and budget at least that much for this year. Inflation adjusted if you like.
Jags4186
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Re: Three steps forward, two back with saving

Post by Jags4186 »

There aren't very many tricks. Given a constant income, spending less is about the only way to save more. I suggest you take a look at all of your expenses and see what you can eliminate. One thing which I'm sure won't come across well is to eliminate hobby/lifestyle expenses. For example, I love dogs--I love other peoples dogs. The vet bill is a lifestyle expense IMO. That's perfectly fine, but take a look at all of your spending and see how much of it is in that hobby/lifestyle category. You might find you have more fluff in your budget than you realize.

Other than that, depending on your income, savings, and age you may not need to put as much money into retirement accounts as you are giving you better cashflow. Another option is refinancing your home to lower your monthly payment (of course increasing the duration). You could always take a small car loan to get yourself into a new car in 2 years.

Best of luck! This is something most people struggle with. There are always "surprise" expenses. It's very important to track all of your expenses for an entire year so you know what you really are spending. It seems to me saying you can save $1000/mo really isn't true. 25% of our annual expenses are irregular expenses. She every month I only move to our brokerage money that's above and beyond that spend divided by 12. Our checking account therefore balloons every so often and then comes back down as the irregular expenses occur. At year end if I'm under our spend I move whatever excess I have to the brokerage and start fresh.
Topic Author
Calico
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Re: Three steps forward, two back with saving

Post by Calico »

Thanks. I think I am going to try the buckets.

Somehow, somewhere, things changed on me. I managed to save $30k by saving $1000 a month for a long time. I just figured I could keep doing the same. I've even cut expenses over time while my income has gone up. I track everything in Quicken and I've seen a few places with expense creep and cut those, but then new things cropped up so I ended up not saving extra.

I think inflation (and an aging house) might be catching up to me. Every year when I get a raise, I put the raise in my 401k so my take-home pay is the same. I've done this for almost 10 years now (and I max out a Roth IRA). I think next raise, I might just pass on increasing the 401k.

I'll set aside the $500 for a car and not touch it, but I will watch the general savings and see if it's realistic over time. I may need to cut back on it. I'll wait a few months and see if I keep having to pull from savings and if I do, reduce it by 25% and see how that goes. And if that doesn't work, reduce it another 25%. Etc.
I am a mere Boglehead apprentice... even after all these years.
Loik098
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Re: Three steps forward, two back with saving

Post by Loik098 »

1) I'm assuming the dog isn't expendable? (sorry)

2) Surefire method: find a way to increase income. Overtime at work, get an additional job, or additional certification to qualify for a raise. We're very similar to you, and after fighting the same battles you're fighting, we just decided to add money to the problem. We find it's far easier to pretend the extra money doesn't "exist" and allocate it to a specific goal, than it is to move around normal salary money.

3) Reset your expectations for your emergency fund. If you don't feel you can ever pull from it, or you have a certain arbitrary number in mind that is has to be at, change your definition of "emergency" and possibly increase the balance in it. I would have pulled from it for each of the expenses you listed, because a true "emergency" isn't common....as you're seeing. If life is teaching you that you have to have a bigger reserve, why fight it?
soccerrules
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Re: Three steps forward, two back with saving

Post by soccerrules »

short answer - Increase Income and/or decrease Expenses.

It appears you have a fairly tight budget, so Increase Income would be the other big lever. What about asking for a raise ? I am not sure how that works for your company, but maybe meeting with your boss and showing justification for a salary increase. Or consider putting your resume together and somewhat actively look for another job.

I would not reduce your tax-deferred savings for retirement for the obvious reasons.
Don't let your outflow exceed your income or your upkeep will be your downfall.
Flyer24
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Re: Three steps forward, two back with saving

Post by Flyer24 »

I have my savings accounts with Ally (good interest rates). It is super easy to transfer from your checking account. You can create as many accounts as you want. I even created a specific account for car replacement. You could also create a custodial account for your daughter too. Both of my daughters have savings accounts there with it all viewable on one page. They have excellent customer service too.
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CyclingDuo
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Re: Three steps forward, two back with saving

Post by CyclingDuo »

Calico wrote: Tue May 22, 2018 11:10 am I was wondering if anyone had any tips or tricks they use for saving. I am asking because, as the thread title says, I feel like I keep taking three steps forward and two back (at least I am one ahead I guess). Haha

My retirement saving is on track and never gets touched. I also have a 6 months worth of expenses emergency fund that I've never tapped either... except once, for a medical emergency, and I paid myself back.

I am talking about my other savings, the one I have for "whatever" but am mainly saving for a car (I will need to get another one in about two years, most likely. My car will be 16 years old then and even if it still runs, it's going to my daughter to drive). I hope to save $15,000 in two years. But I feel like I am not going to make it. The way things are going, I will fall short.

I am putting away $1,000 a month in a savings account for this "short term savings" and it seems like every month I've had to tap into it for something. I had to pay a lawyer to draw up estate documents for me. All $1000 of that month's deposit was gone. Another month, the dog got really sick (with a bad infection) and cost $700 total for all the vet visits. So just $300 saved. Now I have a notice from my HoA that they want me to clean my roof and repaint the trim (I don't understand why. My roof is okay and I just painted two years ago, it's not faded or chipping). But assuming they have a point and I am just missing something, I will have to hire someone for both (sorry, I am terrified of heights. I will fix most everything else on my own, I am not afraid to get my hands dirty, but I can barely stand on a step stood let alone a three story ladder and climb on my roof).

While I am slowly getting ahead, there are just too many setbacks. My savings account balance (for this short term savings) was $4,600 on January 1 and putting $1,000 a month in for five months and taking out for these things that keep popping up, I only have $6,200.

I've cut cable to save money, I've complete cut any and all eating out (I used to treat myself at least once a week), I've stopped going to the movies. I got a freezer and pantry and buy in bulk to cut food costs (the freezer and shelves were free from someone who was moving). And I think the dog needs a job to pay her bills, haha.

I am thinking of maybe playing a game on my mind and opening yet another savings account. Kind of like my money market account that my 6 months living expenses is in. That one could just be for the car and I never take money out of it. Maybe just put $3000 in it now and add $500 a month. I will have my $15,000 in two years. I'll put the other $500 a month in the "whatever" account and not worry about it going up and down.

Does anyone have any other ideas. Tips or tricks that worked for them?
Dual income household?

Skip Roth IRA for one or two or three years to build funds for the eventual needed car replacement? Sounds like the budget is tight as it is with home maintenance, pets, cooking all your meals at home, contributing to your retirement plan at work. I think we have all been there at various points - especially with kids at home.

What percentage of your income do you currently have going to 401k and Roth IRA combined? Maybe you need to cut back a bit to a more reasonable percentage (15%) for now.
"Save like a pessimist, invest like an optimist." - Morgan Housel | "Pick a bushel, save a peck!" - Grandpa
Topic Author
Calico
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Re: Three steps forward, two back with saving

Post by Calico »

The dog is not expendable, but she needs to get a job! Aside from canine food vacuum cleaner when I am cooking and drop stuff on the floor on accident.

To answer more questions that were asked. I am a single parent, so it's just my income and one teen-aged daughter. She's actually pretty frugal with money, even mine. So I don't have the typical kid wanting to buy things issues. The money issue with her band (instrument rental/band uniform costs/lessons etc) and college savings.

I need to parent on top of working, so a second job is a bit hard to do. Maybe when she is old enough to drive, I could do that. I already have my professional certification and I generally get a 5% raise every year. My job isn't the best paying, but it offers the flexibility that I need as a single mom. I am salary, so overtime isn't an option.

I save 11% of my paycheck in my 401k. My employer matches to 6%. I also max out on a Roth IRA, $5500 a year. So total from me, I save 18% plus my employer adds another 6 for 24% in my retirement savings. It's high, but in the final years of my marriage, unbeknown to me (I should have been more diligent), my husband stopped most of my retirement savings for the last few years of the marriage. I was saving in a 401k, so that was good, but I was only to matching then. He stopped contributions to my Roth. I've been trying to catch up.

Total, I am trying to save 25% on my income (that's everything I save: retirement, regular savings, and my daughter's 529). That might just be too much. It didn't used to be, but like I said, I think expenses have gone up. I really would like to look at and compare old Quicken data to current data to see what's going up. But I only have the last three years anymore (my old computer and old Quicken data died). I've only had the new one for a few years now. I have enough in an emergency savings to take care of expenses for more than 6 months. So I don't "have" to save that $1000 a month. I would like to though. It's for other things that I don't consider emergencies like a car in the future, or a vacation, etc).
I am a mere Boglehead apprentice... even after all these years.
staythecourse
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Re: Three steps forward, two back with saving

Post by staythecourse »

You do the best you can do. That is life. You are doing a great job with retirement savings and paying back EF when and emergency actually occurs. Keep doing what you are doing. Either you will save the money in time and buy the car or you will not in time and have to delay or you will not but need the car which becomes an emergency and have to tap into the EF. Either of the situations occurring can be dealt with so no big deal.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
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winterfan
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Re: Three steps forward, two back with saving

Post by winterfan »

If you set up a separate car account and it really was untouchable, what would you do with another emergency? Would you use a credit card and pay it off slowly? I'm not a bucket person (except for my kid's college expenses, lol), but if you really didn't touch it and just dealt with whatever issues you had with the resources you have? Would it be possible?

I know some people who have a big expense and then drastically reduce their expenses to pay for it. For instance, they will just eat what they have in their freezer/pantry and only allot $100 a month for food to feed their family, when they might normally spend $500 or 600. The meals are pretty boring, but they get by. Or they might walk/bike to work and not pay for gas at all that month.
Accrual
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Re: Three steps forward, two back with saving

Post by Accrual »

I suggest using YNAB (You Need a Budget), a budgeting app. You are able to create money "buckets" within the app, so there is no need to create additional savings accounts. I have used this app for the past two years and have had great success. They offer a free trial if you want to try it out for a month.
SmallSaver
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Re: Three steps forward, two back with saving

Post by SmallSaver »

Accrual wrote: Wed May 23, 2018 8:29 am I suggest using YNAB (You Need a Budget), a budgeting app. You are able to create money "buckets" within the app, so there is no need to create additional savings accounts. I have used this app for the past two years and have had great success. They offer a free trial if you want to try it out for a month.
I second this OP. It will help you see where each of those dollars goes. Also, YNAB makes it easy to put money aside for infrequent and recurring expenses like car repairs. I found it took a little while to figure out how it works, but now it's pretty smooth.
frugalmama
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Re: Three steps forward, two back with saving

Post by frugalmama »

Accrual wrote: Wed May 23, 2018 8:29 am I suggest using YNAB (You Need a Budget), a budgeting app. You are able to create money "buckets" within the app, so there is no need to create additional savings accounts. I have used this app for the past two years and have had great success. They offer a free trial if you want to try it out for a month.
I third this. It sounds like your budget is tight like mine. I use YNAB and it shows you where every penny is going and allows you to bucket. If you think your dog is going to have regular health problems in the future, you have a dog fund and save for it in the future. I then use Smartypig to bucket most of my savings goals. That means that I have to wait about 5 days to have access to that money and can see exactly where it is. It also allows me to earn some interest on this money so it isn't just sitting in a low interest earning checking account. I use auto contributions so that the money is saved off the top. I have unexpected expenses every month but I've become much better at planning for them through YNAB.
Texanbybirth
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Re: Three steps forward, two back with saving

Post by Texanbybirth »

Treat car savings as a car payment, it goes into an account and you're not allowed to touch it. $300-$500/mo should be good. You might need to revisit your budget to add "repairs" accounts: car repairs, home repairs (Divide the value of your home by 100, then divide that by 12 and set aside that amount each month. It'll help with things like the paint you mentioned needing to be done.), pets eventual vet visits, etc. Sometimes budgets are lumpy, meaning you have expenses that don't hit each month. I think about things like our life insurance payments, car insurance payments (hmmm, insurance is a recurring theme here), annual flea/tick treatment for fido. It might help to set aside some money each month for those things. It's not "savings" because it's going to get spent eventually, but it'll make it less painful than when you have to take it out of another bucket eventually.

Also, you might want to tone down the retirement savings a bit. It's great to get the company match, and max a Roth IRA, but don't overly punish yourself for your past marriage troubles. You might even want to take your daughter out to eat on a "date" every once in a while. :happy I hope Bogleheads hasn't given you this unrealistic idea that you're failing if you don't save at least 25% of your income. A 15-20% goal may be more than enough for your future retirement needs. I think a 5% raise each year should easily keep up with inflation, so maybe loosen the belt just a little, even if just until you get some of your immediate and mid-term (college) savings goals more in line.

Best of luck and blessings on your endeavors, sounds like y'all are doing great!

P.s. - I chuckled at the dog being a vacuum for food scraps dropped on the floor. It's one of their best traits!
“The strong cannot be brave. Only the weak can be brave; and yet again, in practice, only those who can be brave can be trusted, in time of doubt, to be strong.“ - GK Chesterton
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BeBH65
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Re: Three steps forward, two back with saving

Post by BeBH65 »

Looks like you are managing and planning your financial lifestyle very well.
Your savings rate is high.

From reading your posts it seems your difficulties could come from "unplanned non-emergency expenses".
There is not much that you can do about them, they will come.

You could try to cashflow them or you pay from savings.
- if you would be able to cashflow these unplanned expenses would mean that you would have some buffer in your daily expenses. From what I read you are budgetting your daily expenses carefully this is good.
- Don't use your emergency fund - they are not emergencies. Borrowing from your EF is building up a debt to yourself which will hit you when you have a regular emergency.
- Hence you would need to pay these "unplanned non-emergency expenses" from your savings. extending your car fund or from a seperate bucket.

Where does this money need to come from? There are not that many choices; even less expenses or save less for your retirement.

Based on your posts, in your case it might be the latter.


Some time ago is saw a graphic about the lifetime savings of a typical family. I think it was in our wiki but I cannot locate it.
It looked similar to this picture from Kitches
Image.
Maybe you are now in the period where it is most difficult to save for retirement, and maybe you could save less.
Please also read the article of Kitches to understand the dangers of this.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles
LiterallyIronic
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Re: Three steps forward, two back with saving

Post by LiterallyIronic »

I ran into this same problem. In early 2017 we had a baby. In late 2017 we bought a house. Yeah, I was putting 23% of my gross income into retirement and also paying an extra $250/month toward principal, but I couldn't get anywhere on the "short-term savings." Had to buy a lawn mower one month. Had to get a professional to remove a big wasp nest another month. Had to hire an electrician another month. Another month a random doctor bill showed up from our baby's delivery over a year prior. It was always something. Couldn't make any headway.

In the end, my strategy was just to declare that there was no "short-term savings." There's just savings. So I tightened the screws and dialed it up to 25% of my gross income going to retirement, and I upped our emergency fund from $6,000 to $10,000. Now, as long as our bank account balance doesn't fall below $10,000, it doesn't matter what products/services I buy. I know I'm investing enough to meet my goal. I know I'm paying off the house fast enough to meet my goal. Whatever else happens, doesn't matter. We can spend the other money on products and services that improve our lives in some way.

Now, to be fair, I also have two other goals that I'm not actively working toward yet. One is a DeLorean (which I figure will run me $30,000) and the other is a trip to Europe (maybe $10,000?). My plan for those, like your $15k car, is to set up another savings account for them. Then calculate how much money I need and when I need it to determine how much I need to save per month. Then start transferring that much to those accounts. And as long as those are non-negotiable, like retirement and mortgage, then it doesn't matter what the rest of the money is spent on.
WVbaron
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Re: Three steps forward, two back with saving

Post by WVbaron »

staythecourse wrote: Tue May 22, 2018 9:12 pm You do the best you can do. That is life. You are doing a great job with retirement savings and paying back EF when and emergency actually occurs. Keep doing what you are doing. Either you will save the money in time and buy the car or you will not in time and have to delay or you will not but need the car which becomes an emergency and have to tap into the EF. Either of the situations occurring can be dealt with so no big deal.

Good luck.
I agree and think its important to take a step back and just breathe for a minute.

One challenge of being a devoted boglehead is you can sometimes put too much pressure on yourself. You are saving around 24% (including company match, etc), have a 6 month emergency fund, saving for college in a 529 and still feel like you are not doing 'enough'. I think you are doing really well!

I think its great you are this organized and have a solid savings plan. You also seem to be committed to your budget and have appx an extra $1,000 a month. Its great to be able to save all of it each month but life happens, dogs get sick, you sometimes have to spend some. Its ok....

Slow and steady wins the race. FWIW, I would not cut back too much more on not enjoying the occasional dinner out, having a basic cable package, etc. Keep up the good work and don't forget to enjoy a few nice things along the way. Well done on your accomplishments!
Texanbybirth
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Re: Three steps forward, two back with saving

Post by Texanbybirth »

BeBH65 wrote: Wed May 23, 2018 9:59 am Looks like you are managing and planning your financial lifestyle very well.
Your savings rate is high.

From reading your posts it seems your difficulties could come from "unplanned non-emergency expenses".
There is not much that you can do about them, they will come.

You could try to cashflow them or you pay from savings.
- if you would be able to cashflow these unplanned expenses would mean that you would have some buffer in your daily expenses. From what I read you are budgetting your daily expenses carefully this is good.
- Don't use your emergency fund - they are not emergencies. Borrowing from your EF is building up a debt to yourself which will hit you when you have a regular emergency.
- Hence you would need to pay these "unplanned non-emergency expenses" from your savings. extending your car fund or from a seperate bucket.

Where does this money need to come from? There are not that many choices; even less expenses or save less for your retirement.

Based on your posts, in your case it might be the latter.


Some time ago is saw a graphic about the lifetime savings of a typical family. I think it was in our wiki but I cannot locate it.
It looked similar to this picture from Kitches
Image.
Maybe you are now in the period where it is most difficult to save for retirement, and maybe you could save less.
Please also read the article of Kitches to understand the dangers of this.
It's from this article on the "empty nest red zone".
“The strong cannot be brave. Only the weak can be brave; and yet again, in practice, only those who can be brave can be trusted, in time of doubt, to be strong.“ - GK Chesterton
shipwreck
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Re: Three steps forward, two back with saving

Post by shipwreck »

WVbaron wrote: Wed May 23, 2018 11:02 am Slow and steady wins the race. FWIW, I would not cut back too much more on not enjoying the occasional dinner out, having a basic cable package, etc. Keep up the good work and don't forget to enjoy a few nice things along the way. Well done on your accomplishments!
I fully agree with this.
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CyclingDuo
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Re: Three steps forward, two back with saving

Post by CyclingDuo »

BeBH65 wrote: Wed May 23, 2018 9:59 am
Image.

Maybe you are now in the period where it is most difficult to save for retirement, and maybe you could save less.
That's a very eye-opening image that all of us who have been through the parenting process can relate to on some level. :beer

I know I was encouraged by my parents during those teenage years and college years to take after school/weekend/Summer jobs along with my siblings to help contribute to the cash flow of being a teenager. We did the same for our children as it does help with spending money and is less of a drain on the parents. In our own children's case, it also allowed them to get going in Roth IRA's with some of their own money. When the children finally finish college and are off working and financing their own lives - savings can greatly improve for the parents.

The OP has additional burdens of being a single parent (one income household), but with Summer arriving - perhaps the teenage daughter can be persuaded to land some Summer employment to help save for college and her own "fun money". Good to hear that she is frugal.
"Save like a pessimist, invest like an optimist." - Morgan Housel | "Pick a bushel, save a peck!" - Grandpa
Nearly A Moose
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Re: Three steps forward, two back with saving

Post by Nearly A Moose »

I'd agree with those suggesting you think hard about what the emergency fund is for. If you're very conservative and need to know you have six months in cash in case you lose your job tomorrow, I can understand that, but otherwise consider redefining that fund to allow yourself to pull things like unexpected medical/vet bills and home repairs (love HOAs) if you can't easily cash flow them. Perhaps you set limits - you can draw for unexpected expenses you can't cashflow up to the point the efund dips below 4 months' expense, but below that it has to be for an extreme emergency (eg job loss, major illness). Might help with the cashflow issues. I also like bucketing, even if it's not always perfectly optimal mathematically at times. It's a bevahioral win.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.
Luke Duke
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Re: Three steps forward, two back with saving

Post by Luke Duke »

Calico wrote: Tue May 22, 2018 11:10 am Now I have a notice from my HoA that they want me to clean my roof and repaint the trim (I don't understand why. My roof is okay and I just painted two years ago, it's not faded or chipping).
You might be able to get away with a light pressure wash.
mouses
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Re: Three steps forward, two back with saving

Post by mouses »

I haven't read all the replies.

My thought is that the OP is doing pretty well. She(?) may just be overestimating how much she can save, taking into account inflation, etc. I would take a hard look at where money is going, but if there are not a lot of savings there, perhaps delay the car replacement for a year or so.

(I recently started paying more attention to my grocery bills. I was shocked to notice that some apples (the best ones, Ambrosia) are $1.50 apiece. Holy Toledo. We used to bring home bushel baskets of apples for probably $5 when I was a kid.)

I would contact the HOA and see if what they want is really necessary.

Pets are not lifestyle choices. Kids, well, maybe :-)
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Calico
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Joined: Thu Jan 01, 2015 4:45 pm

Re: Three steps forward, two back with saving

Post by Calico »

Thanks everyone! This is a lot of good information.

The HOA was right about the painting. I misunderstood what they were saying. But I asked and they showed me pictures. It's an area on the back of my house that I can't see unless I am standing in a drainage area (which I never do). But it's pretty bad and the boards are starting to warp. So it's serious. I am glad they pointed it out because I never would have seen it. I still can't see the roof issue though. And my brother is lending me his power washer this weekend.

Back to the savings. Thanks again. I decided to have a separate bucket for the car and I will put $500 a month into it, which is what a car payment, 3 years, would be on the car I am looking at. I will then make adjustments as needed to the "other" savings.

I think a lot of you are right that maybe I am trying to be too aggressive with saving. It's just my nature, even before I read the Boglehead book. I think the same way some people get excited about shopping, new cars, their team advancing to the finals, and such, I get a rush out of seeing account balances grow. I need to reassess and maybe dial it back a notch or two and stop stressing myself out.

Thanks again!
I am a mere Boglehead apprentice... even after all these years.
getthatmarshmallow
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Joined: Mon Dec 04, 2017 8:43 am

Re: Three steps forward, two back with saving

Post by getthatmarshmallow »

It honestly looks like you're doing OK. You have a great savings rate. You're paying for your daughter's expenses and saving in a 529. You're cash-flowing life's unexpected expenses without going into debt or touching your emergency fund. You're doing great!

What you're not getting is the satisfying feeling of watching your non-retirement savings go up every month, or feeling like you are getting ahead. But you've put away lots of money over that last few months, and spent some of it on important unforeseen things. That's... really not bad. You've had a couple of expensive months, but it seems that they're one-off expenses, not the result of lifestyle inflation. And you handled it! So... give yourself a break.

May I ask how you decided on your savings rate? 24% is great. But if 20% will meet your goals, then there's your car right there.

If you need the rush of seeing the account balances grow, check your net worth once a quarter. (I totally had to do this once we started aggressively saving for retirement because the money wasn't in my bank going up where I saw it all the time.)
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