Pets, perhaps, but in a lot of places that second car is needed if there is to be a second income. And when you're at the point where pets and cable are the difference between saving or not, you're right back to that question of living entirely for tomorrow vs having more than a subsistence standard of living today.
Pets, perhaps, but in a lot of places that second car is needed if there is to be a second income. And when you're at the point where pets and cable are the difference between saving or not, you're right back to that question of living entirely for tomorrow vs having more than a subsistence standard of living today.
The argument’s becoming circular, so this is my last word: If you’re looking for an excuse to avoid saving, you’ll always find one. If you're looking for a reason to throw your hands into the air and say, "It's impossible for me!" you'll find that reason. On the other hand, if saving is important to you, you'll find ways you can do it -- maybe not as much as you'd like, but you'll find ways.
In the years (years, not weeks or months) that my husband and I shared a car, we had two incomes. And I was in college. We arranged our lives so that it worked because we needed the budget to work out. It was far from convenient: One of us was always without a car at lunchtime, he frequently had to hang out on the college campus while I had a night class, and it was inconvenient in other small ways, BUT it's the #1 thing we did in our first married years to get some cash into our savings account. I could’ve made more money elsewhere, but it would’ve meant we couldn’t share the car, and that would’ve meant less money in the long run. As for pets and cable TV, if you can’t save and pay for those luxuries, then you’re living beyond your means.
Small is a very relative term, though. Popping some numbers into one online calculator, the "sweet spot" for someone straight out of college making 40K/year is $433/mo to be on track for a comfortable retirement. That's a lot of money on a pre-tax income of $3300/mo, especially if working for a company that doesn't offer any match to help get there. Certainly not the "drop cable and stop going to Starbucks" sum that people like to make it out to be. And that's a calculator that assumes SS will still be there, even for a 22 year old new grad. Others advocate even more aggressive savings targets.
Talking about how easy it is to save a thousand dollars a year is all well and good, but the fact is that no amount of time will make $1K/year into anything even resembling a comfortable retirement.
$433 is more than the 10% that's tossed out as a good number to save. Lots of people live on less than 40K. The trick is to adjust your lifestyle to fit your income (and be happy with it; whether you feel deprived or not is largely a matter of attitude). Keep in mind, too, that a person who starts out at 40K will move up -- yes, yes, stagnant wages, I know, but you're not going to stay at your entry level salary forever.
And herein lies the crux of the problem. People think "I don't make millions, so I can't save anything. I DESERVE to have cable tv and pets just like people who make more money."
Yes, that's it exactly.
And if you get a pension, you should evaluate how safe that pension is. Who are the trustees? How is it being funded? What assumptions are being made on the rate of return? Is it set up to be safe if the company or local government goes under?
People have gotten burned on the answers to each of these questions.
True. I have a pension, and although mine is as stable as anything else in the world today, I won't say that your points don't concern me. I've put my faith in my pension, but I've also kept an eye on how it's going, and I have saved in other ways as well! If my pension were to disappear,
it would hurt me, but it would not put me in the position of choosing between medicine and food, or other desperate situations about which you hear.
In truth, I have no idea how a pension works because I have never had one. If every one of those answers were unsatisfactory, what can you to protect yourself?
Traditionally, a pension is offered in a low-paying job; they take a portion of that pay every month and invest it for you. The deal is that you agree to stay in that job for a fairly long amount of time (30 years is kind of standard), and then you get a payment for life. It's impossible to know whether you'll "win" or "lose" at the pension game because you don't know how many years you'll live -- you might "win big" and collect more than you paid in, or you might die young, in which case you're not able to leave your pension to your heirs. Today, since people are moving around more, pensions are largely unattractive because they're only valuable if you stay in the job for an entire career.
It's not true that you're screwed no matter what you do, but you must plan and save -- and for most of us, that takes self-discipline and sacrifice.
I'm surprised at the number of people saying having pets are budget busters... we've always had them and I really don't notice any kind of drain aside from litter and kibbles. Its way less than people spend on TV and phones...
You're right that phones are more expensive -- that's an area in which many people could cut back; however, pets just came up as an example of "extra" spending. If you can't afford to save anything, your lifestyle needs adjusting, and pets
might be one possibility. We just lost our beloved dog, and she wasn't very expensive until she grew old and became sick; most years she just needed food, a little vet care, and grooming twice a year. I do agree with you that downsizing phone plans would take a bigger bite from the budget, as would eliminating meals out and any number of other things.
