Former super saver is now a super spender. Help!

[4luv2cdisney]

I need to get back on track. I used to be a budget queen. Now I don't even look at where our money goes.

We've just paid off a car and DH got a raise. Those 2 items put $1K / mo back in our pocket. I don't want it to get pissed away.
I need some baby steps here. Off the top of my head, here's some things I think I need to look at. Where to start / what to choose????

Where to direct the new found $1K / mo. (Options: pay extra toward mtg, put into retirement, household improvements, more DVC points - lol)
- I feel like we do have some immediate needs on the home - been neglecting things while paying cash for college tuition
- I'd like to pay off the house ASAP. I keep life insurance policies on each of us solely to pay the mortgage if either of us died. My DH just turned 50 and is a smoker. His life insurance is astronomical. I'd need the help paying off the house more than he would. My policy is cheap, but he could technically pay all necessary bills without my income. I think I will give up my policy as soon as DD#2 is done with college, regardless of mortgage status. But life insurance is a $200/ mo line item I would also like to dispose of. If we directed 100% of the $1k to the mortgage, we would have the house paid off in 5 years vs 10. It is a 3.625 interest rate. But then home projects sit for longer. Should I be considering a refinance, roll home repairs in and then pay the extra to the new mortgage? Or just get the home improvements done (maybe a year to year and half worth of the $) and then start addressing the mortgage?
- Investments would earn back more than paying the mortgage, but we already fund our retirement very well. But still....is that a better choice in the long run?
- DVC points will happen eventually, but it doesn't have to be now. 1/2 kidding on that one. I know it should be low priority, but it makes us happy.

Comcast. Holy crap. Our bill has ballooned to nearly $300 / mo and I don't watch TV. DH is a sports guy, so he will freak out without ESPN. Obviously, we need internet. The kids use mainly streaming (some of which they pay for, some of which I do.) I think because I only need internet, I can't wrap my mind around how to get everyone what they need for a better price. I need some serious guidance here.

I haven't looked at our cell phone plan in a long time, but I think we pay about $180 for 4 phones and our service is fine. Is that a lot?

I'm a Costco-aholic and my food bill is outrageous, but we used to eat out nearly every night, so I think this is low priority right now. However, I'd like to be more "aware" of what I'm spending. How much is typical food budget for a family of basically 4 adults?

Insurance in general seems to eat a LOT of our money. Car insurance, life insurance, homeowners insurance... any tips on shopping around? Our car and home is already bundled but not life. Honestly, starting over on life insurance seems like a time-suck. I think focusing on just eliminating life insurance asap is better plan....?

We have no other debt.

Basically, I feel like we could free up a lot of money if I got my sh** together. Life has just been really hectic, we are not "hurting" and I haven't cared. I'm struggling with how to not stress myself out in an already stressful world, but not just burn money needlessly. Basically, I don't want to take away all joy and convenience, but I feel the pull to be a little more financially responsible.

I'm also trying to get my young adults financials headed in the right direction. I'll post separately on that.

Opening myself up to strangers on the internet.... where would you start? Any other fairly simple tips to redirect more $ toward our goals?

 

[DLgal]

I need to get back on track. I used to be a budget queen. Now I don't even look at where our money goes.

We've just paid off a car and DH got a raise. Those 2 items put $1K / mo back in our pocket. I don't want it to get pissed away.
I need some baby steps here. Off the top of my head, here's some things I think I need to look at. Where to start / what to choose????

Where to direct the new found $1K / mo. (Options: pay extra toward mtg, put into retirement, household improvements, more DVC points - lol)
- I feel like we do have some immediate needs on the home - been neglecting things while paying cash for college tuition
- I'd like to pay off the house ASAP. I keep life insurance policies on each of us solely to pay the mortgage if either of us died. My DH just turned 50 and is a smoker. His life insurance is astronomical. I'd need the help paying off the house more than he would. My policy is cheap, but he could technically pay all necessary bills without my income. I think I will give up my policy as soon as DD#2 is done with college, regardless of mortgage status. But life insurance is a $200/ mo line item I would also like to dispose of. If we directed 100% of the $1k to the mortgage, we would have the house paid off in 5 years vs 10. It is a 3.625 interest rate. But then home projects sit for longer. Should I be considering a refinance, roll home repairs in and then pay the extra to the new mortgage? Or just get the home improvements done (maybe a year to year and half worth of the $) and then start addressing the mortgage?
- Investments would earn back more than paying the mortgage, but we already fund our retirement very well. But still....is that a better choice in the long run?
- DVC points will happen eventually, but it doesn't have to be now. 1/2 kidding on that one. I know it should be low priority, but it makes us happy.

Comcast. Holy crap. Our bill has ballooned to nearly $300 / mo and I don't watch TV. DH is a sports guy, so he will freak out without ESPN. Obviously, we need internet. The kids use mainly streaming (some of which they pay for, some of which I do.) I think because I only need internet, I can't wrap my mind around how to get everyone what they need for a better price. I need some serious guidance here.

I haven't looked at our cell phone plan in a long time, but I think we pay about $180 for 4 phones and our service is fine. Is that a lot?

I'm a Costco-aholic and my food bill is outrageous, but we used to eat out nearly every night, so I think this is low priority right now. However, I'd like to be more "aware" of what I'm spending. How much is typical food budget for a family of basically 4 adults?

Insurance in general seems to eat a LOT of our money. Car insurance, life insurance, homeowners insurance... any tips on shopping around? Our car and home is already bundled but not life. Honestly, starting over on life insurance seems like a time-suck. I think focusing on just eliminating life insurance asap is better plan....?

We have no other debt.

Basically, I feel like we could free up a lot of money if I got my sh** together. Life has just been really hectic, we are not "hurting" and I haven't cared. I'm struggling with how to not stress myself out in an already stressful world, but not just burn money needlessly. Basically, I don't want to take away all joy and convenience, but I feel the pull to be a little more financially responsible.

I'm also trying to get my young adults financials headed in the right direction. I'll post separately on that.

Opening myself up to strangers on the internet.... where would you start? Any other fairly simple tips to redirect more $ toward our goals?

I hear you on the cable/internet bill. Mine has ballooned to $250 and just keeps going up, but I have had NO luck trying to negotiate it down. At this point, our only hope will be to move and establish a "new" service location and start over with the super low introductory offers. This one is a non negotiable in our home.

Our food budget is huge. 2 adults/2 teen boys. I'm spending, easily, $2000/month on food (includes all groceries, Costco runs, and eating out). I don't think we can get below this amount without a LOT of changing our diets (won't happen with 2 picky autistic kids) and sacrificing eating out. My husband also lives away from home part time during the week and does NOT cook, so he gets take out 3 nights a week. I get it once a week with the kids, and then we do a family take out meal once on the weekends.

We get pretty decent car insurance rates, but it's mostly due to driving older cars and not having any teens on the policy (purposely waiting until 18 to let the kids get licenses).

I would invest your additional $1000/month in an EFT or Mutual Fund. Seems like the best option. That way, it can grow some and you can easily pull it out to use it for anything you want now, rather than having it tied up in a retirement account.

 

[TwoMisfits]

I need to get back on track. I used to be a budget queen. Now I don't even look at where our money goes.

We've just paid off a car and DH got a raise. Those 2 items put $1K / mo back in our pocket. I don't want it to get pissed away.
I need some baby steps here. Off the top of my head, here's some things I think I need to look at. Where to start / what to choose????

Where to direct the new found $1K / mo. (Options: pay extra toward mtg, put into retirement, household improvements, more DVC points - lol)
- I feel like we do have some immediate needs on the home - been neglecting things while paying cash for college tuition
- I'd like to pay off the house ASAP. I keep life insurance policies on each of us solely to pay the mortgage if either of us died. My DH just turned 50 and is a smoker. His life insurance is astronomical. I'd need the help paying off the house more than he would. My policy is cheap, but he could technically pay all necessary bills without my income. I think I will give up my policy as soon as DD#2 is done with college, regardless of mortgage status. But life insurance is a $200/ mo line item I would also like to dispose of. If we directed 100% of the $1k to the mortgage, we would have the house paid off in 5 years vs 10. It is a 3.625 interest rate. But then home projects sit for longer. Should I be considering a refinance, roll home repairs in and then pay the extra to the new mortgage? Or just get the home improvements done (maybe a year to year and half worth of the $) and then start addressing the mortgage?
- Investments would earn back more than paying the mortgage, but we already fund our retirement very well. But still....is that a better choice in the long run?
- DVC points will happen eventually, but it doesn't have to be now. 1/2 kidding on that one. I know it should be low priority, but it makes us happy.

Comcast. Holy crap. Our bill has ballooned to nearly $300 / mo and I don't watch TV. DH is a sports guy, so he will freak out without ESPN. Obviously, we need internet. The kids use mainly streaming (some of which they pay for, some of which I do.) I think because I only need internet, I can't wrap my mind around how to get everyone what they need for a better price. I need some serious guidance here.

I haven't looked at our cell phone plan in a long time, but I think we pay about $180 for 4 phones and our service is fine. Is that a lot?

I'm a Costco-aholic and my food bill is outrageous, but we used to eat out nearly every night, so I think this is low priority right now. However, I'd like to be more "aware" of what I'm spending. How much is typical food budget for a family of basically 4 adults?

Insurance in general seems to eat a LOT of our money. Car insurance, life insurance, homeowners insurance... any tips on shopping around? Our car and home is already bundled but not life. Honestly, starting over on life insurance seems like a time-suck. I think focusing on just eliminating life insurance asap is better plan....?

We have no other debt.

Basically, I feel like we could free up a lot of money if I got my sh** together. Life has just been really hectic, we are not "hurting" and I haven't cared. I'm struggling with how to not stress myself out in an already stressful world, but not just burn money needlessly. Basically, I don't want to take away all joy and convenience, but I feel the pull to be a little more financially responsible.

I'm also trying to get my young adults financials headed in the right direction. I'll post separately on that.

Opening myself up to strangers on the internet.... where would you start? Any other fairly simple tips to redirect more $ toward our goals?

So, SlingTV has a tier where you can get ESPN, ESPN2, and ESPN News (and certain ESPN content) for about $30/month...I think there is an add-on sports tier for another $5-$10. You can get just highest speed internet for between $90-$100/month (I'm assuming, like me, you are in a high cost area - you may have someone looking to offer this cheap, but this advice should work no matter where you are). So, if you just need ESPN and sports, you can cut the cable bill in half and still have all of it.

Typical grocery budget for 4 adults is probably $1100-$1200 if you eat most meals at home (according to this calculator) - you can go cheaper, especially if you eat meals out, but it's not usually the easiest place to save unless you are either 1. wasting a lot of food or 2. shopping at expensive stores or 3. totally blowing off seasonality and seasonal sales...https://mint.intuit.com/blog/food-budgets/monthly-grocery-budget-calculator/.

As for what to do with $1K, if you seem to be spending too much, don't spend it. I'd put it for the mortgage or retirement. You won't feel happy spending more on the house while you still have the debt outstanding and lower retirement savings, especially b/c house stuff always costs more than planned (and will this year especially with appliances in low supply, lumber at peak prices, and contractors not needing the work)...

 

[Gr8t Fan]

I'd devote the entire amount toward paying off the mortgage in 5 years so you can eliminate the life insurance cost, unless the needed repairs on the home include a roof, structural issues, etc.

DH and I have both agreed that next time our term life insurance is up we are not going to renew - our house has been paid off for years, we have plenty of money in retirement accounts and savings, and our youngest will be 21 (with older siblings who can step in and help if needed), so we just don't see the need.

Eliminating the need for life insurance + paying off the mortgage will supercharge your available cash and you'll be able to tackle the home improvements you need to do in a few months.

 

[Sleepy425]

I started using YNAB a couple months ago and am loving it. It has really helped to see where all our money goes.
As far as cell phones go - have you looked at things like Total Wireless? Most plans like that are around $100 for 4 lines. I have only one line and it is $26.xx/month and I buy 5gb of data for $10 every 3 months or so (and earn free data with their rewards program, so I maybe buy data 3 times per year).
If you aren't maxing out all of your retirement accounts, then I think that is the best place to start with the $1k.

 

[4luv2cdisney]

I hear you on the cable/internet bill. Mine has ballooned to $250 and just keeps going up, but I have had NO luck trying to negotiate it down. At this point, our only hope will be to move and establish a "new" service location and start over with the super low introductory offers. This one is a non negotiable in our home.

Our food budget is huge. 2 adults/2 teen boys. I'm spending, easily, $2000/month on food (includes all groceries, Costco runs, and eating out). I don't think we can get below this amount without a LOT of changing our diets (won't happen with 2 picky autistic kids) and sacrificing eating out. My husband also lives away from home part time during the week and does NOT cook, so he gets take out 3 nights a week. I get it once a week with the kids, and then we do a family take out meal once on the weekends.

We get pretty decent car insurance rates, but it's mostly due to driving older cars and not having any teens on the policy (purposely waiting until 18 to let the kids get licenses).

I would invest your additional $1000/month in an EFT or Mutual Fund. Seems like the best option. That way, it can grow some and you can easily pull it out to use it for anything you want now, rather than having it tied up in a retirement account.

This makes me feel so much better. I was feeling really bad about myself and our spending.

 

[4luv2cdisney]

So, SlingTV has a tier where you can get ESPN, ESPN2, and ESPN News (and certain ESPN content) for about $30/month...I think there is an add-on sports tier for another $5-$10. You can get just highest speed internet for between $90-$100/month (I'm assuming, like me, you are in a high cost area - you may have someone looking to offer this cheap, but this advice should work no matter where you are). So, if you just need ESPN and sports, you can cut the cable bill in half and still have all of it.

Typical grocery budget for 4 adults is probably $1100-$1200 if you eat most meals at home (according to this calculator) - you can go cheaper, especially if you eat meals out, but it's not usually the easiest place to save unless you are either 1. wasting a lot of food or 2. shopping at expensive stores or 3. totally blowing off seasonality and seasonal sales...https://mint.intuit.com/blog/food-budgets/monthly-grocery-budget-calculator/.

As for what to do with $1K, if you seem to be spending too much, don't spend it. I'd put it for the mortgage or retirement. You won't feel happy spending more on the house while you still have the debt outstanding and lower retirement savings, especially b/c house stuff always costs more than planned (and will this year especially with appliances in low supply, lumber at peak prices, and contractors not needing the work)...

Thank you for the SlingTV info. I will definitely look into that.

Yes, the current higher costs of all things house related is a real bummer!

 

[4luv2cdisney]

I'd devote the entire amount toward paying off the mortgage in 5 years so you can eliminate the life insurance cost, unless the needed repairs on the home include a roof, structural issues, etc.

DH and I have both agreed that next time our term life insurance is up we are not going to renew - our house has been paid off for years, we have plenty of money in retirement accounts and savings, and our youngest will be 21 (with older siblings who can step in and help if needed), so we just don't see the need.

Eliminating the need for life insurance + paying off the mortgage will supercharge your available cash and you'll be able to tackle the home improvements you need to do in a few months.

I think I am leaning this way. It makes the most sense. We may throw a little toward the house as we go by trying to cut some other things out monthly, because while they aren't urgent repairs, I'm not sure I want to sit on all of them for 5 years.

 

[MrsPete]

- I feel like we do have some immediate needs on the home - been neglecting things while paying cash for college tuition

We're the same: we've recently finished paying college tuition, and we have some delayed maintenance to take care of. How about spending the rest of this year fixing those things that need it -- then double down on the mortgage starting January 2022?

I'd like to pay off the house ASAP. I keep life insurance policies on each of us solely to pay the mortgage if either of us died.

You're old enough to have children in college, so I'm assuming you're late 40s/early 50s? I'm mid-50s, and -- yes -- a few of my same-aged friends have died, BUT the vast majority of us are in good shape and likely to be around at least long enough to retire. Think this through: you're betting $200 that one of you will die this month. That's just not very likely. IF one of you did die, you'd have options:

- With the kids finishing college, would the remaining spouse want to remain in the family home? If it were just me and one kid with his foot out the door, I think I'd be tempted to look into low-maintenance condos.
- The remaining spouse could refinance the house -- yes, it would stretch out the length of the mortgage, but the remaining spouse would have that choice.
- Selling the house would be an option for the remaining spouse. This is another reason to go ahead and take care of that deferred maintenance -- if you needed to sell the house, good condition would matter.
- Do you have any no-cost life insurance at work? I have one year's salary at no cost to me, and I think that's kinda typical. That one year of salary would go a long way towards paying off the mortgage.

My DH just turned 50 and is a smoker.

Okay, that's part of where your money's going.

Investments would earn back more than paying the mortgage, but we already fund our retirement very well. But still....is that a better choice in the long run?

With your retirement well in hand, I'd vote for getting the house paid off. Taking the mortgage off your plate will make you better prepared for retirement, and IF one of you should lose your job (not uncommon after 50 -- I read that 1/3 of all Americans don't retire at a time of their own choosing -- and it's tough to get another job paying the same), you'd be in a position for one of you to support the family.

DVC points will happen eventually, but it doesn't have to be now. 1/2 kidding on that one. I know it should be low priority, but it makes us happy.

If you're still paying for a mortgage, I say you're not ready to buy an expensive luxury like this. I know people are devoted to DVC, but you can stay at an onsite value or moderate hotel cheaper than DVC, and you can rent a house or condo through VRBO cheaper than either.
I know: want, want, want -- but I assume you want financial security 51 weeks a year more.

Comcast. Holy crap. Our bill has ballooned to nearly $300

Sling TV is a great option, though you'll still need internet. We had Sling for a while, then we switched to Netflix and HBO Max. Now I'm ready to go back to Sling for a while. These are short-term commitments, and you can switch back-and-forth all you want. Remember that you can always return to Comcast, if you're not happy.

I haven't looked at our cell phone plan in a long time, but I think we pay about $180 for 4 phones and our service is fine. Is that a lot?

I only pay for 3 phones, but I pay $119/month. It wouldn't hurt to look around.

I'm a Costco-aholic and my food bill is outrageous, but we used to eat out nearly every night, so I think this is low priority right now. However, I'd like to be more "aware" of what I'm spending. How much is typical food budget for a family of basically 4 adults?

Aware is a good word -- most of us can cut our food budgets pretty easily.

Insurance in general seems to eat a LOT of our money.

Ugh, insurance is literally the biggest item in our budget -- I've been paying it all my adult life and aside from health insurance, I've literally never had any use from it. Last year I talked to a different person in the same company, and she cut our insurance pretty significantly. We also keep high deductibles (but we have resources to pay, if necessary).

Basically, I feel like we could free up a lot of money if I got my sh** together.

So do it.

 

[dclpluto]

I will do a little of each. Put some extra towards the house mortgage when you can.

dvc points I wouldn’t do it. You are not young where you will make money on the dvc points. I’m 51 wife 53 no way will I be buying more not worth it. Wouldn’t be cost effective.

Too me switching away from cable wasn’t worth it. You have to get internet than with everything you want. Savings might of been 60 dollars a month. But to each their own if it’s worth it for them to switch or not.

your husband is 50 that means he can put more into his 401k if he has one and you can afford to. I know I can’t. But if you can take advantage of it. He can put a extra 6500 dollars into his 401k a year. With him being over 50.

 

[barkley]

i think before you start hunkering down on finding other ways to cut expenses you need to decide what to do with that 1K per month so it doesn't get spent away. do you have an emergency fund, and by this i don't mean dave ramsey's 1K. i mean enough in easily accessible funds to cover whatever your single highest insurance deductible is that you would have to pay in one big chunk (so not nesc. health, but car or homeowners). i've been in a homeowner's claim situation where i had to come up with my deductible to get my home repaired, likewise i've been in car accidents (not my fault) that required use of MY insurance's uninsured/under-insured coverage so i was out of pocket for those until they were finally settled by my insurer (in one case it took a couple of years).

i'm a huge fan of paid off mortgages (thrilled when we were able to do so) but not at the cost of not having some traditional accessible savings. if something happens that requires several thousands of dollars in a short amount of time you don't want to have to rely on paying outrageous interest to a credit card company or worse-using your paid off home as a piggy bank for equity loans (far too many proud 'paid off mortgage' people don't consider the home equity loans they've subsequently pulled from those homes as what they truly are-ANOTHER MORTGAGE ).

if those aren't in place i would earmark the 1K to get them in place (by the end of the year you could have 8K in savings, wouldn't that be great peace of mind?).

if those are in place then i would look at what the home stuff is that needs to get done-

is it repair/maintenance or upgrade? if repair, is it potentially causing increased damage/more costly damage left undone? if so-focus on that. if it's maintenance will it reduce it's lifespan and be costly to replace? if the maintenance saves you from a costly replacement then it's worth considering (this is why i bite the bullet and pay to have my large deck stripped/resealed vs. the insane cost it would run to replace it due to rot). if it's upgrades-i think if you can afford it you need to do some things that provide an amount of home ownership joy. it doesn't have to be the full blown kitchen remodel if you don't have the funds right now, it can be upgrading one appliance you can afford (i never realized the sheer joy i would get from swapping out the builder grade dishwasher for a bosch 'silent' model, sooooooo much quieter and efficient (ended up saving on utilities-so BONUS!). if it's a bigger upgrade then save until you can do it without adding more financial stress to your budget.


figure out what to do with the 1k.

 

[4luv2cdisney]

Answering a few things that have come up:

We have emergency savings. We keep enough to cover mortgage, basic bills / essentials for about 6 months.

Figuring out the retirement stuff has been a bit frustrating / confusing. We have always had automatic savings for retirement. DH has a pension and also a pretty large sum of money goes into a retirement savings account. We have never really controlled any of it. We never even thought about it. Suddenly, reality kind of hit that retirement isn't so far off and we are clueless how any of it works. We talked to 2 financial advisors and ran about every calculator available on the internet. The thing is, it's really all speculation. What will we be making in 15 years? How much will we need to live on? What will the cash fund grow to in 15 years? What will the payment rate on his pension be in 15 years? Will social security change significantly? I find all these unknown really really stressful. And the results of all that speculation can be wildly different!

That being said, it does appear we are on track to have about 115% of DH's income, so it seems there's some cushion if the #s are off. We don't factor my income at all. I was a SAHM that went back to work initially when DH was experiencing a longer than usual lay-off. My job is part-time with good hourly pay, so I just continued working initially to replace some lost savings, pay for kids that suddenly had hundreds of dollars per month in expensive lessons / hobbies and eventually to cover their college expenses, and to buy fun stuff ..... like DVC points!

DVC is a part of our retirement plan. We already own a small amount and will be adding on small amounts regularly to meet our goals. Pandemic has put a damper on our travel though, so we really don't need to add right now.

House repairs....well....they snowball. So, there are a few things that truly need to get done, but if we're doing those things, it makes sense to do this, this and this, too! It's that kind of thing. We can cash flow some of this from our normal monthly and I'm thinking by cutting some other costs (cable and general frivolous spending) we won't have to direct much of the $1K here.

So, to be clear, we are financially stable, we just spend too much money IMO!! I've been reading some of the other budget board topics and am feeling motivated to do better!

I was so hesitant to post, but getting the feedback helps clarify things in my mind. The mortgage is the obvious big source of stress in my life. Once kid #2 is done with college, the mortgage would be the only reason I would say I "need" to work at all. So, getting that out of the way will be huge. I'm really surprised to see how many people have paid off their mortgages. In my circle, almost nobody is mortgage free and many in my circle are 5-10 years older. Very interesting!

 

[QueenIsabella]

We're currently in coastFIRE, aiming towards fatFIRE. DH is 58, and will continue to work until he's 65, partly to cover health care costs, but mostly because he likes his current job--it's a good "costing into retirement job, unlike some previous ones which were much more demanding.

He will have 4(!!) pensions coming in, 2 of them small, on top of Social Security. We currently have RMDS from inherited IRAs that we earmark for family vacations. I have no idea what we're going to do with the gusher of cash once our own RMDs, hit, on top of the pensions and SS. Probably spoil our future grandkids rotten--or at least, set up college funds for them. As retirement gets closer, the picture is getting clearer, and it's pretty amazing how much we'll have due to diligently saving and having some luck.

I did want to say--paying off the mortgage can be a weird issue. We currently have a mortgage, and could pay it off at any time, but the interest rate is low, so it's no rush. I've told DH, I want it paid off before he retires, but it could be the week before, I don't care. We're making more on investments than we're paying in mortgage interest. Now, if your goal is to mortgage-free, there's nothing wrong with that. Especially if it helps you towards other goals, or just plain helps you to sleep at night. But, I don't consider a mortgage to be "bad debt", like a credit card balance. Similarly, I currently have a car payment--the interest is 1.9%. Our investments earned over 5% in the first quarter alone. The nice thing is, you can look at what our family does, and pick out what might work for you, and discard the rest.

 

[4luv2cdisney]

We're currently in coastFIRE, aiming towards fatFIRE. DH is 58, and will continue to work until he's 65, partly to cover health care costs, but mostly because he likes his current job--it's a good "costing into retirement job, unlike some previous ones which were much more demanding.

He will have 4(!!) pensions coming in, 2 of them small, on top of Social Security. We currently have RMDS from inherited IRAs that we earmark for family vacations. I have no idea what we're going to do with the gusher of cash once our own RMDs, hit, on top of the pensions and SS. Probably spoil our future grandkids rotten--or at least, set up college funds for them. As retirement gets closer, the picture is getting clearer, and it's pretty amazing how much we'll have due to diligently saving and having some luck.

I did want to say--paying off the mortgage can be a weird issue. We currently have a mortgage, and could pay it off at any time, but the interest rate is low, so it's no rush. I've told DH, I want it paid off before he retires, but it could be the week before, I don't care. We're making more on investments than we're paying in mortgage interest. Now, if your goal is to mortgage-free, there's nothing wrong with that. Especially if it helps you towards other goals, or just plain helps you to sleep at night. But, I don't consider a mortgage to be "bad debt", like a credit card balance. Similarly, I currently have a car payment--the interest is 1.9%. Our investments earned over 5% in the first quarter alone. The nice thing is, you can look at what our family does, and pick out what might work for you, and discard the rest.

When I say I was a super saver, it was more along the lines of keeping to a budget and clipping coupons. I think we did a good job with what we had and I was able to be a SAHM as long as I wanted to. Overall, we have been pretty ignorant with investing. We both come from poor / not wealthy families and we simply had no knowledge or direction. I am trying to get educated to pass it along to my kids. I feel like we can start the chain of generational wealth that we will never benefit from ourselves.

My kids just funded their Roths for 2020 and 2021 and still have a fairly large sum of money "sitting around" that I'd like to see them to do something with. I just don't know what. I don't think it should be completely inaccessible, because I assume they will eventually need at least $50K each whenever they decide to move out. Maybe they can save that much between now and then, maybe not. More unknowns. I hate unknowns!

I think my big mistake was college funds. I was putting a significant chunk of my pay into a work retirement plan that wasn't ever intended for retirement, but was meant for college funding. It allowed me to get the match $ and keep funds out of reach until we needed. However, instead of withdrawing the $ as we needed it (penalty-free) to pay tuition, I left it there and kind of sucked us dry in every other way for the last 5 years paying that tuition. Now, I can't go back and get the $70K we spent on kid#1. I can draw what I need for kid #2, but so far she's just doing community college. That's small potatoes, so I'm once again cash-flowing it. $70K would pay the bulk of our mortgage right now and we could finish the rest off in a year or two while simultaneously fixing up the house. I want a do-over. lol Yes, it's become extra retirement money, so it's not like it is lost, but I feel like it was not the smartest thing I've ever done.

Kids are expensive, but we're starting to see the light at the end of the tunnel with them starting to fund themselves. Now DH is poised to have a lot of income growth over the next 15 years (as our expenses are declining) and we should end up in good shape. I just wish we would have made some different decisions along the way.
So, I do appreciate all the different perspectives and ideas. I went over to Bogleheads (as I read about in another thread) and . That was very overwhelming. I lasted about 20 minutes. lol

 

[QueenIsabella]

When I say I was a super saver, it was more along the lines of keeping to a budget and clipping coupons. I think we did a good job with what we had and I was able to be a SAHM as long as I wanted to. Overall, we have been pretty ignorant with investing. We both come from poor / not wealthy families and we simply had no knowledge or direction. I am trying to get educated to pass it along to my kids. I feel like we can start the chain of generational wealth that we will never benefit from ourselves.

My kids just funded their Roths for 2020 and 2021 and still have a fairly large sum of money "sitting around" that I'd like to see them to do something with. I just don't know what. I don't think it should be completely inaccessible, because I assume they will eventually need at least $50K each whenever they decide to move out. Maybe they can save that much between now and then, maybe not. More unknowns. I hate unknowns!

I think my big mistake was college funds. I was putting a significant chunk of my pay into a work retirement plan that wasn't ever intended for retirement, but was meant for college funding. It allowed me to get the match $ and keep funds out of reach until we needed. However, instead of withdrawing the $ as we needed it (penalty-free) to pay tuition, I left it there and kind of sucked us dry in every other way for the last 5 years paying that tuition. Now, I can't go back and get the $70K we spent on kid#1. I can draw what I need for kid #2, but so far she's just doing community college. That's small potatoes, so I'm once again cash-flowing it. $70K would pay the bulk of our mortgage right now and we could finish the rest off in a year or two while simultaneously fixing up the house. I want a do-over. lol Yes, it's become extra retirement money, so it's not like it is lost, but I feel like it was not the smartest thing I've ever done.

Kids are expensive, but we're starting to see the light at the end of the tunnel with them starting to fund themselves. Now DH is poised to have a lot of income growth over the next 15 years (as our expenses are declining) and we should end up in good shape. I just wish we would have made some different decisions along the way.
So, I do appreciate all the different perspectives and ideas. I went over to Bogleheads (as I read about in another thread) and . That was very overwhelming. I lasted about 20 minutes. lol

Our situation was a little different. We were raised to not expect SS to be there for us, so we started saving early. My parents were also poor, so they didn't know anything about investing (I know my dad had bonds--that was it). When I got my first "real" job at 21, and they explained 401ks to me, I thought it was a scam. But, I worked hard to educate myself. One other thing we had going for us was, my MIL had told us that she would pay for college for all of her grandchildren. She paid for our oldest, but like your child, #2 went to community college (he's now a commuter at State U), and we've always cash-flowed his college. He also has Asperger's and goes part-time, so he's on the 8-year plan. Anyway, MIL died in 2017, so now we're on the hook for tuition for the younger two, but she also left us plenty of money to cover their costs. Our biggest challenge this year was convincing DD17 that she didn't want Pricey Private U--not if she wanted us to have the funds to pay for law school afterwards.

Another factor that encouraged me to educate myself was, my MIL left all my kids trust funds. Not humongous, live-like-a-beach-bum trust funds, but enough to get them in trouble. So, I needed to learn to invest, to help them make wise financial choices.

BTW, Bogleheads can be overwhelming to the uninitiated. Take it in small bites--they have a lot of good information there, and I find some of the threads really interesting.

 

[winterwhite]

When I say I was a super saver, it was more along the lines of keeping to a budget and clipping coupons. I think we did a good job with what we had and I was able to be a SAHM as long as I wanted to. Overall, we have been pretty ignorant with investing. We both come from poor / not wealthy families and we simply had no knowledge or direction. I am trying to get educated to pass it along to my kids. I feel like we can start the chain of generational wealth that we will never benefit from ourselves.

My kids just funded their Roths for 2020 and 2021 and still have a fairly large sum of money "sitting around" that I'd like to see them to do something with. I just don't know what. I don't think it should be completely inaccessible, because I assume they will eventually need at least $50K each whenever they decide to move out. Maybe they can save that much between now and then, maybe not. More unknowns. I hate unknowns!

I think my big mistake was college funds. I was putting a significant chunk of my pay into a work retirement plan that wasn't ever intended for retirement, but was meant for college funding. It allowed me to get the match $ and keep funds out of reach until we needed. However, instead of withdrawing the $ as we needed it (penalty-free) to pay tuition, I left it there and kind of sucked us dry in every other way for the last 5 years paying that tuition. Now, I can't go back and get the $70K we spent on kid#1. I can draw what I need for kid #2, but so far she's just doing community college. That's small potatoes, so I'm once again cash-flowing it. $70K would pay the bulk of our mortgage right now and we could finish the rest off in a year or two while simultaneously fixing up the house. I want a do-over. lol Yes, it's become extra retirement money, so it's not like it is lost, but I feel like it was not the smartest thing I've ever done.

Kids are expensive, but we're starting to see the light at the end of the tunnel with them starting to fund themselves. Now DH is poised to have a lot of income growth over the next 15 years (as our expenses are declining) and we should end up in good shape. I just wish we would have made some different decisions along the way.
So, I do appreciate all the different perspectives and ideas. I went over to Bogleheads (as I read about in another thread) and . That was very overwhelming. I lasted about 20 minutes. lol

Your kids could start a small CD ladder with maturities every 6-9 months, or simply use a high-yield online checking account to earn some base interest on that money.
I suggest this only because earning real money in the stock market, then taking it out can leave you with a big tax surprise when you’re accustomed to being a student and maybe getting a decent refund. Teach them the value of budgeting including how to budget for longer term items and live on last month’s paycheck so they never have to worry when funds are coming in. The rest will be gravy and grow a little bit while they stay at home.

 

[becauseimnew]

I would totally put most of the money towards home improvement, and not right now. Just save it and wait 12-24 months, when prices settle down.

After you have enough for the improvements you want to make then shift to paying down your mortgage.
Seems like you all are in a really good financial position.

 

[MrsPete]

Suddenly, reality kind of hit that retirement isn't so far off and we are clueless how any of it works.

I think that makes you ... average. Seriously, I think most people who are well prepared for retirement grasp the concept of saving, and we're comfortable with that. But HOW do you transition from putting money into retirement savings to taking it out? Which accounts? How much is safe? The logistics aren't easy.

DVC is a part of our retirement plan.

If that's part of your plan, that's fine -- but I would take care of the home repairs and mortgage first.

House repairs....well....they snowball.

Yes, often if you don't take care of repairs, they grow and end up costing you more in the long run.

I'm really surprised to see how many people have paid off their mortgages. In my circle, almost nobody is mortgage free and many in my circle are 5-10 years older.

Well, in all fairness, I've been mortgage free about 20 years, but it isn't something I go around talking about -- it sounds braggy, and it kinda pisses people off. Yeah, really -- I have a few friends who like to hear about sales on frozen foods, how to mend things, growing potatoes -- but most people in my life roll their eyes and get that "How can you possibly be so cheap" look. So I don't talk about it.
Know who else just paid off a mortgage? My 26-year old daughter and son-in-law. Super proud of them.

I did want to say--paying off the mortgage can be a weird issue. We currently have a mortgage, and could pay it off at any time, but the interest rate is low, so it's no rush.

I understand the math involved, but I love knowing that every brick in the house belongs to me. I grew up rural poor and as a young adult I had no safety net -- that's why I feel so strongly about the house being M.I.N.E - MINE.

We were raised to not expect SS to be there for us, so we started saving early.

People say all the time, "We young people are paying in but will never receive." I don't think that'll ever happen -- but I do think the program will change so that everyone will receive somewhat less /higher earners will receive less-less-less.

 

[4luv2cdisney]

Your kids could start a small CD ladder with maturities every 6-9 months, or simply use a high-yield online checking account to earn some base interest on that money.
I suggest this only because earning real money in the stock market, then taking it out can leave you with a big tax surprise when you’re accustomed to being a student and maybe getting a decent refund. Teach them the value of budgeting including how to budget for longer term items and live on last month’s paycheck so they never have to worry when funds are coming in. The rest will be gravy and grow a little bit while they stay at home.

I am very fortunate to have kids that like to budget and save. And absolutely right about living a month behind!! Nowadays everything is on autopay and it's too easy to make a mistake or forget about something if you don't have a big cushion.

My 22 yo has a huge spreadsheet and she allocates all of her deposits into a bunch of individual categories (budget) and balances everything every month. She is also self employed (independent contractor) and has a lot to track for taxes and such. (No refunds for her!)

My 19 yo deposits 100% of her earnings into savings and only spends gift $ and side hustle $. She is a total penny pincher. I still pay for most of her stuff, so she's got it pretty easy for now.

Ahhhhh.... the good old CD ladder. I used to do those. Had an amount about equal to a mortgage payment for every month of the year. I'll compare those rates to a high-yield online savings / checking. Thanks!

I'm sure there's not much to do with their $ that's going to earn anything significant, but it seems wasteful to have tens of thousands sitting in a savings account, earning almost nothing. But they really can't lock it up for too long or risk it.

I'm hoping they leave the money they've put in the Roth. That is the plan, but even that was chosen just in case they need to access the funds deposited. Kind of like an emergency emergency fund! With one daughter already self-employed and the other one likely to do the same eventually, there is so much more instability. I'm encouraging them both to stay at home until they are very very very secure.

 

[4luv2cdisney]

Know who else just paid off a mortgage? My 26-year old daughter and son-in-law. Super proud of them.

Amazing! Congrats to all!!