Former super saver is now a super spender. Help!

[elaine amj]

Re: your young adult kids:
Mine are 18 and 19 and due to a variety of things (including spending almost nothing of their part time paychecks as they live off their tip money), they are each sitting on $30-50k. I pay their tuition and they are responsible for all their own expenses, including rent.

My thought is they are more than capable of sustaining their daily expenses through part time work or whatever. And if they want to buy a car, etc, I really feel they should work harder to save for it out of their current/future income. (I'm already giving them a huge helping hand by providing each with an aging, serviceable vehicle).

Long story short, I don't think they should need access to this large amount of money for a very long time. So I am suggesting to them that they keep say $5-10k as spending/buffer money and invest the rest long term in index funds. I am a big fan of passive investing (i.e. buy the whole stock market and hold for a long time) so I am recommending an ETF like VTI (Vanguard Total Stock Market Index Fund) that they shouldn't expect to touch for 5-10 years. Maybe even 20-30 years for their own retirement (it would be awesome if they could buy a house, etc with only their future income and not this nest egg).

 

[QueenIsabella]

Re: your young adult kids:
Mine are 18 and 19 and due to a variety of things (including spending almost nothing of their part time paychecks as they live off their tip money), they are each sitting on $30-50k. I pay their tuition and they are responsible for all their own expenses, including rent.

My thought is they are more than capable of sustaining their daily expenses through part time work or whatever. And if they want to buy a car, etc, I really feel they should work harder to save for it out of their current/future income. (I'm already giving them a huge helping hand by providing each with an aging, serviceable vehicle).

Long story short, I don't think they should need access to this large amount of money for a very long time. So I am suggesting to them that they keep say $5-10k as spending/buffer money and invest the rest long term in index funds. I am a big fan of passive investing (i.e. buy the whole stock market and hold for a long time) so I am recommending an ETF like VTI (Vanguard Total Stock Market Index Fund) that they shouldn't expect to touch for 5-10 years. Maybe even 20-30 years for their own retirement (it would be awesome if they could buy a house, etc with only their future income and not this nest egg).

If they're working, they should consider investing in a Roth. They could withdraw the principal in the future, should the need arise, but the growth is tax-free. This would give them a huge leg up on retirement savings.

 

[ruadisneyfan2]

If they're working, they should consider investing in a Roth. They could withdraw the principal in the future, should the need arise, but the growth is tax-free. This would give them a huge leg up on retirement savings.

This is what ds24 did when he received a large chunk from a custodial account my parents opened for each grandchild. Over the years this was their real Christmas and birthday gifts with a small present to open. It adds up fast plus 21 years of growth.
I was so glad he readily agreed to that. I was so afraid he’d want to splurge in some way.
Ds20 will be getting his soon. I hope he’s rational and smart with his too.

 

[QueenIsabella]

This is what ds24 did when he received a large chunk from a custodial account my parents opened for each grandchild. Over the years this was their real Christmas and birthday gifts with a small present to open. It adds up fast plus 21 years of growth.
I was so glad he readily agreed to that. I was so afraid he’d want to splurge in some way.
Ds20 will be getting his soon. I hope he’s rational and smart with his too.

We encourage DD25 to split windfalls, so she puts some in her Roth and has some for other stuff. She got some money from her late grandmother when she graduated from college--she put $10k in a Roth (over 2 years), and put the remaining aside for travel--which DD and her grandmother both love/loved. This year, she's getting a windfall from her late great-uncle--I suggested that she put half in her Roth, and set the other half aside for when her 17yo car inevitably needs to be replaced. The car was also a gift from her grandmother, low miles and in great shape, but, well, it's 17--she needs to have a replacement plan. Luckily, she's comfortable living within her means. And her boyfriend is in finance, so he also encourages her to invest wisely.

 

[4luv2cdisney]

Re: your young adult kids:
Mine are 18 and 19 and due to a variety of things (including spending almost nothing of their part time paychecks as they live off their tip money), they are each sitting on $30-50k. I pay their tuition and they are responsible for all their own expenses, including rent.

My thought is they are more than capable of sustaining their daily expenses through part time work or whatever. And if they want to buy a car, etc, I really feel they should work harder to save for it out of their current/future income. (I'm already giving them a huge helping hand by providing each with an aging, serviceable vehicle).

Long story short, I don't think they should need access to this large amount of money for a very long time. So I am suggesting to them that they keep say $5-10k as spending/buffer money and invest the rest long term in index funds. I am a big fan of passive investing (i.e. buy the whole stock market and hold for a long time) so I am recommending an ETF like VTI (Vanguard Total Stock Market Index Fund) that they shouldn't expect to touch for 5-10 years. Maybe even 20-30 years for their own retirement (it would be awesome if they could buy a house, etc with only their future income and not this nest egg).

If they're working, they should consider investing in a Roth. They could withdraw the principal in the future, should the need arise, but the growth is tax-free. This would give them a huge leg up on retirement savings.

Both of mine funded their Roth for 2020 and 2021 and have another $20-$30K that they are sitting on (also saved from their earnings). They should also be able to fund their Roths for 2022.

The younger one is close to even with the older one at the moment, but she had an earlier start to working (though a minimum wage job), goes to community college (less expenses), and hasn't had to make any large purchases on her own yet, etc. I don't see her adding to her savings (other than the Roth) a lot in the next year. She simply doesn't earn much, but she has more time.

My older one has a higher income, but has always been self employed, so she's invested in her businesses and it comes with lots of fluctuations and challenges. She also already has other bills to pay (car, insurance, etc). That being said, she should double her savings in a year since she's living at home. She bought a 2020 Hybrid SUV right before the pandemic hit (ouch!), but that will be fully paid for by end of 2022. She bought it with the intention of keeping it as long as humanly possible. In normal times, she drives a lot, so the gas savings is a huge deal for her.

Anyway, the Roth should obviously stay put, but I don't think either of them have 5-10 years to set the other money aside to grow. I think it will likely be funding a down payment on a townhouse or condo within 5 years. COL is high where we are and property taxes are unbelievable. Young people are paying more for rent than I do for my (not huge, but larger than average) house. Many of D's friends are sharing a tiny 2-3 bedroom house rented between 4-5 people. I honestly, can't see them living alone unless they have 50% down, but I'm trying to stay optimistic. One step at a time.

DD22 told me she is taking $500 from her next paycheck to play with in the stock market. I have always been really risk averse so that sounds scary to me, but I actually think it's a good time for her to learn about investing and stocks. Even if it becomes a hard lesson in losing some money. DH and I married so young and started with zero and then starting having kids. So we never really felt like we could take risks on anything.

 

[QueenIsabella]

Both of mine funded their Roth for 2020 and 2021 and have another $20-$30K that they are sitting on (also saved from their earnings). They should also be able to fund their Roths for 2022.

The younger one is close to even with the older one at the moment, but she had an earlier start to working (though a minimum wage job), goes to community college (less expenses), and hasn't had to make any large purchases on her own yet, etc. I don't see her adding to her savings (other than the Roth) a lot in the next year. She simply doesn't earn much, but she has more time.

My older one has a higher income, but has always been self employed, so she's invested in her businesses and it comes with lots of fluctuations and challenges. She also already has other bills to pay (car, insurance, etc). That being said, she should double her savings in a year since she's living at home. She bought a 2020 Hybrid SUV right before the pandemic hit (ouch!), but that will be fully paid for by end of 2022. She bought it with the intention of keeping it as long as humanly possible. In normal times, she drives a lot, so the gas savings is a huge deal for her.

Anyway, the Roth should obviously stay put, but I don't think either of them have 5-10 years to set the other money aside to grow. I think it will likely be funding a down payment on a townhouse or condo within 5 years. COL is high where we are and property taxes are unbelievable. Young people are paying more for rent than I do for my (not huge, but larger than average) house. Many of D's friends are sharing a tiny 2-3 bedroom house rented between 4-5 people. I honestly, can't see them living alone unless they have 50% down, but I'm trying to stay optimistic. One step at a time.

DD22 told me she is taking $500 from her next paycheck to play with in the stock market. I have always been really risk averse so that sounds scary to me, but I actually think it's a good time for her to learn about investing and stocks. Even if it becomes a hard lesson in losing some money. DH and I married so young and started with zero and then starting having kids. So we never really felt like we could take risks on anything.

The only one of mine who has any interest in investing is my DS15. He tracks the stock market daily, often telling me how certain companies are doing. We have his "grandma money" invested in mutual funds for now, he can change that when he's older and in charge of it. But, he'll also be getting a windfall from his late great-uncle, so we told him he could buy Apple stock with it (one of his favorites).

The older three just invest in mutual funds and leave them alone. Which isn't a horrible strategy, either, they're just not interested in doing the brain work of managing money. But, hey--at least they're not spending, so I'm good.

 

[DLgal]

Just got a Google Chromecast

We have one. It doesn't replace cable at all. Not even close.

 

[Needsanap]

It's looking like we can make the switch to Fubo @ $80/mo and 500 mb fiber internet with whole home wifi @ $65 /mo.

We give up home phone (not a big loss) plus CNN, TNT, TBS, and TruTV from DH's list. We also have to watch the CW from an app which has only the last 5 episodes of the shows (I don't thing this is a big deal).

If DH is miserable with the loss of 4 channels (out of a 3 page list he provided), they can be had on Sling for another $35. I really hope he can live without.

We will keep our Netflix and Disney+.

Looking more closely at our Comcast bill, it was $250 before taxes, fees,etc. So, we cut $105 unless we need Sling, which would reduce savings to $70 at which point I'm not sure it will be worth it. DH is pouting a bit. He's not sure he's going to like it.

We will have to buy a Roku or Firestick or something for an older TV. That's the last thing I need to figure out.

I don't know. I was thinking it would be easier and a bigger savings. The internet price is guaranteed for 2 years (still no contract) and the Fubo looks like it went up recently, so hopefully it stays the same for awhile, too.

If we save $100+ I guess I met my goal, but it has been a pain so far and I'm guessing DH learning something new will be even worse!
DH is used to all the sports channels and he won't give any up. So, hopefully I don't do all this work and then realize we're missing something he can't live without.

 

[Needsanap]

Just a warning. Once you start streaming you’ll use a lot more data. Make sure the plan you’re picking has enough data or the overages will cost $$$.

 

[4luv2cdisney]

Just a warning. Once you start streaming you’ll use a lot more data. Make sure the plan you’re picking has enough data or the overages will cost $$$.

I honestly didn't know there were limits on some home internet service, but I checked and there will be none for us. Thank you, though. Glad I checked!

 

[ruadisneyfan2]

DD22 told me she is taking $500 from her next paycheck to play with in the stock market. I have always been really risk averse so that sounds scary to me, but I actually think it's a good time for her to learn about investing and stocks. Even if it becomes a hard lesson in losing some money. DH and I married so young and started with zero and then starting having kids. So we never really felt like we could take risks on anything.

Ds20 just bought $1000 worth of Dogecoin after hearing so many friends and coworkers make thousands on it. Of course it plummets after he bought. I keep telling him it's a gamble and I know he's been sweating over it and probably checking it 10x/day. I don't want to discourage him from trying; it's his money that he works hard to earn and making mistakes in life are part of the many lessons we learn over the years. I kind of wish he'd just choose some mutual funds as a pp mentioned. That's what ds24 has but they are very different personalities. Ds24 is patient and has the "slow & steady wins the race" mentality. Ds20 hears his friends who earn less than him are making thousands quick and easy so he wants in.

 

[elaine amj]

My DS18 and DH are deep into playing with stocks and crypto. Luckily, they both recognize that it is "playing" and are not putting any serious money into it. Bugs me since I am a die-hard couch potato investor and have consolidated all our money into a few core index funds with low fees.

But I don't complain too much. It is one of the very, very few "productive " things DS18 takes interest in that draws him out of his video game world. He struggles in school too but can discuss stocks knowledgeably with DH. And given how frustrated DH gets with his "lazy" son, I'm just happy they have a shared interest. I just mentally write off any money they take to invest.

On the good side, DH gave me control of the vast majority of our investments some years back. And DS18 agrees that index funds is the way to go.

He does get hyped when he hears his friends making thousands in a day though. I just repeat that slow and steady wins the race. DH has kept careful records of his play investing over the past 5 months. Last I heard, he won some, lost some, and is now above breakeven. Bugs me that he spends hours a day on his phone building up his ******* chat group, etc etc. Now he even makes me give him the Cliff's notes version of practically every TV show/movie we "watch" because he misses 80% of the action staring at his phone!

I adore dumping money in and forgetting about it for years on end with the couch potato method. Especially since passive investing often outperforms active investing! https://www.google.com/amp/s/www.bankrate.com/investing/active-versus-passive/amp/

 

[sarahrdh]

Okay first I want to tell you, don’t be so hard on yourself! You’re doing amazing! No debt and plenty of disposable income and funding retirement properly is a dream for a lot of people, and you my friend, are killing it!
As I inch closer to 40, my mindset has changed to, my bills are paid and my retirement is being funded properly, WE’RE GOOD. The rest really doesn’t freaking matter. It doesn’t. If it’s not creating a bunch of stress, then I. DONT. CARE. Bc I remember the days where I HAD to charge groceries bc we had NO CASH, NO SAVINGS, NOTHING. We’ve come a long way baby. I’m proud of that. Anyone should be, IMO.
Im in a similar boat as you- my van will be paid off next month! Yassss. Finally. That’s a $526 payment. (Just THINK about the dvc contract that could buy )

We have a tiny bit of debt. Tiny enough that I just haven’t bothered to focus on paying it off bc it doesn’t make a huge impact in our lives so I really just kinda forget about it. BUT- my focus for the rest of 2021 is not only to pay off that couple thousand, but put $1000 each paycheck (biweekly) into savings. I want to buy DVC in the coming months as well. Point being, there’s a lot of stuff coming up in the next 6 months for us, (selling this house, and building a barndomium!)so I can totally relate to what you’re saying about wanting the changes to be managed the best way possible! Oh and I did want to mention, as far as the raise thing- I get a 3% raise every year, so I allocate 1% of that to be added to my retirement contribution and the rest to my check. I feel like that’s a happy medium. My financial advisor suggested putting raises towards retirement just to keep beefing it up, but I still wanted SOME to come to me now so that’s what I did.

 

[ruadisneyfan2]

Oh and I did want to mention, as far as the raise thing- I get a 3% raise every year, so I allocate 1% of that to be added to my retirement contribution and the rest to my check. I feel like that’s a happy medium. My financial advisor suggested putting raises towards retirement just to keep beefing it up, but I still wanted SOME to come to me now so that’s what I did.

The simple solution to this is to have the amount going to retirement be a %, not a flat number, if possible.
This insures that over time, as your salary increases or you have overtime, bonuses, etc the amount going to 401k increases right along with it.

 

[sarahrdh]

The simple solution to this is to have the amount going to retirement be a %, not a flat number, if possible.
This insures that over time, as your salary increases or you have overtime, bonuses, etc the amount going to 401k increases right along with it.

Yes that’s what it is. A percentage. I already contribute a large percentage as well! I don’t necessarily NEED to keep increasing it, but yeah there’s also no reason NOT to so I’ll keep putting an extra percentage in every year. I may just vary each year whether an add an extra 1%, 2%, etc....

I do also take retirement out of my bonuses too. I’m salaried so I don’t get OT. But I do get some bonuses here and there. The only real guaranteed one is holiday which I like to have that cash. I’ve only been there a few years so eventually, I plan to also contribute half to all of the bonus money to retirement. I should get a decent bonus in January, but I’m already allocating that to a dvc contract. Sorry not sorry!

 

[4luv2cdisney]

Okay first I want to tell you, don’t be so hard on yourself! You’re doing amazing! No debt and plenty of disposable income and funding retirement properly is a dream for a lot of people, and you my friend, are killing it!
As I inch closer to 40, my mindset has changed to, my bills are paid and my retirement is being funded properly, WE’RE GOOD. The rest really doesn’t freaking matter. It doesn’t. If it’s not creating a bunch of stress, then I. DONT. CARE. Bc I remember the days where I HAD to charge groceries bc we had NO CASH, NO SAVINGS, NOTHING. We’ve come a long way baby. I’m proud of that. Anyone should be, IMO.
Im in a similar boat as you- my van will be paid off next month! Yassss. Finally. That’s a $526 payment. (Just THINK about the dvc contract that could buy )

We have a tiny bit of debt. Tiny enough that I just haven’t bothered to focus on paying it off bc it doesn’t make a huge impact in our lives so I really just kinda forget about it. BUT- my focus for the rest of 2021 is not only to pay off that couple thousand, but put $1000 each paycheck (biweekly) into savings. I want to buy DVC in the coming months as well. Point being, there’s a lot of stuff coming up in the next 6 months for us, (selling this house, and building a barndomium!)so I can totally relate to what you’re saying about wanting the changes to be managed the best way possible! Oh and I did want to mention, as far as the raise thing- I get a 3% raise every year, so I allocate 1% of that to be added to my retirement contribution and the rest to my check. I feel like that’s a happy medium. My financial advisor suggested putting raises towards retirement just to keep beefing it up, but I still wanted SOME to come to me now so that’s what I did.

I really like your "low stress" thinking! I struggle with that mindset, but truly long for it! It seems I'm hardwired to worry. lol

Good luck with the DVC purchase. We love it. We are on the buy (small) as we go plan. Larger contracts are cheaper but I honestly don't want any single contract over 75-100 points. We intend to only buy as we need more points, then buy the minimum we need. We bought 60 pts @BWV in 2017 and standard studios have stretched those points soooo far (our January stay is 9 points per night!!). Just added on 30 pts @ SSR and because it had 2020 points to bank, we should be good for another 3-4 years. We were lucky to buy when our BWV points got us direct benefits, so we are good until 2042 with that part. I like the idea that we can sell points off in small chunks if we reach a time where we start going less. With kids aged 19 and 22 it's kind of hard to know what the next 10 years will bring. They may stop coming with us or they may have families and we will want to bring them all! DH and I intend to enjoy our DVC as far into retirement as we can.

 

[2China2009]

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?

Frugal Queen here. I live on $2000 month. Age 49 single mom 2 teenagers. House paid off and dent free. I have cut everything.,Bare bones budget. I need to read Dave Ramsey’s book the Total Money Makeover. Follow his 7 steps and with that $1000 u will find where it will go. In his baby steps number 6 is to pay off the house. Get on a budget ASAP. Cell phones we have Cricket 4 lines $100. No cable. Very little eating out. I make homemade cleaners. Clean out ur house and sell your stuff Facebook Marketplace. I have become a minimalist. Less the better. What are things u can cut from ur budget? Yes will find u will free up a ton of money by cutting expenses. I have 9 main bills I pay every month. Good luck.

 

[Shelly F - Ohio]

I would put it down on the house at least $800 of it. $800 X 12 months = $9600 extra that you are not paying interest on. That will put money back in your pocket. We paid off our mortgage in 14yrs by paying $500 extra month and putting our tax return on the mortgage it saved us $232,964.00 in interest. Here is link to a good calculator that will show you how much you will save each month on interest. https://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx