When do you stop struggling?

[whtyger97]

I know everyone struggles when they start out. And somehow magicly many people end up well off. But how when does it happen?

I know we aren't really struggling in terms that most people would think of, its never an issue of do we pay this bill or do we eat sort of thing. We don't have alot of 'excess' bills, no credit card debt, student loans yes but the interest on those is less then the interest on our bank account, we don't have cable, we don't have cell phones (expect the one DH has for work). When own both cars, neither are 'gas guzzlers' and both were used cars when we got them.

I don't know if its a problem with our mind set. When we go to buy something we ask do we need/want it, not can we afford it. But it be fair to us we don't really overspend on impulse buys. If I buy an new outfit its off the clearance rack at walmart and I spent $10 for it. If we go out to movies, its most likely $4 movie night (with free popcorn, yes we get icees but its still $15 for the night).

Now we do eat out more then we should, and we are trying to eat at home, to come up with some 'extra' money for a new computer for me (my old one is fryed). We over pay on our home mortgage but not that much and I know we aren't saving nearly enough for the future.

So how do people do it? How do people do all we are doing and raise kids, take vacations, pay for college, etc.? I keep thinking well maybe if DH gets a raise we'll be ok, but that money would just go to help pay off the mortgage, so I think then I'd even still feel like we're struggling.

(Just a little background...I'm 25 and DH is 26, we've had the house a little less then a year, and before that we were living off his graduate student stipidand. He's almost got a masters {just needs the thesis} but that wouldn't really help him at his current job.)

 

[Christine]

I guess you kind of have to change your way of thinking when you have kids. I know lots of people who, before they had kids, socked away so much money in their retirement account and worked to pay down their mortgages (like you would do if you got extra money). Well, some people just don't do that. They would rather have nice vacations, better clothes, private schools, etc, rather than pay off their mortgage early or shop at Wal-Mart. It's just "different priorities". Also, everyone has a different definition of what it means to "struggle." Obviously, you are uncomfortable with not putting your excess cash into your mortgage. Some people don't feel bad about it at all.

 

[momof2inPA]

It sounds like you would be doing fine if you got the student loans paid. You are very young to own a house, and that will pay off in the long run.

 

[Galahad]

(Just a little background...I'm 25 and DH is 26,

honestly, you probably won't be in the financial position you dream of for at least 10 more years, IMO. It's not magical, but things start coming together later. If you "arrive" at 26 then you are very lucky indeed.

 

[pw2pp]

You guys are young yet. We also struggled for a long time (we are now 43 & 47).
You will find that as time goes on and you have been in your house longer, that you will build up equity and that is when you can get a little more ahead. I think that you are doing things right by thinking before spending, not building up credit card debt, etc....
Have you both gone to college, or are you where you want to be with your jobs/careers, etc....?
If not, you may want to work on that before having any children, it is alot easier that way.
Good luck to you

 

[Bob Slydell]

That's not really a question anyone could answer for you. Actually, it's not even an answer you could predict for you -- too many unknown variables. There's a lot of things you can do to try to put yourself on the right path (sounds like you're doing a lot of them), but in the long run, some things just are uncontrollable and up to luck (good or bad).

 

[karebear1]

You are still very young! Good for you for having no debt (other then school) that in itself is quite an accomplishment! I'm 45 now, and I would say it took DH and I about 15-20 years before we started to get to a point where we could take regular vacations etc. We've been married 25 years now- and it's a lot easier for us now! We had 3 kids in the first 4 years of our marriage and it was really tough. We had no extra money at all- not even enough to set aside for retirement- so we're having to make up for it now. Otherwise, it's pretty smooth sailing. I wish it was magical, how you get to this point, but it really isn't. It takes a lot of hard work and focus... but you can do it! What would I do over again if I could? Definetly start saving for retirement- even if it was just $50.00 a month- andI would set aside vacation money and do that once a year rather then eating out. Good luck!

 

[AllyandJack]

It never ends. I'll be honest....DH and I made a good amount of money last year. We were both working in well-paying jobs. We own a modest home (cost us $260,000 to build), we drive modest cars (we both drive Chevy Blazers), we don't take big vacations (we only go to WDW), I don't own lots of designer clothes (I shop in Sears and JC Penney). We managed to put about 25% of our income into a 401K last year (I did 15%, he did 10%). We also paid for part of our health premiums. We have $10,000 a year in property taxes and $700./month in my student loans. We have minimal credit card debt, our utility bills are fairly low. We did manage to save up some money in a savings account.

Guess what? DH lost his job. The maximum unemployment benefit is only $528./week. Plus, we now had to COBRA the health insurance for $750./month. The day after DH lost his job, my car needed $1500. worth of work or it was going to fail the inspection. Then, I blew a tire that couldn't be fixed and had to buy a new tire. The savings? It's more or less gone. DH found a new job within 6 weeks and we're trying to rebuild the savings again.

But, it never ends. Unless you hit the lottery and win millions, it never ends. I thank God every day we had the savings...if we didn't....we'd have lots of credit card debt right now because that would have been our only option.

I don't mean to be pessimistic....my point is that you do the best you can with what you have....stuff is going to happen....you do your best to make it through that....you do your best to financially prepare for that and hope for the best.

As for being "well off" - DH and I were very well off, according to our tax documents last year....but, we fall hard, too. Were we better able to prepare for the fall? Yes. But, we still fall hard when a job is lost.

My advice....put money in a savings account instead of throwing it as extra on the mortgage. Honestly...you're young....the house will be paid off in plenty of time. You don't want to find one or both of you out of a job, making a tiny amount with unemployment and having to pay big bucks to keep your insurance. That was my priority instead of big fancy cars and high priced vacations (I did WDW in style, but we didn't go overboard with vacations). It really came in handy and saved us from racking up credit card debt when we needed money that wasn't coming into the house every week the way it was before.

You sound like you have a good head on your shoulders...you'll be fine. It's good not to be too comfortable because that breeds a tendency to overspend. But, don't stay up at night worrying about it....there will come a time when you'll HAVE to worry....so, when you don't, take advantage of it!

 

[SC Minnie]

You are doing better than you realize. Not many people your age own their home.

As you get older and move from job to job your salaries will increase. If you don't over extend your spending by the same amount you will be able to save for the future and even nice trips.

As far as how we are able to do things-- I am in my 30's DH is 50. He always lived in apartments before we got married. We have a DD10 and did not take long vacations (week) until about a year ago. We just couldn't afford it. I have advanced at my job enough in the last 10 years to afford DVC so we take nice vacations. We also started to prepay for DD's college when she was 5- our payment is around $150/month. So when she graduates HS we won't be worrying about how are we going to afford college.

I guess what I am trying to say is be patient. You are still young. Ask you parents what it was like when they were starting out. You will probably find that you are in much better financial shape.

 

[SillyMe]

I agree with Christine. It's depends on what you prefer to spend your money on. Some people would rather save it for retirement, some would rather take vacations and buy things, others would like to pay their mortgage off as soon as possible. Some people are fortunate enough to be able to do all of the above and others will put themselves in deep debt to do so.

 

[Miss Jasmine]

How long do you plan on living in your home? I really would consider not paying extra on the mortgage and putting that money toward other uses such as an IRA, emergency money fund, etc.

Anyway, Bob has the best response, everyone has a different situation.

 

[disneysteve]

I don't know if its a problem with our mind set.

Honestly, I'm confused by your original question after reading your post. You are 25, own your own home as well as two cars, have no debt except your mortgage and student loans, pay all your bills on time and are pre-paying your mortgage. It sounds like you are very responsible with your spending habits. I don't see where the "struggle" part enters the picture. What is it you feel you are doing wrong or don't have that you think you should?

One general piece of advice I would offer is to stop pre-paying the mortgage and direct that money into savings instead. Build up a nice cash reserve as an emergency fund and then direct the rest to long term savings.

Otherwise, sounds to me like you are doing incredibly well for your age.

 

[disykat]

You're ahead of us. I was 29 when we bought our first home (it was a starter home) and about 35 when we got cable tv and started going on more expensive vacations. I think what you're describing is normal or above average.

 

[Toby'sFriend]

age 28

No I'm kidding. I agree with the others though, I don't think you are struggling. You have a house, two cars, and no credit card debt. You get to go to the movies and eat out in restaurants. One thing I wonder -- how did your Grandparents live when they were your age? If they looked at your lifestyle now compared to how they lived in their 20's....would they say your are struggling? I ask that question to twenty-some year olds alot. It can be an eye opener.

I also agree that it is very likely you shouldn't be putting extra money toward your mortgage if you aren't funding your retirement and you don't have a emergency savings fund.

In answer to your question. For my husband and I our first real financial break through came at around age 27. He received a huge promotion that year and we sold our first house.

 

[minkydog]

You are still very young! Good for you for having no debt (other then school) that in itself is quite an accomplishment! I'm 45 now, and I would say it took DH and I about 15-20 years before we started to get to a point where we could take regular vacations etc. We've been married 25 years now- and it's a lot easier for us now! We had 3 kids in the first 4 years of our marriage and it was really tough. We had no extra money at all- not even enough to set aside for retirement- so we're having to make up for it now. Otherwise, it's pretty smooth sailing. I wish it was magical, how you get to this point, but it really isn't. It takes a lot of hard work and focus... but you can do it! What would I do over again if I could? Definetly start saving for retirement- even if it was just $50.00 a month- andI would set aside vacation money and do that once a year rather then eating out. Good luck!

Well, you wrote my answer for me. We have been married 24yrs and it probably took us the first 10 years to get estabilished, then the next 10 for having & raising babies and moving up the corporate ladder. We have only taken regular vacations( meaning, not to Grandma's house) in the last 5 years.

i think you are doing great. I know it seems like a bit of a struggle now, but in later years you will look back in amazement at how sweet this time was(really!) The first year of home ownership is a shocker--every house seems lie a money pit that firs year. If you have not started saving for retirement, start now. Even at $25/ month, you will be amazed at how fast this adds up. Increase that to $25/ every two weeks and you've just doubled your asset.

My DH & I have always been hard workers and 2 yrs ago he came down with a serious lung ailment( he's a nonsmoker,too). After nearly dying of heart failure last year he became disabled, at age 47. Thank God we had prepared, at least a little bit, for the future because we aren't making much progress now. But we are still able to take some vacations, we camp, we garden, our 401K is intact and our home will be paid for in the next 7 yrs.

I encourage you to not lose spirit. Make hay while you are young and child-free. Slowly but surely you will get there and when you do, it will likely surprise you.

 

[ahutton]

I'm with AllyandJack. DH and I have had good jobs since shortly after we married - about the same age as you and your DH did. We put money into retirement, bought a house, had two average/functional cars... We did not put every extra penny into our mortgage, we paid our payments so we were about one month ahead. DH worked in the high tech arena, I work in insurance. We took nice trips to WDW, but did it with extended family and pooled DVC points for a place to stay. We did trips cheap - one year you bought annual passes and take the next year trip before they expire. That was how we vacationed.

When I was 7 months pregnant with DD1 my DH was laid off, and was off work for almost 4 months. That put a big dent in our savings, even with the small severance he received. His next job was a 20% pay cut. We've cycled around that DH was laid off 3 times, for about 3 months each time over a period of 4 years. Finally he is in a stable place, but the savings in gone. Vacation this year has been cancelled. We are blessed that we have had 2 more wonderful children, and our family of five is wonderfully happy. Each of these events has decreased what is saved and our perception of what makes us feel happy, stable and ahead.

The definition of struggling changes over the years. We'll get to do another vacation, maybe later this year or next year. The big things is to just allow yourself to be happy no matter what. We have a budget now that we live by, it says sometimes we can go out to eat, and sometimes it is to a place with table service. Often it is not. Sometimes we buy a few special pieces of "work wardrobe" and sometimes we but off the 75% off rack at Target. I'm just working on buying smarter, and saving appropriately for how much we make. That is in the budget too. Money has never been a huge issue for us, we've never allowed it to be so all consuming that we feel like we can't do something nice here or there.

 

[whtyger97]

Thanks for all the advice, I forgot to mention in the orginal post that we have a savings account for emergencies, that has about enough to pay the bills for 6 months incase DH lost his job (I work but only part time (25-30 hours), the other part of my time is being a housewife, so in my/our eyes I work full time).

DH works for the goverment so there isn't too much room for raises The people that have been there 10+ years seem to be making about 20k more then my DH but that seems like what he'll max out at if he doesn't end up as management. The economy here is really bad, I'm just happy he has a good job that we really don't have to worry about him losing too much.

We aren't saving for retirement besides his contribution at work. I cann't remember the details, I think he gets 1/2 or 2/3 of his pay averaged for the highest three years once he retires. I'm not sure how much more we'll need to save towards retirement but right now we're saving nothing additional.

Part of why we are seriously looking at our finances is we are trying to decide if we want kids. If we did have kids we would want to contribute towards their collage (at least enough to cover half or more of a state school), and I would not be able to work for 5 years (till they were in school). I just think about doctors visits and clothing and dentists, school field trips and school supplies, family vacations, etc and don't see how we could do it. There are other non financial reasons why we aren't ready to have kids yet/or decide 100% we aren't ever going to its not just money. But when I think about the money either way, I just don't see how people make it.

Btw I don't feel comfortable giving specific dollar figures, but the house we bought is almost exactly 3 times my husbands annual salary (not counting my income at all).

 

[Christine]

Honestly, I'm confused by your original question after reading your post. You are 25, own your own home as well as two cars, have no debt except your mortgage and student loans, pay all your bills on time and are pre-paying your mortgage. It sounds like you are very responsible with your spending habits. I don't see where the "struggle" part enters the picture. What is it you feel you are doing wrong or don't have that you think you should?

One general piece of advice I would offer is to stop pre-paying the mortgage and direct that money into savings instead. Build up a nice cash reserve as an emergency fund and then direct the rest to long term savings.

Otherwise, sounds to me like you are doing incredibly well for your age.

What I got from the OP is that she is doing all the right things, yet she still doesn't feel comfortable with her discretionary spending and when do you get to the point that you *do* feel comfortable buying all the extras.

I think it is definitely a mindset and that some people never get there and some people get there all too well!

 

[Miss Jasmine]

Start saving for retirment (even just a $1 a day in an IRA to get started), you cannot count on pensions these days (even governmental ones).

As for having kids, I don't think anyone ever really feels totally financially ready.

 

[RadioNate]

ok - you are in GREAT shape. really.