Author Topic: Case Study? Confessional? Cry for help?  (Read 2473 times)

hadabeardonce

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Case Study? Confessional? Cry for help?
« on: March 01, 2017, 02:33:02 PM »
From the case study spreadsheet:

CategoryMonthly
Comments
Annual
Salary/Wages for earner #1$7,710$92,520
Salary/Wages for earner #2$7,400$88,800
Pretax Health Ins.$204$2,448
Pretax Vision/Dental Ins.$12$144
FICA base salary/wages$14,894$178,728
401(k) / 403(b) / TSP / etc.$3,000At maximum$36,000
457 plans   $1,500Room to increase?$18,000
Income subject to IRS tax$10,394$124,728
Pension contribution$540$6,480
Paycheck income before tax$9,854$118,248
Federal Total Income$10,394$124,728
Federal tax$1,3952016 rates, MFJ, item. ded., 2 exempt.$16,734
State/City tax$486Guess, using 5.00% * (AGI - Exempt'n)$5,831
Soc. Sec.$923Assumes 2 earners paying$11,081
Medicare$216$2,592
Total income taxes$3,020$36,238
Income before other expenses  $6,834$82,010
Monthly Average Expenses:
Mortgage$882$10,585
HOA$460$5,520
Property Tax$267$3,205
Home/Rent Insurance$27$324
Car Insurance$177$2,124
Car Maintenance, Registration, etc.$300$3,600
Clothing/Shoes$50$600
Dining (Lunch/Dinner/Etc.)$840$10,080
Electricity$30$360
Entertainment$110$1,320
Fuel/Public Transport$140$1,680
Groceries$300$3,600
Hair Care$50$600
Internet$80$960
Miscellaneous$1,100$13,200
Pets$240$2,880
Phone (cell)$140$1,680
Travel/Vacation$300$3,600
Non-mortgage total$4,611$55,333
Loans:
Total Expense$5,493$65,918
Total to invest$1,341$16,092
Summary:
"Gross" income$15,110$181,320
Income taxes$3,020$36,238
After-tax income$12,090$145,082
IRA+401k/403b/TSP/457 (Savers' credit)$4,500$54,000
Living expenses$6,249$74,990
After-tax investable$1,341$16,092
Time to FIRE?:
Extra income after RE (pension, SS, etc.)4780/year
Time to FIRE20years
Safe Withdrawal Rate4.00%percent
Real return on tax-deferred investments5.00%percent
Real, after tax, return on taxable investments4.25%percent
Current Savings
Taxable$42,000
Tax-deferred (e.g. trad. IRA/401k)$78,383
Projected Savings at Retirement
Taxable$588,366
Tax-deferred (e.g. trad. IRA/401k)$1,993,536
Total projected stash$2,581,902
Projected Expenses in Retirement
Non-loan, non-work expenses$48,853
Annual non-tax retirement expense$48,853
Income taxes$3,251
Total$52,104
Total loan principal due at FI$52,707
Stash needed for retirement @4.0% SWR$1,235,809
Have $1,346,093 extra.


Filing Status21=S, 2=MFJ, 3=HOH
# Exemptions2
Adult #1Adult #2
Age3534
# of earners2
Total Income$124,728
Std. Deduct.$12,600
Act. Deduct.$15,861
Exemption$8,100
AGI$124,728
MAGI$124,728
Taxable$100,767
1040 Tax$16,734
AMT adder$0
Saver's credit$0
Tax after n-r credit$16,734
NIIT$0
EIC$0
Child Tax Cred.$0
Net Tax$16,734
Monthly$1,395
Mtg. Int. (approx.)$6,825
State tax$5,8315.00%
Prop tax$3,205
Item. Deduct.$15,861
VersionV8.11

Loans:Orig. Prin.Orig. LengthCurr. Prin.Yrs leftRate
Mortgage$182,00030$167,120264.125%

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Budget/spending for the first two months of 2017: (Courtesy of Mint)



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Retirement investment info:

403b @ 18k/yr - 100% Vanguard Target Retirement 2045 (VTIVX)
403b @ 18k/yr - 100% Fidelity Freedom K 2050 (FFKHX)
457 @ 18k/yr - 40% Vanguard Total Bond Market (VBTIX) / 60% Vanguard Total Stock Market (VITSX) (+.25 expenses for account maintenance [CalSTRS Pension2])

Last year was the first year we maxed out our 403b accounts. This year I opened the 457 account to further increase contributions. My wife went from part time to full time with her employer, so it made sense to collectively put away more money.

Beyond the 403b and 457 accounts, I'm not totally sure what else I should be going with our money. We have a chunk($40k) sitting in the bank not earning any interest, so I should probably find a money market or interest bearing checking account to put that. I could also pay down the mortgage a little bit. Looking for ideas/suggestions.

I have a pension through CalPERS, which makes me think (financially) the earliest I'd want to retire is 55. I would have over 30 years of service and be able to collect $4780/mo.

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More detail on the budget/spending via Mint:

Auto & Transport
My wife drives a 2014 Mazda2 which requires little or no maintenance. She works 40mins(15.8miles) from home.
I drive a 1987 Toyota Corolla FX16 GT-S and a 1986 Toyota MR2, which I maintain myself. I work 20mins(7.8miles) from home.

Bills & Utilities
I have 7 lines total with T-Mobile. My employer gives me $80/mo for maintaining a work cell # and I get $30/mo from a relative for 3 of the lines.

Food
We eat out too much, but my wife is really motivated toward making more meals at home and preparing our own lunches. I love my cappuccinos and am debating getting another espresso machine... I tried kicking the habit, but it's so hard to do! Coffee is such a social thing, but a total waste of money.

Shopping
We buy too many comic books. I'm 5 issues away from a full Daredevil run (1964-Now), but we need to hit the brakes on how many new series we're reading.
I'm guilty of buying other dumb collectibles.

Many improvements could be made through lifestyle changes and by putting more thought into purchases. Easy to say, hard to do. I appreciate any details on how others were able to learn to make changes.

I could provide a longer look back at the data on Mint. I think I've been using it for over 2 years now, but the household keeps changing. My wife was in a bachelors program for the last year and half which cost $16k and last September our niece started staying with us during the week while she's in college.

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TL;DR - I'm checking if I should make any investment changes and trying to find the best way to drill the concept of the importance of lifestyle changes into my brain.

MDM

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Re: Case Study? Confessional? Cry for help?
« Reply #1 on: March 01, 2017, 03:02:33 PM »
From the case study spreadsheet:

CategoryMonthly
Comments
Annual
457 plans   $1,500Room to increase?$18,000
Dining (Lunch/Dinner/Etc.)$840$10,080
Groceries$300$3,600

403b @ 18k/yr - 100% Vanguard Target Retirement 2045 (VTIVX)
403b @ 18k/yr - 100% Fidelity Freedom K 2050 (FFKHX)
457 @ 18k/yr - 40% Vanguard Total Bond Market (VBTIX) / 60% Vanguard Total Stock Market (VITSX) (+.25 expenses for account maintenance [CalSTRS Pension2])


Beyond the 403b and 457 accounts, I'm not totally sure what else I should be going with our money. We have a chunk($40k) sitting in the bank not earning any interest, so I should probably find a money market or interest bearing checking account to put that. I could also pay down the mortgage a little bit. Looking for ideas/suggestions.

I have a pension through CalPERS, which makes me think (financially) the earliest I'd want to retire is 55. I would have over 30 years of service and be able to collect $4780/mo.

Food
We eat out too much, but my wife is really motivated toward making more meals at home and preparing our own lunches. I love my cappuccinos and am debating getting another espresso machine... I tried kicking the habit, but it's so hard to do! Coffee is such a social thing, but a total waste of money.

TL;DR - I'm checking if I should make any investment changes and trying to find the best way to drill the concept of the importance of lifestyle changes into my brain.
First, anyone putting $54K/yr into retirement accounts is likely to come out just fine - keep up the good work!

That said, some thoughts/questions:
- Can another $18K/yr go into a different 457 plan?
- Yes, you are more or less backwards on the ratio of dining to groceries.  Good opportunity to save a few $K/yr there.
- See Investment Order for "what to do next"
- As you become more certain of pension income, and your traditional balances get higher, switching to Roth contributions might be appropriate.  See Traditional versus Roth - Bogleheads.
- Expense ratio for FFKHX is 0.67%, while VTIVX is 0.16%.  Any better options in the account holding FFKHX?

ChasingStash

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Re: Case Study? Confessional? Cry for help?
« Reply #2 on: March 01, 2017, 03:57:43 PM »
Do you or your SO have access to an HSA?

I am in a similar position to you (income level, savings, etc.) (My info here: http://forum.mrmoneymustache.com/case-studies/case-study-what-to-do-with-excess-cash/) and HSA was just suggested to me also. Good place to park money especially with rising healthcare costs.

Otherwise, I am putting my excess into a taxable Vanguard account and parking it in VTSAX.


hadabeardonce

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Re: Case Study? Confessional? Cry for help?
« Reply #3 on: March 01, 2017, 05:25:41 PM »
First, anyone putting $54K/yr into retirement accounts is likely to come out just fine - keep up the good work!

That said, some thoughts/questions:
- Can another $18K/yr go into a different 457 plan?
- Yes, you are more or less backwards on the ratio of dining to groceries.  Good opportunity to save a few $K/yr there.
- See Investment Order for "what to do next"
- As you become more certain of pension income, and your traditional balances get higher, switching to Roth contributions might be appropriate.  See Traditional versus Roth - Bogleheads.
- Expense ratio for FFKHX is 0.67%, while VTIVX is 0.16%.  Any better options in the account holding FFKHX?
Thanks! I feel good about contributing so much, so early, but I know I can improve. Frugality and maturity seem to go hand in hand.

I explored the three available 457 providers and CalSTRS Pension2 looked to be the best of the bunch. The others had even higher fees and expense ratios. ( Here are the funds they have to offer: http://www.calstrs.com/sites/main/files/file-attachments/p2_fee.pdf ) Regardless of the additional fees, it seemed worth contributing to the 457 to take advantage of tax deferment and ability to access the funds as soon as I sever employment. I chose the 40/60 bond/stock fund split.

What are the details on a "mega backdoor roth"? I'm a ways away from retirement, but I will need to read up on the conversion or rollover process that would allow me to access those 401k funds without a penalty or with a lower penalty prior to age 59 1/2.

I'll have to look over what funds my wife has access to. At one point she could choose some Fidelity Spartan funds, which had lower expenses, but I left it up to her with what to do with her money. Target date funds just seem so simple for novice investors, I didn't want to take the blame if the market tumbled and her retirement account balance dropped.

Do you or your SO have access to an HSA?

I am in a similar position to you (income level, savings, etc.) (My info here: http://forum.mrmoneymustache.com/case-studies/case-study-what-to-do-with-excess-cash/) and HSA was just suggested to me also. Good place to park money especially with rising healthcare costs.

Otherwise, I am putting my excess into a taxable Vanguard account and parking it in VTSAX.
Called my benefits department, they say an HSA is not an option. We do have an FSA, but I think that's "use it or lose it" money. I'd have to take a look at the cost of my wife's prescriptions and see if any of her vision expenses would qualify, that may save me some money... but I think I need to set that up during open enrollment.

Thanks for the tip.

---

It looks like I have enough with Vanguard to check out their "Personal Advisor Services". Maybe I'll check in with them, just to see what they say.

ChasingStash

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Re: Case Study? Confessional? Cry for help?
« Reply #4 on: March 02, 2017, 07:50:46 AM »
Even if you don't have access through your employer, if you have a HDHP (deductible >$2500 for family), you can open and HSA on your own, even one with Vanguard funds! Unfortunately for me, I do not have a HDHP.

https://personal.vanguard.com/us/whatweoffer/overview/healthsavings


zolotiyeruki

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Re: Case Study? Confessional? Cry for help?
« Reply #5 on: March 02, 2017, 10:58:57 AM »
Wow, $840/mo for eating out and $1,100/mo for "miscellaneous"?  I think that's definitely facepunch-worthy right there.  I mean, sure, your income is fantastic, and you're saving a full years' worth of spending every year, and that's fantastic.

For me, the lifestyle changes come down to habits.  Here are a few things that have helped DW and me be more financially disciplined:
1) Any purchases over $X have a mandatory Y day waiting period.
2) Any purchases over $Z have to be approved by both of us.
3) We review our budget in detail each month.  If a category goes over, we find out why and decide if we need to change something.

and in a more general sense:
4) For any purchase, I ask myself "will this actually make my life better, or is something else creating the urge to buy this?"  Having a complete DD set sounds exciting....but then what?  What do you do with them all once you have them?  (I'm just picking on the comics, since you did too :) )
5) Recognize the "Collectibles" is nothing more than an emotional marketing ploy.  They're only collectible because that's the business/marketing model the manufacturer is pursuing.  There's nothing intrinsically better for you, the customer, about having the complete set, other than the emotional satisfaction.
6) I heartily approve of your selection of automobiles, and of your DIYing all the maintenance :)  I learned to drive in an '87 Corolla (base model, stick shift, but still)
7) It looks like you're paying full retail price for things like your internet and phone.  It's not a huge amount compared to the nearly-$2k in restaurants and misc., but every bit helps.
8) You're putting away $54k (at least) per year into retirement accounts.  Your spending is about $54K/year.  You're expecting $57K/year from CalPERS.  In 20 years, you'll have enough in your retirement accounts to support DOUBLE your current spending level.  Which, with CalPERS, means you'll be looking at an absolutely ludicrous amount of retirement income.  The spreadsheet is telling you that.

So you have the luxury of choice, here.  You can work until 55 and retire with a ludicrous lifestyle.  You can work until 50 and still retire to a very luxurious lifestyle (you'd still get something like 50% of your originally-estimated CalPERS income).  One of you can quit now, and the other works until 55, and you'll have plenty.  It's all about what's important to you.

hadabeardonce

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Re: Case Study? Confessional? Cry for help?
« Reply #6 on: March 02, 2017, 12:31:02 PM »
Even if you don't have access through your employer, if you have a HDHP (deductible >$2500 for family), you can open and HSA on your own, even one with Vanguard funds! Unfortunately for me, I do not have a HDHP.

https://personal.vanguard.com/us/whatweoffer/overview/healthsavings


I think my benefits are too good to qualify, here's a summary:



Wow, $840/mo for eating out and $1,100/mo for "miscellaneous"?  I think that's definitely facepunch-worthy right there.  I mean, sure, your income is fantastic, and you're saving a full years' worth of spending every year, and that's fantastic.

For me, the lifestyle changes come down to habits.  Here are a few things that have helped DW and me be more financially disciplined:
1) Any purchases over $X have a mandatory Y day waiting period.
2) Any purchases over $Z have to be approved by both of us.
3) We review our budget in detail each month.  If a category goes over, we find out why and decide if we need to change something.

and in a more general sense:
4) For any purchase, I ask myself "will this actually make my life better, or is something else creating the urge to buy this?"  Having a complete DD set sounds exciting....but then what?  What do you do with them all once you have them?  (I'm just picking on the comics, since you did too :) )
5) Recognize the "Collectibles" is nothing more than an emotional marketing ploy.  They're only collectible because that's the business/marketing model the manufacturer is pursuing.  There's nothing intrinsically better for you, the customer, about having the complete set, other than the emotional satisfaction.
6) I heartily approve of your selection of automobiles, and of your DIYing all the maintenance :)  I learned to drive in an '87 Corolla (base model, stick shift, but still)
7) It looks like you're paying full retail price for things like your internet and phone.  It's not a huge amount compared to the nearly-$2k in restaurants and misc., but every bit helps.
8) You're putting away $54k (at least) per year into retirement accounts.  Your spending is about $54K/year.  You're expecting $57K/year from CalPERS.  In 20 years, you'll have enough in your retirement accounts to support DOUBLE your current spending level.  Which, with CalPERS, means you'll be looking at an absolutely ludicrous amount of retirement income.  The spreadsheet is telling you that.

So you have the luxury of choice, here.  You can work until 55 and retire with a ludicrous lifestyle.  You can work until 50 and still retire to a very luxurious lifestyle (you'd still get something like 50% of your originally-estimated CalPERS income).  One of you can quit now, and the other works until 55, and you'll have plenty.  It's all about what's important to you.
1) Good tactic for avoiding impulse buys and the lure of sales.
2) We talk about major purchases and my eBay buys, but a pair of nerds who want to see the other happy have a hard time denying one another.
3) We review our budget and talk about methods for improvements, but things typically fall apart in the execution phase. Lately she has really surpassed me in effort toward reducing our food costs, so I need to catch up.

4) We enjoy reading the comics. Every few years I'll go back and re-read some series I've enjoyed, but I could be buying them differently to save some cash. Most don't retain their value and only a rare few go far beyond.

Asking myself more questions prior to making a purchase would be a good move: "Will this make my life better and for how long?" I'm a bit worried that I've lost an understanding of the value of a $1 in some ways(I know MMM had an article about the growth of $1 - searching for it)... every so often I look at the money I've spent on coffee and I know it adds up to a lot, but since my net income at the end of the month is positive I don't feel too remorseful. Designating where money goes, like the asset prioritization list, has helped, but I feel like I'm missing something even though I'm maxing out the retirement accounts.


5) There are a lot of feeds I need to turn off. You're certainly right about the emotional satisfaction, but it's very fleeting.
6) I go back and forth. I like to tinker too much with the cars, which leads to lots of tool buying and parts buying.
7) I get a 15% discount for being a gov't employee for the phone and $80/mo from my employer as a stipend for maintaining my own work cell #. There are 7 lines on the plan - I get another $30/mo for 3 lines from a family member. My internet is through Sonic.net and I pay for faster speed... I could call them about available discounts.
8) Many of my co-workers think I'm crazy for contributing so much at an early age. They are all convinced that they need to work here until they are 63 and get as close to 100% of their salary for their pension. CalPERS says I'd get 2182/mo @ Age 50 and 4780/mo @ Age 55.


zolotiyeruki

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Re: Case Study? Confessional? Cry for help?
« Reply #7 on: March 02, 2017, 01:20:17 PM »
1) Good tactic for avoiding impulse buys and the lure of sales.
2) We talk about major purchases and my eBay buys, but a pair of nerds who want to see the other happy have a hard time denying one another.
3) We review our budget and talk about methods for improvements, but things typically fall apart in the execution phase. Lately she has really surpassed me in effort toward reducing our food costs, so I need to catch up.

4) We enjoy reading the comics. Every few years I'll go back and re-read some series I've enjoyed, but I could be buying them differently to save some cash. Most don't retain their value and only a rare few go far beyond.

Asking myself more questions prior to making a purchase would be a good move: "Will this make my life better and for how long?" I'm a bit worried that I've lost an understanding of the value of a $1 in some ways(I know MMM had an article about the growth of $1 - searching for it)... every so often I look at the money I've spent on coffee and I know it adds up to a lot, but since my net income at the end of the month is positive I don't feel too remorseful. Designating where money goes, like the asset prioritization list, has helped, but I feel like I'm missing something even though I'm maxing out the retirement accounts.


5) There are a lot of feeds I need to turn off. You're certainly right about the emotional satisfaction, but it's very fleeting.
6) I go back and forth. I like to tinker too much with the cars, which leads to lots of tool buying and parts buying.
7) I get a 15% discount for being a gov't employee for the phone and $80/mo from my employer as a stipend for maintaining my own work cell #. There are 7 lines on the plan - I get another $30/mo for 3 lines from a family member. My internet is through Sonic.net and I pay for faster speed... I could call them about available discounts.
8) Many of my co-workers think I'm crazy for contributing so much at an early age. They are all convinced that they need to work here until they are 63 and get as close to 100% of their salary for their pension. CalPERS says I'd get 2182/mo @ Age 50 and 4780/mo @ Age 55.
1) It has helped me tremendously to remember that there is no such thing as a "limited time offer" for commodity goods.  There will always be a chance to buy it at a discount later if you decide you actually need it.  Case in point: I've been wanting to upgrade my computer for a while, and finally decided to pull the trigger about a month ago.  I decided on the parts I wanted (just a CPU (i5-3550 or 3570) and motherboard, really), decided what price I was willing to pay ($60 for the CPU), and waited for the right price on eBay.  Or my favorite kind of pants (Duluth Trading Company Firehose pants)--I can wait until the next 25%-off-plus-free-shipping deal.
2) Oh, I totally get that--it's awesome to put a smile on their face, isn't it?  That doesn't necessarily spending (lots of, or indeed any) money.  Would it kill you to wait a month and buy a used-like-new copy of the comic, for example?  Not only do you save money if you buy it, but you might decide that "meh, maybe it's not so important" (see #1! :D)
3) I think you've really hit on something here, in combination with your longer comment in the middle--you have a high income and you're living within your means, and in reality, you can afford it.  Your wealthy enough that the extra you spend on restaurants or whatever doesn't hurt--you can still pay your bills, etc.  Without that motivation, I can see how it can be easy to spend money unnecessarily.

Another thing that helps me is to think of purchases in terms of how much retirement time they will cost me.  Let's say I expect to retire in 16 years (so money will double twice) and my expected retirement spending is $3k/month.  Under those conditions, a $25 purchase is equivalent to an entire day of retirement.

5) That's the idea! :D  There's certainly power in choosing not to expose yourself to advertisements.
6) Is it something that brings you enjoyment, i.e. it's a hobby?

8) Sounds like your coworkers may be eligible for the Overheard at Work thread!

PJ

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Re: Case Study? Confessional? Cry for help?
« Reply #8 on: March 02, 2017, 01:43:38 PM »
This is just quick and non-specific advice, but if you feel like your sense of the value of a dollar is out of whack, and if you find that it's in the decision making process about an individual expense that your resolve breaks down, do you think it might make sense to try doing a Buy Nothing Month, or even one Buy Nothing Week per month, or even specific Buy Nothing Days each week? 

Just some kind of exercise where the individual decisions are removed and replaced with a blanket ban on spending, and you get to "practice" going without, seeking alternatives and so on...
'To be human you must bear witness to justice. Justice is what love looks like in public." 
Dr. Cornel West

hadabeardonce

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Re: Case Study? Confessional? Cry for help?
« Reply #9 on: March 13, 2017, 05:21:02 PM »
1) Another thing that helps me is to think of purchases in terms of how much retirement time they will cost me.  Let's say I expect to retire in 16 years (so money will double twice) and my expected retirement spending is $3k/month.  Under those conditions, a $25 purchase is equivalent to an entire day of retirement.

6) Is it something that brings you enjoyment, i.e. it's a hobby?

8) Sounds like your coworkers may be eligible for the Overheard at Work thread!
1) The idea of today's dollars being worth double down the road is good one to keep in my head to prevent unnecessary purchases(the math is simple too.) Your previous suggestion of asking, "will this actually make my life better?" has already helped quite a bit.

6) My older cars are an enjoyable to tinker with, but the costs feel like they can get unreasonable when I want to do some major repairs/improvements. Recently on one car I went to replace valve seals, which lead to buying a $140 air compressor. The suspension on my other car has been feeling worn/squishy(it bottoms out over dips,) so I bought some new springs and struts -$800... eventually the ideal will be to get my rear in gear and on a bicycle more often. I could probably scale down to one "hobby fun car" that I drive infrequently. I have a 3rd car that hasn't run in a long time that I need to repair and sell too... but at least I don't have five cars, like I did years ago - progress? :P

8) I work for a school and many of the people looking at retirement are entirely depending on their pensions. Most faculty take summers off and when they return they talk about their trips out of the country... it feels like a lot of my co-workers could retire much sooner if they scaled down their spending. The goal for most is to get 30 years of service and retire in their 60s to get somewhere close to 100% of their salary. My idea is to try and bail out much earlier and I've been making noise about starting a "retirement planning group" on campus to share financial experiences and knowledge.

This is just quick and non-specific advice, but if you feel like your sense of the value of a dollar is out of whack, and if you find that it's in the decision making process about an individual expense that your resolve breaks down, do you think it might make sense to try doing a Buy Nothing Month, or even one Buy Nothing Week per month, or even specific Buy Nothing Days each week? 

Just some kind of exercise where the individual decisions are removed and replaced with a blanket ban on spending, and you get to "practice" going without, seeking alternatives and so on...
Part of the reason I feel like my value of a dollar is out of what is that I'll get super bent out of shape if I ever see a bank fee - which is a dollar, but I'll regularly spend $3 on a cappuccino. Coffee probably should have never become a regular purchase in the first place, but now that it's a habit, it's hard to break. I had a $100 espresso machine that was working, but now it's broken down after a few years of use. I was looking at upgrading, but that would mean money and it seems more sensible to give up drinking the java all together. I should probably think of more purchases like completely unnecessary fees(outrage!) instead of luxury items(or just not putting any thought into the purchases at all.)

"Will this make my any life better at 2x the sticker price?" is the question I'll keep in my head before swiping my card from now on.

My wife and I also discussed creating a separate fund(like just in the savings account) that's dedicated toward one specific goal. Like putting away a set amount of money toward the purchase of a house or for improving our current condo. We'll see how it goes. We're still gaining money despite funding our retirement accounts to the max, so that's good news. Hopefully we can continue to get better. I appreciate the responses - gracias!

Having more rational questions to pose prior to a transaction helps fight the consumerist propaganda.

BabyShark

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Re: Case Study? Confessional? Cry for help?
« Reply #10 on: March 13, 2017, 07:16:17 PM »
I'm also super guilty of buying comic books and collectibles.  I try and limit it now to just buying when I'm at Cons (which is a whole separate un-mustachian issue...) and I've found that it helps because I only have one or two of those a year usually.

Eager to follow.

zolotiyeruki

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Re: Case Study? Confessional? Cry for help?
« Reply #11 on: March 13, 2017, 08:44:32 PM »
1) Another thing that helps me is to think of purchases in terms of how much retirement time they will cost me.  Let's say I expect to retire in 16 years (so money will double twice) and my expected retirement spending is $3k/month.  Under those conditions, a $25 purchase is equivalent to an entire day of retirement.

6) Is it something that brings you enjoyment, i.e. it's a hobby?

8) Sounds like your coworkers may be eligible for the Overheard at Work thread!
1) The idea of today's dollars being worth double down the road is good one to keep in my head to prevent unnecessary purchases(the math is simple too.) Your previous suggestion of asking, "will this actually make my life better?" has already helped quite a bit.

6) My older cars are an enjoyable to tinker with, but the costs feel like they can get unreasonable when I want to do some major repairs/improvements. Recently on one car I went to replace valve seals, which lead to buying a $140 air compressor. The suspension on my other car has been feeling worn/squishy(it bottoms out over dips,) so I bought some new springs and struts -$800... eventually the ideal will be to get my rear in gear and on a bicycle more often. I could probably scale down to one "hobby fun car" that I drive infrequently. I have a 3rd car that hasn't run in a long time that I need to repair and sell too... but at least I don't have five cars, like I did years ago - progress? :P

8) I work for a school and many of the people looking at retirement are entirely depending on their pensions. Most faculty take summers off and when they return they talk about their trips out of the country... it feels like a lot of my co-workers could retire much sooner if they scaled down their spending. The goal for most is to get 30 years of service and retire in their 60s to get somewhere close to 100% of their salary. My idea is to try and bail out much earlier and I've been making noise about starting a "retirement planning group" on campus to share financial experiences and knowledge.

This is just quick and non-specific advice, but if you feel like your sense of the value of a dollar is out of whack, and if you find that it's in the decision making process about an individual expense that your resolve breaks down, do you think it might make sense to try doing a Buy Nothing Month, or even one Buy Nothing Week per month, or even specific Buy Nothing Days each week? 

Just some kind of exercise where the individual decisions are removed and replaced with a blanket ban on spending, and you get to "practice" going without, seeking alternatives and so on...
Part of the reason I feel like my value of a dollar is out of what is that I'll get super bent out of shape if I ever see a bank fee - which is a dollar, but I'll regularly spend $3 on a cappuccino. Coffee probably should have never become a regular purchase in the first place, but now that it's a habit, it's hard to break. I had a $100 espresso machine that was working, but now it's broken down after a few years of use. I was looking at upgrading, but that would mean money and it seems more sensible to give up drinking the java all together. I should probably think of more purchases like completely unnecessary fees(outrage!) instead of luxury items(or just not putting any thought into the purchases at all.)

"Will this make my any life better at 2x the sticker price?" is the question I'll keep in my head before swiping my card from now on.

My wife and I also discussed creating a separate fund(like just in the savings account) that's dedicated toward one specific goal. Like putting away a set amount of money toward the purchase of a house or for improving our current condo. We'll see how it goes. We're still gaining money despite funding our retirement accounts to the max, so that's good news. Hopefully we can continue to get better. I appreciate the responses - gracias!

Having more rational questions to pose prior to a transaction helps fight the consumerist propaganda.
6) The journey of 1,000 miles, first step, blah blah some assembly required :P
8)  Here's the thing:  you *could* work for 30 years, retire with the near-full-salary pension plus a ridiculous amount saved up in your various other accounts.  How much happiness would that extra money get you in your 20-retirement?  Does it make up for the extra 20 years (or whatever) of working?

I think it's ok to have a few simple pleasures in life.  I enjoy an occasional Slurpee :)  When it's a habit, though, I've found that I get little enjoyment out of it.  The law of diminishing returns applies especially to luxury items.  I've found the same works for things like desserts--the first bite is exquisite, and so is the second, but by the last bite, I've sorta stopped paying attention to it.  Or, put another way, "I'll enjoy the second half of this dessert more tomorrow than I will right after I eat the first half."