S/o saving for retirement - how do you find balance?

[Heatherwith4]

The retirement threads have given me a lot to think about. How do you balance living your life with saving?

I am not talking about living way above your means, or thinking you deserve a new car every five years. But what about family vacations? We do frugal family vacations for the most part. However, last year, we decided to take our kids to Disney. We wanted them to go before they were too big. We paid cash, but I could have put that money into savings, for sure.

I'm not really asking for comments on my specific situation, but I'm wondering how do you decide when to place priority on saving for later and when to decide to go ahead and spend now. (Realizing that we may not live to retirement age.)

[Jane in NC]

Everyone must recognize their own priorities. For us that has included travel but for someone else those dollars may seem frivolous--in the same way that I look at spending money on cable television as frivolous.

 

We have not always maxed out the retirement accounts but we have always contributed something.  And we have always been able to exercise some self restraint.  For example my husband receives a variable annual bonus.  In the leaner years of our family life, we always saved part of that for travel or recreation, saved some for unexpected expenditures (which hopefully would not happen) and rewarded ourselves with something that we have been coveting.  My husband still does this.  Even though we don't need to think through every expenditure, he is waiting to buy a replacement stereo component until after his bonus arrives.  But I suppose this is good training.  He has done his research and found that he can buy it locally for the same price as online but with the local purchase he gets a service deal.  (His old stereo receiver died so I have encouraged him just to replace the darn thing. He doesn't need to wait!)

 

I do think the key is determining what you value, what your family's priorities are.  My son never had an Xbox or Playstation growing up but we had saved money for his college education.  He does not feel that our priorities were misplaced.

[QueenCat]

For us, balance is very important. Not everything is about the future. We do vacation once a year, along with visiting our families. We make one visit per year to each side, they don't live near each other, as a family. Additionally, I visit my parents once or twice a year without dh (sometimes with kids, sometimes not). We believe that is money worth spending even if it means less in savings. We've watched people put so much emphasis on the future and then the future didn't come because one spouse died younger than expected or one was too unhealthy to travel after retirement. However, we do save 15% of dh's salary towards retirement. And have decent but not Dave Ramsey standards amounts in our short and long term savings. We have a mortgage and typically one car loan; we're okay with that debt.

Edited February 4, 2016 by QueenCat

[Anne in CA]

There are some things you can only do at a particular age. The magic of Disney with a small child is one of them. Disney is a whole different experience when your kids are older. We spent a lot of money traveling to Nepal, Africa, Mexico, places that are not elder friendly, that could have gone into our retirement account, but safari at 75 is a very different thing than safari at 45. Africa is slightly dangerous and keeping yourself secure is not easy, so I felt it was better to do it while I was young and healthy.

 

 

[Heatherwith4]

We are fortunate that our families are close by, but I think if they weren't we would definitely make traveling to see them a priority.

 

I know that my views on this subject are somewhat colored by the fact that my FIL died at 61, just as they were talking about slowing down at work and doing more traveling.

[Ottakee]

It is a tough balance. We try to balance it out because as someone earlier said, the future isn't promised. Building memories with the kids is so important.

[QueenCat]

 

I know that my views on this subject are somewhat colored by the fact that my FIL died at 61, just as they were talking about slowing down at work and doing more traveling.

 

I'm so sorry you all lost him so young. This is so much why we have taken a view of "not everything is about the future".

[Night Elf]

Our balance comes from our choices of cars and house. We purposefully buy much less than we could afford so we have extra money to do what we want when we want to do it. DH is still able to save plenty in his 401K with his employer matching. We try to put money into our regular savings account too, for those unexpected expenses. We recently got hit hard with a cracked house foundation. It occurred a week before DH got his year end bonus. It took all that money, most from savings, and we had to borrow from our home equity line. It will take us about 4 to 6 months to recover. We're hoping nothing else big happens. But we still leave ourselves money for discretionary spending.

 

As for vacations, we only take one a year. We visit his family out of state. We were lucky for the past two years to be able to stay at my BIL's house but he got married this year and is having a baby. We'll have to pay for hotel and that isn't cheap for 4 people when we have a teenage dd and a young adult son who need their privacy. Our oldest dd stays in a small bedroom at my MIL's house, thank goodness.

 

We have discussed the possibility of taking a second vacation, but as a family we cannot think of a single place we could go that we would all enjoy. So we just use our money for things like dining out, movies, games, books, and Starbucks.

[PeachyDoodle]

I was very much a future-oriented kind of person, until my sister was killed in an accident at the age of 19. Now we work very hard to find a balance. Homeschooling is one of the things that came out of that changed outlook. I want to spend the time I have with my kids. We put off a lot of things because we're a one-income family. The 3 to 5-year plan we had has become an 8 to 9-year plan. We are just now beginning to realize some of those goals from a decade ago. But it has been worth it.

 

We made a similar decision to take our kids to Disney last year. We had a small window when ds was old enough to enjoy/remember the trip and dd still young enough to experience it as a little kid. We hope to go again when they are teens because the experience will be so different. It was the best family vacation we've ever had, and we don't regret it for a second. But yes, it was expensive, and there's a lot we could have done with that money. If I think about it too hard, I start to panic, so I have to keep it in perspective!

 

In a perfect world, we would have been independently wealthy so we could retire at 40 and spend the rest of our lives doing what we want. Since that's not likely to happen, we have to make the best decisions we can with the information that's available to us at the time.

[sophiasapientia]

I definitely think there has to be a balance.  

 

My husband and I try to be mindful about our finances.  We both have chronic health issues and are very aware that life can turn on a dime.  We are committed to living debt-free.  We have paid off our modest house, we have a hefty emergency fund and we sock a significant amount into our retirement fund each month.  We are trying to be as proactive as we can to protect our future, given our situation.  

 

With that said, we also prioritize enjoying life now.  We love Disney and have been 3 times, including on a Disney cruise, within the past year and a half … and lived it up fully on each of these trips.  Are there wiser things, like putting even more into savings, that we could do with our money? Probably, yes, but we have no regrets.  Creating memories, like enjoying nice vacations,  are important to us because, frankly, we might not be able to travel much or easily as we get older.  There are no guarantees.  My in-laws passed away at ages 49 and 63, before they could enjoy the fruits of their labors.  We don't want to have any regrets. 

 

So, we have financial goals like staying out of debt and saving money.  Within that, we also budget for fun and wants. This year, and probably for at least the next couple years, home improvement projects -- both a want and a need -- will trump extravagant vacations and our trips will be to visit family.   We cash flow everything, large and small, and this means that we have to prioritize and make choices.  It truly is a balancing act.  

 

Edited February 4, 2016 by sophiasapientia

[Rosie_0801]

Think about what you need to feel like you are living, rather than just existing.

 

[Ausmumof3]

We struggle with this. Both dh and I lost one parent young (48 and 53) and they had unfulfilled dreams which probably could have been fulfilled if they had been less careful with money. On the other hand the surviving parents retirement is reasonably comfortable although they are inherently frugal so that probably helps.

 

I think a big part of it is figuring out what stuff really brings you joy. If it's a new car every five years or fancy clothes that's fine but it probably can't be a holiday as well.

 

What I'm struggling with is kids extracurriculars. I must admit I feel strongly that now is really the only opportunity they have for some of this stuff. I also see a major improvement in overall attitude when they're involved in more outside the house stuff. But the costs add up quickly. If I go with "pick one thing which you really love" I'll still be running three different directions with less benefits to the other kids.

[JustEm]

We save 15% of our gross pay and then budget for everything else. We value experiences over things so that is where our leftover money goes. I'll ever regret not having new furniture or an updated kitchen but I will regret if I never get to travel.

[LucyStoner]

Being able to live cheaply and do the financially prudent thing 80-90% of the time has allowed us to room to save for retirement and still pay for the spurges that matter to us the other 10-20% of the time (more like 10% now on a small income and 20% when we were at a fairly high double income point, lol).  

 

I don't want to eat potatoes for decades, never spending a dime on entertainment, hobbies and educational enrichment. A long bleak life doesn't appeal nor is it a particularly great investment as far as my kids are concerned.  To me that's a version of "work and pray, live on hay and you'll get pie in the sky when you die"  No thank you.  So we eat some pie regularly.  But not every day and in every regard.  

 

Music lessons, extracurriculars and annual family camping trips are top of the list.  Other things we might like but can't afford on top of those high priority things are on the maybe someday list...like international travel, lots of concert and play tickets and family vacations that involve boarding an airplane.  

 

We also remember that "cheap is expensive".  So I buy certain things that are more costly but last forever.  I would rather buy 1 pair of good shoes that fit my ginormous feet well than suffer through 4 pairs of cheap shoes that are uncomfortable, 1/2 a size too small and wear out quickly.  

Edited February 4, 2016 by LucyStoner

[marbel]

I'm glad you posted this.  The retirement threads that come up here periodically make me feel like my husband and I are such slackers, especially when people express criticism for their own parents who are not able to fund a comfortable old age. 

 

I've known several people who didn't live to see retirement.  One I remember very clearly was a gentleman I worked with.  A few months before his scheduled retirement he was diagnosed with cancer and he was dead within 6 weeks.  The dreams he and his wife had for his retirement were gone.  I'm sure she was left with plenty of money and of course that helps, but they had put off pretty much everything for later... and later never came.  She was very blunt talking about her regrets at waiting too long to enjoy life -- a cautionary tale for some of her husband's young coworkers.

 

I think it's important to save for the future but it is also important to enjoy life now, particularly with our kids.  We aren't getting this time back. 

 

 

Edited February 5, 2016 by marbel

[ScoutTN]

We have a low income, so not much ability to save. We do what we can and trust in God to get us and our kids through this pilgrim life. We do our best to be responsible, keeping in mind that tomorrow may not happen.

 

My dad died of cancer at age 64, less than a month before he was to retire and begin enjoying the time hed saved for and looked forward to. He lived a balanced life enjoying nice (not fancy or super expensive) vacations and treasuring the small blessings and fun things in average middle class life.

He remembered to really enjoy a well-grilled steak, cold beer, summer tomatoes, corn on the cob and homemade ice cream with family after a nice afternoon of golf and swimming after a morning of errands and yardwork.

 

We live simply and enjoy the pleasures we can afford. We have not taken our kids to Disney; that is completely beyond our means. We remind ourselves not to compare our life to friends with upper-middle class lives. Money does not guarantee happiness or a good marriage or even well-educated kids. We are thankful to have enough healthy food to eat, a comfortable home, day-to-day safety, freedom to worship, freedom to educate our children, cars that run, health care and insurance, a good dog, family nearby, time to be together etc. We live near a part of town with many immigrants. Listening to their stories helps us to keep perspective!

Edited February 5, 2016 by ScoutTN

[Carol in Cal.]

We did a lot of staycations, and bought memberships to local things, which we used a lot.

So for instance, for quite a few years we belonged to the local park and zoo, and visited there very often, and also used their summer camp and special member day programs for enrichment.  We joined the science museums from time to time.  For two years we were in a local hiking group that went somewhere every Friday after school hours.  This introduced us to a lot of opportunities to have a good time without going anywhere.  I was always ready to detour  and spring for a living history site, too, when we were on the road.  So, when we visited DH's parents, who are very sedentary and mostly want to watch TV, we would plan at least one field trip to a museum or living history site or a local vista. 

 

I've always hosted other kids at our house, and when DH lost his job and we had no income, people kind of pitched in and included DD in some activities that I couldn't manage.  We can all be magnanimous at times, and I think that being somewhat generous makes people feel somewhat rich. 

 

Also, when I was home, I made a game out of trying to figure out the cheapest possible sources of just about everything.  That was actually fun.  Once that's all up and running, it is pretty easy to sustain.  "Your Money Or Your Life" was hugely helpful with this mindset, and "The Tightwad Gazette" was hugely helpful with specifics.

Edited February 5, 2016 by Carol in Cal.

[solascriptura]

We try our best and that's all we can do. I refuse to be ruled by money whether spending or saving. Money is a tool and not our god. This seems trite, but I've seen the damage that money can cause; whether by excess or by want of it. Not a pretty sight.

[Χά�ων]

Depending on where I was in life. Forst, I do not buy new cell phones just because. R even when I need them because the screen registers the wrong button. Forgive typos in this post.

 

I vuew budgeting as an ongoing process. I meal plan and keep details on costs to help me know about how much I will spend. I love to cook and cook from scratch 99% of the time and that helps.

 

Planning and goals setting helps a lot. We have monthly goals for the next 4-5 months, a 6 month goals, 1 year goals, 5 year goals, and 10 years goals. With each goal is a plan on how to reach the goals and what steps need to be taken to reach each goal. The biggest thing we do is write it down so we can revisit it and reevaluate as needed. We have found tha buy doing this an expensive purchase we were planning to make was not as high of a priority as we thought it would be so we dropped it.

 

I keep most entertainment free or really cheap by using the library programs and community classes offered through a local university are inexpensive, often free, ways to test out new hobbies and interests. But, we like vacations. Instead of spending money on entertainment every week or every other week and hobbies that are expensive, we put that money into savings for vacation.

[Aiden]

We save 15% of our income for retirement. We tithe 10%.

 

We don't do debt. We have an emergency fund.

 

Everything else, we budget--we cover the necessities (food, transportation, insurance) first, and we save for long term, non-retirement goals (our daughter's college, a house once we're done with our current highly mobile lifestyle). Whatever is left, we spend guilt-free. We enjoy Disney cruises--they're expensive, but we enjoy them guilt free because we know we've saved what we needed to save for our other goals, and we've saved what we've needed to pay for the cruise without debt.

 

We're very blessed in that we're currently in a situation where we don't have to cover some large expenses that normally we'd have to cover (our housing is provided by my husband's employer, for example, so we pay "rent" to our house fund instead). Because of that, we're able to save substantially for retirement and other long term goals while also indulging our cruise habit. We know that in a few years, our situation will change, money will get a lot tighter, and we won't be going on so many vacations. We're prepared for that and enjoying these years of plenty.

[DawnM]

In my job, they automatically took out 8% of my salary for retirement and they matched it 8.5%.  I didn't do more than that.

 

DH's job he has to set up his own, but he puts in about 10% and they match 5.5% or something like that.  I just know he has to put in a certain amount to get the match so he does the max for the match.

 

We don't do a lot more than that.

 

But we DO find ways to do things as frugally as possible.  We do Disney quite inexpensively, or have in the past.  Disney has realized that people like me don't bring in the funds, so they have found ways to make it impossible to do it as frugally anymore (even their homeschool ticket rates have skyrocketed.)   We used to go every year, sometimes twice, and do it on about $1,500 for a family of 5 for 10 days.  That isn't possible anymore.  So, this past year, we went to Universal Studios and were able to do it for that price.  We actually got annual passes and went three times for the price of one Disney trip.  ($250/wk condo x 3, $150 each annual passes, ate a lot of our own food, gas is cheaper now, etc...)

 

Right now we are in the throws of college entrance stuff and we are weighing our options and living at home and going to the local school is outshining anything else based on the majors my kids want and the expenses involved.  A degree from the local 4 year school will not get him (middle son) any less of a job for his field than going away to an expensive school would.  We have a couple years before he needs to worry about it, but we are talking to him now about it.  Oldest is at the CC now and prob. will not go further, but we will see.

 

I think my kids would rather go to a less expensive college for cash than have to worry about ME in my old age.

[DawnM]

We struggle with this. Both dh and I lost one parent young (48 and 53) and they had unfulfilled dreams which probably could have been fulfilled if they had been less careful with money. On the other hand the surviving parents retirement is reasonably comfortable although they are inherently frugal so that probably helps.

 

I think a big part of it is figuring out what stuff really brings you joy. If it's a new car every five years or fancy clothes that's fine but it probably can't be a holiday as well.

 

What I'm struggling with is kids extracurriculars. I must admit I feel strongly that now is really the only opportunity they have for some of this stuff. I also see a major improvement in overall attitude when they're involved in more outside the house stuff. But the costs add up quickly. If I go with "pick one thing which you really love" I'll still be running three different directions with less benefits to the other kids.

 

 

 

 

That is a tough one.  All 3 boys did scouts, which was the best bang for our buck IMO.   Although camp ran high every summer.  

 

Middle son did soccer for a while.  It wasn't TOO bad.    

 

Oldest did robotics for while.  Fairly minimal costs.

 

We just found what we could and couldn't do and told them no sometimes.  

[DawnM]

There are some things you can only do at a particular age. The magic of Disney with a small child is one of them. Disney is a whole different experience when your kids are older. We spent a lot of money traveling to Nepal, Africa, Mexico, places that are not elder friendly, that could have gone into our retirement account, but safari at 75 is a very different thing than safari at 45. Africa is slightly dangerous and keeping yourself secure is not easy, so I felt it was better to do it while I was young and healthy.

 

My parents are in their 80s, they just got back from spending 5 months in Africa.   :laugh:   Who says you can't go back!