Happy Valentine’s Day

Hope you are enjoying a nice Valentine’s Day.  The sun came out, our water is back on, and I have Split Pea Cauliflower soup on the stove from this week’s meal plan.

Have you perused any of the great Dave Ramsey Valentine’s Pick Up lines?  My favorite came from the comments section: “How would you like to be a line item in my budget?”  If I weren’t already happily married….

We got our federal tax refund back and used it to bump up our emergency fund, as well as topping up some other categories like car repair and summer kid activities.  This last batch of crazy winter weather has me more motivated than ever to keep saving for retirement somewhere warmer!

Do you have any special Valentine plans?

 

Slow and Steady – Financial Goals Update

It seems like it was just a handful of weeks ago that I wrote ‘What’s All The Saving For, Anyway?’ outlining our financial goals for 2013.  Much of the time our budgeting process seems rather uneventful – we’re trying to save each week so we can build money to put towards our Roth IRAs, or Christmas, or new tires.   A little here, a little there.

I thought it was time to revisit the financial goals I outlined in spring.

Goal 1: Increase cash savings by 30% by end of 2013 – Done.  We hit the 30% increase and kept right on going.  We anticipate replacing our siding between winter and spring sometime, and continue to build cash to pay for it.  We would like to be able to pay for the siding and maintain a cushion sufficient to prevent us from having to borrow again.

Goal 2: Fund Roth IRAs to the maximum, if possible – We are 63% of the way to completing this goal.  We have until March 2014 to make contributions, so we may just be able to do this.  We will continue to assess the number of federal furlough days coming in 2014 and make contributions as we get a better picture of what to expect in unpaid days next year.

For us, having a written budget that we look at together a minimum of once a week is the key to making progress on our goals.    I could live without Facebook and Pinterest, but life without a spreadsheet program would be really complicated, and require a much cleaner desk!  If you are new to budgeting “on paper, on purpose” you might want to check out some of Dave Ramsey’s free PDFs.

Caviar Dreams, Star-Kist Budget?

Lifestyles of the Rich and Famous (Photo credit: Wikipedia)

This summer the New York Times ran an article called ‘For Would-Be Retirees, A Million-Dollar Illusion.’  The gist of the article was that increasing inflation and low returns on bonds can create a situation for retirees where they could run through a $ 1 million dollar nest egg before they die.   A million ain’t what it once was!  I’m not near retirement and I don’t have a nest egg that size,  but I found the end of the article to be very thought-provoking:

“When you are in your 50s… you can try to save as much as you can and try not to get accustomed to a lifestyle that you won’t be able to afford later on”

If a retiree is drawing conservatively from a $1 million portfolio and taking Social Security, that might look like $61,000 per year.  Nice, sure, but not the kind of cash that will have Robin Leach calling you to be on “Lifestyles of the Rich and Famous”.   Cranking up the “lifestyle” too high during your working years and you might find retirement to be a rude awakening.  If you are used to saving, and living a comfortable yet not opulent lifestyle, your retirement income might feel a whole lot like what you have been used to.

It seems one of the big barriers to creating wealth (aside from debt) is what goes on in our own heads.  Or, as the article implies, what lifestyle we think we deserve to be living.  It might sound like:  Someone with my income wouldn’t drive a used car… I have a full-time job, so if I want Starbucks, I am darn well going to have it…. My family doesn’t ‘do’ leftovers… All my neighbors have a cleaning service…    I think that we already live a fairly modest lifestyle, with the exception of vacations.  This summer, though, a number of bloggers have opened my eyes to some areas where I have been unaware of my own lifestyle beliefs.  If you haven’t met them yet, check out Creative Savv and The Prudent Homemaker.  They are both showing me ways to create a healthy, frugal and less wasteful lifestyle … and I’m tuning out my inner brat who demands “Champagne wishes and Caviar Dreams.”  Now I am off to pick (more) zucchini for dinner tonight, inspired to save a little more towards the things that really matter to me.

Have you ever given yourself a lifestyle adjustment?

100 Meter Freestyle – A Savings Update

I wrote in What’s All the Saving For, Anyway? and in Hocus Pocus! Change My Finances! that our written budget is the foundation for setting financial goals.  We look at our weekly budget every Saturday evening for no more than 10 minutes to talk about upcoming needs and look at our progress with long-term goals.  Before we got in the habit of setting measurable goals, it felt like we were treading water with our money – hanging in there but never getting much forward momentum.

Not treading water!

After reviewing our budget together, we set two key financial goals for the year.

1.  Increase savings by 30% by the end of the year – This goal is 97% complete.  We have been focused and also lucky that we haven’t had any surprise home repairs this summer.  Yes, I am looking over my shoulder as I type this…

2.  Fund each of our Roth IRAs up to the maximum, if possible – This goal is 50% complete. I am cautiously optimistic!  Payments made through March, 2014 apply to the 2013 tax year.

I read that Dave Ramsey will begin airing a video version of his daily radio show.  The show will be free and, I believe, streaming on the computer beginning this week.  If you want your money to swim the 100 Freestyle, you might want to get some Dave-style motivation and tune in!

A budget is telling your money where to go instead of wondering where it went

– Dave Ramsey

Under the Spell of Retirement

I’ve come back from our trip to Santa Fe with renewed vision and focus on planning and saving for retirement.  Santa Fe turned out to be a place where we could really see ourselves spending time in retirement.  Our commitment to being debt-free comes first, so the only thing standing between us and a retirement of our choosing is having the savings we need.

Condo on the Plaza in Santa Fe – works for me!

‘You can’t take a loan for your retirement’ – Mr. Saver

Mr. Saver is eligible for retirement in his mid-50s, approximately 15 short years from now.   This will occur just after our daughter would finish college.   We are saving as though he will retire in his 50s so that when the time comes that option is available to us.  I find myself running through a mental to-do list of items to put my attention on so that we are prepared:

1. Remain debt free.  Interest on home, cars, and credit cards is money that isn’t available for savings.   “Rather to go to bed hungry than to rise in debt” – Ben Franklin.
2. Budget money to maintain the things we already own, like home and cars, so that they last.
3. Roth IRA – we should have a goal to fully fund both of our Roth IRAs every year from here on out.  For more on this, see my prior post.
4. It’s all about the weekly meal-plan… keep planning meals at home based on sales and what pantry items are available.  Maximize veggies and beans, which are cheap and nourishing.
5. Weekly budget meetings so that we are on the same page about where money should be allocated based on what expenses are coming up.  It’s July, so now is the time to think about saving for holiday expenses, and so on.
6. Practice contentment.  We do not have the fanciest clothes, cars or house, but right now I value doing what we can to become financially independent so my husband can be in charge of when he retires.  Contentment helps keep me out of the mall!

It’s a lot of moving parts to keep an eye on!  What the trip to Santa Fe did for me, among other things, is enhance my vision of what we could create in our future.  Having a vision of what you want is one of the most important steps to take when you have a goal that requires sacrifice.    You can read more on creating a vision in my post “Imagining The Future.”

Do you have a vision for the future that is beginning to take shape?