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Old 01-08-2015, 03:46 AM   #1
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Hi, I am...Paying Attention

I mainly wanted to post a thanks to the lot of you. I've been lurking a long time. Reading, thinking, understanding. Reading, not understanding, Googling, thinking, "Eureka"-ing.

I'm also placing a little marker in the virtual sand to perhaps update in a year.

Me: Took a long time to grow up. Worked crappy retail jobs and made pocket money until around 30 years old. Took some schooling and work for a hospital now. I'm 35 next month.

DH: Has almost 15 years in at a place with fair pay, bennies, and pension. He will be 40 this summer.

No kids. No plans to have kids. Love, love, love to travel and eat good food, and that's where too much of our money goes. We're in Michigan; for the employed, the cost of living is great.

I would consider retirement anywhere in my 50s a success. I LOVE my job (Newlywed phase, I keep saying, but so far it sticks) so I wouldn't be crushed to be part time depending on how things go. DH does not like his job but does not despise it.

Here's to improvement for us all in 2015! *clink*

DEBTS:
Mortgage: $134k to go. Fixer-upper -- potentially limitless projects/Money Pit
401k loan (Not proud of it but working on it): 14k
Car (Few years ago finally gave up the '93 Olds): 14k

ASSETS:
My humor and charm
Lint in my pocket
DH 401k: 50k? current balance
My 403b: 5k (Not at job too long and am entry level-- just bumped to 15% taken out with a small employer match -- aiming to raise this by at least 5% per year until maxed)
Roth: 2k
Emergency Fund: Aforementioned lint in my pocket and a credit card that I keep paid off every 2 weeks.

We don't make a ton of money, so we're somewhere between the pizza man making it happen and the 4-year degree folks saving like a house on fire.

I shall resume lurking, reading, and learning. Thank you all so very much again.

Liz
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Old 01-08-2015, 05:46 AM   #2
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Welcome, Liz. Sounds like you are off to a good start. Heck, just thinking about retirement in an organized fashion puts you ahead of most people your age. I hope you'll let us know how you're progressing.
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Old 01-08-2015, 05:48 AM   #3
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Welcome to the forum.

Congratulations on getting started. Stick with LBYM and saving money. Your best "investment" is probably paying off your 401k and car loans. You gave no indication what investment choices are in your 403b but at your probably low tax rate you may be better off putting only enough in your 403b to get the match. Then maximize your Roth and do after tax savings.

Read Andrew Hallam's Millionaire Teacher.
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Old 01-08-2015, 07:31 AM   #4
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Really focus on your net worth by calculating it at least every quarter. It is a great motivator. Good luck.
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Old 01-08-2015, 08:10 AM   #5
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Welcome aboard, Liz....from another 'gander. :-)

As you've already no doubt seen, tons of great info here and very knowledgeable and helpful posters.

Keep your eye on the FIRE prize.

omni
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Old 01-08-2015, 10:01 AM   #6
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Welcome to the forum. Just your efforts so far, by earning and educating yourself about finances and savings, and having the goals, put you on path for success. Starting later in mid 30's may require working a bit longer, or being real dedicated to savings, but you will get there.

Your best investment right now is in your education, so stick around and keep reading, don't be afraid to ask questions. I agree, pay off your 401k loan and car and once you do that you can increase the savings.

Basic LBYM plan:
1. Save 401k/403b to get max employer match. Save more if you can.
1a. If tax rates are lower, consider Roth instead of additional pre-tax savings once the employer match is met.
2. Only good debt: house mortgage is OK, others are to be avoided
3. Save minimum 15% of your income to build up nestegg
4. Don't be too conservative with your investment choices, you have longer time frame to allow compounding. Evaluate fund fees and net return vs total return, over time this can make big difference. Also don't panic and sell when a drop occurs, instead look at as a potential buying opportunity. Hard to adjust your emotional response to do these for many people.

You like travel and eating out, just realize the trade-off. Not saying never have vacation or eat out. Life sucks without some fun and enjoying things you like. The trick is to balance these.
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Old 01-08-2015, 10:42 AM   #7
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Welcome.

I agree with others that you're ahead of some of your peers because you're aware of retirement and working toward that goal. I hope the honeymoon phase of the job turns into a happy married long-term phase... It sounds like a great situation.

Keep paying down the debt, maxing the savings, and watching your spending. Charm and good looks - and a little pocket lint can compound over time.
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Old 01-08-2015, 10:45 AM   #8
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Welcome! Enjoying life along the way is important such as travel and good food. But...

a good bit more cheese and crackers with a good travel show may be a better idea .
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Old 01-08-2015, 11:32 AM   #9
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Track your expenses for a few years Liz. It is enlightening and will help you decide where you can save. It's not a tool to nickel and dime things but put things in perspective.

Develop a mentality of investment enjoyment. At your age I loved buying shares of stock and it gave me joy watching my portfolio grow. Slow at first but eventually if you plug along the snowball starts rolling. As I grew older my investments shifted to mutual funds which I highly recommend.

The key is keep debt as low as possible. Never, ever carry a credit card balance. Save for things you need before putting them on a card. Keep raising your 401k percentage every year. A point or two goes a long way to maxing out over time. Think of your IRA as a way of sticking it to the tax man. Always worked for me.

Plug along but enjoy life along the way.


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Old 01-08-2015, 11:36 AM   #10
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Welcome Liz. Great introductory post.

Sounds like it might be best to target a specific amount of savings, pay yourself first (have your savings automated) and then feel free to spend the rest. When you or DH get a raise, try to increase your savings for at least half of it.

If any of the loans are high interest it might be best to pay them down as an alternative form of saving.

If you are in the 15% tax bracket, I would contribute just enough to get the full match and make other savings after-tax (like a Roth IRA). Tax-deferred savings is most beneficial where your current marginal tax rate (aka tax bracket) is higher now than you think it will be when you retire.

When it comes to retirement saving, slow and steady wins the race.
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Old 01-08-2015, 12:30 PM   #11
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Quote:
Originally Posted by LizMortal View Post
I mainly wanted to post a thanks to the lot of you. I've been lurking a long time. Reading, thinking, understanding. Reading, not understanding, Googling, thinking, "Eureka"-ing.

I'm also placing a little marker in the virtual sand to perhaps update in a year.

Me: Took a long time to grow up. Worked crappy retail jobs and made pocket money until around 30 years old. Took some schooling and work for a hospital now. I'm 35 next month.

DH: Has almost 15 years in at a place with fair pay, bennies, and pension. He will be 40 this summer.

No kids. No plans to have kids. Love, love, love to travel and eat good food, and that's where too much of our money goes. We're in Michigan; for the employed, the cost of living is great.

I would consider retirement anywhere in my 50s a success. I LOVE my job (Newlywed phase, I keep saying, but so far it sticks) so I wouldn't be crushed to be part time depending on how things go. DH does not like his job but does not despise it.

Here's to improvement for us all in 2015! *clink*

DEBTS:
Mortgage: $134k to go. Fixer-upper -- potentially limitless projects/Money Pit
401k loan (Not proud of it but working on it): 14k
Car (Few years ago finally gave up the '93 Olds): 14k

ASSETS:
My humor and charm
Lint in my pocket
DH 401k: 50k? current balance
My 403b: 5k (Not at job too long and am entry level-- just bumped to 15% taken out with a small employer match -- aiming to raise this by at least 5% per year until maxed)
Roth: 2k
Emergency Fund: Aforementioned lint in my pocket and a credit card that I keep paid off every 2 weeks.

We don't make a ton of money, so we're somewhere between the pizza man making it happen and the 4-year degree folks saving like a house on fire.

I shall resume lurking, reading, and learning. Thank you all so very much again.

Liz
This... is an entertaining introduction. I like all the little subtle hints about how long you've been lurking, specifically the "pizza man making it happen." Nice.
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Old 01-09-2015, 04:25 AM   #12
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Liz,
If you haven't already Googled and Eureka'd on "the magic of compound interest", do so. Time is another of your assets!
Good luck!
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Old 01-09-2015, 06:02 AM   #13
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Liz,
Congratulations 😀
We all started somewhere when the light came on and said I want to retire with dignity. I started in early 20s then got busy, life took over. We are in our early 50 and have gazelle intense saving plan. Debt free ! Which is a big deal last kid graduated college dec 2014.
Two things helped me
Dave Ramsey great man with lots of character helps people understand their financial dreams.
"When is the best time to plant a tree". Well 20 yrs ago "When is the next best time to plant a tree" TODAY !!

Living below your means is the real trick in my mind and watch your money grow

Welcome aboard I have found this forum really cool to read daily





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Old 01-09-2015, 07:01 AM   #14
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Liz; Welcome and I appreciate your self deprecating sketch of your current situation. I would suggest you focus first on establishing a basic emergency fund of at least $1,000. Then switch all available cash to making extra payments on the highest interest rate non mortgage debt. When that is paid off throw everything at the other debt until it is paid off. Next would be to beef up your emergency fund to 3-6 months of expenses. Only then should you devote dollars to savings, either pre or post tax. Freeing yourself from the monthly payments from the two non-mortgage loans should enable you to ramp up quickly. Good luck!
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Old 12-11-2015, 01:29 AM   #15
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I thought I'd sneak in an update before the 1-year mark.

I know what I'm supposed to do. It's pulling the trigger... DH is also less enthusiastic about FIRE. (We are not in deal-breaker territory.) He goes up to the company match and has a gleaming set of golden pension handcuffs waiting in 13 years. I'm trying to squirrel it away more aggressively with a 403b and my Roth.

Tastes differ with couples working together, and I'm not looking to produce a virtual fight. We have his money and my money in separate accounts. He makes twice what I do and pays the mortgage and the large bills. I pay for groceries and anything considered fun/impulse/"whoops, a bill" type of stuff.

We both got sexy raises this year considering we are small fish in a Midwest pond.

DEBTS:
Mortgage: Had $134k to go, now $129k. Fixer-upper -- potentially limitless projects/Money Pit. This year we ponied up for (desperately needed) new flooring.
401k loan (Not proud of it but working on it): Was 14k and now about 10k
Car: Was 14k and now about 10k. We just got a $4200 quote on a timing chain/engine issue, and I'm dangerously close to green-lighting a bad decision trade-in. I'm talking myself into using my expected tax return to help with it and drive that beast into the ground.

ASSETS:
My humor and charm: Still intact!
Lint in my pocket: Cleaned out as I buckle down for a new chapter.
DH 401k: Was 50k? Current balance 65k? -ish?
My 403b: Was 5k and now 13k. I have JUST put my foot down and changed my paperwork to begin maxing my 403b contributions starting January 1st. I have my fun money, but I'm wasting money on stupid **** and have just hemorrhaged my account for Christmas... buying presents for doctors who don't need what I'm buying... buying presents for in-laws closing in on 70 and working and keeping up with the Joneses. I'm disgusted with myself and that helped me file the paperwork with Voya.
Roth: Was 2k, now 3200. Pathetic and out of order of how you should go, but I'm working on that. Bless me FIREther, for I have sinned. I will try harder with my Roth.
Emergency Fund: Last year zip, currently 1k. That will also need fattening to get to 3-6 months.

THANK YOU to all of you. I'm still reading. I'm still learning. I value you all more than you know. Merry Xmas and a Happy New Year.
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Old 12-11-2015, 12:12 PM   #16
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Thanks for the update, I love seeing people making progress! Your DH's pension is wonderful and can provide a solid base for your future. But your savings are also important (especially since you never know what might happen). And being positioned for FIRE isn't just so you can quit a job, it's also to give you a sense of security knowing that you can take care of yourself no matter what happens.

You've made progress on each of your metrics, and you seem motivated to continue to make even more! Watching expenses is so important because not only will that let you save more, but it also reduces the aggregate amount you need to be FIREd.

Congrats on your progress!
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Old 12-11-2015, 12:55 PM   #17
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I did not see your first post.... but read it all since it is so short....

You seem to have missed the suggestion on putting money aside at low tax rates... (I am assuming with the tone of your posts that you and DH combined are still in a low tax bracket)... unless you are putting your money in a ROTH 401 (can you do it in a 403?).... I would not max out the 403 since you probably do not get matched... max out your ROTHs after you max out the amount to get matching funds...


Did you engine blow up I have never heard of a timing belt costing over $1k, much less $4K.... get a second opinion... what year and mileage do you have on it? I would seriously consider a trade in and getting something newer and with less repair costs.... that $4K would be a sunk cost and if you totaled the car the next day you do not get a penny back from insurance....


You have improved, and since I do not know your total story I do not know if you could have done better or not... assets up 24K and debt down 13K... so this seems to be good....
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Old 12-11-2015, 08:13 PM   #18
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Liz, I also missed your 1st post, so I am glad you updated it. I love your sense of humor - it should definitely be counted as one of your assets!

Congratulations on the great progress this year! Good for you. Others have much better advice on LBYM, savings priorities, Roth considerations, etc. than I can offer. Keep measuring your progress (it will definitely keep you inspired), and keep doing annual updates here!

I will just mention something our smallish extended family agreed to do to help with the holiday madness, stress and expense. First, years ago, we agreed to draw names at Thanksgiving so every adult only had to buy something for 1 adult with a $50 limit for Christmas. Eventually, everyone reverted to getting a $50 gift card their recipient. I suggested we just quit giving adult presents since it seemed so silly to exchange $50 gift cards. Now we just enjoy each other's company and only the kids get presents. I realize that every family has different traditions and this would not work for everyone.

Also, I suggest you focus on very inexpensive presents if it is required at work. Maybe even some homemade treats (brownies, cookies, etc.). It will probably mean more for the docs to take the goodies home to share with their families than you buying some item they do not need and may not ever use. After all, your gift money will now be going to max out your retirement accounts, right? Keep up the good work!
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Old 12-12-2015, 07:42 AM   #19
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Those are good points, Diver. The holiday season can be a real budget buster.

For as long as I have been at my office, we have done the Yankee Swap immediately following our holiday luncheon. In a Yankee Swap, each person buys one gift (for us , valued around $20 dollars). It should be something that anyone could enjoy and there are certainly style points for being clever or funny. The gifts, which are wrapped but anonymous, are all piled on one of the conference tables. We then draw numbers out of a hat. When it is your turn, you can either open a new gift or steal one from someone who has already had a turn. If your gift gets stolen, you get to open a new one. We instituted a ban on gift cards. A common gift is a bottle of wine, but if too many people do it, that could get boring.

In the last two years, we have also instituted this practice in the young wife's family. It allows our nephews -- who are in their early 20s and generally broke-- a way to participate, since they only need to buy one gift to cover the whole family, and we all have fun.
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Old 12-13-2015, 10:00 PM   #20
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Gumby, the "Yankee Swap" sounds like fun, and that is what the holidays should be about!
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