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Old 08-27-2010, 08:53 AM   #41
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In practice, we banked a significant portion, but not all, of each true pay raise. All through automatic deductions (never saw the money). It made a huge difference in building our retirement nest egg, and also provided a gradual increase in our standard of living, which was nice. You can't live with cinderblock-and-board shelves forever, and it does cost money to raise a child.

By limiting spending and banking an ever increasing amount, you accomplish a secondary objective in addition to building your savings: you get accustomed to living at the modest level that you can carry into retirement and thereby reduce the amount needed in the nest egg.

Regarding the workplace discussions on FI (and certainly RE), as the OP has learned, they typically don't end well. It's best to keep these heretical thoughts of saving and the options/freedom that come with it to yourself. Many of your co-workers are making the choice to remain chained to the desk for an extra decade or more to sustain their lifestyle, and their spending will enrich you through the earnings of companies and the dividends they pay to you. Your coworkers may need to keep working after FRA, and their payments into SS will help keep the system afloat.
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Old 08-27-2010, 10:25 AM   #42
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In practice, we banked a significant portion, but not all, of each true pay raise. All through automatic deductions (never saw the money). It made a huge difference in building our retirement nest egg, and also provided a gradual increase in our standard of living, which was nice. You can't live with cinderblock-and-board shelves forever, and it does cost money to raise a child.

By limiting spending and banking an ever increasing amount, you accomplish a secondary objective in addition to building your savings: you get accustomed to living at the modest level that you can carry into retirement and thereby reduce the amount needed in the nest egg.

Regarding the workplace discussions on FI (and certainly RE), as the OP has learned, they typically don't end well. It's best to keep these heretical thoughts of saving and the options/freedom that come with it to yourself. Many of your co-workers are making the choice to remain chained to the desk for an extra decade or more to sustain their lifestyle, and their spending will enrich you through the earnings of companies and the dividends they pay to you. Your coworkers may need to keep working after FRA, and their payments into SS will help keep the system afloat.
Automatic deductions is an excellent point - probably a critical success factor for most.
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Old 08-27-2010, 07:46 PM   #43
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I'm finding that since the kids have gone away to college, our costs have gone down even though we are paying for tuition, books and housing (they are on the hook for their own food and play money...this being part of the education process in my book). DD has been home for 3 months, and I have been in shock at how our expense have gone back up in that time, and how much junk is in the fridge (I want my fridge space back!!!). She goes back to school next week. We'll miss her, but will enjoy getting back to our own life, our own way of spending, and saving more.

Just a few items that have gone away since DD went to college: 500/mo piano lessons (english piano instruction in Tokyo is expensive), 100-150/mo train fares, at least 300 or more in snack type, instant, or pre-prepared food of the less-than-healthy type, 100/mo in miscellaneous contributions to her school, probably 100/mo in school lunches in the cafeteria (even though she packed a lunch from home 2/3 of the time...remember, Tokyo). Not quite as much went away when DS went to school, as he was much happier with home cooking and less junk food than DD, and didn't go out to play as often as DD.

Overall, we now cook simpler meals that we like, don't go out as often, and these two things alone save us hundreds.

So yeah, the costs of kids and how much we let their choices rule our budgets is or can be a big determining factor in whether our cost of living go up, remain relatively stable, or go down.

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Old 08-27-2010, 10:12 PM   #44
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As SamClem says, your coworkers can offer plenty of reasons why that'll never work. Best public answer seems to be to let everyone know you'll be taking a few months off to see what comes up. Eventually you'll find the one or two (out of several hundred) who really "get it" and are ready to talk about what you'll do all day without feeling bored or unfulfilled.

We always banked our pay raises and spent very little on lifestyle. (Hey, c'mon, we're submariners, who needs to buy a lifestyle?) I frequently got teased about driving decade-old cars instead of spending our nuke bonus pay, but the teasing usually stopped when I'd point out that our values were reflected by our investment portfolio... not by our depreciating assets.

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So yeah, the costs of kids and how much we let their choices rule our budgets is or can be a big determining factor in whether our cost of living go up, remain relatively stable, or go down.
Keep those college stories comin', I'm taking notes...
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Old 08-29-2010, 06:00 PM   #45
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What in the world? It's "human nature" to spend every penny you have, just because you have it? How does he figure? Is this the average philosophy of personal finance?
He is exactly right that it is human nature to increase spending as income increases. Just as it is human nature that people want to get married and have children. Which is why there is no person in the world who is single and/or childless
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Old 08-29-2010, 08:15 PM   #46
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I learned very early on to keep mum about money and spending especially around the office. People are all too willing to rain on your parade and they brag about how they can't seem to save anything. We built our own house and never had a mortgage more than $20,000 or so. We saved as we went and maxed out our retirement accounts. I spent a couple years as a financial advisor so could learn the ropes of financial investing. When I left the firm, I moved everything to Vanguard and handle our finances and those of my (semi) grown children. Along the way I never talked about money to anyone but family.
I repeat: don't talk money to anybody in the office. It can create the impression that you have it made and you never know who hears about it when layoff time comes or even when promotion time comes. Employers like to think that you are desperate for money and so would never leave and it can color their ideas about you as an employee. Better that they never know what you are doing...besides, it is none of their business, is it?
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Old 08-30-2010, 04:10 AM   #47
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I repeat: don't talk money to anybody in the office. It can create the impression that you have it made and you never know who hears about it when layoff time comes or even when promotion time comes.
Or make you a good target when people have blown all their cash on booze over the weekend and want to hit you up for gas money.

I get what you're saying, and it makes sense. There are some things that it is hard to find the right audience for. I was just trying to test the reaction to some things with people who I do not normally have to be around. You never know. Wisdom is sometimes found in unlikely places. Still, on the whole, yeah... everyone already knows enough about every one else's business as it is. There's no need to make it easier for them.

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Old 08-30-2010, 06:16 AM   #48
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I have to adjust my 401k contribution slightly downward...
Why?
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Old 08-30-2010, 07:39 AM   #49
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Why?
Sorry, I probably phrased that wrong. I have to adjust the contribution % slightly downward, not the overall contribution. Otherwise, I hit the federal limit too soon in the year, and lose out on part of my company match. My company does a 4% of income match, but if I hit the federal limit, say, in the 23rd paycheck, then I stop contributing in paychecks 24-26, and my company stops matching.

One thing I liked about my old company was that they'd just give me a flat-out 4% of income, regardless of what I contributed. In 2008 I managed to hit the federal limit in the first paycheck of October. So suddenly my paychecks got a lot bigger as I wasn't contributing anymore, but the 4% match continued on.

With my current company though, I have to tweak my percentage every once in awhile, to make sure I don't hit the federal limit too soon. It's a shame that companies won't let you just do a flat-out dollar contribution, rather than a percentage. Just let you take the federal limit, divide by 52, 26, 24, or however many pay periods you have, and let that be it.
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Old 08-30-2010, 11:20 AM   #50
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I learned very early on to keep mum about money and spending especially around the office. People are all too willing to rain on your parade and they brag about how they can't seem to save anything.
Along the way I never talked about money to anyone but family.
I repeat: don't talk money to anybody in the office. It can create the impression that you have it made and you never know who hears about it when layoff time comes or even when promotion time comes. Employers like to think that you are desperate for money and so would never leave and it can color their ideas about you as an employee. Better that they never know what you are doing...besides, it is none of their business, is it?
You phrase this as an absolute, perhaps based on your FA experience, but I think there are very few absolutes among the topics discussed on this board.

We've had posters who have kept their ER plans confidential until the minimum required two-week's notice. But we've had others who have quietly let their bosses know that they wouldn't mind being laid off, and who have benefited from being able to promptly take opportunities that were either unavailable to the rest or were quickly oversubscribed.

Money is frequently discussed in the military "office". Everyone's pay is posted on a website for the whole world to review, and yet the military salary/compensation system is so arcanely obtuse that everyone benefits from sharing the info. It also doesn't take a lot of talk to discern who knows what they're talking about (and who doesn't). Subjects that come up once in front of the whole group can later be quietly taken off-line with the few who "get it".

In my case, I've regretted talking about money with family. Spouse & kid, sure, no problem. Sibling, parents, in-laws, cousins, um, not so good. Some of our worst money experiences have been at the hands of my parents-in-law, and now our household vocabulary is full of the horrible advice quaint phrases uttered by my FIL while we think to ourselves "There but for the grace of God"...

Rather than envying me for "having it made", most of my relatives, friends, & acquaintances seem to pity me for either not having what it takes to survive in MegaCorp, or for not wanting to take charge of my own business, or for being "forced" to live a low-key beach-bum lifestyle.

Sure, there's a lot of money negativity out there. But exclusively focusing on avoiding the 99 bad money co-workers out of every 100 will surely overlook an opportunity to encounter the good one.
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Old 08-30-2010, 11:44 AM   #51
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There's no "if", only "when"...
Correct. I shoud've said "if I die YOUNG"
Before I didn't know how exactly to explain the purpose of saving because in the end I'd be painted as being cheap. But now circumstances have changed...kids came along . So, it's not for me then kids can use it. So far I have no regrets saving except times when I visit my family/relatives who live in this materialistic fog I don't to be in but feel sort of guilty at those moments. I'm perfectly fine seeing neighbors, coworkers, and whoever having lavish lives, but when I meet my family I'm not 'cool', so I do my best to steer from topics like saving for the future.
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Old 08-30-2010, 12:24 PM   #52
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That's what someone said to me the other day. "You know it won't happen..."

Let me recap the conversation. Some folks were standing around a classroom, waiting for some training to start. The discussion turned to savings and retirement options. I mentioned that I had recently done up a spreadsheet for how much money I'd have saved by retirement if I kept my current standard of living (ie lived off of the paygrade I'm at now) but continued to receive promotions on a fairly conservative schedule. If I were to do that, I said, I would have $XXX,XXX in the bank by the time I could retire.

"Yeah," says the guy I'm talking to, "of course, you know it won't happen that way."
"Well, nothing's exact," I say, "but it's still a guideline."
"No, no," he says. "It's just not possible. You'll be able to save a percentage of your income, but the amount you spend will go up with your paycheck. It's just not possible to keep the same expenses even though you earn more. You'll see the money coming in, and you'll spend it. That's just human nature."



Huh? The conversation came to a dead halt right there. I was floored. I couldn't even figure out what to tell the guy, so I just went back to my desk and waited for the training to start.

What in the world? It's "human nature" to spend every penny you have, just because you have it? How does he figure? Is this the average philosophy of personal finance?

I admit, I haven't been perfect with my spending lately, but I haven't been trying to stick to a budget recently, either. I used to be much, much more strict about it. I think I've been in something like shock the last couple years just having a job that I'm not afraid will disappear by the end of the week, so it has taken me a while to come down off the high and start planning for the future, but to just flatly state that I will never be able to maintain the same standard of living in the face of a rising income in order to plan for my retirement? I don't know what to make of that. Has anyone else had any experience with this supposedly fundamental part of "human nature"?

Josh
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