S/o is saving for retirement a priority

amother

Taupe

Sun, Sep 16 2018, 3:26 am

amother wrote:

B”H I make a full-time, professional salary, but being frugal saves way more than $1,000 a year.

Being frugal includes living in a large apartment, rather than in a 1-family house - so that there is rental income to partially or completely cover the mortgage/taxes/insurance, etc associated with owning a home.
Being frugal includes owning one (old but reliable) car outright - so no car payments.
Being frugal includes free (or low cost) activities (e.g.hiking, biking, rollerblading, libraries, low cost memberships or zoos/museums on free days, etc.) - rather than spending money on entertainment.
Being frugal includes not eating out or buying takeout.
It includes doing whatever we can by ourselves - so VERY minimal or no cleaning help, DH doing all minor repairs by himself (B”H very handy), etc.
Being frugal includes buying clothing that is classic, rather than trendy - so it can be worn for many years, rather than needing yearly wardrobe updates.
It includes not buying new clothing and/or jewelry for every Yom Tov and/or simchah.
It includes not sending kids to babysitters when either DH or I am available . . .
It includes turning off lights, air conditioners, etc. when not needed . . .

I could go on, but you can see already that this adds up to way more than $1,000/year . . .

We already do most of those things. We rent for under $1800 a month, own one old car (hand-me-down), rarely spend on activities or clothing, almost never do takeout. We get some cleaning help because I am a WAHM and otherwise would get no work done, I don’t think I can remember the last time we paid a babysitter or got real jewelry.

Being frugal on top of that world not net us much more than $1000, if that.

amother

Salmon

Sun, Sep 16 2018, 3:33 am

perquacky wrote:

This is especially the case if the schools see you're saving for retirement. Most schools will not begrudge your need to save for the future.

Not true unfortunately. We lived a very modest life. Small house, no vacations, no cleaning help, etc... We made a decent salary (actually an amazing salary if you don't have Yeshiva tuition) but because we had been saving for retirement since age 21, and had a hefty 401k because of that, we were denied assistance. They told us this. We switched to a cheaper school which ended up being better anyway.

I am so glad I didn't take that money and give it to the school. Because the school sure isn't going to step in an help fund my retirement.

amother

Copper

Sun, Sep 16 2018, 7:41 am

amother wrote:

Maybe bring MORE frugal wouldn’t net much more than ANOTHER $1000, but it sounds like you are ALREADY being frugal.

youngatheart4

Sun, Sep 16 2018, 7:51 am

No one else is going to fund your retirement. Always try to spend less than you make and save! Delay your "wants" and take care of your "needs" and eventually you will be able to afford your wants. Compounding is your friend - with time and compounding a small amount will grow to be a significant amount.
Yeshiva tuition makes it hard to save but it is doable. Use a program like Quicken to track your income and expenses from year to year. There are two ways to have more money - increase your income or decrease your expenses. If you can do both you will come out way ahead!
Make sure that your kids get an education or skill so they can support themselves. Once they become teenagers, let them earn some money (babysitting, tutoring, camp counselor, etc.). Whenever my kids wanted something I didn't think they needed or was too expensive, I always told them they had to pay for half or all of it and "usually" they didn't "want" it that badly. Having "skin in the game" helps teach the value of money.
Saving money for retirement is about security later in life. Parents don't want to have to depend on their children for financial support and adult children shouldn't expect their parents to provide for them. Buy 20 level term life insurance when you're young to take care of your family if something happens to you or your spouse. Consider the premium a "need" not a "want." The premium is a fixed amount for 20 years and the younger you are when you take out the policy, the lower the premium will be.
My job was to take care of my children when they were young but as they got older, it was about making sure they could take care of themselves and become independent and responsible adults.

amother

Powderblue

Sun, Sep 16 2018, 3:02 pm

amother wrote:

I'm just trying to understand....

First, a house that has rental income can cost quite a bit of money, if you live in a frum area.

When you buy a car outright, it costs money too. Especially if you want it to last.

If you work full time, how do you manage without cleaning help? And no take out either?

We spend similar to you, yet there is no way we could possibly put away that much every month. We generally go over, actually, and we are always in the red. It sounds like there is some magic there!

amother

Taupe

Sun, Sep 16 2018, 3:07 pm

amother wrote:

Yup. My guess is that previous amother is making in the area of $300K a year or more, part of it with passive income (so not working 14 hour days). Her kids are older so there is less mess made at home. She gets a cleaning lady for an hour every 2 weeks or so to deep clean the bathrooms. She makes simple meals with prepared ingredients so no need to get take out.

Not really a practical thing to aspire to if your salary is under $75K a year.

amother

Turquoise

Sun, Sep 16 2018, 6:20 pm

amother wrote:

I think you are picking holes in what she is writing instead of taking it as a whole

For example, a two family house is generally less spacious for the owner than a single family residence. So what this means is that even if you don't get a two family house, you make do with a smaller home. My parents (for example) never traded up their relatively modest two family home but same would be true if they stayed in a modest starter home. Their mortgage payments became relatively small compared to rental prices and then after 20 years they owed no mortgage and had an appreciated asset.

If you own a car and drive it until it is no longer reliable you save lots of money instead of leasing a car or trading it in after five years and having constant payments. How you do this is purchase a car with payments (no lease) and then SAVE the payments after your car loan is done and then you will have the money to purchase a car outright for the rest of your life as you just keep buying reliable cars and driving them for 10 or more years - meanwhile saving what you would have spent for car payments.

People do manage to function without take out very well. Get some cookbooks that are about cooking for a month or spend every other Sunday cooking large quantities of food that is freezable. There are also meals to cook that are simple and easy. It's much cheaper to buy pizza dough - or just make up several batches of pizza dough and keep in the freezer. If you start a thread on easy and quick meals, there would be loads of good ideas

How often do you have your cleaning lady come and what percentage of your income is going to that.

There are also many "leaks" that people don't stop to think about - coffee out; lunches at work; baked goods (again very easy to make baked goods and freeze - you can even just freeze separate balls of cookie dough and make enough for dessert. I am not a huge fan of cake mix but if you don't want to even measure out ingredients, a cake mix is very cheap and you generally just add oil and egg. Home made brownies even without a mix are easy and fool proof - and something even kids could make as long as an adult supervises actual baking.

I see the difference in retirement among my elderly friends and what a difference having adequate retirement savings makes.