S/o is saving for retirement a priority

amother

Violet

Sat, Sep 15 2018, 5:55 pm

with all these threads about how much and what people spend on things I figured I would jump on the bandwagon Wink

. I was wondering if saving for retirement or other down the road things like paying for your kids weddings a priority for people? If you have some leeway in your budget do you splurge or save or a little bit of both? My dh always talks about how because we put away x dollars for our childrenG-d willing they will hopefully have y dollars when they are old enough to get married. Wondering if others think that way or just buy the expensive clothing for their kids instead Wink

amother

Lawngreen

Sat, Sep 15 2018, 6:44 pm

amother wrote:

with all these threads about how much and what people spend on things I figured I would jump on the bandwagon Wink

saving money has been instilled in me since I was a child. Dh and I save/invest money. Savings accounts don't pay too much - need to take on a bit more risk.

amother

Lavender

Sat, Sep 15 2018, 6:51 pm

mommy3b2c wrote:

Smart, mature people save. Dumb, immature people spend it on frivolous things. It’s pretty much as simple as that.

I mostly agree but I think it's difficult to really understand the predicament if you're able to do both. By both I mean live a comfortable life as well as save. It's not so simple if your 35 years old and you have to decide should I send my kid to the camp all his friends are going to or should I save the $300 bucks and send him to the cheaper camp so I can save for the future. These are very difficult decisions.

mommy3b2c

Sat, Sep 15 2018, 6:54 pm

amother wrote:

Worrying over which camp to send to is not frivolous spending.

mommy3b2c

Sat, Sep 15 2018, 6:58 pm

amother wrote:

And some smart people simply have nothing extra at the end of the month to put away.

Try to see the world outside of your own little bubble.

I’d imagine those people are not spending their mone on frivolous things. I’d suggest you read the op and my original response one more time, before assuming I said something that I didn’t actually say. I’d recommend focusing specifically on the following sentence:

“If you have some leeway in your budget.”

amother

Firebrick

Sat, Sep 15 2018, 7:06 pm

mommy3b2c wrote:

Smart, mature people save. Dumb, immature people spend it on frivolous things. It’s pretty much as simple as that.

If you save any money at all and the tuition board sees it you wont get tuition assistance.
They told us flat out-if u have any extra money at the end of the day it goes towards tuition. No reason to have 6 months of salary in case of ch"v emergency, cant save for weddings or bar mitzvah, cant save a dime if you want to ask for a bit of help with tuition instead of min 10k per student...

Unless of course you hide it. Which is a whole nother story

amother

Lavender

Sat, Sep 15 2018, 7:24 pm

amother wrote:

Thankfully, this is not the norm. I believe most schools will allow families to save a little without being disqualified from getting a tuition discount. It's a shame your school is so unreasonable.

amother

Copper

Sat, Sep 15 2018, 8:09 pm

I put approx. 25% of my gross salary into a TDA for my retirement. It comes off of my paycheck, so we never see the money. Whenever things get too tight, and I suggest putting away less, DH (who is in kollel) says he’ll look for a job, rather than cutting back on that savings . . . Our goal is (b”eH) to never be on programs and/or tzedaka . . .

We also scrimp and save for our children’s weddings. B”H we have managed to marry off a couple of kids without loans or tzedaka. When my son, who was a chassan warned me that a chassuna item would be expensive, I explained to him that all the years of scrimping and saving were so that we would have the money to meet these expenses. . . .

We continue to scrimp on daily items to put away for anticipated, coming expenses (e.g. camp, seminary, college tuition, wedding, supporting young couple, retirement, etc.). I was brought up to live within my means, weigh short-term pain against long-term gain, and always have an eye to the future (I.e. ezeh hu chacham? haro’eh es hanolad . . .”). Fortunately, Dh is on the same page, and B”H we have so far been successful at conveying these values to our children, who likewise live within their means and prioritize saving over spending. . .

amother

Taupe

Sat, Sep 15 2018, 8:24 pm

amother wrote:

WOW, if you don't mind sharing, what salary range are you making that allows you (with frugality) to pay tuition and chasunas, with only one income and 25% going straight into retirement?

ETA why I am asking - one reason I am not so frugal is that I don't see the potential to make a major difference. Being frugal would save me maybe $1000 a year, which would disappear instantly into tuition and decrease our quality of life dramatically.

amother

Copper

Sat, Sep 15 2018, 9:29 pm

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 . . .

amother

Lavender

Sat, Sep 15 2018, 9:47 pm

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 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 . . .

While your frugality certainly helps, there is seemingly more going on here. You say you save 25% gross. That's probably around 35% net. Your dh is in kollel. You're talking about tuitions and camps and supporting a family. You even mention supporting married kids. You have to either make a really big salary or have been on the receiving end of a yerusha. My point is simply that frugality alone would not allow you to do the things you describe.

amother

Copper

Sat, Sep 15 2018, 10:07 pm

amother wrote:

No yerusha, but one salary does not mean one income. Rental and investment income are significant. Frugality adds up, however, and allows for money to invest, etc.

amother

Sapphire

Sat, Sep 15 2018, 10:17 pm

B"H for our 401(k) plans because I don't think we would have a single penny saved otherwise. DH is absolutely not interested. Constantly telling me Mashiach is coming so no need to save. I'm the type to save, and I do - I keep stashing money away. But every few years I have to dip into it to pay for things that come up so not much of that sitting around for retirement. But B"H I've insisted that we do maximum contributions to our 401(k)s over the past 2 decades, so there's that.

LittleDucky

Sat, Sep 15 2018, 11:26 pm

amother wrote:

My school never asked for a bank statement or cc statement or tax return doc.
From my previous company I have sitting some 40K towards retirement on stocks and real estate. Its the TIACREFF program. They used to give bonus 6% for retiremnet so it accumulated. Bli ain hora. I pay some 47 dollars a month for Genworth? I dont remember the name. Its an insurance for when I get old. Not such a great idea because it only covers homeattendant. There are better plans. But because I freak out thinking who will diaper me, I took the offer for this plan from my old job and it continues now even if Im not employed there. So its 550 yearly for many many years just for my diaper changer 😃.
There's a great thing called Areivim. We are also on it. You only get charged a month when a jewish family loses a YOUNG parent. If no one dies that month there are no charges, but unfortunatelly every month someone goes now that the group is bigger. It pays to sign up and money from maaser can go towards this. Its like a term policy but money can be from masser and you know the money is funding a family that lost a parent this month. Its managed by Shauly Pernstein and some others.

In my new company I can also contribute to something similar to TIA CREFF but the company does not give any bonus towards it. I need to contribute myself. Thats not so exciting. Maybe I should stop the strickly home attendant insurance and put into the retirement plan?

Be careful with Areivim. There was some talk on here years ago about it. I read here, on their website and elsewhere that they won't pay out if you have other assets, other life insurance policies, or practically any other reason for them not to pay (like if your kids are all married). They aren't insurance, are not regulated by insurance and while a nice tzeddakah it isn't a guarantee.
Read the terms. They only pay a widow if there are 3 unmarried kids under 35. Only pay orphans who are unmarried under 35. After a death they can request medical records and if there was a preexisting condition they can decide not to pay. (Unlike insurance where they guarantee payments unless you lied and they see medical records upfront and set payments based on that). There is no guarantee they will give anything...

amother

Coral

Sun, Sep 16 2018, 12:05 am

amother wrote:

Savings was my first priority. We put away 10% no matter what and then budget with the net. We had an income of $5000 and put away $500 a month - not easy. BH we have a home bought with cash and healthy savings. Every credit card is paid monthly. The early years we skimped. I would have chosen the cheaper camp. Now when we are tempted to take out of savings, it becomes a top priority to pay back. I make repayment plans with DH when he wants to purchase a luxury item with savings.