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Life is Expensive!

August 2nd, 2019 at 10:19 am

For the last two years, I've been working on tracking where the family money goes. I've tried YNAB and Dave Ramsey's version. I've made various excel spreadsheets. I tried paper and pencil. But, nothing seems to stick. Part of the issue is that we spend cash and haven't been good at writing down where the dollars went. And, I had broad categories such as Capital One and Target credit cards. Yes, I know....

With retirement on the horizon, 599 days to the earliest point for full benefits retirement (aka freedom), I am scared that we won't have enough money and I will have to continue to work at my current job. As I stress, I use online calculator to predict how long our retirement savings will last. But until I know where the money goes (actually how much flows out), I am only guestimating.

So, several months ago I set up a jar for all receipts and added a small notepad and pencil to record cash purchases. I made another excel spreadsheet with specific budget categories. I have been tracking almost every cent. I record expenditures and go through the Capital One credit card bill, identify those charges without a receipt and record those as well.

I have been doing this pretty faithfully for the last 6 months and I'm shocked. I didn't realize that we actually spend as much as we do. Y'all would be shocked if I gave a lot of the details. Netting out vacation travels, we spend about $10,000 per month on life. Yikes! Fortunately, net earnings cover this.

I am fortunate to have a pension and I've been saving for retirement since I started working in 1987. I also have a good work record so social security will supplement our retirement income. However, if we keep spending at our current rate, I will need to draw about $4,500 from savings. And, that seems just crazy. I know eventually expenses will go down (downsize the home, kids will be off on their own) but we are talking 10 years out.

I need to start campaigning that the rest of the family needs to be as frugal or cost conscience as me. I plan to have a family meeting this weekend. Wish me luck!


April 14th, 2019 at 04:49 am

Sorry for the absence from the blog...life happens and nothing seemed pertinent to blog about.

I recently discovered the show Billions on Showtime. Through my cable subscription, I can marathon watch old episodes. So far, I've completed season 1 and am half way through with season 2.

While watching, I am amazed at the display of wealth in homes, cars, clothing, food, etc. Yes, I understand that this is a tv show but it must represent how the "other half live." How do people live like that?! They must be born into living those high standards.

I am, by no means, poor. I make a good salary (probably better than most of my friends) and my husband works a part time job too. We generally live below our means as I'm able to save over $1200 per month to retirement, aggressively repay the mortgage, give to charity and still save a little to our growing liquidity (emergency fund, fun fund, overspending fund, etc.) All this is to allow me to retire young enough that I can enjoy life, be available for kids’ activities, etc.

My money guy tells me that I have more than enough money saved. Through a Monte Carlo analysis, the downside analysis shows that I will have over $1 million at age 92. That's a good predictor but how true is it? The analysis is based on current spending plus escalating increase in expenses (when I retire, I carry health insurance at a reasonable rate until death). But I still wonder if I will have enough.

I've written before that I would love to have a LV Carry All bag but I can't get myself to buy it. I would love to have a Tesla but I can't get myself to buy it. I would love to have a diamond and sapphire ring but I can't get myself to buy it. What happens if I become a spendthrift? What happens if I start being comfortable with large dollar purchases? Is it true that it is highly unlikely that my frugal personality won't change?

Is anyone familiar with the Monte Carlo analysis? Should I have comfort in it? Do you think a person's personality/standard of living is generally set and doesn't really change?

Thoughts please!