Hubby and I started our spending plan officially on February 1. I am 11 days into it and I can't believe the difference it is making. In addition to writing down everything we spend hubby is also tracking everything in Mint.
We stopped using the VISA and are now using a debit card only. I have to pay off the last VISA statement balance of $1,100 which I will do on its due date and I am DONE with the charge card! I am excited about this. Dave Ramsey says using credit causes you to spend about 20% more. For me, I probably spent 50% more! Having that card and knowing I didn't have to pay it off for a month was a license to spend like crazy on many things we didn't even need.
I am amazed that we have only spent $499 since the first of the month! In the past I could easily spend literally thousands each month so this is truly amazing. Most of our regular monthly bills are still to come but I am very pleased to have spent so little. Our monthly budget is about $5,500 each month. That is my salary which we are living on and we are saving his.
We hope to save a lot of money this year to convert our real estate rental house IRA into a Roth. That will mean that after we retire, all the income from the rentals will be tax free forever. To make the conversion we have to save a great deal of money this year to pay the taxes, but having figured out all of our numbers, we can do it if we are careful.
When I think of the thousands of dollars I have blown due to being a spend thrift it almost makes me sick to my stomach. Oh well. I guess I can only start from where I am right now. I really think I have a spending addiction, but one day at a time, and following our spending plan, it is being arrested.
It is odd but I was kind of grouchy over the weekend and didn't know why. I figured it out this morning. I really think in the past I used excessive spending to numb out. Now that I am not using addictive spending as a "drug" I don't always feel the best but I know I will get used to this in time.
I am so pleased to finally be on the right course in saving money and being careful with our resources. Better late than never.
I also really like the idea of trying to figure out what we REALLY like to do and making sure we have the money for that without blowing lots on things or experiences we really don't care about. I think being frugal is just spending your resources wisely on the things you really like to do.
Two Weeks In & Doing Fine
February 11th, 2013 at 10:16 pm
February 11th, 2013 at 10:21 pm 1360621317
February 12th, 2013 at 12:46 am 1360630012
February 12th, 2013 at 01:40 am 1360633254
I'm sorry you lost 75% of your investment in the tech bubble. It's never a good idea to invest more than a small percentage of holdings in a high risk sector which is more like gambling than investing. You need to understand what you are buying and why you are buying it.
Would it help to look at the top 10 holdings in Vanguard's Dividend Fund to see if they are mostly names of major companies whose names you recognize. A Dividend Fund by a well run, low cost Mutual Fund pools investors funds to buy stock that are making money and pay investors Dividends. An Index Fund follows the broad market and new investors often build their portfolio via Dollar Cost Averaging .
Retirement is often subdivided in 3 parts, active/home & family/ assisted living
February 12th, 2013 at 01:44 am 1360633484
It's important to understand that retirement lasts a long time. We don't cash out on the day we leave employment, most people withdraw a set sum on a set day like payday since the bills are ongoing. It's often suggested that retirement funds be re-allocated 60% equity, 40% bonds [subdivided corporate & gov't].
February 12th, 2013 at 01:48 am 1360633721
February 12th, 2013 at 02:23 am 1360635829
February 12th, 2013 at 09:59 pm 1360706352
Then, if you want to purchase real estate in your IRA you need to send your IRA funds to a company which administeres "self-directed IRAs." We use Equity Trust Company. Then you can use your IRA funds to purchase rental houses or other real estate. All of the expenses on the homes must come out of the IRA and all the rents must go back into the IRA and they can't be withdrawn until you are 59 1/2.
There are quite a few additional rules for it but the above is basically how it works.