Can't seem to save anything outside of retirement/college accounts. I feel guilty. Is this common?
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Anonymous
| We have a very comfortable income and are able to save a lot (at least in my mind) for retirement and kids' college funds - we fund these accounts to the max allowed (or for the college accounts, to the max we can deduct on our taxes). Altogether, we are saving about 20% of our income, but I feel like it's not enough because it's mostly dedicated to retirement and college. We have an ample emergency fund, and other than possible someday renovations to the house, we don't have any particular goals to save for beyond our retirement and kids' college. But I can't shake the feeling that we should be doing more. Anyone else feel like this? |
Anonymous
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You're doing better than we are. We do not have a very comfortable income though.
We save for retirement and college but we have no cushion right now. Things will get better for us in a year or so when student loans are paid off and day care is done. Sounds like you're doing great. Enjoy life! |
Anonymous
| It sounds like you are doing fine financially - certainly in the very top tier of families. What do you want or what would make you feel satisfied? I don't think the issue is really about your savings accounts. |
Anonymous
OP here. I think you are describing my problem - objectively, I know that we are fine financial shape. But there is something in my head that because most of the savings are in these special purpose accounts, it's not enough. Not sure I know why, or what it would take for me not to feel like that, but was wondering if others feel similar (or maybe I am even more neurotic than I thought). |
Anonymous
I share your exact feelings, and a similar situation. But if you are maxing two 401ks, plus Ira, plus 529 that means you are putting away approx $55k a year, plus company match. You are doing well. I had to post my situation here to convince myself of it - (we save $30k 401k, $20k into general savings, $10k or so into other accts) - I'd bet you do similarly in total. One thing that helped me stop fretting was realizing that we not only save the $50-60 or so, but also reduce our overall debt by about $10k a year by paying our mortgage, plus whatever appreciation we get in our accounts, and, in a few years when I don't have a $4,000 a mo nanny expense, even if I only save half that cause of summer camps and the like, I'll add another $25,000 a year to our total. To say nothing of salary growth. Again, I'm guessing you are in a similar boat... You'll be fine |
Anonymous
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Can you open a simple brokerage account (or money market/CDs, whatever you're comfortable with) and call it something besides "retirement" and "college"? Maybe "Dream Fund"?
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Anonymous
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What do you mean, you "can't seem to save"? Do you mean you're spending too much? Or you don't have enough to cover your daily expenses after retirement and college? Or you just don't know how to go about it?
If you want to be socking more away for something something, just call up your broker, tell him/ her to open a money market for you, and create an automatic transfer from checking. Even just a few hundred bucks a month. |
Anonymous
| OP, how many months' emergency fund do you have? |
Anonymous
| Is your mortgage paid down to a reasonable level (or paid off)? That's a "form" of savings that is similar in some ways to what you are doing. It will pay you back big time when you retire and you have no mortgage. |
Anonymous
| +1 if I were in your shoes I'd pay off the house. |
Anonymous
My boss told me the other day that she opened savings accounts for her kids (who are 13 and 15 now, I think?) when they were little. She's putting maybe $50 per month per kid in a savings account for each of them that will account for incidentals when they're older - books in college, outfitting dorm rooms, etc. Stuff that her kids will need that won't be something that's eligible under the 529 which is only tuition, I think. Something my dad did: he opened a small brokerage account for each of us, paid for three years of college, then gave us the amount in the brokerage account for senior year and said, "Here, it's yours. Pay tuition, books, room & board, car payment, car insurance, with this now." (They didn't buy my car - I paid for the half downpayment with savings from working two jobs for three summers and part-time while in college and financed the rest.) It was a good budgeting lesson. You could also buy an investment property down the road. |
Anonymous
| First world problem for sure. Lighten up (or get an ulcer or TMJ or an immune disorder worrying about it) ... Up to you. Put it this way-- when the kids are done with college which you paid for, and after you enjoy some retirement which you paid for, are you going to lay on your deathbed fretting that your available bank balance is too low? |
Anonymous
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If you're feeling like you're not savign enough, take your eyes off your savings & look carefully at your spending. I'd bet that's where your source of discomfort is from. Do you feel in control of your spending? Are there things you're spending on you're not happy about? Extravangences you wish weren't there?
If after a close review you're feeling good abotu your spending, I bet your feelings about your savings will be much moer positive |
Anonymous
That last sentence. It's exactly what made me leave Goldman Sachs and pursue a less affluent career. I made more at 22 than I do now at 32. It was a realization that I'd never sit on my deathbed and say "Gosh, of I'd just retired with $20M instead of $5M ... Then that would have done it." Don't get me wrong, I'd never advocate leaving a high end career for $30k a year, but at a certain point, it kind of stops mattering, provided you can get past the neighbor having the tesla while you have a Kia. |
Anonymous
| Most people I know are choosing one OR the other, OP. So you are doing fine. |