Why money makes me feel overwhelmed
There always seems to be somewhere else I should be putting it no matter how much of it I think I have.
Out there on the internet, there are a host of sound financial principles that “everyone” should follow. Maybe reading too many of them is really at the root of my current funk. (I honestly don’t know exactly what is the root cause of said funk, which is why every day, maybe more than once a day, I have a new theory about it. I figure if I identify the cause I can actually do something to address it. What that something I can do is, no clue.)
I’ve been reading a lot about retirement since making the decision and putting into action moving my Roth IRA to Vanguard. There are many sites and experts that suggest one should be maxing our their and their spouse’s IRAs and also contributing up to the company match on the 401K. Okay. Well, the company match 401K part is already being done (not to the full match, but very close, and my spouse’s company only matches 20% of the contribution not 50 or 100%. Yes, we’re losing a few dollars being short a percent and the automatic 20% return but we’re working towards it. Probably before the end of the year we’ll be raising that contribution to the company match limit after we give the budget a few months to shake out). But the IRAs… well.
The maximum we can contribute is $4000 each ($8000 combined), going up to $10000 combined next year (and we won’t be doing anything ’til the debt is gone, so it’ll be after next year for sure). Well, $10000 a year, that’s over $800/month…. more than our minimum payments to our debt that we find so oppressive are! So it just won’t be able to happen. Sure, once we are out of debt, I intend to start funding our IRAs to some extent, but I am seriously scared to even calculate what level we “should” be funding it to in order to provide enough income in retirement. But ignorance is not the way to go! I must use some calculators and start crunching some numbers. Seeing figures for our specific incomes and lifestyle in black and white might provide some small reassurance. Maybe. Well, there’s one action plan I can put on my to do list at least.
I’m having trouble figuring out the balance between living for today and saving for the future. Not even to live extravagantly, but just to live comfortably (read: not paycheck to paycheck) and have enough money to keep up the maintenance on our house and for our kids to have a little fun once in a while and still save for the future. Which not only includes retirement but two college educations (I hope) as well. Not that I plan on saving enough to fully fund my kids’ educations but I think it would be rather presumptuous of me to say “I really want you to go to college, but you are completely on your own in figuring out how to pay for it. Good luck.”
I do know one thing. No matter what happens, I will be greatly relieved when I no longer feel like I am paying for my past. Figuratively and literally.
~J
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August 3rd, 2007 at 6:11 pm
If “living comfortably” just means not living paycheck to paycheck, that’s pretty easy–just spend less than you earn. It all sorts itself out pretty quickly when you have positive income month after month.
The problem is when “living comfortably” requires buying stuff. I spent years agonizing over all the stuff I wanted to buy but couldn’t afford. Gradually, I came to find comfort in the not-buying. It really gives me considerable pleasure now to see a friend’s new car (that I would have coveted a few years ago) and think, “I’m sure glad I don’t need to spend X tens of thousands of dollars on a car.”
I’m not sure how to articulate the shift. Part of it, I think, was coming up with a few reasonably frugal indulgences and thinking, “These are the places where I spend money to treat myself.” When I can find something that’s not really much money and yet convince myself that it’s a guilty pleasure, it helps give me the strength to resist spending that doesn’t give as much pleasure.
August 4th, 2007 at 12:47 am
I appreciate the comment.
I don’t think I’m fully through the shift yet. I do however understand what you are saying and feel it happening a little bit in some areas. When we bought this house 8 months ago, I couldn’t stop thinking about how I wished we could put laminate floors in the front entry to cover the old and somewhat cracked and peeling (around the edges) vinyl tile (also ugly but that is another point).
Now I won’t say I don’t want to replace the floors. But I don’t… covet my neighbor’s floor? I don’t get slightly jealous and cranky when seeing a floor like I would like to have someday. instead I think about taking a class when the kids are a little older on installing floors myself and then waiting until I find some nice durable floors on clearance and doing the work myself. And I glue down the current vinyl a little tighter so my three year old stops pulling it up.