Some days (this one in particular), I feel like I am staring at the financial crossroads in my life.
I’m debt-free (including my mortgage), I have a 401K that is coming along nicely, a Roth that I haven’t contributed to yet this year, and a regular brokerage account. By most measures, I’m doing okay. I’m well past Get Rich Slowly’s First State of Personal Finance, but not even close to the stage where he quit his job, and I don’t know if I ever will be anytime soon, or perhaps not even before retirement age!
While it’s true that I am debt-free, I still have expenses that are like debt, so even though I’m debt-free, I don’t really feel like it. And to make matters worse, lately I’ve been getting the urge to say screw it, and start to spend some money on my kids and on more grande vacations. I would love to get my son a mini-bike, and schedule a trip for us to go to Paris or Hawaii someday soon (not to mention another Disney Trip).
I’ve also been tempted to go to some of the fancier restaurants… the ones that are a bit better than the popular food chains (like Olive Garden) that we typically frequent! I’ve been admiring this little dated steakhouse called Diamond Grille that everybody swears by. Yeah, the meals are over $100.00 for 2, but well worth it from what I’ve heard.
I’m kind of tired of living so frugally, and would like a new fancy car, then perhaps my friends would stop thinking that I am poor in comparison to them?
I could do all of the things above, and still be somewhat ahead of the curve, but I won’t. I know what got me here, and I know that staying the path will get me to the next level.
So, I’ll plod on, being the frugal guy that I am, with specific savings goals per year! If I meet those financial goals successfully, then the excess money will go toward enjoying life a bit more. That said, I’m sure if there is excess money, at least part of it would go towards investments too!
So yes, I’m still on the path to become financially independent, but I choose to do so while enjoying life just a little bit more!
How about you? What is your strategy?
-MR
Pingback: Tweets that mention Staring at the Financial Crossroads | Money Reasons -- Topsy.com
I’m very close to your stage. I am wondering if I will have as much fervor with saving as I did with debt reduction. Paying interest is a pretty strong negative motivator.
We’re contemplating getting a retirement home and renting it out so I have another debt to focus on even though retirement is a ways away. I’m not sure the market has corrected enough or if it’s worth the hassle but it’s something we’re considering.
We’re at the third stage. The first year or two that we had a real salary we were really catching up to my savings goals (and a house and a new baby). By year 1.5 I stopped scrimping at the grocery store. By the third year we had enough “slush” that I felt comfortable going to fancy restaurants occasionally. Then we started having enough “extra” money that we could do big things with it, like have DH take a year off work to explore a start-up. Right now we’re thinking about furnishing the rooms that currently have no furniture, but that may get put off until next summer.
We could pay down our mortgage in 4 years if we were willing to throw everything at it and just contribute 6% to retirement savings, but we’d rather bulk up the retirement savings and enjoy life a little bit.
It is kind of hard to decide what to spend on though. We don’t have enough money (yet) to truly make a life change. If we save DH’s salary for 10 years then we will have enough savings to replace his income on the dividends, with conservative assumptions.
If we cut our spending that would come faster. But the best thing about stage 3 personal finance is that I don’t have to THINK about money. I don’t have to agonize over my choices. I can pick canned beans instead of dry at the grocery store and try expensive cheeses. We’re not willing to make those trade-offs.
So as much as I’d like to be in Stage 4, I think we’ll enjoy life at Stage 3 for a longer period of time and take our opportunities a little at a time.
@Sandy L
The retirement home idea sounds like a great one at that! Currently, I’m thinking about rental property too, but not retirement property!
But retirement property as a rental sounds like the best idea. I can imagine that it’s a win-win for you because even if you rent out the property for break-even prices, it still help you buy your future retirement home! very nice!!!
@Nicole
Sounds like your family and my family are at a similar stage 🙂
I joined J. Money’s Millionaire Club, and had the goal of making that goal wihtin the next 10 years. But I’m seriously thinking about taking the bigger vacation, perhaps going to Hawaii and Paris, seeing the sites. If I pursue that route, it’ll assuredly bump my time out to accomplish J. Money’s goal by at least a few additional years…
With my mortgage, I made additional payment that enabled me to finish it off at almost 10 years even. At the same time I continued to contribute to my 401K, and my kid’s 529 plans. Where I cut was the nicer vacations (we would take a few 3 day weekend vacations for a few years, practically every other year). And at least once (or twice) visit friends in vacation areas.
The one thing I CANNOT resist is a good steak! You GOT to go for it Don and try it out!
Play this game. I donno about you, but I have an optimal fighting weight I want to be at during tennis season.
Put a physical conditioning or weight goal to try and achieve. If you do, go get that steak! If not, use it as motivation.
It’s the most gratifying thing!
@Financial Samurai
Good idea!
I personally like to use milestones with rewards associated with the accomplishment of the given goal task!
So taking your suggestion, that’s what I will do! Once I get under my weight goal, I will be blogging about the great steak that they prepare at the “Diamond Grille”.
Thanks for the great idea!
Money Reasons, I am all for living life. I am so frugal in so many areas of my life that I don’t feel bad about going to a steakhouse for an anniversary or taking a nice vacation with the kids. I only have my kids living at home for 18 years, so I want to have as many experiences with them as I can. It doesn’t mean you have to go to a 5 star hotel. Plan your trip with enough time in advance to find specials and such and have the best of both worlds.
Pingback: Link Round Up, and Some Complaining About the Heat | Everyday Tips and Thoughts...
@Everyday Tips
Wise advice from a wise lady 🙂
It’s all about balance, but sometimes it’s nice to tilt the balance in a frugal manner! It really does pay to do the research to get the best deals!
Nice comment add!
Pingback: Money Weekly Cache 2010, August 15 | Money Reasons
Bucksome Boomer
Yeah, I like Sam’s idea too. I can’t believe I didn’t think of it, since I used a similar milestone system to pay off my house early…
By using the dinner at the steak place as a milestone reward, it will support my financial goals too. So it’s a win-win.
Pingback: Week in Review: Sports Edition
Pingback: Weekly favorites | Financial freedom through information
way to go MR for not leaning to the extreme. what good is the money we make after all when not enjoyed?
the idea of a vacation home as a rental sounds like a good idea. something to keep in mind – if you rent it out fewer than 15 days a year and use it more than 14, there are significant tax advantages to it. You can claim all expenses as if it were a personal residence with no allocations to worry about. The BEST PART is that you do not have to claim any of the income from it.
I have rented out a few properties for major sporting events in the past and plan on doing the same this year (season) in Dallas when the Super Bowl is hosted.
@Sunil from The Extra Money Blog
Thanks, I’m still working on that perfect balance. I’m at the stage when it’s kind of like when a doctor slides the weight on the scale during a checkup. It takes a few tries to get it in balance…