Tag Archives: Saving

Retirement Advice from an Expert (NOT Me)

I read an article today that rocked my world and I want to share it with my vast audience of literally TENS of readers. 

If you’re like me, you want to retire as early as possible.  It doesn’t matter how much I enjoy my job; there will always be a long list of other things I’d rather be doing.  Planning for retirement is intimidating, and I always feel like I’m not as far along as I should be.  My goal, and it’s a bit of a stretch, is to semi-retire at 55.  By “semi-retire”, I mean I would be perfectly content to work for, say, ten years in a low paying, low stress, part time job that helps supplement my income.  Then, at around age 65, I’d like to embrace full retirement, devoting 100% of my time to my worthy hobbies, which include traveling, drinking wine, and napping, among other things. 

*Side note:  In a perfect world, I would embrace full retirement at age 55 and earn supplemental income from passive sources like rental properties.  We’ll see how that plays out.  Thinking about how to create passive income streams is an intimidating and confusing topic for another day.

Retirement planning seems a bit simpler today after reading an interview with investment advisor William Bernstein on the CNNMoney blog.  Mr. Bernstein has managed to make retirement planning seem a lot less like rocket science and a lot more like common sense.  I’m not even going to try to summarize the main points here because I don’t think I could possibly be as clear and concise as Mr. Bernstein is in his own words.  Just click through and read the interview.

Viva la frugal!

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Filed under Savings & Retirement, Value of Time

Monthly Update: August 2010

I’m a few days late getting my monthly update posted, but that’s because July was a crazy busy month.  I got a new job, am moving, and might be buying a new house.  All of which should make for some good HotFrugal topics over the next couple of weeks.  Stay tuned.

In the meantime, here is the update as of yesterday, August 3rd.  The great news is that I have more than reached my emergency savings fund goal.  Of course, I may be eating into this soon if I do decide to buy a house.  I’m not sure if it’s actually wise to use part of my emergency fund to buy a house, so I need to do some serious number crunching in a rent vs. buy analysis.  Naturally, all of you HotFrugal readers will see how this plays out. 

For now, let’s move on to the update…

Net Worth

I made a good recovery on my net worth this month, bringing it up to $70,508 from $64,888 the month before.  This increase is completely attributable to saving aggressively.  The refunds I got on home insurance and my escrow account following the sale of my house went straight into savings. 

The cool thing about this is that I didn’t feel the least bit tempted to spend that money.  This is a huge mental shift from where I was a year ago.  You know how you occasionally get some unexpected cash (a larger than expected tax refund, a bonus at work, etc.)?  I always thought of this as “free money” that I could spend guilt-free on anything I wanted.  I actually still think that this is a legitimate option and that there’s no need to feel guilty about spending money like that, especially if you have your financial basics in order.  But if there isn’t anything that you truly, genuinely, deeply want or need, why spend it? 

Assets Liabilities
Emergency Savings $25,680 Nada!!
Mad Money Savings $2,366  
Checking Account $841  
Health Savings Account $1,557  
401(k) (Vested Balance) $34,939  
Car Value (per KBB) $5,125  
TOTAL Assets $70,508  
   
Net Worth (Assets – Liabilities):  $70,508

 

Spending

Spending over the past six months has averaged $2,498 per month, which is right on target with my goal of $2,500. 

My always challenging grocery and dining out budgets were really wonky in July.  I think the spending in these categories is a good reflection of how busy July was.  It was a very fun and social month with lots of going out and meeting up with friends.  As such, my dining out expenses were quite over budget.  On the other hand, my grocery expenses were WAY under budget.  As a combined total, I was under budget but it’s probably not too healthy to eat out as much as I did in July.

  Budgeted Amount Actual Spend (July) Variance
Dining Out $160 $211 $51 over budget
Groceries $238 $110 $128 under budget

 

Summary

Another good month, which has brought me to an interesting new place in my financial life.  I’m currently debt free and I have my emergency savings established.  So what’s next?  I’ve never before been in a position where I have “extra” money for investing.  I’m not quite sure what to do!  It’s a confusing (but completely fantastic!) position to be in.  Stick with me while I figure it out…  I’ll be needing the support and advice of all my fabulous HotFrugal readers!

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Filed under Monthly Updates