Category — goals

Obviously, the answer is as soon as possible. But it’s hard to know when it’s time to really buckle down when you’re young and in debt.

Tony and I are 24 and 25, and I had hoped to start saving for retirement this year. But the more I look at our finances and goals, the more I hesitate to start now.

As a grad student, Tony obviously doesn’t have access to an employer-based retirement fund. Neither do I in my current job. So any retirement saving we do at this point will be on our own.

We’d like to open a Roth IRA and start saving a little every month, even if it’s just $50 each. We can always increase that amount later. But then I start thinking about our debt and our likely cross country move in less than two years and all of our other goals, and I can’t help but feel like that money would be better spent on debt and liquid savings at this point in our lives.

I know that saving for retirement is essential, especially for my generation. But I feel like 20-somethings in debt should focus more on becoming debt free. Otherwise, we could wind up paying student loan debt until it’s time to send our own kids to college.

Even though our income is relatively low, I almost never feel deprived. This is one area where I really feel the constraint of our low income, though. After our bills are paid and our necessities are covered, there just isn’t enough left over to save for emergencies, save for our future, and pay down debt. If I split up the extra money between the three, I feel like we’re not making any headway on any of them. But if I concentrate my efforts on one or two, then I feel guilty for foregoing the third.

My fear is that it will only get harder, especially since we plan to live on one income. If we can’t find room in the budget for retirement savings now, how we will be able to once we increase our financial responsibilities and have children?

I trust I’m not the only 20-something in this predicament.

When did you start saving for retirement? Is it crazy for me to wait another couple years?

We had an absolutely wonderful time visiting our family and friends. After a fun, relaxing vacation, we’re back home and ready to start reaching for some new goals.

As much as I loved seeing everyone, the best part of our trip was the time we spent together. We spent a total of 34 hours in the car together driving. It was plenty of time to talk about our priorities, our goals, and what we hope to achieve in the coming year(s).

I hadn’t realized it, but the regular hustle and  bustle of daily life was leaving us very little time to talk to one another, reconnect, and make plans. We’ve only been married 7 months, but we’d already fallen into a routine that didn’t include much time for philosophical heart to hearts.

If you haven’t done it in a while, I really suggest spending some time with your spouse, one on one with no distractions, to talk about your plans, goals, and future together. If you have a date night coming up, spend it in a quiet place talking instead of at a movie or a loud restaurant.

It’s so easy to get caught up in talking about day-to-day life — jobs, kids, bills, etc. Tony and I like to occasionally have conversations like the ones we had in our first months as a couple when we had few responsibilities — long, windy philosophical discussions about our relationship, the future, and other things we don’t get a chance to discuss during the busy work week. These conversations help us look beyond what’s happening in our current daily lives, set new goals, keep us working toward achieving them, and leave us feeling like two teenagers in love with a world of possibilities ahead of us.

We talked about our careers, our finances, and our plans for after he graduates in 18 months. It was a lot of fun, and now we’re starting the new year with a renewed sense of purpose and a clear path to achieve our goals.

With just 18 short months until the next chapter of our lives, we’re deciding now where life will take us next. Hopefully there are big changes ahead. Don’t you just love the new year?

I’m so excited about the year ahead! For the first time, I feel like I’m looking ahead with a clear set of goals and the resolve to actually achieve them.

In the interest of keeping myself honest, here’s what I hope to accomplish in the coming year:

• Finish building our 6-month emergency fund. We’re a third of the way there now, but I hope to finish it by the end of the year.

• Spend less than our budget. We’re doing a lot better than we used to, but we continue to go over budget by $50-$100 every month. Technically we’re not spending more than we make because we save at least $300 a month, but we’re cutting down our actual net savings by going over budget each month.

• Make a dent in our student loan debt. Now that we’re credit card debt free, I want to really crack down on our spending and send every extra penny to our student loans so we can be completely debt free sooner.

• Learn more at my job and grow my skill set. Someday when we have children, I’d like to work from home, so it’s important that I learn as much as I can now to build my credentials and qualifications.

• Enjoy the present, and try to stop looking ahead to the next big thing. This is a constant work in progress for me. Planning ahead is essential to reaching long term goals, but sometimes my constant planning makes me lose sight of the present. I need to find a balance between appreciating what’s now and planning for the future.

What are your resolutions for the new year?

Photo by sideshow blues

I hope you’re all enjoying a safe and happy holiday. Now is the perfect time to take a step back and think about all the people and things that are truly important in your life.

Here’s what I’m thankful for this holiday season:

• Seven months of marriage to my wonderful husband, who will be with me every step of the way for the rest of our lives. He’s been incredibly supportive and willing to hop on board the frugal train from the beginning. I’m so thankful for our shared goals and his willingness to make sacrifices to help us reach them.

• My parents, my sisters, their husbands, and my healthy nieces and nephews. I don’t see them as much as I’d like, but I’m thankful for their well being and their presence in my life.

• My new in-laws who accepted me completely as part of their family long before it was ever official and have provided us with endless support and love.

• A job that I enjoy (most days) where I’m learning a million new things every day.

• An unexpected career in a field I didn’t know existed before I was hired at my job, but that I’m so excited to be a part of now.

• A steady paycheck that allows me to pay all of my bills on time, put food on the table, and save for the future.

• Frugality and budgeting. Without it, I would still be financially lost and overwhelmed with no goals and no plan.

• The people who read my blog. This blog has been such a huge part of our financial journey so far. I truly love blogging, and I’m thankful to the people who take the time to read it. Without you, I’d be talking to myself.

• The coming year and its endless possibilities.

I hope you’re all taking the time to count your blessings this holiday season. Merry Christmas!

I wasn’t expecting to receive a bonus from my employer this year. We’re in a recession, after all. So imagine my surprise when I received a bonus of about a week and a half’s pay. That’s quite a lot of money considering how little we spend.

I find that extra money is a lot easier to control when it’s expected. For instance, we know we’ll receive a tax refund this year. We’ve been anticipating it all year, and we already know where it’s going (savings).

However, when someone hands you a check out of nowhere, it can be tempting to blow it. After all, I was doing fine 5 minutes ago before I received the money. It’s not like I’ll miss it if I just spend it, right?

I have a feeling that no matter how committed I am to frugality, I’ll always have these moments of temptation. In that moment of weakness after I looked at the amount on the check, I started thinking about new furniture, a new TV, and a thousand little, inexpensive things I could use this money to buy. It would be a lot of fun to just blow this money. But then it would be gone, I wouldn’t be any closer to reaching my goals, and I’d regret it.

I quickly reminded myself that we’re in debt, and we’re nowhere near reaching our financial goals. Blowing money on things we don’t need is a good way to keep ourselves from reaching those goals.

So what is the practical side of me considering using the money on? Here are some thoughts I’ve had:

Summer fund

Two months of the year, Tony doesn’t receive a paycheck for teaching. He’ll find a part time job, but chances are it won’t pay as much as his monthly stipend. Last year we adjusted our budget and tightened things up to accommodate for our lower income. I’m considering throwing my bonus into a savings account to help us a little during those summer months of lower income.

Emergency fund

Our emergency fund is about 1/3 of the amount we want. This money could help us beef it up a little.

Debt

This is the least appealing option. After all, my bonus is dwarfed by our $60,000 in student loan debt. However, every little bit does help.

Retirement?

This is a tough one. Tony and I are 24 and 25, and neither of us has a retirement account. We’ve wanted to open a Roth IRA for some time, but it has taken a back seat to debt and savings. I’m considering using this bonus to jumpstart our retirement saving. While I don’t think it’s enough to open an account (I think I need at least $3,000 for that, but I’m not sure), it could at least get us started until we have enough saved to transfer it to a Roth IRA.

While I really want to get started on retirement saving, I’m hesitant since we are considering moving in a year and a half. We really need all of our savings to be liquid so we can use some of it for the move if that’s what we decide to do. So I’m leaning toward putting off retirement savings for another two years until we’re settled down somewhere.

I could use some advice. What would you do?