Vix reminded me on Thrifty Thursday that we can't take money with us when we die. True for sure. Like her, I want my money to go where needed and priority now and not always think save, save, save. I thought I'd remind myself where that mix is, while not forgetting we hope to have decades of well planned retirement. Here's a mix of high level categories, beyond the shelter, food, clothing, transportation needs, and monthly fun wants, we spend our money on. This is just us, and no suggestion that any of these are for you or how you should manage your money. Nor am I looking for advice, but always appreciate a bit of good discussion.
- Maxing our 401 K contributions
- Annual Roth max contribution
- Monthly annuity/whole life insurance plus monthly top off insurance for me
- Annual annuity/whole life on each child, set up when they were born and never changes in cost but benefit has grown incrementally
- Monthly donation to our church, quarterly donation that aligns with holiday and event calendar
- Biweekly charitable donation to our local family service, taken out of my pay check
- Quarterly charitable donations-determined to who and how much
- Setting aside $200 per month in unknown potential costs that pop up-a sinking fund of sorts but for the unexpected (we have a different method for sinking funds for the irregularly timed bills such as taxes, home and car insurance)
- Ad hoc donations for family fundraisers-sometimes we do the fund raiser, sometimes we just send some money to help with the cause/cost. We have a annual budget line for this, and I review when the asks come in. I don't donate to everything, as some of the kids are constantly in a fund raising mode for something-you know what I mean! I also sometimes think about the experience for that child and what the fundraiser is for. I'm turned off by fundraisers for for profit business participation such as skating, gymnastics, or dance schools, but I'll pay admission fees to attend such events. It's not that I don't support small businesses, but I don't agree with a business model that has kids hocking crap. I'd rather help the family member if they need a bit of help covering tuition that month.
- One more year, two semesters, of college tuition, room, and board
Things I still need set up with more intentionality:
- Separate long term health care account
- Final resting/funeral expenses
- A true vacation account
- A true household project account
I know I said this but bares repeating. This is my direction for our income, and likely has little to no bearing on your plans. With the exception of college tuition, and who knows, we may have a different education fund set up, and 401K, these spending areas follow us into retirement. We're not money wizards and don't aspire to hoard money. We just want to keep living a good life with friends and family until our lives come to a close.
We currently have one big pot for all of our savings, and don't have it broken out as thoughtfully. We also get monthly (me) or quarterly (M) vests of our stock, which serves as our current additional money to pull from. Mine automatically vests/sells monthly, and can then be used to cover larger expenses, or go to savings.
ReplyDeleteInterestingly, we have no life insurance outside of our current work policies. Our current employer forward vests all of your stock, pays your salary for a year as well as your health insurance, and also pays out a generous life insurance policy. I don't think we will replace my income with a portable life insurance policy when I leave work, as our current financial model doesn't require my paycheck. It's a good question to discuss, though. We also plan to leave enough to cover our death expense, although want to be cremated & for no funeral services.
It's always useful to hear how others think about this.
We both are category people I guess. Yes, some of it is in one pot, but we have spread sheets tracking that tally up-like the property taxes, insurance, and random sinking fund are all in one account. There's no one right way, just in the US, we have made financial life so complicated, we need to think across multiple lines.
DeleteWhen you get that last child off and they have a job there is no better feeling for a parent. Those college years are expensive. But they will pay you back tenfold. I wish I had the funds to have categories, right now it is survival of the fittest. Whoever is screaming the loudest gets the money!
ReplyDeleteI agree with you. When my youngest was "set" (i.e. still living at home but working and paying for his own gas/clothes/entertainment) there was a sudden feeling of "freedom"!
DeleteI just hope for my daughter she can get on the property ladder soon-its her goal and things are so tough in her price range. My son likely will not own a home ever, or unless he inherits one. Well, maybe a condo type as his lifestyle and work doesn't lend itself to either stable reliable income, or time in one place for home ownership needs.
DeleteThose are all expenses that need to be accounted for - I'm impressed that you're so good at doing this, Sam! My younger brother has zero savings, no money for retirement...it's astounding how many people don't do this!
ReplyDeleteI contribute to a TFSA (Tax-free savings account), RRSPs (Registered retirement savings plans), and we have almost no debt (our recent trip to Vancouver set us back about $1K, which is nearly paid off). My donations are done by shopping at charities, to help support them, and I also support local charities through my work.
I've voiced this to my mom - you can't take it with you - and encouraged her to use some of the money she's saved for so long to make her life easier, like hiring a cleaning service.
It's that mix between being planful and not hoarding, planning for tomorrow while loving today. I think we are set n our plans, but think is the operable word.
DeleteThanks for the shout-out.
ReplyDeleteDespite having a very succesful career my Dad scrimped and saved all his life and - looking back - we lived so frugally it was ridiculous - no heating, no washing machine, no freezer and a single portable TV. If we wanted to watch a video or be warm we visited friends! Tea was rationed so visitors were only offered a glass of tap water. I didn't go abroad until I was old enough to pay for it myself.
After he died the government siezed a large percentage of his savings in tax and, of course, having money in the bank meant he had to fund his 24-hour nursing expenses when he went into a nursing home five years before his death (almost £1000 a week) - imagine the fun he could have had frittering away some of that hard earned cash on sports cars, fine wine and some decent clothes - at 80 he still wore the same clothes he'd worn when he was in the RAF as a young man.
Use it, or lose it - that's my motto! xxx
That makes me sad for your dad-nope, we will not live a restricted life. It's that darn US health care system that has too much control over how we plan for the future. One badly covered illness and people can lose their entire livelihood. I hope friends and family see us as generous with what we have, while being practical about our future. My parents didn't have a lot of money, but we overall had a good life and they enjoyed things-travel, meals out with friends, a comfortable home, right up until they passed away. .
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