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My suggestion: keep on like you are doing and invest most of the extra. You will be able to either retire early or have a better retirement, or else survive a huge period of unemployment.
However, set aside some of it each month as "fun money:" Maybe 10% of it. That money gets used to enjoy life. Maybe a better vacation, or maybe stuff like a good camera, or clothes, or electronics.
Life can be too dull if you never treat yourself. Put "treats" into the budget and enjoy some well controlled spending of part of that money. Part of pinching the pennies is to give you the money to enjoy the things that you enjoy.
And also, 10K per year into retirement is NOTHING. You may have missed part of the point of saving for retirement. If you save enough, you could retire EARLY and maintain your current standard of living indefinitely.
I was thinking this too. I was wondering why you would spend 6k on vacations but only 10k on retirement.
I haven't read this whole thread though and don't know OP's finances exactly.
If that's the case, I'd max out your retirement and live relatively the same as you do now. If you are comfortable with half of what you just went up to, stay there and invest. You can always use the cash later if you must. Better to live below your means than at them.
Try to live the exact same lifestyle you are currently living and save the excess. Half in a Roth IRA, half in a traditional 401k.
Look me up in five years and thank me for giving you the best advice ever five years ago! Feel free to throw some of the wealth you will have built-up my way!
Excellent advice! -- There will always be 'opportunities' to diversify or do different things in the future --- and you will have the freedom to take advantage of them!
Have you noticed how some people are always scratching their heads and wondering, "I wonder how in the world those folks can afford to ... (live in that house, take that vacation, retire early, start-up that business, etc)"? The one's asking invariably spend whatever they make and create debt on top of that; ... the one's they wonder about, are those who live within their means, save and are not depending on 'stuff' for their sense of self-worth.
We always took the latter path and as a result, always 'had enough' to live the life we wanted to live; plus saved and planned enough to retire early with sufficient money to live-out the rest of our lives in relative comfort. Those things do not simply happen by luck, but, rather require conscious choices when it comes to one's lifestyle and savings.
Nothing is permanent. Human nature can kick us in the rear. Live on much less than you make and invest and save more than any other expense. If you do that, you will be fine financially.
Kids are cheap when they're little. The teen and college years get expensive in a hurry. And if college is in the future, don't save any money in the kids names. Colleges take a lot higher percentage of the kids money than yours. Kudos to you for thinking about your future. You'll thank yourself many times over later.
If you are comfortable at 40K/year, you probably aren't living in a major metropolitan area.
Haven't read the entire thread, but I would be more concerned about making sure to meet the new expectations of the employer. You will have increased responsibilities, which may also mean more time at work.
Because of having less free time, you may find yourself requiring a maid service. I would also continue to save, because when your pay grade and title are higher, it takes longer to find work if you are out. If I were you, I wouldn't change my lifestyle much, because 80k really isn't that much these days and "things" happen..
Try to live the exact same lifestyle you are currently living and save the excess. Half in a Roth IRA, half in a traditional 401k.
Look me up in five years and thank me for giving you the best advice ever five years ago! Feel free to throw some of the wealth you will have built-up my way!
I disagree with the investment advice.
Instead of "saving" into a 401K/roth/ira/etc... buy precious metals. It will be better for you in the long run, since if the economy ever collapses, you can still use the metals to buy things you need; while the paper dollar will be good for starting fires and that's about it.
Quote:
Originally Posted by Stagemomma
Jasper had some great thoughts.
And also, 10K per year into retirement is NOTHING. You may have missed part of the point of saving for retirement. If you save enough, you could retire EARLY and maintain your current standard of living indefinitely.
That's 25% of their yearly income, that's quite a bit honestly. Better than average actually. Most financial planners say save 10-15% of your yearly. The OP is almost doubling that!
Not to mention not everyone wants to stop working early. My Dad is an unconfirmed millionaire (my godmother and his executor has confirmed it although he won't say a word, lol) and he still works 70/hrs per week happily. He can retire at ANY time, yet there he is at 77yrs old still working, doing what he LOVES.
Way easier said than done. If he doesn't have any expensive hobbies or interests or 'wants' then he should just keep steam rolling onward and invest the rest.
Exactly. I fail to see the 'problem' is he speaks of.
First world problems I know, but any advice is appreciated.
Listen to the guys at TastyTrade and take control of your money.
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