Silly Tricks for Budgeting

by Louise

Now, that Holiday shopping is coming to a close, let’s examine our spending. Did you spend too much and a fiscal shutdown is in order or are there still a few dollars in the piggy bank ? What are some of your budgeting tricks ? Putting money away in discretionary spending accounts, not going over a certain amount in your bank or credit card, waiting for returns to be credited before buying more, no more Amazon . Share with us your tricks for spending less.


108 thoughts on “Silly Tricks for Budgeting

  1. Well, the way I used to do this was to build in a couple of levels of savings. I started with setting my budget below my salary (not huge amounts, more like rounding down to the lower $100). I then set savings as a separate budget category. And then I made it a game to see if I could come in under-budget in my discretionary spending categories. I realize this might not be for everyone. ;-)

    Now I am much lazier and the budget is not so tight. So now I just have all of the “must-dos” automated. In addition to stuff like 401(k)s and insurance that come through work, I think we currently have monthly automatic transfers to (1) a money market for periodic big expenses (car replacement, roof, etc.); (2) 529s for both kids; and (3) a separate VTSAX fund for extra college/retirement savings. Everything else just goes into the checking account, and we manage our spending by making sure the balance stays the same over time. If we see a big unexpected swing, we go look (usually it’s something like plane tickets for an upcoming vacation).

  2. I’m also interested in tricks for budgeting time. I learned that my kids don’t mind Costco’s eggplant parmesan frozen dinner, for example. I used to do more housework and determined that my cleaning person would do a bit more for a bit more money. Keeping growing children shod and clothed makes me grateful for internet shopping.

  3. Over time, yearly and monthly fees for various services, charged to my credit card, had piled up. Stuff like magazine subscriptions, software subscriptions, memberships that auto-renew – it is easy to lose track of it all. So recently I went through a bunch of old credit card statements, located all of them, and then started aggressively canceling stuff I no longer need or use.

  4. Time trick of 2018 – outsource fall and spring clean up. So worth the $$ (which isn’t a lot when you compare to the number of hours DH and I spend on leave pick up).

    Budget trick – We take a small amount of cash out when we get paid. It amounts to about $50 a month. That’s our money for the month. Whatever we want to spend it on. And to be cruel, we agreed that we’d only replace what we spend, not add to our pile if we didn’t spend all our money that month. But it’s helped with the misc. purchases that find our way onto debit cards (like Starbucks or lunch out or drinks after work).

    My goal this year is to increase our savings rate (hopefully by March), and look into a index fund or money market account as a method for saving money for periodic big expenses. Of course I’m slow on this because last quarter wasn’t kind to ANY account I have.

  5. I use reward credit cards whenever possible and then every month, use the reward amount as an additional payment on the car loans.

  6. I don’t travel much any more but one trick I’ve used was to take my T&E reimbursement and deposit it directly to savings. I’d just pay the business travel expenses with all my other bills. I generally could get away with this providing there weren’t any international trips.

    I feel like I’ve been very spendy lately on personal items. My food bills will decrease dramatically as soon as the boys return to college.

  7. Ginger – same. I suddenly felt like my work wardrobe needed a refresh and so I got rid of several old suits and other things that I haven’t been wearing and acquired a couple of new things, plus more Polartec leggings since those are all I wear in the winter when I am home (along with down skirts and hoodies).

    If I am feeling like things have been too spendy I go on a spending diet, which usually means no clothes, shoes, makeup, bags, etc. for at least a quarter. Q1 usually feels like an appropriate time for this, but I delay until later January (now, basically) since I like to get stuff on sale after New Year’s. I also recently increased our 529 plan allocation but I don’t think it’s enough. What number did everyone target for 529 savings by age 18?

  8. We’ve been spending a lot of money lately on our home, and dental bills. It is never a “good” time to spend this much money, but the holiday bills combined with the home and dental bills all hit in Dec/Jan. It stinks because my DH always does a financial health check on Jan 1, and we had a bad year due to the markets. He also earned less due to the markets so….it is ugly.

    I am trying to make some small changes such as meeting people for coffee vs. lunch or dinner. The reason is that many of my friends like to meet at the diner for lunch and they order salads. Then, they add chicken or some other protein. I might order a burger and suddenly I am stuck splitting a check and I owe $25 for my $10 lunch. I’m also drinking more water and spending less on beverages during the day. I am avoiding stores and web sites because I did a lot of shopping for me during November/December when I was supposed to be holiday shopping. I also want DD to ramp up here babysitting so she can spend more of her own money on some of the stuff that we pay for all of the time.

    I am still going to complete the renovations because most are long over due such as the windows, but I am not going to do as much decorating inside the rooms. That will probably wait until next year. I am considering going back to work full time. I’ve been exploring a few options, but I have to weigh the cost/benefit of full time work since I would need some before/after school help until DD is able to drive. I have two more years until she can drive to school. I sort of passed on an opportunity that recently popped up because it would require a lot of travel. I would rather do something that pays less if I can spend more time around home as long as I am working again. I spend at least 35- 40 hours a week on this volunteer stuff and that will finally end this year because I gave notice to all three boards.

  9. Lauren, we hit cash flow issues in the early fall – combination of bills coming due for renovation work outside, having to buy things like a computer for the college kid, two neurospych evals, and some other stuff. I am very anal about paying off the credit cards in full each month, whch meant for a bit, we didn’t have a lot of cash in the accounts. I got very aggressive about budgeting for food – weekly grocery store trip with meal plan and list in hand, no expensive meats or other products, only buy what is needed, no clothing purchases, etc, etc. I even put an end to Friday takeout for a while because I can always cook for cheaper. Even after the crunch eased, I was very good at holding the line this year on Christmas spending. We have that mile long list of relatives on DHs side to shop for, and there is an ever-expanding set of new small kids on that side. So I established a spending limit of $20 per gift, and found a couple of great sales at sites I like on the weekend after Thanksgiving, and bought everything for that side of the family in 2 days during the sale. I am glad I did it that way because when I went to compare the costs with last year;s costs, it was way down. And the little kids were all just as happy with their gifts as ever.

    One question – why does your daughter have to be able to drive to school? Are you guys not eligible for the school bus?

  10. I am waiting a few more months to accumulate more cash, and then I want to tackle some inside redecoration. There are two end tables I want to replace, and the downstairs curtains. The cat shredded them and they look disgusting! I have to figure out some style of window covering that doesn’t cost a fortune, that is to my taste (no heavy drapes, no fabric covered slats), and that is cat-resistent.

  11. I have so many little tricks for saving money and budgeting.
    – Live on one salary. My parents did this and it always felt completely normal to me, so we have also done it from day one. Some years, when one person was in grad school and the other was working, we only had one salary in the first place. But whenever we’ve had 2 salaries, we’ve only depended on one for day to day. Right now we live on DH’s, and mine goes 100% to savings.
    – Separate savings accounts for everything. I really have to silo our money, in order to both be motivated to save and to give myself permission to spend. I have separate accounts for travel, home projects, school tuition, and general/emergency. Each of those is funded each month, although not necessarily equally.
    – Max out retirement savings first. Before anything else, we put money in our 401(k)s, IRAs, and long term investment account. We don’t have 529s. I track our contributions every month, and we have a set amount that is our total goal each year.

    – If we get too spendy on the credit card, we revert to cash for a while. We each take a certain amount out of the ATM for the week, and when it’s gone, it’s gone. We have done that anywhere from 3 years at a time to just a month. That really helps reset spending habits.
    – We never, ever carry credit card balances. I don’t think we ever have once. If we can’t buy it out of cash flow, we don’t buy it.
    – Earn more. Since DH and I are both paid on productivity, sometimes our time is better spent earning more rather finding ways to cut costs, and the extra earning then goes to savings.
    – Pretend we earn less. DH is paid on productivity, which means he bonuses out a couple times a year. We set his base salary much lower than the ‘normal’ calculation (I think we set it at 70% of expected earnings, most people set at 90%) and we live just on his take-home, which means he always gets a significant bonus. This is the money we throw at debt, with the goal of being debt free when DS #1 goes to college.

  12. Similar to Lauren, we had a bunch of things hit around Christmas time.

    The couch broke (one of the recliners) and we wanted a new one. We’d been leaning toward a sectional for maximizing feet-up, tv-viewing seating capacity. The only one we could find that we liked and that seemed like decent quality, somewhere in that stylistic space between man-cave with power headrests/built-in cooler and rather formal and not particularly comfortable, was the kind where you pick out the fabrics and they make it in NC for you. So that was a big bill.

    Then the puppy probably ate something he should not have, and after X-rays and some consultations about the different possibilities, we elected to have the surgery before we traveled with him to the middle of nowhere.

    DW has been on this kick about traveling now that the kids are the right age and our overall financial goals are on track, so she had booked three ski weekends for which we needed to pay all the VRBO fees. And she booked our travel out west for spring break, so there were five airline tickets plus a week-long VRBO. The in-laws have talked us into a Scandinavian/Norwegian cruise, either going up through Norwegian fjords, or up the Baltic Sea. I’m all for it, but I was like we got to slow this down. Not 2019, let’s plan it for 2020. I can’t afford it right now.

    Anyway, the kids were very worried about the dog, and got concerned about the cost of the surgery, and they were volunteering different activities that they would forego, and thinking of items they could sell. I told them that if we cut way down on restaurants for a while, we could mostly “cook our way out of the hole.” And they said that was just fine, as they seem to get no particular pleasure out of dining out, anyway. They’d usually rather stay home.

    DW got an Instant Pot for Christmas, and we’ve been using that a lot. I made a really good pulled pork recipe which, after cooking and shredding, I was able to smoke the cooked meat with a small, “cold smoker” that I got for Christmas. It’s the coolest little thing — it’s a plastic dome with an attached rubber hose connected to this handheld device with a battery-powered fan. The device has a cup with a mesh screen into which you drop just a few pinches of small, specially made woodchips (they sell hickory, applewood, cherrywood, etc.). You turn on the fan, light the wood chips, and the fan sucks the air through the chips like it’s smoking a pipe, and blows the smoke through the rubber hose to fill the dome. In addition to the pulled pork, which got flavored like it had been cooked all day on a smoker, I’ve smoked blocks of cheese. The trendy thing to do with it is to smoke cocktails. We had this at an upscale restaurant last summer. DW was very intrigued; I was less so, but that’s what inspired her to buy it for me as a gift.

    So…long story short, we’ve been cooking a lot more, with some good results. Friday lunch is our standing restaurant date for just DW and me, since I no longer work Fridays.

    Otherwise, I’m content to leave finance on autopilot, and I’m more focused on fitness goals.

  13. “What number did everyone target for 529 savings by age 18?”

    Roughly $60k in each. Then the difference can be covered by diverting investment dividends from “reinvest” to “deposit in checking.”

  14. Like Lark, I seem to need specific silos of funds for specific things (e.g. next car, new windows in the house, big vacation). Just makes me feel better I guess vs just having one big ol’ savings account on the side to accumulate the cash we don’t need for the day-to-day. We do have a general savings account that’s more or less earmarked for Christmas presents.

    It’s not particularly convenient to go out to get something for lunch so I bring stuff in. When the mid-afternoon hunger pangs hit I am much more conscious of avoiding the vending machines a couple of floors below me. On those days when I’m successful in not spending on food for unplanned* lunch/snack, I move what I probably would have spent into the general savings account around the end of each week. Sounds stupid but whatever.

    I did pay off one car loan last month and probably will pay off another by the end of the month. <2% interest rate for both, so it's not like the carrying cost was important at this point. I just want to free up the cash flow and I have the actual cash sitting around available to me.

    *like everyone, there are the planned group lunches for whatever event. Those I give myself a break and don't feel bad about spending on since they are infrequent.

  15. In terms of stupid money frittering, eating out for convenience is definitely the easiest to cut out and the one that adds up the fastest.

    I agree with Mooshi too about things that are automatically charged to the CC that you forget about, and that’s smart to go through those. We just canceled Hulu, and I am also going to to through the next few CC bills to see if we have any recurring charges that should/could be canceled.

  16. Mooshi, we have busing. In order to save money, the district sends the same bus, but it comes at three different times. The HS starts at 7:55, but the bus comes at 6:50 AM because it has to drop at the high school and get back for the middle school run. No teenager wants to get up so early just to sit in school. I have a morning carpool and I only drive two days a week. As she gets older, she can probably go with some neighbors that are seniors.

    The afternoon is a mess because the bus leaves the HS after the run for the MS and waits until after the elementary school on another day. There are late buses, but she sometimes stays for activities, sports etc. I have friends that I can call, but the afternoon is messy because so many of my friends still have younger kids that they have to pick up at other schools etc. If I get a job that is in the city, I’ve told DD that she can go to the homes of some of our friends near the HS. One side of our community borders the HS and it is walkable. One of our close friends offered to give DD her garage code. I have back up plans if I really want to work.

  17. @ Milo – did you get pet insurance? We did not, but I think on our next puppy (if we were to get one, not sure we would) I would get pet insurance.

  18. No, because I heard on here and in other places that it’s generally not worth it, and a PITA to use. And, as a matter of principle, I’m opposed to excessive insurance.

    But it could have paid off in 2018, I agree.

  19. We suck at budgeting, we really need to work on it more. I did finally find a good alternative to Quicken – Moneydance – and fully switched a few weeks ago. I should start using the budgeting tools in it.

    We’re getting slammed right now with the health insurance deductible resetting. DW is in the hospital and that will probably be at least $5k. We had to get a new furnace last month. We just had to pay the auto insurance. It will eventually work out.

  20. “What number did everyone target for 529 savings by age 18?”

    Honestly, it pissed me off that I was able to go to a great SLAC on my mom’s teaching salary, and that I made so much more than her but didn’t feel like I could offer the same opportunity to my kids. So my *real* (unspoken) goal was to be able to do that.

    My more practical goal — the one I said out loud — was to make sure we at least covered full in-state tuition/room/board (extras covered by the kid from summer job/work-study). I figured if one of the kids did get into a HSS and it was the right school, that amount would let us cover most of the cost out of savings and cash flow, so any loans would be minimized. Thanks to the market, the unanticipated trust from my stepdad, and DD’s offers so far, loans should not be required at all, and if she takes one of the scholarship offers, there should even be money left for grad school/med school. So I was able to tell her that she can go to whichever school fits her best.* And that feels really, really good.

    Re: “live on one salary”: we also did this. And once we each started getting significant portions of our pay in bonuses and end-of-year, we made sure not to count them in the “normal” budget.

    *With the understanding that she can weigh the relative value of using the money on a more expensive undergrad vs. a cheaper undergrad + med school.

  21. “The HS starts at 7:55, but the bus comes at 6:50 AM because it has to drop at the high school and get back for the middle school run.”
    Oh, that is ridiculous.

    How far are you from the HS? Can she walk or bike?

    Our district is in an uproar right now because they discovered they are out of compliance with the mandated busing distances, so unless the town votes to allocate a bunch more money to busing, lots of kids are going to lose bus service (and please, don’t ask me why – I am completely clueless as to how this works or what the money is for). What a mess.

  22. “Honestly, it pissed me off that I was able to go to a great SLAC on my mom’s teaching salary”

    I am confused by this because back in my day, there was no way my father’s salary as a professor could have paid full tuition at a private college. Even back then, private school tuition was considered to be very expensive. Did you have financial aid?

  23. Our house and cars are paid off and other than current credit card charges we have no debt.
    The one bad habit we have is eating lunches out and I try to cut down on this. I hate seeing the money go out for vacations but love the vacations.
    Our home improvement projects are all the basics that are required for an older home (insulation, windows, roof and a whole house generator). We haven’t done much of changing the inside of our house (we did replace our kitchen counters). After the kids are off to college and we have a big fund, I want to look into building a new house on our existing lot (the trick is trying to pull on and save without spending too much on older home).

  24. “What number did everyone target for 529 savings by age 18?”

    120K, instate cost for four years.

  25. @MM – yes, lots of financial aid. It just made me feel like some version of failure that as well as I had done, I still didn’t feel like I could front a full college education. (Of course, I also didn’t predict the raging bull market of the past @18 years, either).

  26. I believe our 529 savings goal is supposed to be $200,000 per child (Class of 2027). But, we stopped funding the 529 a few years ago and now fund an IRA and consider that the college fund. The thought is that if our kids get scholarships, inheritance, or grandparents chip in, we don’t have an overfunded 529 (better to have an overfunded IRA).

  27. $150k per, calculated roughly as in-state flagship plus enough extra to live life. That extra is a big enough cushion to cover things like a used car, car insurance, clothing, etc.

    When kids were younger I really wanted a bigger house and an inground pool. And nicer cars would always be welcome. But the goal is/will be met and I’m glad now that I don’t have an inground pool to deal with. In those early years, every time I saw a house in town that had one more bedroom and in inground pool I got twitchy. I was convinced it was the key to familial happiness. And I still think it would have been but at 19 and 15 I think they would have abandoned the pool by now and I would be swimming on purpose to bring down my cost per use, because I am nuts like that.

  28. Many of these budgeting comments reflect the reality that eating out is expensive as compared to cooking at home. Something we have to work on in our house is using what we buy. I try to get creative about that, bu sometimes just end up frustrated that we bought something that looked good but we never got to it. I have a moral problem with throwing away food.

  29. I need to go through subscriptions, services, insurance, etc. and audit all for possible savings. Our electric/gas bill shows we’re using considerably more than our neighbors, so an energy audit would be good.

  30. “sometimes just end up frustrated that we bought something that looked good but we never got to it”

    Oh man, Whole Foods is right near my D’s job and she’s always getting something that inevitably never gets finished. I just threw away an extra container of rice wine vinegar sitting in our pantry because she had bought the organic version. We like to encourage her to cook but this has gotten out of hand. My H also buys stuff that we already have, or buys too much so some gets thrown out.

  31. My in laws are great at grocery planning and at our house food wise hardly anything goes to waste. It probably saves us a good amount of money. We are more disciplined about opening very limited packages of snacks, drinks, cereal etc and making sure we finish and not throw out half full bags of things.

  32. “Our electric/gas bill shows we’re using considerably more than our neighbors”

    I don’t believe these for a second. The last one we got said that we use 50% more than our neighbors and that we were among the highest in the neighborhood. The time period for this was for a three month time that we were not living in the house. It was under construction and we had the heat set to 55 degrees, no washer/dryer, and the water heater set to the lowest setting. We were living next door, so we knew the subs weren’t leaving windows open, turning up the heat, etc. Oh, and our utility bills for that time period were significantly less.

  33. July, my DD is the biggest offender in our house as well. She played high school soccer this year and really revamped her eating (great!) to include more fresh fruit and veggies and lean protein, but our grocery bill increased as a result. We will be making a quick trip to Whole Wallet this eve so that she can get sunflower butter without added sugar because the other local grocery stores only sell sunflower butter that has added sugar. I’m glad she has taken charge of her nutrition and is making healthy choices, but those choices are more expensive. I recognize that this is a totebag problem.

    You folks motivated me to choose my credit card carefully. I did some research last year to find the one with the best rewards program and have been very happy with the switch, well worth the time spent.

  34. By sticking to cooksmarts, we’ve really thrown less food out. Usually it’s something extra (like a sauce) that we had too much of. Last week (of course when I was going overnight to the leadership program I got into), the fridge and freezer started acting up. It was a good excuse to clean it out. So much of the extra sauce and random things were tossed.

    I always look at larger homes and think the key to happiness would be one extra bedroom and/or a bonus room. But to keep the other things we like and/or upgrade (like similar lot size, or get a garage or better school district), we’d have to add about $1,000 per month to our mortgage bill, probably more with insurance costs. I just don’t want to justify that right now. I have a feeling when we are actually comfortable enough to justify the expense it really won’t be worth it. But who knows… in the meantime, we have our reno list and keep plugging away.

    I think honestly if I could have someone come in and convince my family that clutter is bad and none of the things we are storing in the basement (aside from decorations, food, a few appliances, etc.) spark joy and need to leave. Then proceed to do that through the rest of the house. It’s like on Love it or List it. People want to keep their house when they don’t see 95% of their stuff anymore.

  35. Denver — I hope your wife is OK.

    July — ITA with Lemon that those “you are using way more energy than your neighbors” statements are BS. We get them, but I know for a fact that our house is way more efficient than many of our neighbors’ houses.

    Question: A lot of you have mentioned replacement windows. How long should one expect windows to last? The previous owners of our house did a kitchen/family room addition in 2000, and I have noticed of late that those windows have gotten very drafty. Is it normal for modern windows to fail after less than 20 years??? (Related to the budgeting topic, we’re going on a big vacation this summer, so replacement windows are not in the cards for 2019; for now, I just bought some of that rope caulk stuff at the hardware store, and put it around the frames where the drafts are coming in.)

  36. @July: what is wrong with an extra jar of rice vinegar? I mean, it’s not like it’s going to go bad and turn to vinegar. . . .

  37. what is wrong with an extra jar of rice vinegar?

    I may have something to answer your question after I have viewed the “Acid” episode of Salt, Fat, Acid, Heat.

    But I can tell you from the Fat episode, in no uncertain terms, olive oil will definitely turn rancid if you don’t use it an timely, if undefined manner. And to think all these years…

  38. Swim — A few years ago, my DH was on a Paleo-diet kick. He loves peanut butter, and eats a lot of it, but under the Paleo theory, supposedly peanuts are Bad, whereas tree nuts are Good. So he resolved to switch from peanut butter to almond butter. When he saw how much almond butter cost, however, he decided that peanut butter probably wasn’t so bad after all.

  39. MM, made from sunflower seeds. Quite tasty, and a change from peanut butter or almond butter. She uses it on her apples for breakfast. Honeycrisp apples, of course, as they are the tastiest and most expensive apples known to man.

  40. The questions about how often to replace a window depends on the age of the home, weather, age of windows, and especially the composition of the material. For example, wood will rot much faster than a synthetic. We recently replaced three windows that we installed in 2006. We were new to home ownership and made a VERY stupid choice by going with a low cost guy that was a friend of a friend. We had no idea about the quality of the windows, or his work. The window “failed” within ten years because of our choice of cheap windows, and his poor quality installation.

    This time, we went to a window store chain. We researched different options from Andersen and Marvin. Also, we learned about the different types of windows that are now available. The technology has improved to the point that the materials last much longer and both companies will warranty some of their new windows for 25 years. We also chose our own contractor for installation instead of going with some random person from Andersen or the window store.

    We also needed to replace three doors on the front of our house. There is this tiny deck that we never use, and I have never seen any of my neighbors with a similar home on this deck. It can fit two chairs. Anyway, it has three doors – french door style. I replaced the original doors so those were probably 30 years. Those were wood and I replaced them with doors that are made of a combination of wood and synthetic materials. They should last much longer. Also, the windows and doors were impacted by some sagging and so they no longer lined up properly so some air was coign through the tiny cracks. Every seal is now tighter so it is not as drafty.

  41. “Honeycrisp apples, of course, as they are the tastiest and most expensive apples known to man.”

    But of course! My D has bought the ingredients and made vegan mac and cheese so many times, but every time it was bleh. Lots of wasted food, including expensive ingredients like organic, unsalted raw cashews.

    I threw out the rice wine vinegar because we don’t use it that much and I didn’t want the extra container taking up space in my smallish pantry. That’s the thing, all these extra containers crowd the pantry and fridge shelves and make it hard to see what I have.

  42. I used to use Quicken for management, and a spreadsheet for budgeting, but switched to You Need A Budget (YNAB) about 5 years ago. It took some time to get my head around the philosophy of this envelope-based system, but once I did, boy am I a convert. I used to have several separate savings accounts for things like “vacation” but because they weren’t more granular I was always stressed that we were spending too much on THIS particular vacation and wouldn’t have enough left for THAT one later in the year. And we didn’t really track spending until AFTER the vacation was over, when it was really more of a tallying up of the damages. With YNAB, I can create a virtual envelope for each item – “Beach in June”, “NYC in October” etc. and add a little to it each month. Then when June comes, I know exactly what I have to spend on that particular vacation. And there’s an app so I can record my spending right away and see what’s left in the envelope in real-time. (If I’m lazy, I can rely on the auto-import, which is usually a day or two behind but often good enough for my purposes.)

    My DD(21) uses YNAB as well, and when she recently needed to replace her iPhone (water damage from a toilet drop), she said she wasn’t too stressed because she had $300 in her “new phone” envelope.

  43. My Anderson windows from our renovation in 2001 are still going strong, even if they’re rarely cleaned. They replaced the very drafty original 1925 wood frame windows.

  44. Thanks! Right now 200K is my hazy goal, but we are really far from that and only 8 years away from needing it. Oy. I am projecting (knock on wood) that my income should be far more this year than last, but I will also be able to put a ton more in retirement so net may be closer to last year (still more though, I hope!).

  45. We just have to manage to live on our retirement income and can do that pretty well. The major budgeting decision in taking early retirement was NOT to try to establish family dynastic wealth (not really achievable with only half of an adult work life and large family) and NOT to plan to pay for the grandkids’ college. Our asset position is low compared to what many on this site would think necessary, but DH has a decent pension. His objective is to leave his son an inheritance, so he takes his RMD every year and sticks it in a CD payable to his son upon death. My objective is to be the no questions asked real time financial, housing, and hands on safety net for all of my kids, so I keep a fair amount of liquidity.

    I do a rolling one year cash flow spreadsheet, so I make sure I have enough cash coming in for known future bulk expenses. The monthly nut is so small with house and cars paid for, and no need for clothes, that any major unexpected expenses can be handled by cancelling a planned vacation before having to liquidate assets. I did about five years of charitable giving to the donor advised fund in the past two for tax planning purposes, so that is also not an expense that impacts cash flow. House reno projects (windows, carpet, painting) are on the very back burner until DD moves out, which is not imminent.

  46. YNAB – I love that thing. DH and I need to get better about “envelopes” (and we will this year), but we’ve gotten ourselves out of trouble which began late grad school and culminated with a huge flood and high risk pregnancy. DH still uses his spreadsheet, and we haven’t migrated to the app, so it’s a little stilted. Either way, YNAB changed our thinking. I seriously am no longer worried about bills.

    Windows – we need those things. I’m pretty confident that every window (with the exception of the french-style door we installed in 2008) is >20 years old. Possibly nearing 30. Some of them are downright drafty.

    If we ever replace the siding, I’m doing to have them blow in more insulation in the house. I think that’s “failing” (or compacting… either way not doing its job) too.

  47. Windows: some of the worst possible windows are vinyl or aluminum windows from the past 10-30 years. The problem is the vinyl itself is a little too flexible and doesn’t have the rigidity to maintain tight seals. Older wood windows are actually better — they just usually are single-paned, and solid wood can warp over time. The best option is usually a vinyl-coated wood or engineered wood option.

    But the first line of defense is caulking and glazing — those are the kinds of things that give out much more quickly than the windows themselves.

  48. I did save some money on my implant, but timing was important. It still cost a fortune!!! I had the tooth pulled in Dec 2017. The oral surgeon made me wait a very long time until the bone and gums were healed for phase 2. By the time his work was complete, it was October 2018. My dentist said to just wait for the crown and she put that in on Jan 3 2019. I was able to hit dental insurance in all 3 years because our dental insurance has a very low cap for major restorative work. I think it is only $1000-$1500 per person per year.

  49. – Live on one salary.

    It’s interesting that I’ve seen a lot of people in that position take on mortgages on beach houses, lake houses, bigger houses, Florida houses, etc.

  50. @ DD – hope your DW is OK.

    On wasted food – it is impossible for me to go an entire week without a mid-week grocery shop. We always run out of bananas, milk, cream cheese, eggs or some other basic by Wednesday or Thursday. So I’ve stopped buying groceries for a whole week’s worth of dinners (even though I will have planned the whole week). I just pick up what we need for the 2nd half of the week when I’m there getting milk and eggs (or text to DH if he’s the one making the stop). That has made a huge difference in the unused food in our fridge.

  51. Lauren – my implant cost a fortune too. All dental work costs a fortune, even with dental insurance. And we are facing implants for DS2, His braces come off next month, and then we have to start planning. Ugh, ugh, ugh.

  52. I wish we would have lived on one salary from the start, but we didn’t. We aren’t very good about paying off credit cards in full, so we pay almost everything in cash, but I always feel bad that I’m not earning points. There are a bunch of things I wish I knew more about personal finance starting out, but we’re doing fine now. We don’t make as much or have as much as a lot of Totebaggers, but we should be fine for retirement. I’m not interested in passing down an inheritance. My goal is to not have my kids worry about needing to support us financially when we are older compared to how both DH and I worried that would be the case with our parents.

    We use YNAB, and I love it. We use the app to enter purchases, and then I do all the reconciling and budgeting. I have become the finance person in our marriage. DH has no idea about our finances. I tried to give him an update on 1/1 where we were at, and he could barely tolerate listening for 5 minutes. He was surprised that we don’t have credit card debt. I was surprised that he was surprised. If I die first, at least most of the bills are auto-pay, and we have enough life insurance. He’d figure it out eventually. But I really could have an affair or run off with all of our money, and he’d have no idea. On the other hand, the second he makes a weird purchase, I’d be all over it.

    Our airport gave us ~$15K 9 years ago to use for sound insulation (installing A/C, putting in insulation, new windows, or new doors). We used it for all new windows on our main floor. We chose a local company over the Andersen window inserts because they were cheaper and there was more glass. On our energy audits, we are always listed as doing great compared to our neighbors.

    When both kids are in college, we will have ~$70K/annually of cash flow freed up from no longer paying private school education and our mortgage will be paid off. We plan to start saving more in mutual funds over the next few years and take out loans, if needed.

    I used to stress about money a lot. Over the last few months, we’ve met some goals and our advisor says we are on track for retirement. I’m now more focused on overall health – getting more sleep, eating better, and working out.

  53. The other way we’ve saved money is that we haven’t moved. We live in the house we bought when we were 24 and 22. We decided to spend money on private school rather than increasing our mortgage. Our insurance and taxes are a lot lower than if we had moved to a bigger house, making our house very affordable in retirement.

  54. But I really could have an affair or run off with all of our money, and he’d have no idea.

    Me too! I’ve also pointed out that I could easily kill him, because when he doesn’t feel well, I put together whatever cocktail of meds I think he needs and then just hand it to him, and he dutifully takes them. Some day it could be cyanide, you know? It won’t be, but jeez is he trusting.

  55. “I threw out the rice wine vinegar because we don’t use it that much and I didn’t want the extra container taking up space in my smallish pantry.”

    Were I in a similar situation, I’d make some sushi to use it up, because

    “I have a moral problem with throwing away food.”

  56. “Our electric/gas bill shows we’re using considerably more than our neighbors”

    In all the places I’ve lived, I’ve never had that sort of comparative information on my energy bills.

  57. “olive oil will definitely turn rancid if you don’t use it an timely, if undefined manner.”

    As will most cooking oils. But you can increase the time before rancidity by storing in a cool, dark place. We store infrequently used oils in the fridge. The big bottle of olive oil is in the pantry closet.

    But IME, vinegar doesn’t go bad.

  58. “What number did everyone target for 529 savings by age 18?”

    For us, it was 0. It was in part because we shared

    “the goal of being debt free when DS #1 goes to college,”

    as well as

    “The thought that if our kids get scholarships, inheritance, or grandparents chip in, we don’t have an overfunded 529 (better to have an overfunded IRA).”

    And then DS strayed from the plan. But we still have hope for DD.

    More generally, I agree with the financial advice givers who suggest prioritizing full funding of your retirement accounts over college savings.

  59. “Many of these budgeting comments reflect the reality that eating out is expensive as compared to cooking at home.”

    Yes, but as WCE points out, there is a middle ground:

    “Costco’s eggplant parmesan frozen dinner, for example.”

    For quite awhile, we usually had either the frozen eggplant parmesan or the frozen lasagna on hand for those nights when we didn’t have anything else already prepared, nor the time to prepare a regular dinner. Canned soups sometimes filled that role.

  60. “You folks motivated me to choose my credit card carefully. I did some research last year to find the one with the best rewards program and have been very happy with the switch, well worth the time spent.”

    If you’re willing, please share which card you chose, and what other candidates you identified.

  61. One thing I like is when employers let you add more than one account to your direct deposit. I had one that allowed 3 accounts and it allowed either a percentage or a fixed amount. One account was for fixed expenses then a short and long term account for savings. They also deposited any excess amounts into the third account. So that’s where all my expenses report money went.

    You can’t really do the same thing with auto payments from checking to brokerage because they don’t allow percentages.

  62. “overfunded 529”

    Another possible reason for this would be kid attending local school while living at home. E.g., a lot of local kids attending flagship U, or other schools in the state college system, commute from home.

  63. “One thing I like is when employers let you add more than one account to your direct deposit.”

    I used this through my employment with my first employer after college. Most of my check went to my checking account, but some went straight to the CU for savings, and some went straight into a mutual fund.

  64. “When both kids are in college, we will have ~$70K/annually of cash flow freed up from no longer paying private school education and our mortgage will be paid off. “

    In today’s dollars, that’s about what one kid would cost at many private schools. OOS at some publics is close to that.

  65. I haven’t worried about an overfunded 529, because (i) it is highly likely one or both kids will choose either an expensive school and/or some sort of post-grad education; (ii) if DD takes advantage of scholarship offers, we can withdraw that equivalent without penalty; (iii) if neither (i) nor (ii) holds true, we have nieces and nephews who could sure use the money; (iv) we put only up to the state-tax-deduction max in the 529s each year and put any extra in VTSAX; (v) and really, the worst-case scenario is a 10% penalty on your *profits* in whatever small portion of the account is left and is not used for college expenses — which, as downsides go, doesn’t seem terribly horrible to be, especially when considered in relation to the decades of tax deductions we got for making the contributions.

    @tcmama: if you are managing both $70K/yr in private school fees + getting your mortgage paid off, I’d say you’re doing freaking awesome. You shouldn’t feel bad or guilty about jack shit.

  66. LfB, I don’t disagree with your points WRT 529 contributions, but I believe the decades of tax deductions to which you refer are based on the state in which you live. Many others, like me, don’t get any deductions for 529 contributions, so we don’t have as much incentive to contribute.

  67. “I’m also interested in tricks for budgeting time.”

    One of ours is minimizing time spent on financial budgeting. We are from the

    “If we can’t buy it out of cash flow, we don’t buy it” school, and largely base spending decisions on account balances. We don’t have savings silos, which saves time spent managing them.

    We automate our savings (mainly maxing out 401k contributions), and automate as many payments as possible, especially those that are the same amount for each payment period.

  68. DW is fine. She has a chronic condition that flared up and she needs four days of infusions. We were hoping she could come home today (day 3) but they couldn’t work out doing the fourth one outpatient so she is staying until tomorrow.

    With YNAB, how do the envelopes correlate to your actual accounts? If you have $300 in the new iphone envelope, where does that money actually reside?

  69. I relate to many points in tcmama’s post. We still live in a small space & haven’t upgraded. Our car is ancient are rarely used. We do pay for private school – but for one. When DS was small, things were very tight, but we really haven’t increased our lifestyle anywhere near the increases in income, and that’s put us in a comfortable place. I am also the finance person in the relationship and DH is marginally and intermittently interested. He is very invested emotionally in paying off the mortgage though so he tracks that balance regularly.

    My goal for the 529 is around 100K. That is a recent goal. We’ve started putting more in there as we’ve gotten raises over the past few years. We are working to pay off the mortgage before he is in college, and we are also used to a private school bill. So I’m not too worried. If he goes to public for MS and/or HS, the tuition money will go to the “snowbird house fund”. I don’t plan to fund the 529 anymore than we are now.

    My main approach is to save right off the top, and to plan out our big expenses for the year. So I know we have $X in our “big ticket” budget for vacations, season tickets, (optional) home improvement, etc. We talk about what we want to do early in the year & review periodically – eg extra vacations can replacing the flooring in the bedroom.

    We also have a biweekly spending tracker where we write down what we are spending against our normal goal. There is no “punishment” for going over – but looking at it stops is from splurging on too many different things at once.

    We aren’t big on take out or convenience food. My mindless shop-too-much trigger is clothing. I also put myself on a spending diet, but it tends to be more around late summer/early fall. I am so sick of being hot at that point, and I almost always overbuy fall clothes that I then end up not liking or forget about.

  70. DD – I hope your wife is doing better.

    Yeah, the deductible reset on 1/1 every year is a bitch.

  71. “One thing I like is when employers let you add more than one account to your direct deposit.”

    I think I can up to 99 different accounts which is great because (and I know some/many/all of you will think this is crazy, but it works for us) here’s what I do with my pay:
    – DS2’s ckg acct gets his monthly ‘allowance’ from us
    – DS3’s ditto (this is theoretically for stuff like haircuts, underwear/sox, other clothes, some fun, since he’s on a meal plan)
    – DW’s ckg acct which we really use as a fund for charitable contributions
    – DW’s savings acct…vacation fund
    – My ckg acct at the bank satellite office I can walk to from my office in 3min. I pay our gas/electric/landline (yes!)/cell from it since I have to do $500/mo in direct deposit to keep it free. I have it so I have a place to get e.g. $50 or $100 bills for cash gifts if we want those that’s convenient vs having to make a point of going to the bank on a Saturday since it’s a pain to go out during the week
    – CU where we have the one remaining car loan from
    – My separate ckg acct from which I pay our life, home, car insurance
    – My separate savings acct for property taxes
    – balance to our joint ckg acct as is DW’s net pay for the rest of life.

  72. Oops…bad typing (sorry Finn!) combined mortgage and private school is around $70K. That would cash flow one kid but not two.

  73. I think I can up to 99 different accounts

    I wonder how much extra that costs per employee vs. 3 or 1?

  74. I wonder how much extra that costs per employee vs. 3 or 1?

    I’m guessing close to nothing. It doesn’t take very long to do the extra data entry, and then it’s all automated.

  75. Question for those of you over 50 with substantial tax deferred IRAs or 401ks. How do you pick your funds or other investments? I am used to having managed after tax accounts and not thinking about the strategy and the personal service is worth the fees. I just rolled all of my employer funds into my self directed IRAs (mostly traditional, a little bit of Roth). I may just put the funds under management if it becomes a stressor, but I want to give it a go. The 401k I rolled over was in fixed income investments, but I don’t like bond funds so it seems a lot of work to select an assortment of individual bonds, and I can afford to be a bit more adventuresome anyway This represents 1/3 of my invested assets. The after tax remaining 2/3 is in dividend paying equities, plus I keep some cash/Tbills. So I figure those in their 50s would be a good peer group – I am more risk tolerant that the usual late 60s retiree.

  76. We haven’t saved a whole lot for college. We subscribe to the same theory as Finn that it’s more important to save for retirement because you can always borrow for college if you need to. But we haven’t been doing a great job of saving for retirement either. We’re both spenders so we don’t have saver to balance it out. But we’re getting better. And fortunately the kids have some generous grandparents and great-grandparents so there is some money for college.

  77. Mémé, between me and DW, we have several IRAs and 401ks, and different accounts are invested differently.

    Some 401ks don’t have a managed option; the closest to that is the target year funds they offer. We’ve been pretty aggressive with those, putting a lot of those funds into S&P 500 index funds. With those accounts, we don’t have a lot of options, but the options we do have come with pretty low fees.

    One self-directed IRA is with a brokerage, and I touch bases with my broker once a year or so to move stuff around, take profit and look for value or upward trends. A lot of those decisions are shaped by guidance put out by the brokerage. This has been the most volatile of the accounts, because it’s the most aggressive and invests in individual stocks. It’s been hit or miss, but the hits have so far covered for the misses.

    There are several small IRAs that are mostly sitting in various index funds.

    I’ve been thinking about using a robo-advisor, but haven’t pulled the trigger yet. Schwab has added that option, but I haven’t had the time to look into it yet.

  78. DD – I hope your wife comes home as scheduled.

    Looking at my savings now, I feel much better that I stayed employed. At one point, kids daycare bills were eating up a large chunk of my income and it seemed not worthwhile to work.
    Passing on wealth – that is very prevelant in my ethnic culture. People forego comforts in retirement just because they want to leave more for their kids. Many of the “kids” people in their 50s/60s when their parents pass on are ungrateful usually about what they see as not getting their fair share. This happens in spite of the inheritance getting split as equitably as possible and the inheritors being comfortable themselves. Really brings out the nasty in people.

  79. Oh – and IMO, Sunflower butter is pretty delicious. It’s the one I keep on hand for nut-free lunch needs. It is really expensive though & it’s that natural stuff that gets really thick & the oil rises to the top.

    “People forego comforts in retirement just because they want to leave more for their kids.”

    I don’t think this is going to be me. I mean, I like the way Meme describes it – being the no-questions asked emergency fallback for her kids, but I am certainly not making major lifestyle choices to leave my perfectly capable (hopefully) 50-60’s DS more money.

    And I have no expectations of inheriting anything myself. I hope our parents all live long enough to spend most of their money.

  80. @Meme: VTSAX. I am pretty binary: I have more than most in cash/money markets, and then everything else in VTSAX (or the equivalent in my 401(k)). Except for a little personal play money that is in value funds (which probably offsets DH, who puts his play money into growth funds). I am assuming that I could get more money from bonds, but to date interest rates have been so low overall that the hassle and transaction costs haven’t seemed worth it. I will look at that more closely when we are looking to have several years’ worth of expenses accessible like that.

    Have you thought about a Roth ladder to get the money out of the taxable accounts with minimal tax consequences?

  81. “With YNAB, how do the envelopes correlate to your actual accounts? If you have $300 in the new iphone envelope, where does that money actually reside?”

    DD – in your linked checking (or savings) account. The idea is to use YNAB to dictate your spending, not your checking/savings account.

    We only link our checking account. So, because we have a “savings” envelope in YNAB, we have a surplus of $$ in our physical checking account (if I logged on BoA it would show say $10k, but I know $5k of that is in our YNAB “savings” envelope). Every so often, I transfer the money out of the checking to our savings (so checking would go from $10k to $5k with the transfer), and then I mirror that transaction in YNAB (the “savings” envelope would read $0). I still have the money, but it’s not being watched by YNAB anymore.

    (most people don’t do it this way, but if I don’t see the money I don’t spend it. So by only linking our checking account, I don’t “see” how much we have in our savings accounts and therefore I don’t try to budget it.)

  82. “With YNAB, how do the envelopes correlate to your actual accounts? If you have $300 in the new iphone envelope, where does that money actually reside?”

    What Rhode said. For those just starting out (living paycheck to paycheck), the recommendation is to just have one account, so there’s no concern about overdraft. The thing is, you only put in the “envelope” money that you actually have in your bank account. So as long as you don’t spend more than what you have in the envelope, you know you’ll have the cash to cover it. And if you need more than you have in a specific envelope, you take it from another envelope to cover the shortage (leaving less in that other envelope for whatever that is earmarked for.) It makes it very clear that, say, if you overspend on dining out this month, it will impact how much you have left for vacation.

    As you build up a cushion of savings, you can choose to do what Rhode does — keep savings “off-budget” or do what I do and keep nearly everything except long-term retirement funds “on-budget.” So, I have a checking account, two different savings accounts, and a Vanguard account all linked, and all the money in all of these accounts is distributed into about 60 virtual envelopes. ALL of my day-to-day spending is from my checking account, but every once in awhile we have a big item and I transfer money from one of the savings accounts or from Vanguard to my checking so I have enough to cover it. Moving money around between accounts does not affect in any way how much is in the envelopes. This was a tricky concept to get my head around at first.

  83. Meme –
    (1) I think there is value in having a good/trusted advisor do the bond (ladder) selection for you.
    (2) As to dividend paying equities, I am very impressed with SDY, an etf which invests in the top 100 or so dividend paying companies in the S&P 1500 and which have been increasing dividends annually for the last 20 years. It’s not as volatile as VTI or overall S&P500 funds, so it does not capture as much upside in good times, but is also more muted downside in declining markets, ref: Morningstar 5* and Lipper 5 across the board.

    p.s. I am fairly risk seeking, but also recognize the value in protecting the downside.

    good luck!

  84. Meme — I just have my advisor handle both my taxable and retirement accounts. I know most people in this group think it’s anathema to pay for investment management, but I take your attitude that “not thinking about the strategy and the personal service is worth the fees.” I have been with my advisor for about 15 years, and she has done well for me.

  85. Meme – I am a bit older, but I would say I am also more risk tolerant than many in my age group. I go for a “classic” type of growth allocation. The equity section is unscientifically divided into large/small cap, value/growth, domestic/international, and some aggressive new ventures. I’m a lot in Vanguard (RIP Bogle) but I’ve thought of diversifying among more vendors including Fidelity. The bonds are mainly individual bonds, triple-a or municipal. It’s more trouble to select individual bonds but for security it’s worth it to me. The equities are now about one-half ETFs, 40% mutual funds, and 10% individual stocks. TBH I have been sloppy about being more structured and diligent with my portfolio, which considering my background could be a case of the cobbler’s children going without shoes.

  86. “Moving money around between accounts does not affect in any way how much is in the envelopes. This was a tricky concept to get my head around at first.”

    Flyover – YES! When we needed to put a down payment on a car, but the savings to checking transfer would take a couple days, I realized that I had enough in the checking to cover the check, and when the transfer came through, it would be zero out the “loss”. DH took a bit to see how it would work. He thought we’d bounce checks that were mailed already.

    I was thinking about trying to link everything (which would be ~4 savings accounts plus our checking) and see how we can really shift the envelopes around. But I tend to do this small or massively huge. The massively huge leaps usually scare DH, so in respect for marital harmony I will keep things small. Plus our savings accounts are labeled, so I know what we have in those.

  87. I know most people in this group think it’s anathema to pay for investment management,

    I’ve changed my mind on that. I’ve seen how hard it can be for a surviving spouse to deal with everything especially if they aren’t the one used to managing the finances. It can be a great comfort to have Mark from Merrill Lynch tell you everything is all set. “A new roof and a Viking Cruise with a fellow widow? Oh, ok. You can afford that. I’ll wire the money.”

  88. Oh, I agree that paying for investment management and general financial planning is a good idea for many people.

  89. “I’ve seen how hard it can be for a surviving spouse to deal with everything ”

    This. My MIL, a former math teacher who is very on top of the finances resisted the help of a third party, but eventually came around and it turns out her investments were sort of all over the place, without any clear direction of what she wanted to see happen to her money.

  90. It can be a great comfort to have Mark from Merrill Lynch tell you everything is all set. “A new roof and a Viking Cruise with a fellow widow? Oh, ok. You can afford that. I’ll wire the money.”

    My parents have a financial planner in the home country who will wire them the money to pay Viking cruises in the nick of time. He hates to have them lose income, if the money just sits around. It’s an amusing tug of war.

  91. Rhett — I have all my financial documents, insurance papers, info on bank accounts, etc. in a file box. On the outside of the box, I have literally written a note to DH that says, “If I die, get in touch with [name of advisor] and hand them this box. They will take care of everything from there.” Every so often I remind DH of the box’s existence and location. DH doesn’t have one iota of interest in dealing with financial matters, so I think it will be a real relief to him to learn that I’ve set him up with a nice source of income for the rest of his life, and that all he needs to do if he has any questions is to call my equivalent of Mark at Merrill Lynch.

  92. Funny story on sunflower butter. We have a friend whose kids go to a nut-free school. She said they have banned sunflower butter as well because it looks too much like peanut butter, and they are afraid people will give the kids pb sandwhiches but say that it’s sunflower butter.

  93. “I was thinking about trying to link everything (which would be ~4 savings accounts plus our checking) and see how we can really shift the envelopes around. But I tend to do this small or massively huge. The massively huge leaps usually scare DH, so in respect for marital harmony I will keep things small.”

    This is SO the right call. I know I have told the story before, but my first budget on Quicken was very much like YNAB: I kept one account, called “budget,” and I tracked everything I spent in that account. Because I was keeping track of money as I spent it, I never had to worry about whether there was enough money in my checking account when the credit card payment was due. Then DH and I got married, and he thought my approach was “stupid” and far too imprecise, and so he set up Quicken to track all of the payments and transfers into and out of every account. It made everything SO much more complex that I avoided sitting down to do it. Which, of course, led to the “crap I have 6 months worth of CC purchases to add in”; which, in turn, only made me avoid it even more. No shock that within a couple of years, his “better,” much-more-precise system had led me to stop tracking entirely.

    And I HATED that. I’m the one who loves knowing where my money is going and where I am on budget, so it was almost like going through withdrawal not to have that weekly/monthly check-in. In the end, I got comfortable with it by keeping a giant cash cushion in our checking account, because at least that way I didn’t need to worry about bouncing a check. Thank God for online banking that now allows me to download all of those transactions! (Although I still don’t go back and recharacterize them, so I know it’s not as accurate as it used to be)

    Money management is more psychological than anything else. So if you’ve found something that works for you, DON’T MESS WITH IT!!!

  94. LfB – getting DH to do YNAB properly was a huge fight. But we got through that (in the nick of time, and it helped that my income had a massive boost), and now are dealing with some course corrections. The tough part for us is that he’s the day-to-day guy and I’m the big picture gal. He can manage day-to-day, but I operate knowing that the things we agreed upon are happening. When they don’t happen, my plans can’t happen and we don’t save/make money. This quarter is devoted to course correction. We’ve gone back to discussing things weekly rather than monthly to get back on track. He feels terrible for not saying something (the bills were being paid, we’re fine), and I feel terrible for not checking in (hey, are we closer to X, so I can do Y). This is a good time of year for new goals.

  95. I don’t link our checking account in YNAB as I don’t like having to reconcile what has been imported. I have an Excel file that is a check register, so I know that I tie out to what is in our checking account. I then manually enter all transactions into YNAB. I have 2 YNAB budgets. One for the checking account and one for savings. The savings account is for upcoming purchases – Christmas, auto insurance, summer camps, school re-enrollment, and a cash buffer. I have our emergency fund with ING/Capital One. I found it too tempting to have all the bigger savings in our checking account, and I find it painful to have to move money from savings to checking, so it helps me from dipping into funds allocated for bigger purchases.

    I like YNAB for tracking purchases on the fly. DH will enter what he spends, but he doesn’t spend money that often. It forces him theoretically to look at what bills we have. After our 1/1 review, I realized he doesn’t know what we have in savings.

  96. I have a bunch of savings accounts on an online bank. Every week/month, a certain amount is automatically deposited in each account. Kind of like the envelope system, but with accounts. I’ve found that most car dealers will hold your deposit until the money is transferred between accounts. Other large purchases go on credit cards because, rewards, and then there is plenty of time to transfer funds.

    Our retirement accounts are set up in age based target funds. I figure if we manage average returns we will be fine. We have enough exposure to commodity, interest rate, exchange rate risk in the business that I don’t have any more bandwidth to deal with active management.

  97. “I’ve seen how hard it can be for a surviving spouse to deal with everything ”

    My parents cushy bank* in Florida is set up to prevent that. They have a series of classes for the wives (because in their generation of folks able to afford nice second homes in retirement, it is wives), teaching about investments and strategies. After funding a couple grandkids through college, my parents stunned me by saying they’d discovered this amazing thing called a 529, I think through this program. Then they go through accounts and wills with them. I don’t know what the next steps are, but I know that my mom is considerably less stressed about my dad screwing up finances accidentally now that she has a clue what’s going on. She isn’t keen on stepping in to manage them, because that will be a clear sign and shift in their relationship, but when she needs to, she expects to be ready. There’s no telling who the surviving spouse will be, but there are a couple “Mark from Merrill” and “Val from Vantage”s around.

    *not just the occasional reception with glasses of champagne, but dinners with awesome spreads. I haven’t been there, but assume very tasteful, comfortable furniture. The one time I dealt with one of the bankers, she was the perfect balance of friendly, knowledgeable, and watching all the angles.

  98. Finn, we went with a BoA card that offered a $500 immediate account credit and the highest cash back rewards percentage we could find. Rewards can be taken in check form, account credit, or a seemingly endless variety of gift cards, including Amazon.

  99. “Have you thought about a Roth ladder to get the money out of the taxable accounts with minimal tax consequences?”

    Do you mean annual conversions of funds from a traditional IRA to a Roth IRA? I’ve read a bit about it, but mostly in the context of very early retirement (the RE part of FIRE). Since you addressed the question to Mémé, I assume you’re not referring to it in that context.

    I need to get more familiar with this concept, although not in the FIRE context (I’m already too old for that). I think I’ll have a window between when I retire and when I turn 70 (start taking SS) or 70.5 (RMD) to convert funds from traditional to Roth IRAs.

    Something else I need to learn more about is charitable contributions directly from traditional IRAs. I know Mémé mentioned setting up a donor-advised fund account so she could continue annual giving to her charities while still being able to get tax deductions in the higher standard deduction environment, but I’m wondering whether making charitable contributions directly from traditional IRAs might make more sense. I think there’s the benefit of essentially having a deduction exactly equal to the amount of the contributions, as opposed to giving funds outside of IRAs where you have to meet the standard deduction threshold, but then there’s also the loss of tax-free growth in giving from an IRA. I’m thinking that once one hits 70.5 and has to take RMD, it might make more sense to give directly from traditional IRAs as part of the RMD.

    OTOH, giving appreciated assets to a donor-advised fund might make more sense, especially before age 70.5.

  100. Finn 2:59 – That is the plan for me. I will do my donations out of RMDs after 70.5 but that is not for another 5 years. I donate a fair amount – when you have good fortune and are able to have a much better quality of life as result, it isn’t meritorious to make donations, it is a commandment.

  101. As I think about this now, it seems to make sense to put appreciated capital assets into a donor-advised fund up until age 70.5, then at 70.5 switch to giving from the traditional IRAs.

    This way I can still avoid the need to find cost basis info for some assets I have, mainly stuff given to us by my and DW’s parents while they were alive.

  102. My trick of spending less is simple – this is free budgeting app Wallio. I used to struggle with my overspending habits, having family conflicts over budgeting, but since I started using Wallio it was completely resolved. The trick is… no budget categorization. All you have to know is – how much can you spend today. I used to categorize my expenses before using Mint, Clarity money, and other apps, but Categorization doesn’t work to me and I found it a waste of time for effective budgeting. Wallio completely automated my budget and helped to replace my poor spending habits to good ones.

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