What are your financial goals? What habits, practices, and strategies do you use to reach them?
How do you spend your money? How do you want to spend it? How do you save?
I'm curious what strategies my fellow Tildenizens use to spend efficiently, build savings for retirement and other purchases, and otherwise maximize their financial lives. How do you use your money to maximize your happiness?
Here's me: I'm young, single, thankfully debt-free, and my annual salary is about $70,000. I'm able to save approximately 35% of that by living relatively frugally:
All My Stuff
- I live in a big city, but not an expensive one. I pay rent, but it's pretty low for the amenities I have access to.
- I live with a roommate to reduce expenses. We're on the same wavelength about minimizing spending.
- I don't own a car and rely on public transit and carpooling to get places. I also work from home.
- I go out of my way to shop at the cheapest grocery stores in the area to cut my weekly bill in half (or more).
- I have three credit cards, but I always keep my utilization low and never miss a minimum payment.
- I have a separate bank account (checking) for bills than for general spending. I set up my direct deposit to automatically put in all necessary funds for bills into the bill account. Then I set up autopay with all my providers so I don't miss payments. I have one month's buffer in this account in case there's some issue with my paycheck.
- I contribute as much as I can to my employer-provided 401(k) savings account every month and invest in index funds. I can get to about 65% of the IRS max contribution limit with my income.
- I contribute to a Roth Individual Retirement Account (IRA) every month to reach the IRS max contribution limit for the year, and invest in index funds.
- I have a high-deductible healthcare plan (HDHP) which lets me use a Health Savings Account (HSA). My company pays a little into my HSA each month, and I contribute a similar amount to reach the IRS max contribution limit. Instead of using the HSA to pay for medical expenses, my strategy is to pay out of pocket for all expenses and simply invest the funds in my HSA in index funds to maximize their growth potential. Since this account is so tax-advantaged, investments here are more efficient (as far as I can tell) than in any other account I know of.
- I have a taxable brokerage account that I contribute a small amount to each month. I know this isn't technically as efficient as putting more into my 401(k), but I figure I might want to use some of this money before I retire. I also kind of like betting on random stocks. Irresponsible, I know, but it's like $20 at a time. Gotta have fun?
- I set up my TreasuryDirect.gov account to automatically buy I-Bonds while inflation is high, but only on the order of $100/mo. I don't know when I should stop exactly... we'll see what the interest rates are in May?
I'm not really sure what I'm saving for here. I know you're not supposed to make financial decisions without a plan, but I honestly don't know what I want to do in the next 5 years, let alone 50. People tell me that I should buy a house to build equity instead of throwing away money in rent, but I'm enjoying not dealing with maintenance, and I don't know if I want to stay in this city for more than a few years. It's cute, and I have friends here, but city hall is full of goobers and there are too many highways nearby messing with the feng shui.
Someone also suggested that I buy a small property and rent it out through a property management company, even if I'm still renting myself. Besides landlords being the scum of the earth and the moral quandaries that might present if I were to become one (even a tolerable one), that also feels like a lot of work. Possibly also financially unrealistic considering I'd need a 20% down payment on a house I don't intend to live in, and... I don't have that.
I also might switch careers soon-ish, possibly to software engineering, which has a better earnings potential. I've avoided it in the past because I feel like I'm just not good enough at programming. I don't know how I would properly improve those skills now that I'm out of school.
My pipe dream is that I want to build a really fricking big building. That's my goal. I want it to be really sick and have big Gothic spires and gargoyles and stained glass windows and cool stone carvings everywhere (but also be ADA accessible and not full of asbestos, because it's 2023). And people would come from miles around and say, "Wow, that's a cool building." All the non-racist secret societies could meet in its various hidden chambers and do whatever they do. I would hire whoever builds concert halls to design the acoustics so I could have some bomb choirs going in there, and make the floor sprung so they could do those crazy ballet dances too. Maybe at the same time. Also there would be a moat full of lava. And a robot dragon to guard it all just in case. I think this would cost upward of $500 million in total. Unfortunately that's slightly out of budget, even at my abnormal savings rate.
But priorities change, right? I figure that if I can save enough to make myself think I might be able to build my big-ass building one day, when I eventually realize, "Wait a second, my kid needs to go to college," I'll accidentally have enough to make that happen.
How does this compare to your life? What tips, tricks, and ideas would you like to share to help each other out? What are your financial dreams? I'm really interested in chatting with everyone about this.
I find myself thinking about this frequently. I am simultaneously content with my life and want it to be very different. I want independence from an employer. That could mean anything in between being independently wealthy and having a bootstrapped one man saas. I'm far from either. I want the luxury to work, go to school, or travel at my discretion. I'd like to help my friend's/family/community too.
I work. I'm not in debt except for the massive mortgage on our house, but the monthly payment plus tax and insurance is probably equal to what I'd be paying on rent anywhere I'd want to live. All of our money is being dumped into our house remodel, at which point we will probably be broke by the end and still have much left to do.
I put enough into a 401k to meet my employers match, but I honestly don't believe in retirement. I think it's a scam that either won't be there for me if I/we even make it that long (as a planet/country/peoples), or won't be enough by the time I need it. I put it in the Vanguard target fund but I am still very skeptical.
The only thing I actually pour thought/time/energy into is the occasional side project that I start, and have a habit of not finishing, in the hopes of generating some income.
My industry (tech) is so volatile that I can't help but want financial independence. It's scary that I'm 100% dependent on a single company for my income.
I'm considering doing some freelance work on Upwork or Fiverr, but I can't tell if these websites are actually worth my time. I'm good at what I do, but I don't know how I'd stand out. There are so many people doing the same thing, and marketing/self-advertising is unfortunately not one of my skills. :(
I believe that I'll retire one day, if nothing else because dividends will probably continue even if prices go flat. I suspect we know little about economics as a species, and future research will reveal ways to generate more value on fewer resources. I doubt we're hitting a wall there within 50 years at least. I'm not certain though.
People talk to me about FIRE/early retirement, but I don't know if I'd enjoy that. Realistically, all my buddies would still be grinding at the office. It would be a lonely life.
I have some interest in "value investing" in stocks (Peter Lynch, Joel Greenblatt, Warren Buffet-esque stuff), simply because I believe most people have no clue what they're doing at any time in investing and I might have some clue if I actually bother to learn some boring formulas. But I think technical/statistical modeling of this stuff can only get me so far considering I'm just one person and Berkshire Hathaway probably has a bunch of supercomputers.
My employer surprised me today by giving me a 6% performance raise (compared to everyone else's 0% "the economy is in shambles" raise). It's not actually a raise because inflation this year was closer to 7%, but it makes me more confident in my job stability. Still, I'm not bursting with joy. It's been more like "Oh, OK. Thanks. Huh. I guess I'll buy an extra thing of blueberries." This makes me wonder if achieving my financial pipe dream would actually make me happy. The more I think about it, the more I think it wouldn't.
I'm not sure what would make me happiest. I like to help people, so I've always wanted to start a non-profit. But I don't think running an organization would actually make me happy either. It's too abstract. Same with donations to existing charities. I guess I'll do it anyway, but it still begs a question of futility.