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Balancing now for later...

November 21st, 2014 at 07:17 pm

Nika brought up a great point about enjoying your money now and later. That it's hard to find the balance between spending and saving. It really is. It's so very easy to get miserly and not spend money. At the same time it's also easy to go off on a spending spree and justify all your spending because you make $X.

So how do you balance spending now versus saving for later?

My thought, it depends on what your priorities are. Do you want to retire early? Do you want to have time with your kids now by staying at home? Or perhaps time later by retiring early? Can you never imagine retiring early because you want a certain lifestyle? Or do you feel obligated if you have kids to pay for college so retirement is out of the question?

There are so many choices and no one right answer. All of the choices above are valid. The choice you make is the one that will lead your financial decisions.

About a year ago when I submitted our financials to MMM blog for a reader case study, I realized that without knowing it we were mustachians. I also realized and confirmed that my DH and I bought wanted the financial security of being "financially independent" from working. He's still unsure about "retiring early" but my DH is completely on board with having money to say FU to anyone, anytime. To know that if we didn't have an income we'd still make it as a family. How did this realization affect us?

We have never lived up to our income and never been big spenders. But that realization that really living on a budget, curbing our spending, and watching every dollar meant we might be closer to "FIRE = financial independence early retirement" than we ever imagined. We had $462k in retirement, we now have in 9 months $519k. We had $163k taxable and $54k cash, now we have $167k and $58k cash and our liabilities has gone down to $3800 car payment gone in 6 more months. Also according to zillow (very underestimated) our house went from $609k to $647k, I am guessing more like $750k to be honest.

Are we there yet? Projections say no. But I do think that we are definitely closing in fast on a FI number but more importantly we are much more focused on becoming FI to decide what we really want to do.

2 Responses to “Balancing now for later...”

  1. creditcardfree Says:

    It is about balance. We tend to the frugal side, but do we spend money? Yes. We bought some inexpensive art for the walls this year, purchased senior pictures, go out to movies occasionally(usually the cheap matinee), even dinner at a restaurant. But yet we save over 20% of our income towards retirement and college. And if you read my blog, we even pay down on our mortgage.

    I think you are doing great!

  2. scfr Says:

    You are right. It really depends on your priorities.

    Getting maximum pleasure for discretionary dollars spent is important, and this is an area where I'm confident that I am getting better with time. I can find tremendous joy in situations where little or no money is spent.

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