Need help regrowing my frugal brain

[2TxAgs]

Building on the $20,000 number above, remember that your emergency fund doesn't have to all be immediately available. In other words, you could put $10k into a hysa, and the remaining $10k in a CD paying a bit more. In a real emergency, if you needed more than the $10k in savings, you could cash out the CD. You'd lose a bit of interest, but your principle is still there. It could be a 'laddered' emergency fund as it's not likely you'd need the FULL amount all at once.

To the OP - if you don't know what your pension amount will be, and you don't know what you spend now, how do you have any idea of whether your pensions will support your spending in retirement? I don't agree that you will just adjust your spending to match what you're bringing in, especially if what you bring in (your pension income) won't cover your basic expenses. You HAVE to have some idea of what your spending floor is, and what your pensions will cover. If you need a minimum of $4k/month to meet your obligations today, and your pensions will be $3500, you need to feel confident that you've saved enough to cover the remaining $500 every month for the remainder of your life. And as to not being able to predict what you'll need...you need to TRY. You can roll the dice and 'hope' you'll be good, or you can do the best to plan, including setting aside money for unexpected expenses, and have a bit more confidence that you'll be able to have a comfortable retirement. There is nothing like having a cushion to fall back on in a difficult situation. In our family, we've always said that savings gives you options....

 

[cvjw]

curious-if people don't mind sharing


where do you park your 'emergency fund'? is it in a totally liquid account? i ask b/c it kills me to not be taking advantage of some of the shorter term cd rates right now but i can't come up with any other options that don't just pay little to no interest.

Short term treasuries. Totally liquid. Paying 4.4% right now.

 

[fbb]

Here's my take. Frugality is born of necessity. When it stops being necessary, it becomes a burden.

Budgeting is like dieting. It's hard to stick with because you feel deprived of SOMETHING. If you don't need to do it, why would you? It's a difficult mental hurdle to get over, and if you don't really NEED to, why stress about it?

I don't diet. I also don't budget. I set goals for savings that are realistic, but the thought of counting every dollar that leaves our account sounds like such a chore and it's overkill.

It really sounds like you guys are in good financial shape. You will adjust your spending when your income goes down, the same way you adjusted it upwards when your income went up. Don't worry about it.

This is a good post; I think similarly. I’ll also add that for me and my wife, there is a romance and a 20 year patina on the memories of those early days when we had no money and had to stretch every dollar. It would not feel the same today if we were forced into it, and I can’t maintain the energy required to get into that frame of mind.

 

[CaptainAmerica]

No. Emergency funds need to be completely safe.

Okay Dave Ramsey.

If your emergency fund needs to be "completely safe," then it's not big enough.

 

[rnorwo1]

Ok...since you asked....and since you said you used to be a frugal person.... I'm gonna say that keeping your emergency fund in your checking account,and not keeping track of spend is not wise. Not to mention you're not making any decent interest,
-I recommend starting to track all expenses no matter how big or small,and all income. Join some groups that encourage frugal tips and tricks in a positive way,that can help reset your mind on these things. If you can make a few changes,get your finances in order it sounds like you could really retire earlier,and actually know your position so you won't need to worry.

My checking account earns 5.5% interest; I don't know of any other accounts earning that much. We are somehow keeping the savings intact; It has not gone down on average- it grows some months and slightly dips others. It should be growing every month, though. "Tracking all expenses no matter how big or small...." is what I'm trying to get back to, but I have totally lost the drive to do that!

So first thing that jumped out at me is that you were frugal when you married and stayed that way for a long time. I can sympathize as I was and still am a person who struggles with spending money on myself. I have gotten better over the years. I was the type of person who didn't want to pay for a side of ranch more out of principle but also because it adds up, also for 2 liters of pop I'd wait for sales. There are a lot of behaviors I have adjusted over time. I no longer ask "is it it okay if I get this" at a restaurant because while we won't go crazy with a meal I don't internalize angst over the $14 meal vs the $17 meal like I used to.

If I had to guess most of your issues is that you fear you'll go back to such frugal mindset that you'll miss the way you feeling right now. So the way you deal with it is "out of sight out of mind" basically in so much that if you don't look at the accounts much you don't have to actually look at things. You went from one extreme (because frugal and absolutely no debt combined with frugal is what I would consider extreme) to the other. You may not be financially in a rough spot such that you're about to go under but you're uncomfortable with the uncovered reality that you've been living for a while.


I don't really call this a financial strategy to be blunt or at least one to keep. Spending "slightly less" than you make is not good but if you are needing to dig yourself out of crazy spending then use this as a starting place not a goal of behaviors you'll maintain.

This could be a minority opinion but I think you need to address your mindset about money in general first. No amount of budgets or tips or tricks will work long-term without that.

Yes, I definitely used to obsess over the little things, and I still struggle with splurging in general. Our waste is more in the little things for sure. I don't think I'm afraid of getting back to that extreme, but you're right that I am probably avoiding. Those are hard numbers to face when I'm so used to thinking of myself as frugal! And when I wrote "financial strategy," that was pure sarcasm. We are not living off of savings, although some months we may dip into it. Again, it's all one "pot." I do know the overall balance does not fluctuate much, but there are months when we have lots of extra income, so it should be increasing. And yes, I could have substituted "mindset" for "brain" in my title, but that's exactly what I need to do. I definitely have the knowledge, I just don't have the desire to apply it anymore.

Yep. I know the stage of life you're in. DH and I were at the height of our careers and earning power while putting kids through college, enjoying vacations, buying new vehicles, etc. etc. etc. We weren't frivolous and I've always been frugal, but I'm not still sure where all the money went. I tracked our spending, but we were definitely spending more as we earned more.

This... this moment is when it changed for us. In July 2020, DH decided he wanted to retire early and wouldn't accept my ignoring him about it any longer. Together, we sat down and looked at our finances in preparation. We wanted to be completely out of debt (which was a mortgage & car loans) when he retired, so we made a plan. We decided to live on 25% of our total income and put the rest towards the debt. He set his retirement for Dec. 2021. We reworked our budget and paid everything off while maintaining our savings over the course of the pandemic. The pandemic lifestyle definitely helped us. After he retired, we were already used to living on a portion of my income only so it wasn't stressful waiting for his pensions to kick in. It's a year later and we're still on the same budget. His pensions are growing our savings, which helps me look forward to my own retirement in a few years.

Again, looking back, I wish I'd tightened our finances up much earlier. With earning more it's extremely easy to spend more. OP, if you can, shore up those leaks now for the peace of mind it will bring when retirement is a reality. Life has a way of easily distracting us and before you know it... it's here.

Yep! This is exactly where we are. We don't "need" to cut back or be more careful, but we could just be so much better set for retirement. Thanks for your story; I hope I can get my butt moving and do the same shortly!

To the OP - if you don't know what your pension amount will be, and you don't know what you spend now, how do you have any idea of whether your pensions will support your spending in retirement?

My husband's retirement account is plenty for us to live a simple life even without pensions. I'm not trusting enough that pensions will be there to count on them, although there isn't really a reason to doubt them. If we get pensions and social security on top, then all the better. I have a wonderful, easy job that I love, so I plan to stay until 65 at the absolute least (another 16 years). I could easily stay longer, and I can't fathom giving up my side gig then either. My husband is 49-yo, so he would need to do something else just to stay active if he retires in 5 years; I just want him off the shift work and the ridiculous overtime. So, we should have plenty of time to save more. We will definitely meet with a financial planner when we get closer to it, but I'm trying to want to stop the slow bleeds now.

This is a good post; I think similarly. I’ll also add that for me and my wife, there is a romance and a 20 year patina on the memories of those early days when we had no money and had to stretch every dollar. It would not feel the same today if we were forced into it, and I can’t maintain the energy required to get into that frame of mind.

YES!!! It was fun earlier, and I was on FIRE for budgeting, tracking, saving, etc. I checked accounts and spreadsheets obsessively, talked about it with friends all the time, and so on. That is what I was wanting to get back when I posted this question, but it is only a cognitive desire to get back there now. My feelings are definitely "blah" about it. I have slowly plugged numbers into the budgeting app over the last 2 days, but I'm just doing estimates. I think I'll just start with separating some accounts and saving first out of each paycheck, and then I'll allow the budgeting app to track for me whatever it can pull from our accounts and cards so I can know a bit more. I'm not going to aim on tracking anything manually right now the way I'm feeling.

 

[DLgal]

Okay Dave Ramsey.

If your emergency fund needs to be "completely safe," then it's not big enough.

Dave Ramsey also advocates for only a $1000 emergency fund before "tackling debt." Super foolish. Your emergency fund should be priority #1. How do you think you got into debt in the first place?

 

[barkley]

If a 19% decline in your emergency fund is "petrifying," then your emergency fund is likely too small.

No. Emergency funds need to be completely safe. All our Vanguard brokerage funds have a federal money market fund as the sweep acct, it's 7 day SEC yield is 4.21%, and we have Marcus savings at 3.4% (AARP rate).

In other words, you could put $10k into a hysa, and the remaining $10k in a CD paying a bit more. In a real emergency, if you needed more than the $10k in savings, you could cash out the CD. You'd lose a bit of interest, but your principle is still there

your principal is not entirely safe-if you have to break that cd and the terms call for a forfeit of 180 days (not uncommon) of interest that would be earned on the amount in the account on the day of breaking the account the institution will take that from the principal if there are insufficient funds in what has been accumulated in interest at that point in time (and some folks take their interest each month to supplement retirement so there's only the principal to pull that penalty from).

If your emergency fund needs to be "completely safe," then it's not big enough.

Dave Ramsey also advocates for only a $1000 emergency fund before "tackling debt." Super foolish. Your emergency fund should be priority #1. How do you think you got into debt in the first place?

on emergency funds in general-

i don't buy into the dave ramsey $1K figure. at worst-the minimum i feel it needs to be the amount of one's homeowner's insurance policy deductible (or renter's or car) whichever is higher. working one's way up-it's peace of mind to have additionally at least one family member's health insurance deductible for a year (if you don't qualify for one of those hsa's to fund ). since we achieved being debt free our goal has always been to additionally have at least 6-8 months of regular monthly expenses in an entirely secure/liquid/accessible account b/c we don't want to have to turn to a credit card or some overpriced hospital financing program in an emergency. we've been in emergency situations where we would have been without a car due to an accident, waiting on our insurance company to cut a check for temporary housing due to major damage, and in the worst case-unexpectedly and totally disabled from a job and learning just how long and time consuming it can take for disability insurance finally process a claim (and how having one disabled parent can create the need for the other to take unpaid leave to provide for their care or the care of minor children).

i'm just curious where people park their funds b/c it kills me to not be reaping the same interest on that money i'm getting on my non emergency savings.

 

[hsmamato2]

YES!!! It was fun earlier, and I was on FIRE for budgeting, tracking, saving, etc. I checked accounts and spreadsheets obsessively, talked about it with friends all the time, and so on. That is what I was wanting to get back when I posted this question, but it is only a cognitive desire to get back there now. My feelings are definitely "blah" about it. I have slowly plugged numbers into the budgeting app over the last 2 days, but I'm just doing estimates. I think I'll just start with separating some accounts and saving first out of each paycheck, and then I'll allow the budgeting app to track for me whatever it can pull from our accounts and cards so I can know a bit more. I'm not going to aim on tracking anything manually right now the way I'm feeling.

OK...I think I see your mindset more clearly now.... I think your title says what you want, but your current feelings maybe don't match that(?) I'm not sure where your current mental block is rooted, that you changed from knowing your financial situation pretty well to feeling less in control of what you can do with your income, but maybe that's a place for you start from inside your head? I've always (my adult life) done the accounts in my house,not b/c I'm rich, but b/c I need a way to keep track of what I have/can use without feeling too stressed. A simple notepad and paper ,keeping track is the most basic,foolproof way to get an idea of what your income can do for you. Imagine if you started paying 'frugal' attention to the details again, you could make your situation work without wondering about it....or perhaps (sometimes) keeping your budget on track may mean "finding" money you can easily focus on your goals- that's what keeps me interested in all of this- I try not to base my actions on what I'm 'feeling' at the moment either, instead I try to discipline myself to sit down with my household books weekly b/c I have to.

 

[amylevan]

Why not just start with 1 month? Track everything for 1 month and see where you are. Look at what you’re spending/earning and get a better feel for where you are.

I’d pull out your savings to a different account so you stop dipping into it and pay yourself there monthly (even if it’s only a small amount).

I’ll admit to not tracking everything anymore. I only make sure that we earn more than we spend. I auto-transfer funds to an Ally savings account every paycheck and the rest is used to pay bills and fund life. My “budget” consists of making sure that we didn’t spend more that month than what we earned. If for some reason we had an expensive month, I might go back and analyze where the money went to see if we need to adjust a mind set or a spending habit. Sometimes we have a lean month and I throw a little extra to our savings. In general, once the money is transferred to Ally it doesn’t get touched unless it’s for a purpose that I save for (vacation, new big ticket item, emergency…)

 

[OrangeBirdGirl]

Not really sure you need to do more of a budget, just more lifestyle changes. We are like you everything is paid off. I know roughly how much we spend per week on food, misc spending, gas, etc. I then transfer a majority of our paycheck into savings each week but leave quite a bit of a buffer incase we spend more on groceries then I figured we would.

I think yours just comes down to lifestyle changes. Plan our meals before you go to the grocery store, which will hopefully save on less wasted food and less convenience items.

Actively look at your savings account and see them grow each month and that should be motivation. Good luck!

 

[Mackenzie Click-Mickelson]

I'm not sure where your current mental block is rooted, that you changed from knowing your financial situation pretty well to feeling less in control of what you can do with your income,

I could see it as the income increased and the necessity of frugality stopped being as necessary if that makes sense. Frugality can come from necessity and from personality and sometimes both. With more income the little things like food wastage became less visible and more invisible. The effort behind tracking the dollars and cents can become laborious and if you're at least in a comfortable enough income position these things would take a while to catch up to someone.

 

[smwisc]

We use Mint for tracking expenses and budgeting. Like you, 20+ years ago I entered every expense manually (into Quicken, back then), painstakingly reconciling the credit card bill to split the transition into each expense, keeping every receipt, etc. The good news is that you don't have to do that anymore! With Mint, you connect all of your accounts (checking, savings, credit cards) and it will automatically import the transactions. It will attempt to assign a category, and you can reassign if it's wrong (and set rules for common ones). I'm sure other programs do the same thing - Mint just happens to be what we use.

It isn't all or nothing, either - you can be somewhat flexible in how detailed you want your categories to be, and how much room for error you're comfortable with. If you commonly buy your household cleaning supplies and paper products at the same places you buy groceries, fine, make that all one category rather than pore through receipts to separate out the toilet paper cost. I have a healthy "miscellaneous" category in my budget that covers all kinds of irregular, small (or sometimes not so small), random things that don't fit elsewhere - back in my hard-core budgeting days, I would have that broken down much more, but now I don't find it necessary. My paychecks are just "paycheck" with the net amount of the deposit - I no longer break it down to record all of the taxes and deductions. If I occasionally get $20 cash back, more often than not it's going to land in the "grocery" or "household" category because that's where I got the cash (if I were doing that a lot, I'd be more diligent about splitting it out, but it's not enough to matter in my budget now).

I deliberately try not to use too many categories (I use far fewer than even the built in ones) so that I can more easily set my budget, and then attempt to record every transaction to a category that I have a budget for. Then I can periodically check expenses against budget, look for anything that seems out of whack, correct categories, etc. Most of my budget categories I have set to roll over month to month, so if I spend less one month the balance rolls forward and vice versa. Transfers to various savings accounts all just show up as "transfers" of various kinds - they can either be in the budget or not, doesn't matter, as long as they are happening.

But for as much flexibility as I've given myself, I also have enough detail to have a pretty good handle on what we spend. Each year I can set a high-level budget looking ahead to the year. I can also see less pleasant trends, like the impact of inflation on our grocery budget, or just how much those extracurricular activities are costing us!

 

[georgina]

Never looked at Dave Ramsey. I have never had a budget, I don't officially keep track of our spending but I have a good grasp of the finances. We are retired, debt-free, living off DH's small pension and our investments. He will claim SS in a year and a half and that will be a significant boost to our income. I have 7 more years to go before claiming it. I keep a decent amount in liquid savings because we have been spending a lot in travel the last couple of years. Had planned to buy a new house and move in 2021, ended up finding something in 2020 and had to scramble to arrange the funds. Sold some investments, pulled some from a Roth IRA, paid cash which I believe is why our offer was accepted.

 

[hsmamato2]

I could see it as the income increased and the necessity of frugality stopped being as necessary if that makes sense. Frugality can come from necessity and from personality and sometimes both. With more income the little things like food wastage became less visible and more invisible. The effort behind tracking the dollars and cents can become laborious and if you're at least in a comfortable enough income position these things would take a while to catch up to someone.

I can see that happening.... But I agree with some other pp's that frugality isn't a desperate mindset,it's a way to keep myself on track,no matter my income level. making 100k/year? that's fine, allocate your dollars wisely and live well- make 25k/year? allocate your dollars carefully and live as well as you can...and here's the key to frugality (IMHO) it's all about knowing what you make, and living within your means,making the best use of what you've got.

 

[Mackenzie Click-Mickelson]

But I agree with some other pp's that frugality isn't a desperate mindset,

Well it's not only a desperate mindset as in that's the only definition. That's why I said it can be personality. I was not in a desperate mindset when I was 9 getting a savings account because I had too much cash at home because my mind said save save save I don't really need this or that (a behavior that continued into my adulthood and what I have worked to change). The way I viewed how I spent money did save me over times but it was not borne out of what was mentioned about poverty mindset.

TBH though I think people like to throw around the word frugal like a drop of the hat. Frugal isn't living within your means. That's just living within your means. People are often conscientious of their income to spending amounts without being frugal. An example I've seen on this board and related to the OP's food wastage comment is people who detest leftovers. They might be conscientious to what that means for the overall lifestyle should they do it so often that it impacts them negatively. But a frugal person would be more apt to say throwing away food just because it's leftover is wasteful there's nothing wrong with eating leftovers.

When I said as income increased what I meant is for the OP it could be the more they made the easier it was to lose sight of where that money goes as the tracking can become less and less needed. To me it reads like the OP hit a wall in hypervigilance into where and what things were going. I suspect that the increased income is what allowed for this wall to be there in the first place because the OP's aversion to debt early on probably prevented it from happening then. But like you it's just my opinion

 

[rnorwo1]

We use Mint for tracking expenses and budgeting. Like you, 20+ years ago I entered every expense manually (into Quicken, back then), painstakingly reconciling the credit card bill to split the transition into each expense, keeping every receipt, etc. The good news is that you don't have to do that anymore! With Mint, you connect all of your accounts (checking, savings, credit cards) and it will automatically import the transactions. It will attempt to assign a category, and you can reassign if it's wrong (and set rules for common ones). I'm sure other programs do the same thing - Mint just happens to be what we use.

It isn't all or nothing, either - you can be somewhat flexible in how detailed you want your categories to be, and how much room for error you're comfortable with. If you commonly buy your household cleaning supplies and paper products at the same places you buy groceries, fine, make that all one category rather than pore through receipts to separate out the toilet paper cost. I have a healthy "miscellaneous" category in my budget that covers all kinds of irregular, small (or sometimes not so small), random things that don't fit elsewhere - back in my hard-core budgeting days, I would have that broken down much more, but now I don't find it necessary. My paychecks are just "paycheck" with the net amount of the deposit - I no longer break it down to record all of the taxes and deductions. If I occasionally get $20 cash back, more often than not it's going to land in the "grocery" or "household" category because that's where I got the cash (if I were doing that a lot, I'd be more diligent about splitting it out, but it's not enough to matter in my budget now).

This is what I'm going to try to do. I have got to let go of the all-or-nothing thinking about doing a budget and/or tracking perfectly. That's probably what got me off the track to begin with. If I can track and actively cut back on a couple of areas, like food, then we will be able to put much more away.

When I said as income increased what I meant is for the OP it could be the more they made the easier it was to lose sight of where that money goes as the tracking can become less and less needed. To me it reads like the OP hit a wall in hypervigilance into where and what things were going. I suspect that the increased income is what allowed for this wall to be there in the first place because the OP's aversion to debt early on probably prevented it from happening then. But like you it's just my opinion

Yes, exactly! I automated all the bills and have a large enough cushion in the checking account so I don't need to track. But as our income went up, and even when it goes up paycheck to paycheck with OT, I'm not accounting for those increases, and they're leaking out somewhere. I just want to save more of the excess.

I have enjoyed reading everyone's responses; I really appreciate the time you all took to make them! I'm feeling a bit more accomplished just by starting the budgeting app. This is just going to come down to discipline for me; maybe the motivation will return, but hopefully I can get some processes in place even if it doesn't.
Thanks again!

 

[robinb]

My checking account earns 5.5% interest; I don't know of any other accounts earning that much. We are somehow keeping the savings intact; It has not gone down on average- it grows some months and slightly dips others. It should be growing every month, though. "Tracking all expenses no matter how big or small...." is what I'm trying to get back to, but I have totally lost the drive to do that!

Yes, I definitely used to obsess over the little things, and I still struggle with splurging in general. Our waste is more in the little things for sure. I don't think I'm afraid of getting back to that extreme, but you're right that I am probably avoiding. Those are hard numbers to face when I'm so used to thinking of myself as frugal! And when I wrote "financial strategy," that was pure sarcasm. We are not living off of savings, although some months we may dip into it. Again, it's all one "pot." I do know the overall balance does not fluctuate much, but there are months when we have lots of extra income, so it should be increasing. And yes, I could have substituted "mindset" for "brain" in my title, but that's exactly what I need to do. I definitely have the knowledge, I just don't have the desire to apply it anymore.

Yep! This is exactly where we are. We don't "need" to cut back or be more careful, but we could just be so much better set for retirement. Thanks for your story; I hope I can get my butt moving and do the same shortly!

My husband's retirement account is plenty for us to live a simple life even without pensions. I'm not trusting enough that pensions will be there to count on them, although there isn't really a reason to doubt them. If we get pensions and social security on top, then all the better. I have a wonderful, easy job that I love, so I plan to stay until 65 at the absolute least (another 16 years). I could easily stay longer, and I can't fathom giving up my side gig then either. My husband is 49-yo, so he would need to do something else just to stay active if he retires in 5 years; I just want him off the shift work and the ridiculous overtime. So, we should have plenty of time to save more. We will definitely meet with a financial planner when we get closer to it, but I'm trying to want to stop the slow bleeds now.

YES!!! It was fun earlier, and I was on FIRE for budgeting, tracking, saving, etc. I checked accounts and spreadsheets obsessively, talked about it with friends all the time, and so on. That is what I was wanting to get back when I posted this question, but it is only a cognitive desire to get back there now. My feelings are definitely "blah" about it. I have slowly plugged numbers into the budgeting app over the last 2 days, but I'm just doing estimates. I think I'll just start with separating some accounts and saving first out of each paycheck, and then I'll allow the budgeting app to track for me whatever it can pull from our accounts and cards so I can know a bit more. I'm not going to aim on tracking anything manually right now the way I'm feeling.

My husband is 49-yo
{snip}
YES!!! It was fun earlier, and I was on FIRE for budgeting ...

Ah! That actually makes your original post much clearer to me. You're both 49 and you want to retire early. You are both in your peak earning years and should in fact still be actively and aggressively saving. Even if you plan on retiring early at 54.

 

[MrsPete]

... As we made more money, and became so busy with kids and careers, we have gotten away from some of those things ... We have stayed out of debt. We have plenty of savings for emergencies. HOWEVER, I am horrified by the amount of money we spend and would like to save more ...

I know where you're coming from. We've just a little older than you ... we've been married 34 years and are recently retired. Your kids are teens? Then you're in your biggest spending /busiest years ... we were in that same spot not too long ago, but once the kids finished college, things changed fast ... it just happened naturally: they support themselves now, and we spend so much less than we did.

Don't beat yourself up for being in your high-spending years; take the vacation now while your kids are still at home. But, at the same time, you need not to be wasteful ... for example, throwing away food that should've been eaten. No matter how much you have, you shouldn't waste. Set yourself some guidelines; for example, you mentioned take-out food ... maybe agree that you're only doing take-out 2Xs a week ... and cook big on the weekend so you'll have "planned leftovers" during the week.

Something that really helped me "see" our future financial needs was to draw out a timeline ... this year I'm 56, and he's 59 /we have X amount from my pension, X amount in our various accounts, and we spend X amount on health insurance ... next year we'll be 57 and 60 /this is how much we'll have, etc. By drawing it out in a timeline, I could "see" when various things are going to happen; for example, we're going to have a great year when he hits Medicare and I qualify for Social Security! I'll stop paying so much for his health insurance and I'll have the option for Social Security.

Whether to do 5 more years or 10 more years to get the higher pension is a hard call, and the question involves so many moving pieces: What other savings do you have? Will the kids be through college in 5 years? What financial requirements will you face in retirement? (Note: your access to health insurance will be the biggest question mark.) I'd say keep saving now ... you still have at least 5 years to go. Does it have to be 5 or 10? Could it be 6, 7, 8 or 9? Does he have any options for going part-time and "easing his way out" of the work force?

As a physician who has seen many young/middle age healthy people just pass away unexpectedly , I would say live your life. It does not mean you should burn money, but just do what you want, eat and drink what you want.
If Covid-19 taught us anything, it taught us that we should celebrate our present more and worry less about the future.

What I hear you say is, Look for balance in your life. Don't postpone fun too long, but also don't be wasteful.

I'm 56, and several members of my friend group have died young /unexpectedly (or have had a spouse die young /unexpectedly), but the reality is that MOST OF US are still going quite strong.

Honestly, we should all invest more in our health ... it's just as important as our retirement savings. By that, I mean more exercise, more vegetables, etc.

 

[ruadisneyfan2]

curious-if people don't mind sharing


where do you park your 'emergency fund'? is it in a totally liquid account? i ask b/c it kills me to not be taking advantage of some of the shorter term cd rates right now but i can't come up with any other options that don't just pay little to no interest.

We also use Ally. Completely liquid and FDIC insured. I can immediately transfer any savings to our Ally checking account or transfer to our local bank within 1-2 days.

 

[ruadisneyfan2]

For the record, DR only recommends the $1000 Emergency Fund while you're paying debt down 'with gazelle intensity'. That means following all of his other quite intense advice for paying debt down quickly: cancel cable, stop contributing to retirement accounts, sell a car if it has a loan on it and buy a beater, etc. No vacations, no eating out. Do it like you're on fire and need to save your life. Let's face it, none of us on the Debt Dumpers thread are that intense.
We paid off all our credit cards, car loans and mortgage but never gave up cable, vacations or retirement contributions. The world didn't stop turning; it just took us longer that it would have if had we followed ALL of his debt paydown recommendations.

Baby Step 3, after non-mortgage debt is paid off, he recommends people save 3-6 months worth of expenses. If you feel better with 6-9 months, no one will stop you. Do whatever helps you sleep soundly at night.

My point is, he says that $1000 EF is very temporary, not a life long plan.