I have given up... We can't do it...

[Autorotica]

At 46 years of age, I have resigned myself to the idea that WE lack the ability to put aside money at a rate that exceeds inflation. Its cheaper for me to pay the interest and to have it now than it would be to wait... and do it with cash.

Despite having paid our home off 10+ years ago, we seem to make almost no headway saving money. We bought a $40,000 Tahoe in 2007 and paid it off in 362 days, but haven't been able to accumulate a similar amount in a savings account in the last 7 years since.

I cant keep fighting this fight. I have succumbed...

Given the super low cost of money last year, We pulled a cash out REfi for less than 80% of our home's value. Projects include redoing the kitchen, building a deck, buying a toy or 3 and with what is left over building the shell of a Shed that will end up having to wait until additional monies comes available to finish.

Ever find yourself here?
Chris

 

[Jrussell86]

Re: I have given up... We cant do it...

I find myself having that problem with a new pickup. I cant seem save much more in a year than to make up the difference in what they cost from one year to the next. With mine having 230k on the odometer it's probably about time to just sign on the X and take the low interest / high payment note lol.

 

[Jrussell86]

Re: I have given up... We cant do it...

After all there is another side to the whole you cant take it with you bit ... They cant get it from you when your gone.

 

[PapaD]

Re: I have given up... We cant do it...

Please don't take offense, but you are caught in the "gotta have it now because everybody else does trap". Been there done that. Dude, if you can pay off a new Tahoe in a year you can build a shop in a year. Folks spend what they earn. Listen to Dave Ramsey some time.

 

[RivennHewn]

Re: I have given up... We cant do it...

Please don't take offense, but you are caught in the "gotta have it now because everybody else does trap". Been there done that. Dude, if you can pay off a new Tahoe in a year you can build a shop in a year. Folks spend what they earn. Listen to Dave Ramsey some time.

Dave just may have saved my life, and my marriage.

 

[srmofo]

Re: I have given up... We cant do it...

I find myself having that problem with a new pickup. I cant seem save much more in a year than to make up the difference in what they cost from one year to the next. With mine having 230k on the odometer it's probably about time to just sign on the X and take the low interest / high payment note lol.

With auto interest rates the way the are, I just couldnt see the point in saving up to buy a vehicle. My IRAs are earning more in interest than my auto loan is costing me and that isnt saying much.

On the other side if you cant afford to save the money, then how are you going to afford to pay the bill? Sometimes people can force themselves to pay bills, but cant force themselves to save money. Other times people simply cant afford what they want. Theres nothing wrong with either type, you just have to be able to honestly recognize which one you are.

 

[HAY YOU]

Re: I have given up... We cant do it...

I don't scrimp & safe to buy something, that can get depressing. I find ways to make money over my normal income & buy things that way. It's a lot more fun.

 

[ZRX61]

Re: I have given up... We cant do it...

After all there is another side to the whole you cant take it with you bit ... They cant get it from you when your gone.

Oh yes they can, & do. Death taxes for starters & under the new ACA rules they can come after your estate for medical expenses.

 

[larry_g]

Re: I have given up... We cant do it...

Oh yes they can, & do. Death taxes for starters & under the new ACA rules they can come after your estate for medical expenses.

I think the point he was trying to make is to go out with negative net worth.

lg
no neat sig line

 

[Highlux]

Re: I have given up... We cant do it...

Bad move.

 

[justanengineer]

Re: I have given up... We cant do it...

Nope, cant say I have gone that route tho I have entertained the idea a time or two. The bank owns my *** on this house for ~3 more years then we are done making monthly payments beyond taxes and utilities. The trick for me is that SWMBO is even cheaper than I am, and thats a huge freakin compliment for a monstrous task well done. During the month of January for example, we have spent exactly $0 on our food bill as we werent home for half of December and challenged ourselves to live off what was in the freezer to keep it from being wasted. Also, rather than go out I have been cooking for her upon occasion, forgot how much I enjoyed it and I enjoy not having a $50+ restaurant bill even more. Shes also a big fan of the "envelope full-o-cash" method for things, and it works. Budget yourself and stick to your budget, its actually easier than most think. Bc of small things like that, weve been doing a few home improvement projects without affecting our budget otherwise, no saving necessary. On a similar vein, Menards had their 22% rebate sale then a week or so later had their 14% off bag sale in conjunction with a big clearance sale, much as I dislike most household projects weve been getting a lot of them done here recently.

 

[jerseywild]

Re: I have given up... We cant do it...

I am having trouble comprehending your post. If you bought a $40,000 dollar Tahoe in 2007 and paid it off in only 362 days. You must be making a boat load of cash or put down the boat load when you bought the Tahoe.
If you were able to do that you shouldn’t have any problem saving money. It sounds like you have saved zero in the last seven years. So now you have refinanced your house for less than 80% of the value. (No PMI)
Sounds like you put some money back into the house but you didn’t even have enough to finish the shed.
No offense but you are the worst money manager in the history of garage journal. Take PapaD’s advise and go to the public library and get Dave Ramsey’s book. Then follow his advice “Live like no one else today so you can live like no one else tomorrow”

 

[Angelfire]

Re: I have given up... We cant do it...

So where does your money go? Not meaning to see an itemized list here on this board but honestly, if you haven't already made your thorough budget and actually assessed where you spend/save, then yes, you will continue to have difficulty. It seems that you had it all under control a few years ago...I mean paying off your house at 36 years old should be showing you a pretty good sized windfall assuming your income hasn't dropped significantly.

The key to saving is understanding where you are spending (and why). I have a rather elaborate budget and it takes me about an hour a month to keep it updated but since I started it, I'm amazed at the amount of $$ I was spending on **** and how much I've saved since then.

 

[Yankeefarmer]

Re: I have given up... We cant do it...

One secret to saving is viewing that monthly deposit into a savings account as a bill that must be paid, and that savings account as a fund that cannot be accessed except for serious financial emergencies. If you have a 401k, that's even better, because you"ll need to pay a big penalty if you decide to pull the money.

 

[2Big2Ride]

Re: I have given up... We cant do it...

Trivial thing, don't make a budget, build a spending plan. The word budget seems so negative and restrictive for many folks. You know you will spend on both wants and needs, and hopefully a little in saving/investment, so admit it and build a realistic spending plan versus a restrictive budget. Make the saving/investment part an automatic payment so it becomes a (mental) requirement to make the payment every month.

 

[rslaback]

Re: I have given up... We cant do it...

Don't let everyone else here get you down. It is easy to throw stones. I myself have a pretty crappy willpower most times. Borrowing money and making payments changes the cost of the item from a should save it to a must pay it. There is a distinct difference in that.

I'm a borrower too. I go into the situation with eyes wide open knowing that I will pay a bit more for something based on interest charges. I also go into the situation with the realization that the purchase of the item is not likely to occur any other way.

 

[Morrison]

Re: I have given up... We cant do it...

Have you seen the feed the pig commercials? This reminds me of that. People over spend and wonder why they're always broke.

 

[bczygan]

Re: I have given up... We cant do it...

He who dies with the most debt...wins.

 

[wornoutoldman]

Re: I have given up... We cant do it...

The last check you write should be to the undertaker. It should bounce.

http://books.google.com/books/about/Die_Broke.html?id=7RGbyOcoEpwC

 

[Aberdale]

Re: I have given up... We cant do it...

At 46 years of age, I have resigned myself to the idea that WE lack the ability to put aside money at a rate that exceeds inflation. Its cheaper for me to pay the interest and to have it now than it would be to wait... and do it with cash.

Ever find yourself here?
Chris

A couple things stand out in the above statements. First, you capitalized "WE", which to me means your SO has a spending issue. If that's true, it's a big problem and will forever limit your ability to save until it is corrected. My first wife was a spender and overly concerned with her image and what others thought of her. We could never save and were constantly adding to our debt.

Second, your comment that it's "cheaper" to pay interest and to have it now. Nothing could be further from the truth. You are confusing "easier" and "cheaper". Yes, it is easy to get into debt. But it's a trap that is difficult, expensive, and time consuming to get out of. The banks love people with your way of thinking because you are easy money for them.

Earlier in life (with wife #1) we had lots of expensive toys and lot's of debt. Others thought we was rich. But I was never truly rich until I married wife #2. We lived within our means and got completely out of debt, but it took a long time. Now, all of our money is ours and we can pretty much afford anything we want.

'dale

 

[Ross/Kzoo]

Re: I have given up... We cant do it...

Don't let everyone else here get you down. It is easy to throw stones. I myself have a pretty crappy willpower most times. Borrowing money and making payments changes the cost of the item from a should save it to a must pay it. There is a distinct difference in that.

I'm a borrower too. I go into the situation with eyes wide open knowing that I will pay a bit more for something based on interest charges. I also go into the situation with the realization that the purchase of the item is not likely to occur any other way.

Not to knock you or anyone else down but your attitude of " I want it now and I'll pay the consequence" generally leads into a downward spiral. That's the "you deserve a break today" mentality.

What I try to do, and it doesn't always work, is to delay buying something. After mulling it over in my head for days or weeks many times I come to the conclusion that I really don't need it or I can't afford it now. By not buying those items it opens up new opportunities to consider going in a different direction.

One of those purchases was a cut off saw to cut all the metal needed for a project. I didn't really need a cut off saw and later purchased a power band saw, definitely a better way for me to go.

 

[Chevy72pu]

Re: I have given up... We cant do it...

He who dies with the most debt...wins.

He who dies with the most debt...........................is still dead.

 

[5mall5nail5]

Re: I have given up... We cant do it...

Buy used cars

 

[LX-Markham]

Re: I have given up... We cant do it...

At 46 years of age, I have resigned myself to the idea that WE lack the ability to put aside money at a rate that exceeds inflation.

Despite having paid our home off 10+ years ago, we seem to make almost no headway saving money.

This is the part I can't understand (unless your financial situation and/or job has changed). You paid off your mortgage, but you can't put away money at a rate greater than inflation?

We paid off our mortgage a couple of years ago, and it's been great! We kept our budget (or spending plan) the same, so all that money that was going into bi-weekly payments is now going into a savings account.

I'm 42 btw.


....i don't think this thread has gone the direction you were hoping, sorry.

 

[Koken]

Re: I have given up... We cant do it...

"I'm entitled to it" mentally is your biggest problem. You buy a 40k car in 2007 and then whine about your finances................ You re-fi your home "at your age" to remodel and buy toys........... You could star in the next Michael Moore film.

 

[OccupantRJ]

Re: I have given up... We cant do it...

I am somewhat a student of human nature. When a person always talks about money problems, look at their vices. Never fails. When a person talks, the more the word "want" appears in the conversation, the more i know they make bad money decisions. If a person will concentrate on their needs instead of their wants, eventually the wants will take care of themselves. This is the real key to saving money.

 

[JakeKohl]

Re: I have given up... We cant do it...

Owning my own business (and having an accountant who advises) was a real eye-opener in this regard and I've been through several similar discussions. I don't subscribe entirely to this principle but the business world is designed to revolve around credit. If you want to be big, you borrow money to grow and build your business around making more money than the cost of borrowing the money. You live quarter to quarter and do what you do to make sure you cash flow is in the positive.

I still struggle with this concept and our business is owned fully by us as is our equipment. It's also a small business but we do OK and I sleep better at night. However, I have seen the light of day in that time and our age never stops growing. I've lost some friends who spent their entire life planning to retire early and nearly lost my best friend a couple of years ago. There's a balance between responsible finance and a point where it just makes sense to play with other people's money. When the lending rates got really low, I refinanced our house (which we were solidly on the way toward paying off) because I wanted to enjoy my garage now. Rates were low, the payments weren't really a big deal (extending the house loan four years with cash for the garage actually saw our monthly outlay reduced), and it just made sense to play with other people's money. On the other hand, we are currently saving for a future kitchen remodel that will hopefully be paid for in cash.

I could never argue that a cash only attitude is superior, but I believe there is a balance to borrowing a reasonable amount of cash and enjoying some things now rather than later.

 

[LandR]

Re: I have given up... We cant do it...

Thanks for your honesty and transparency here. I'm not going to flame you but want to draw a careful distinction here.

It appears that you don't have a problem buying nice things and paying them down. Does not appear that you are asset poor.

Therefore the question is:
1. Are you unable to afford the lifestyle you choose to live? (It appears not)
OR
2. If the impatience factor so high that you choose to purchase now on credit and pay off over time.

I was fortunate enough to study under the chairman of the VA federal reserve who explained that interest can be though of as "impatience factor". How badly am I willing to forego future gains to have what I want now.
Said differently, how impatient am I today? Am I willing to trade 1.1 apples in a year for 1 apple today. If inflation was higher I would get 2 apples in a year to forego one apple day.

You are hinting at the fact that your impatience factor outweighs low interest rates. If rates were high perhaps you would be more inclined to save than to eat your apple today.

Does the above apply to you? Are you someone who finds it easier to pay your debts quickly than to save cash and earn interest because your impatience is high?

Sam

 

[Kevin54]

Re: I have given up... We cant do it...

When my wife and I got together, neither of us had two nickels to rub together. My ex got every single thing, and my now wife, had just lost everything in a fire. We worked hard, put money into a 401K, every time we got a raise, we put more money in a 401K. We bought a house, and refinanced twice at a lower interest rate, and less years each time. We have a little over 4 years left on it. We leased our vehicles, and bought our last lease.

When my wife decided to retire, the first thing that came to my mind was that we wouldn't be able to afford things. Just the opposite was true. The less money we had coming in, the less money we spent. She rolled her 401K over to Edward Jones and makes money off of it. We started eating at home instead of going out 2-3 times a week. When I went out on medical, I found that even with less money now coming in, that we still had more in the bank, all for the fact that we were spending less.

Over the years, we have made loans on vehicles, and such. We did get a little stupid with a credit card once, but that was when we were first starting out and actually did need some things. A CC was not the way to do it as we soon found out.

If you belong to a Credit Union, talk to them about saving. A lot of Credit Unions set up plans to save, then gives a bonus to the ones who do the best job of saving. I think the Credit Union here calls it a "Savings Race". If you don't have direct deposit, get on it so you don't see the money from your check. Take a portion of that money and have it put into another account, whether it be checking or savings, and force yourself to only use your main checking account.

It's not hard to save, it just takes some discipline. And quit looking at what others have and be thankful what you have. For one, the neighbor with all the toys, may just have as many bills to go with the toys.

 

[lat905]

Re: I have given up... We cant do it...

Its all about deciding what is more important. If stuff is more important to you, and often moreso to your SO, then saving is extremely difficult.

On the flip side, having no debt can be detrimental as well, especially in mid-life.

I work to leverage and balance my debt. As an example, right now I have a mortgage (with about 25 years left to pay), and 2 vehicle loans. One is my wife's 2011 SUV and the other is my 2012 Tundra. The Tundra is at 0%, so its free money, and even if I could have paid cash I wouldn't when they are offering free credit. My wife's Mitsubishi is at 1.9%, which is close enough to free that I don't care. The mortgage was refinanced after paying for 2 years, started in 2007 at 4.5% and refi got me to 3.1%.

That's the only debt I have right now. I will occasionally buy things on credit (furniture/electronics/etc.) when 0% for 6 months or something similar is offered. Once in a great while I will have to use a credit card for a large unexpected expense that I can't handle in one month, like 2 months ago when the washing machine crapped out.

My rule is this: If its 0% and I know beyond any doubt I can pay it off on time---go for it. Otherwise, toys are paid with cash.

In the last year, through a combination of things, I put something like $30k into my project truck, all in cash, and did not touch my savings. In 2011 I bought my motorcycle with cash (that came from savings). All of my garage renovations (about $6000 over the last 2 years so far) have been cash.

I'm lucky----I've worked hard to be a successful professional and have a very stable career. Even if my present employer falls apart, my skills will keep me working and earning. My wife has a successful home business that is a nice supplemental income, but we could make it just fine with no real hardship on my salary. We basically don't have money worries---and we have reasonable debt and savings.

It took me what seems like a long time of hard work to get in this position, but I'm 37, 2 young kids, wife, and all my toys. There were lean years where lived on hamburger helper and cashed in pennies to pay bills, but that led to where I am now.

 

[CORTEZSS69]

Re: I have given up... We cant do it...

The last check you write should be to the undertaker. It should bounce.

http://books.google.com/books/about/Die_Broke.html?id=7RGbyOcoEpwC

Thats great.

 

[TAMPAGT07]

Re: I have given up... We cant do it...

He who dies with the most debt...wins.

What's really screwed up is that the wife, myself and my kid (coming next month) have zero dept...(Well, except for the debt that the US government has on our behalf.....Which is approx $450,000 for our family.)

 

[JimVonBaden]

Re: I have given up... We cant do it...

Bad move.

I have to agree. I would not remortgage a house like that for remodeling. Do it a little at a time. As time goes on you will find that saving for each project get easier, and you won't have a monthly mortgage payment. Too late, I know.

 

[JimVonBaden]

Re: I have given up... We cant do it...

Owning my own business (and having an accountant who advises) was a real eye-opener in this regard and I've been through several similar discussions. I don't subscribe entirely to this principle but the business world is designed to revolve around credit. If you want to be big, you borrow money to grow and build your business around making more money than the cost of borrowing the money. You live quarter to quarter and do what you do to make sure you cash flow is in the positive.

I still struggle with this concept and our business is owned fully by us as is our equipment. It's also a small business but we do OK and I sleep better at night. However, I have seen the light of day in that time and our age never stops growing. I've lost some friends who spent their entire life planning to retire early and nearly lost my best friend a couple of years ago. There's a balance between responsible finance and a point where it just makes sense to play with other people's money. When the lending rates got really low, I refinanced our house (which we were solidly on the way toward paying off) because I wanted to enjoy my garage now. Rates were low, the payments weren't really a big deal (extending the house loan four years with cash for the garage actually saw our monthly outlay reduced), and it just made sense to play with other people's money. On the other hand, we are currently saving for a future kitchen remodel that will hopefully be paid for in cash.

I could never argue that a cash only attitude is superior, but I believe there is a balance to borrowing a reasonable amount of cash and enjoying some things now rather than later.

Very reasoned response!

 

[Holedgr]

Re: I have given up... We cant do it...

Dave just may have saved my life, and my marriage.

The same with me as well!!!

Dave Ramsey/his methods aren't rocket science...he just me a new perspective on money...

 

[84944Redline]

Re: I have given up... We cant do it...

This is a very interesting thread and I've enjoyed reading everyone's comments. And I appreciate different points of view on how others view money and debt in relation to what they have and what they really need or want.

To the OP, I'd be interested in what your close neighbor or good friend would say about your "wealth".

Paying off the house at your age is commendable. And being able to pay off a $40K vehicle in such a short time is impressive.

My take is that the fundamentals of personal finance and management are set in at a young age. It begins with what you did with birthday money, allowance, and odd jobs in the neighborhood.

Adjusting how (and if) you budget is so easy to suggest and advise on, but carrying it out is another story.

I just turned 34 and have no other debt besides the mortgage. I do have assets that could be used to pay off the mortgage, but I don't think it's the best financial move for my family at this time.

$1M is a lot of money...to me at least. Others may view that as only some vacations and a bunch of toys. I've worked hard and have been very disciplined with my money to get to this point. I'm still worried as all hell about saving up enough for retirement though...so I'll continue down my same path.

 

[Hpozzuoli]

Re: I have given up... We cant do it...

Lots of good suggestions. At 46 your are still young. It seems like you got your mid life crisis out of the way with toys and material things. The hardest thing about money is when you have it, you want to spend it. Pay the bills...keep some pocket money and force yourself to put some away. There's no magic formula or secret way of saving. It's something you force yourself to do. Unfortunately you need to stay away from toys and probably this forum .....your Ira or 401k should be your dumping ground for extra money, followed by savings. I don't own a credit card. I have a debit card that won't allow credit charges.

Another great way to save is by generating more income. Do you have a passion you can turn into a service, start or expand your business. Rates are low. Take advantage of them for reasons other than buying toys.

 

[Slednut]

Re: I have given up... We cant do it...

3 years ago we started saving fives, have over $15000 so far.

 

[tehach]

Re: I have given up... We cant do it...

You lost me at $40,000 Tahoe.

 

[b-body-bob]

Re: I have given up... We cant do it...

under the new ACA rules they can come after your estate for medical expenses.

I read yesterday that the Captain & Tennille are getting divorced, they're in their 70s. Speculation is that they are doing it to protect their assets from health care costs. He's sick, but she got all the assets in the divorce so they can't take them from him. Helluva world we live in when you're pretty much forced to take such steps.