Snow finally strikes and budget/retirement continues

It was only a matter of time until winter finally struck central Illinois, we were definitely living on borrowed time. We have had some bitter cold, windy days, but had been fortunately to avoid any accumulating snow falls.  Until yesterday.  We ended up with 5-6" of snow, which wouldn't be bad, except the wind was howling all day so the snow is drifting.  Some places only have an inch of snow, others 1-2 feet.  Here is a shot from my slow drive home last night:

Other than the weather, we've had a pretty uneventful week.  We're going to have to spice things up a bit so I have some stuff to write about! 

I did want to submit a quick follow up regarding my divergence into savings and early retirement in my last post.  I've been doing some more reading and research and I ran into some interesting numbers regarding saving and retiring. I pulled this info off of one of the money blogs, it is a "formula" for living on a certain percentage of your salary and then investing the rest and how that percentage relates to when you can retire.  Of course, the less you live on now the quicker you could potentially retire. I haven’t fully researched how reasonable this really is, but for entertainment purposes here it is:


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Ask yourself this question: If I live off of X% of my salary and invest the rest, how many years will it take to retire?

Assuming the following:

a.  2% inflation

b.  8% return on investments

c.  living off of 4% of your investments (that leaves a 2% buffer for taxes, etc.)

d.  You have $0 in retirement today

Live on this percentage now=years until you can retire if you save the remaining amount

90% = 50 years  (Yikes!)
80% = 36 years
70% = 28 years
60% = 22 years
50% = 17 years
40% = 13 years
30% = 9 years
20% = 6 years
10% = 3 years
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I’m going to go ahead and rule out living on 10%-30% of your income, because unless you make a ton of money or already own your home outright, there is no way that you can do it. (I could be wrong on that, but I don't think so) Also remember that this doesn’t take into consideration any potential retirement income from social security (I doubt it will still be around for me) or retirement/pension from your employment. I will be the first to admit that it sounds pretty good in theory, but can it really be done? I think the 8% gains that they are using are a little optimistic, but maybe my current retirement investments are going into the wrong funds and 8% is entirely possible! Can you see yourself being able to do this?

Personally, I don’t see a single person being able to pull this off, unless they make a good bit of money or own their home. However, I do think that a couple with reasonable incomes could probably pull it off. With a joint income family, it definitely could be possible to live off of half of  your combined income; according to this theory you could retire in 17 years.

Lets look at this for a moment: 17 more years of working would put me at 53 years old.  I will admit that, on paper, this is worth digging into further. Heck, even retiring in 20 years sounds good.  After pondering it over a couple lunch breaks, I do have a couple questions that need answers:

1.  What about taxes? There is no way you can accrue large quantities of interest, which you would if you are investing 40-50% of your income each year, without taxes becoming an issue.  As we all know, our high spending government will want their share of the interest that you earn, fair or not. How can you do this and minimize the taxes?

2.  Where/How do you invest the money to try go get good returns without losing sleep every night that it is all going to disappear?  Putting it into traditional retirement accounts (401k or Roth IRA) will limit your access to it until you are older, so I know that is out...  Although I guess you could put some there...

Get on Budget

Last night, while watching the BCS Championship game, I was playing around with the spreadsheet that I use to track our checking account. Yes, I actually keep track of that stuff manually, even in this age of online banking. Can you say detail oriented? After taking a quick over view of last year’s total expenditures, all I can say is, “Holy crap, where did all that money go?” Yes, we went on a nice vacation and we don’t eat ramen noodles for dinner every night, but good grief! I guess it all just adds up: digital cable (not even HD AND we don’t have a DVR either) and internet, one smart phone, one reasonable car payment, and…



Could we do without cable? Sure, we would continue to live without it (and Karen suggests getting rid of it occasionally), but I like watching some TV at night. Is that so wrong? I have certain shows that I like, some I even consider “educational” (anything on discovery or history channel counts as educational, even American Pickers and Pawn Stars) and some that are just for entertainment. I would rather not eliminate that routine, unless times get really tough and it comes down to cable versus eating the before mentioned ramen noodles every night for dinner. Then I would seriously consider it.


Yes, I didn’t “need” the iPhone that I got this year, but my old phone was falling apart and I have wanted an iPhone ever since they came out several years ago.  I will say that it is very nice to have all that power right there in your hand. I would also argue that it has already paid for itself several times over since we got it. For example, when we were out of town and we needed directions or needed to find out what restaurants were around, the answers were right there in my hand. I also use it to check gas prices to make sure that we go to the cheapest station in the area. See, it is paying for itself, even if it is two to five cents per gallon at a time.  Even better, we use it all the time to reserve redbox movies when we are out running errands or out for dinner (another expenditure!). No need to stand there and browse at the box, just swipe your card and out comes your movie. Nothing is worse than having to go to two or more box locations to find that movie that you wanted to see, reserving online takes out all the guess work.
 Looking back at the “hope and possibility” (tacky political reference) that I remember having when I graduated from college over 12 years ago, I don’t think that I imagined that my mid-thirties (soon to be late thirties, gulp) would be like this. Sure, I knew that I probably wasn’t going to be a BMW driving high roller bringing in a big salary, but I did imagine that things would be easier by now. Now don’t get me wrong, it isn’t like we are broke or anything like that. If you look at it that way, we are doing OK compared to what others are going through right now.  But I think it could be even better.


So, where am I going with this? Who knows, sometimes I just start typing stuff like this and then I later decide if I am going to post it on the blog or just delete it after venting. I never imagined that writing could be a way of stress relief, but in some ways I think it is. It may not make for the most enjoyable blog posts to read, but oh well.  Short of thinking up the next great idea (post it notes, super glue, facebook, etc), we're going to have to work with what we've got.


The fact is, we both like to travel and, in my opinion, one trip per year just isn’t enough. There are so many places that I want to visit and I’m not getting any younger. In order to do more travelling, there has to be money (and time) do it. I can’t do anything about the tiny bit of vacation time that I get each year, but we can do something about the money.


I don’t think that I’ve ever tried to stick to a budget before, I always just estimate it in my head and hope that I come out on the positive side at the end of the month. There was a time, before marriage, that I lived beyond my means and didn’t always come out on the positive side at the end of the month. However, I have learned from that mistake and won’t be doing that again. I’m seriously considering the idea of trying to hold us to a budget and see how it goes. Do any of you try to stick to a monthly budget?


I have been following a few blogs online and a couple of them are what I refer to as “money blogs.” Several of them are focused on retiring as early as possible and they cut out a lot of stuff in order to meet that goal. One of them, specifically, made what I consider a big salary at his (and his wife's) job, so it was probably pretty easy to squirrel away half or more of their income and still live comfortably. I fully plan on working another 25-30 years (as bad as it sounds), so I guess we need to find an appropriate balance between cutting for the future and enjoying ourselves now. What fun is having a bunch of dough in your 60’s-70’s if you tortured yourself  getting to that point?


Some of the money bloggers say that you should only have one car in a household… We have 3 when you count the convertible toy and I don’t see us getting rid of it or one of our “daily drivers.” Teacher and 8-5 employee schedules don’t exactly mesh together well for car sharing.  I’ve considered returning to riding my bicycle to work (I did it in when we lived in GA), but there isn’t a shower at the office where I work. I might give it a try and do the “baby wipe” clean up when I get to work, but I’m not sure how well that will really work. The other issue with that plan is that I can’t get myself to try riding in sub-freezing weather. Getting soft in my old age, I guess.  That eliminates 4+ months out of the year.


We already do a lot of the other things that the money blogs recommend to cut costs: I already bring my lunch to work most days and typically try to fix our cars myself instead of taking them to the shop. We don’t rush into big purchases and try to drive the wheels off our cars. Of course, we did buy a new car in 2007, which is frowned upon.  However, since we are going to keep it for many years, I'm not sure that is such a bad thing.  Yes, a slightly used vehicle would save some money, but after working at a dealership, I am not sure I will ever fully trust a preowned car again. 

We’ll see if this budget idea goes anywhere or not.  Consider this a warning:  Don't blame me if you get bored this weekend and decide to run some quick numbers on what you spent last year. You might be very surprised with what you see.

Happy New Year!

Happy new year everyone! As the year begins, I am crossing my fingers that 2012 will be a little more calm for us, I’m not sure we can handle another crazy year. We spent Christmas 2011 with Karen’s family in Virginia. Karen flew up the Monday before Christmas and I flew up on Friday after work. It is not fair that she has so much time off!!!  Thankfully, the weather was great for travelling and all of our flights were on time. It is definitely different travelling by plane for the holidays, we had to be a little more mindful when buying gifts for everyone one, with an eye towards being able to pack or ship the gifts.



While we were  in VA, Karen had planned a full schedule of visiting friends and relatives, however I managed to throw a wrench in that as I started feeling progressively more sick during the visit. By Tuesday, I was feeling bad enough that it was decided that I should go to the doctor. Like most people, I have to be feeling pretty bad to be willing to go to a doctor, especially when we are out of town. I was diagnosed with Bronchitis and prescribed antibiotics and a strong, knock you on your a$$ cough medicine. As of today, I am still not feeling 100%, I’m still battling congestion and a cough. I am ready for this to go away.


We received a lot of great gifts for Christmas, everyone was way too generous. In fact, our carry on luggage could not handle all of the gifts that we acquired in VA, so we left a majority of them at her parents’ house. (They will bring them with them the next time that they come to visit) Some of my gifts were new tools, which I would have liked to bring home with me so I can put them to use. However, I wasn’t sure that TSA would approve of me carrying on a collection of new screw drivers and a big, heavy ½” ratchet wrench with a swivel head (enter your Tim Allen grunt here), so I decided against trying to pack them. With my luck, they would have confiscated them at the security checkpoint.


I worked last Thursday and Friday and then was off for a 3 day weekend over the New Year weekend. We didn’t do too much over the weekend, as I was fighting the sleepy side effects of the prescription cough medicine. We did, unfortunately, suffer through watching UVA getting beat by Auburn in the Chick Fila bowl and then Georgia’s embarrassing triple overtime loss to Michigan State in the Outback bowl. Ugh, not the way I wanted either team’s season to end. The good news is that since the SEC added two new schools to the conference (Texas A&M and Missouri), they had to rework the 2012 football schedule. That resulted in Georgia playing at Missouri in September, which is only a little over four hours away from us. We will definitely be trying to get tickets to that game; it is the closest away game to us.


What does 2012 have in store for us? I’m not really sure, but as I said earlier, hopefully it will be a bit less uneventful. Since both of us have gotten a little more settled into our jobs, we are going to try to do some more travelling. In addition to that, I am doing another session of curling; it starts in the middle of January. As I mentioned in an earlier post, I am going to attempt to do the weekly photo topic to help improve my photography skills. This week's theme is “the best of your 2011 photos,” I’ll have to go through my pictures and see which one I like best. If all goes as planned, Karen and I will pick up where the golf lessons ended last October and start trying to play some golf once the spring warm up comes. I am also hoping to make some more progress on the landscape in our yard. I still have a lot of ground to cover, I just need to get the CFO to authorize some funds for plants. Based on that quick list, it looks like 2012 could be a fun year.

As for the travelling, we’ve been in Illinois for over a year and really haven’t explored the surrounding areas. I would like to spend some more time wandering around Chicago and head down to St. Louis for a weekend. We have scheduled a trip to Denver this spring, Karen will be presenting at a conference and I will be tagging along to sight see. I have only been to Colorado once for a ski trip and I am looking forward to exploring Denver while Karen is busy at the conference.  I will try to cover the historical stuff that she doesn't like while she is at the conference. In May, I will make a trip into neighboring Indiana for my first Indy 500.  We are also talking about taking another cruise, who knows if that will actually happen or not. We had such a good time on the one we did over Thanksgiving 2011 that we are itching to do it again.


This looks like a lot of travelling and it doesn't include trips to visit family for the holidays. Hopefully this all works out and we have a great year. What do you all have planned for 2012?