Budgets Are Sexy has started a worthy club with the goal of making millionaires.
Crunching the numbers with modest assumptions about growth, we could become millionaires in 10 years without changing our lifestyle (but we may want to change our lifestyle, so it will probably take longer). We don’t buy a whole lot of stuff outside of grocery stores.
If we wanted a million dollar net worth sooner than that, we would have to make a lot of sacrifices that I’m just not willing to make.
1. Getting rid of impulse spending. Moderate impulse spending is one of the great joys in my life. Trying out a new cheese or an unheard of author at the used bookstore… or a new ice cream shop or fancy restaurant etc. These happy serendipities are the most exciting thing that happens to me and I’m good with that. They’re not planned, but without them I wouldn’t spend on anything fun at all ever. (DH still would– he’s good with his allowance, but the way he treats his allowance seems like work to me. All that planning.)
2. Taking on extra contract work and grants. I could probably earn an extra 10K to 30K per year doing extra contract work. Stuff that I’m not necessarily all that interested in that may or may not further my career that takes a lot of time to apply for. I tend to do the grants that fall into my lap, but if I really wanted to make big bucks, with more time and effort I could.
3. Get a higher salary by moving jobs. The best way to get a big annual raise is by leaving for greener pastures, or at least threatening to. I like my job and my colleagues. Going on the market, even though it makes sense to try from time to time takes time and effort and I just don’t feel like doing it any time soon. Even though I’m potentially throwing away tens of thousands of dollars per year. It just isn’t worth it to me.
4. Chase higher interest rates. I’ve had large lump sums sitting in very low interest accounts while they wait to be used or moved for better purposes. But the higher interest rates never last forever and there’s always different hurdles you have to jump to get them. I just don’t have the mental power to keep up.
5. Shop around for cheaper insurances etc. We’re about average for our insurances according to online calculators, so there may not be much of a better deal out there, but we don’t periodically check so we don’t know.
6. Not have a second child. This is going to be a big expense at some point in the future. How expensive depends on a lot of factors, but suffice to say it will put a crimp in our savings.
7. Not allow my DH to quit his job if he wants/needs to in a year or so. Until then we’re banking 100% of his salary and a bit more of mine.
8. Cut back on the charitable giving, especially the education subsidies to family.
What do I spend my time doing instead?
1. Research. Feeding my ambition. Exploring how the world works.
2. Teaching. This is my public service– teaching people to think critically about important issues.
3. Enjoying my family. I have the best family on the face of the planet.
4. Reading novels, watching netflix, cooking, and surfing the ‘net (includes this blog). I would rather blog to you all about random things than I would do more work for big monetary payoffs. You all (or my ego) must be worth a lot!
Still, we are doing some things to save up rather than spend.
1. We’re paying down the mortgage early.
2. We’re living on less than one salary.
3. We’re investing a LOT in tax deferred retirement funds and DC’s 529. (After all, if we do quit someday that channel will be cut down to the IRAs and 529s alone.) Though not all 76K that we could be putting away into retirement accounts.
4. Reinvesting dividends in our non tax-advantaged accounts. Though part of me wonders if we shouldn’t tax advantage the whole shebang. Still, it feels like having a little extra security blanket on top of our regular emergency fund. A goal is to replace DH’s salary with dividends alone.
You’re not going to find me feeling guilty about our purchases. I won’t be doing much examining of the little stuff. I think we’re at a happy equilibrium right now, though we’ll re-examine that from time to time. We didn’t have this freedom when we had high interest debt out of college and we didn’t have it when we were living on graduate stipends (paying off said debt). But now that we’re at a comfortable point I don’t want to suffer or stress about money anymore. We won’t go crazy… but I like having and spending enough and a little bit more.
I’m not willing to sacrifice what I have right now for what I could have in the future. Getting to some arbitrary number just isn’t worth it to me. I’m not willing to make deep sacrifices for something that isn’t going to change my quality of life that much in the future. When I had no money and debt and so on, I was willing to make those sacrifices for big gains in the future, and I’m glad I did. But not now. Now is too precious and the future gains too small.
At what point will you be more interested in balance than saving to hit a number? Debt freedom except mortgage? Complete debt freedom and an emergency fund? Automatic savings on track? 1 million? 10 million? Never?