Ask the grumpies: How much to save when your salary is small?

Leah asks:

I comfortably live on my salary with no issues. I easily put away 50% each paycheck (between savings and retirement). But my salary isn’t huge. Should I be digging deeper to find some less-easy money to amp up my retirement or savings account? I’m contributing to my 403(b) but not really my Roth IRA because I don’t know how to use my bank’s interface. Yes, lamest excuse ever.

Also:  How does my spouse saving for retirement impact my savings? As in, is it okay to not save quite as much? I’m saving, but I’m not saving 15% of my income for retirement. [Ed:  this means 50% of her income is going to general savings + retirement, but less than 15% is going to retirement]

And: I started saving at 30 for retirement. How much do I have to save?

It’s only been a little over a year since you asked this question, and it’s not like your family situation has changed at all, say, by having an adorable baby.  (*Cough*)

If you’re really only living on 50% of your paycheck, then that means you’re doing fine for retirement. Saving 50% starting in your 20s (even late 20s) will allow you to have more money than you need later on, if you keep those living expenses low.

However, some of your living expenses are probably subsidized by your husband.  So you’re probably not really living on just 50% of your income.  You will need to figure out as a family unit what your joint savings and joint spending is and what it’s likely to be in retirement.  What kind of retirement do you envision as a family?  What risks are there in the future?

As a general heuristic, you want to save 10-15% of your (joint) income for retirement.  If you didn’t start until you were 30, then you probably want to aim closer to 20% (or more).  But again, this is going to depend on what your husband is doing.  Even if you have separate finances in most areas, you will most likely be sharing living expenses now and in retirement, just assuming that you want to keep living with each other.  (And in the unthinkable event of divorce, many states are community property meaning they cut your assets in half no matter how many assets there are.)

In terms of whether or not you should dig deeper… well, that depends a lot on what’s going on now and being able to predict the future.  You do have a child now, and for the child’s sake, you want to make sure that he doesn’t have to support you during your golden years.  At the same time, babies are a lot of work and you may have more time and more money to devote when the baby is school-age.  A lot of things change over time.

As a side-note, when your salary is *truly* small, because you’re one of the “47%,” Social Security will replace a large percentage of your income.  And, correlation-wise, you’ll die younger.  But that’s not really your situation.

Yes, not wanting to figure out your bank’s IRA thing is lame.  Don’t use your bank for the Roth IRA (unless the only way you are going to do an IRA is through the bank, but that would only be the case if the bank was super easy to use, satisficing is always better than doing nothing).  Give Vanguard a call and they’ll help you figure out what to do, assuming you have enough money to put away in a Roth IRA.  Stick it either in an S&P 500 index fund or in their Target-Date retirement fund.

So, um, take that advice for what it’s worth given your changed circumstances from when you asked it.  We can elaborate in the comments!

Grumpy Nation, anything to add?

I used to like people more

I have become quite the misanthrope.  (#2 has always been one and welcomes #1 to the club.)

That’s not to say I actively *dislike* people, just that I’m not seeking people out.  I’m not trying to get to know people better unless we hit it off right away.  I’m no longer curious about what makes most folks tick.

I didn’t used to be this way.  For the longest time as long as a person wasn’t a bully I would like them.  I liked crazy people who were always getting themselves into trouble.*  I liked people other folks would find annoying.  I liked anybody who would put up with me.

I think I figured out why I no longer like so many people.  Part of it, of course, is family life and work demands that lead me to not have as much time for other people’s craziness.**

But the main part, I think, and the part that came as a revelation, is that I used to have a growth mindset about people.  If they did something I found annoying, like constantly making the same stupid decisions that hurt themselves, well, that was something that could be fixed.  That was something *I* could fix.

But I no longer try to fix people, other than my students whose math anxiety I carefully remove as part of my job.  (That’s a healthy level of fixing people, I think, and they’re receptive and it’s necessary.)

And since I no longer try to fix people, that means any annoyingness, any self-destruction… that’s permanent, and not temporary.  It isn’t interesting because I’ve seen it before and there’s no reason to explore the insanity any further because there’s nothing I can do except be silent witness.  And I’d rather not do that.  Not when there’s work to do and family to hang out with.

Part of being older is realizing that I don’t like as many people as I used to… and more importantly, that I don’t really care that much.  (Though I do feel bad that I don’t care, to paraphrase Brittney in The Misery Chick episode.  Daria says that makes me a good person, even though I suspect I’m really not.)

*Disclaimer:  #2 was crazy when I met her, but I liked her because we shared hobbies and world-views and she was smart and funny and definitely not because I found her craziness interesting, because I didn’t find her craziness particularly interesting because it was too self-destructive and was definitely beyond my ability to even to try to change, though I did get her a book.  She helped herself with the help of professionals.

**Of course, we always like you, gentle readers.  Our readers are AWESOME.  Or at least our commenters are awesome.  We assume our silent readers are as well.  They at least have great taste in blogs, which is a good sign.

Have your views on or desire to hang out with random members of the human race changed over time?

How we visualize reviewers

Whenever I get a bad reviewer, I imagine him as either a obnoxious male graduate student or some idiot male professor who doesn’t know anything and doesn’t think he needs to find out because he hasn’t so far in his career.  And he’s rude because he’s got Dunning-Kruger syndrome and has been able to get away with it.

Good reviewers are always female in my head.  They give useful feedback and help to improve the paper.  They’re polite and professional.  (Because, of course, as a woman, you have to be or you get labeled emotional and unprofessional.  Men get excused, “that’s just the way [bigname] is.”)

Chances are the majority of the reviewers I get are one gender, but I want to not just say, “he” all the time when referring to one of the other, even in my brain.  And with “ze” it’s difficult to tell reviewer #1 apart from reviewer #3.  So rather than assigning random genders, I use this mnemonic.

Do you have mental images of the people who give you feedback?  What do they look like?

November Mortgage Update: And hypotheticals

Last month (October):
Years left: 3
P =$1,042.82, I =$171.58, Escrow =$788.73

This month (November):
Years left: 2.75
P =$1,054.86, I =$159.55, Escrow =$788.73

One month’s prepayment savings: $7.90

Man, it sure is nice to be getting paid again.  Beautiful beautiful paycheck.  Bank account numbers are going up instead of down again.  :)

I won’t find out whether or not I’m getting a half-paid sabbatical next year for several months.  However, I may take the year off unpaid *anyway*.  We have an awfully large savings buffer and DH’s company swears they have enough money to stay in business for the next two years even if they earn no more money during that time (and they’ve got grants out and products being made, so hopefully they’ll get more money).  And DH is one of their valued employees.  And he should be able to find new employment even if he loses his job depending on where we do the sabbatical.

There’s a lot of questions about where to go too, but I’ll defer that for a later post.  All of the places, however, have a higher cost of living than where we are right now (which isn’t difficult!)  Think double the cost of daycare, 1.5 to 2x the cost of housing for something much less nice than our current mortgage (even without the prepayment).

The hypotheticals I want to address right now involve the house.

We currently have 3 cats, one of whom still occasionally pees on a comforter or pile of laundry if we leave it out when she’s out and about.

Our house is also a superficial mess.  Yes, the carpet in the kids’ bathroom is gone and the vertical blinds that were in the worst shape have been replaced, but that’s only the tip of the home-repair ice berg.  The kittens literally shredded the master bathroom when they were still kittens.  It will need to have the wallpaper completely removed, patching done, and paint.  The entire house needs to be painted– it’s grungy and chipping in places and occasionally sports two year old art.  There’s a sizable black ink stain in the carpet in DC1’s room that won’t go away with steam cleaning (it, in fact, just gets bigger every time we try).  The deck needs painting.  The screens need to be replaced or patched.  The guest toilet is getting rusty.  And on and on and on.

We are not allowed to rent to students by HOA rules.  (Though we’re fairly sure there’s a group of students living down the street from us, but the HOA board is currently weak.  When strong it has brought lawsuits to such houses and won against them.)

Our house, in theory, if it were in good shape, would rent unfurnished for $2000/mo.  Though one year rentals may drop as low as say, $1600/mo.  (Note, our required mortgage is $2003/mo, though as you can see the escrow and interest are under $1000/mo.)  Storage for our furniture would cost something like $300-500/mo, give or take.

In bad shape, any house in town will rent for $1200/mo, possibly even $1500/mo.  Our house would be a bargain at that price, even with stained carpet.  Though we’d still have to repaint, I think.

We’re not sure if anyplace we go will allow 3 cats.  Two, yes.  We might be able to leave one of the cats at a relative’s place for the year (though the two black kittens are very attached to each other, and we’d be breaking that attachment– it is unlikely that a relative would take the incontinent kitten).

Our utilities range from $50/mo to $800/mo depending on time of year.  Lawn mowing costs $35/mo, plus weeding $50/mo, but only during the growing season.  Our lawn has to meet a certain standard or we get nasty letters from the HOA  threatening to take our house.

Obviously we’ll stop mortgage pre-payment for next year if I go on leave.

So our choices:

1.  Fix everything up, try to get market rate for the house.

2.  Fix some stuff up (painting, but patch instead of replace screens, put a rug over the ink spot etc.), put the house on the market for cheap.  Potentially offer a discount for renting it furnished rather than unfurnished.

3.  Hire someone to house sit.  Here we could either ask that they pay utilities and take care of the lawn or we could pay utilities and pay them to take care of the house and the two kittens.  If we pay them, then we could get the house fixed up while we’re gone rather than this year when we’re both living here and busy.  With infinite money we could even have the kitchen redone (except we don’t have infinite money).

So I don’t know.  We have quite a bit of extra money in savings right now earmarked for home improvement (we’ve only spent ~$3K so far), though some of that may end up going for rent next year depending on what we end up doing.  If we had a lot more money we’d pick option #3 no contest.  But while we could afford that option (without the kitchen remodel), it would potentially drain our non-retirement/non-529 savings (when combined with our living expenses for next year).  

What are your thoughts on the options?  What should we be considering to make the decision?

If a link love meets a link love

The other one of us is traveling this week.  Can you tell the difference?

I feel like we should say, “This week in misogyny” or “This week in racism” but it gets so depressing.  Anyway:

Gamergate harasses and doxxes Felicia Day.

Fox news hosts tell young women not to vote, go back to tinder and

Ferguson October goes all month long.

grah:  Even NPR fell prey to these false narratives.

How much does a professional cheerleader make?

Career advice from actors to academics.

Work vs. school:  what is the difference?

Advice to study from Ian McKellen

401K contribution limits are going up in 2015.

Bad advice for rich people tired of giving candy to the moocher class.

Awesome people reading is awesome.  Also:  Lena Dunham has the only tattoo I have ever thought cool enough to be permanent.  How awesome is that?

Grand-daughter of google questions

Q:  is 17 presents too much for christmas?

A:  Depends on the presents!  And social norms in your little circle.  And whether the presents are to just one person or spread out, and if to one person if boring stuff you’d get anyway like clothing is included.  And so on.

Q:  should kids work while in college

A:  Between 10 and 20 hours has been found to be at least correlationally beneficial.  More than that is bad.

Q:  is it a good idea to pay off student loans early

A:  If you can, then yes!  I did.

Q:  how to handle kids that don’t want to do anything

A:  Make them do chores.  They may not want to do them, but at least you’ll be getting work out of them while they complain.  And they may end up figuring out something they’d rather do!

Q:  why my kid dont like to study

A:  Nature vs. Nurture is always such a difficult debate

Q:  why do people wallow in misery

A:  Because it’s so much more satisfying than just dipping your toes in.

Q:  why do people pretend not to listen

A:  sometimes that’s more polite than what they’d have to say to you if they didn’t

Q:  in a second pregnancy is it normal to not like any part of it

A:  I’m fairly sure that’s normal in *any* pregnancy

Q:  how do u call a romantic man

A:  I assume with your cell phone these days, assuming you’ve got his number somewhere.  Bat signal probably won’t work because that’s for Batman.  (#2 notes:  Batman isn’t romantic.  He’s Batman.)

Q:  what is an untenured visiting teacher

A:  Depends on their position and institution.  Could be Visiting Assistant Professor, Lecturer, Instructor, Adjunct, Adjunct Assistant or Adjunct Associate, Scholar in Residence, etc.


Current book podcasts

There are podcasts about books?  Why yes, there are!  Here’s what I usually listen to these days, all through iTunes:

Book Fight – two white male friends in Philly who are writers, editors, and teachers of writing and literature discuss one book or short story per week, sometimes with a theme, and sometimes wandering off into fascinating, funny digressions.

Oh, Comics! – just starting, you can get in on the ground floor!  The podcast for the new site about comic books, Panels.  One host is a man heavily into comic books, and the other is woman just recently getting into them.

Book Riot – like the site, and the podcast!  Everything books- and reading-related.  Hosts work well together.

also just picked up Reading Lives, a new podcast in the Book Riot Empire (Book Riot, Oh, Comics!, Dear Book Nerd, etc.).

Bookrageous – a roundtable discussion about what everyone’s reading and why books are great, featuring a rotating cast of fun regulars.

Sword & Laser – The sword and the laser stand for fantasy and science fiction: books, TV, movies, pop culture, and more books.  They even have a cute mascot, Lem, a cyborg dragon (Lord Bookwyrm Lem of Swaser).

Books on the Nightstand (sometimes).  One of the co-hosts, Ann Kingman, reminds me a lot of my stepmother in both her voice and her vocal tone/inflection/mannerisms, so that makes the podcast a bit weird for me to really enjoy.  (N.B.: My stepmother is great tho.)

I tried a few episodes of Dear Book Nerd, but I quit listening because I felt like I always had the ONE RIGHT ANSWER to the question, and the host didn’t.  That’s a weird personal preference, though!  You might like it.

That’s all the book podcasts I even pretend to keep up with.  I have other ones that are about geekdom in general, writing, spec-fic writing, video games, etc.

Grumpeteers, anything I should add?