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Re: The Savings Playground for June, 2017 -- summer break!

[ Edited ]

Ready to play!

 

I'm at See-Saw level. I've got the account opened and have set up automatic transfers, but the first one won't happen until next month.

 

My goal is to put $100 a month into the fund and eventually reach $5,000, which is enough to get me through six months.

 

 

  • What credit union or bank do you lilke for a savings account?  Interest rate?  Ease of transfer?  Fees?

I would really like to use my local/regional bank, especially for a true emergency savings account (in an emergency it might be easier to get money out of a neighborhood bank), but their interest rates are pathetic. I will be using an online CapitalOne360 savings account with a .75% interest rate mostly because I already had an unused account open there. They don't charge any fees and their online interface does everything I need it to do.

 

  • What things have you cut from your spending habits to increase your Playground savings account?  How much has it helped you save over time?

I already live so narrowly it's laughable. I won't be cutting specific things, but will transfer money into the new emergency fund account on the "pay yourself first" principle and see what I need to do without later.

 

  • Have you ever considered tapping into savings for non-emergency related spending, and how did it affect your stress and goals?

Good question. I have tapped into savings many times, most recently to make a downpayment on a car, which stressed me out a lot. I didn't have a dedicated emergency fund then, but I was aware that in putting that money into a car I was putting myself in a bad position if I had an emergency. The Playground opens at a perfect time for me to begin rebuilding and this time to keep the emergency money off limits.

 

  • What's the biggest mistake you've made in overspending and how do you work to avoid it now?

SPENDING IMPULSIVELY! I'm not a big spender. I don't have luxuries. I just don't plan my spending very well.

 

  • If you got into credit trouble before and can analyze it now, how much savings would have saved you the FICO destruction from your past dealings with The Bully?

Luckily I've never been in credit trouble. I've always been the kind of person who would pay a bill even if it meant not buying groceries and scraping by on big bags of rice and beans. Also, knock wood, I've never had the kind of emergency that wiped me out financially. At this stage of my life I'm also lucky that I don't have a mortgage, student loans, big cc balances, or other inescapable expenses. My biggest obstacle to savings is simply being low income, which is not that big a problem on my simple lifestyle.

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Re: The Savings Playground for June, 2017 -- summer break!

What piece of playground equipment I am: by the definitions above, I am on the carousel, but to some I could be merry go round. I have been saving and saving and saving for a few years (through my BK13 I was still able to save due to steady increases in my salary).  Last year I did a big spend for my #1 bucket list item and backpacked for 2 weeks through the south island of New Zealand so that took a lot of my savings.  Then I decided to buy a house in Jan and just recently closed so another big chunk.  I STILL have at LEAST probably 4-5 months of reserves.  Now my goal is to build it back up and then some (in a year and a half those 2 things totaled about $18K).  My first goal is just to replenish the house expense portion.

 

- What CU or bank do I like for savings? My checking and savings is with BofA and I have been a member there since early 90s.  They treat me GOOD.  I also have 2 IRAs with them.

 

- What things have you cut from your spending? I'm a minimalist so really I dont look to cut anything, but my goal is now to stick to the budget that I have in place since I bought the new house.  Since I closed mid May, I gave myself the month of June to spend where needed for the house, but starting July 1 the budget kicks in.  I have in my budget for saving:  $600 a month to emergency/savings,  $80 a month goes into Christmas cash that I keep on hand in the house, and then I have my 401K that I put 6% in which my company matches

 

- Have you ever considered tapping into savings for non-emergency related spending? Not really because I keep my checking amount very high (currently has over $10K in it)

 

- Does tapping into savings stress you out and/or affect your goals? N/A

 

- Biggest spending mistake: Years of living above my means and not taking money seriously.  I was making a high salary, living like there was no tomorrow, then 2008 hit.  Enough said.  I guess the mistake I made was deciding to go to school in my 40's, taking out loans, stopping school after 2 years with no degree but a lot of debt.  Again 2008 was a ROUGH year.

 

- How much needed to get out of my past dealings with debt: N/A  Other than the $200K mortgage I now have.

 

 


In second year post 13 DC (12-28-15)
Entered garden 05-19-2017 CLOSED ON MY NEW HOUSE 5/17/17!!!!

Current Scores FICO 8: 690/707/711 FICO 5/4/2: TU738 EQ732 EX697 Updated: May 17, 2017
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Posts: 72
Registered: ‎03-09-2017

Re: The Savings Playground for June, 2017 -- summer break!

First, thank you for creating this new idea. It's a creative way to promote saving money while at the same time helping those who are looking to move up a step or two financially.

 

My story is pretty straight-forward. I lost my job with a multinational bank in December of 2006 and had difficulty finding work for several years. I had to be supported by my then girlfriend, now wife for quite some time. We used every dollar we had to juggle bills and lost any credit we had. I eventually went back to school and earned my BA and MA in Political Science, and am now working as a Marketing Analyst for a Professional Services firm in NYC while my wife's practice has taken off like a rocket in the past year. We recently moved from an apartment where we had to climb over each other to get anything done to a 3 bedroom, 3 bathroom house (we still rent, but we plan on buying in 2022, which will be quite some time after my wife earns her PhD (we're expecting this fall) and she starts up in Manhattan (People will pay large amounts of money for therapy with someone with a PhD.)

 

Anyway, to answer your questions:

 

What credit union or bank do you lilke for a savings account? Chase, since she's had a checking account there for 20 years and just started the savings account last year to set up the house  Interest rate? Not very high. Ease of transfer? No problem  Fees? None.

  • What things have you cut from your spending habits to increase your Playground savings account? As you can guess, we had to more or less cut everything to the bone before things improved. How much has it helped you save over time? We use that as a reminder to set aside a certain amount every week for the savings account.
  • Have you ever considered tapping into savings for non-emergency related spending, and how did it affect your stress and goals? No, any time we tapped into the savings it has been for the house or to pay the credit cards we used to pay for the furniture. We have a solid PIF policy and the savings is swinging back up now that we're finished setting things up.
  • What's the biggest mistake you've made in overspending and how do you work to avoid it now? I think it was that I viewed credit as something to have for when I wanted to buy things I didn't need. Now, I view credit as something that is available if I ever need to use it.
  • If you got into credit trouble before and can analyze it now, how much savings would have saved you the FICO destruction from your past dealings with The Bully? I didn't think about savings for a long time, but my total credit line in 2006 was under $10,000.
In the garden until at least 1/1/19 unless I prequalify for a superprime card (10k minimum) or $25,000 PLOC
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Re: The Savings Playground for June, 2017 -- summer break!

I'm on the see-saw.

 

I went into 2017 with a few grand saved up, but dipped into it for various and mostly valid reasons. Taxes, overdue car maintenance, and to pay down the debt I was carrying to app with NFCU and PenFed for the most favorable results possible. PenFed just increased me to $18k and I have all of my CC debt ($3800) sitting on that card at 0%. I'm on a payment plan for the $6k of taxes left at 6%. I am content with this and am going into budget mode and building up the reserves again. Starting back out with just a few hundred, though.

 

Banks: I've banked at Wells Fargo (SouthTrust-->Wachovia-->WF) for nearly 20 years. It still proves convenient for a brick and mortar bank, but I also have savings accounts at NFCU and PenFed now. Not so concerned with interest rates as I'm starting out. The WF savings is fun because it transfers a dollar from checking to savings everytime I use my debit card. I do need to switch around all of my checking/savings account activity. Ideally, I want whatever bank I use for my primary savings to be largely sock drawered so I don't dip into the savings. (Sidenote: I managed to save $20k when I was in my early twenties by routing 25% of my direct deposit to a savings account at a smalltown bank that wasn't tied to my checking and I didn't even have an ATM card for.) 

 

Cuts made:

  • I haven't had cable for a decade
  • I usually only subscribe to one streaming service at a time and I rotate them
  • I changed phone carriers and got two phones for the price of one. I pay the same, but take care of my Mom's now also. (Goes to show what you can get when you shop around.)
  • My car is 11 years old and has been paid off for 5 years. You can get 200-300k miles out of cars nowadays with maintenance. Have some patience and a AAA membership and you can save a FORTUNE.
  • I rediscovered the library recently . . so much free stuff!
  • I rotate subscriptions to things like newspapers/satellite radio/etc. All of those $10-$15/month items can add up to a couple of hundred bucks if you don't keep an eye on them. I also don't really have the time to use all of them at once anyway.

Cuts I need to work on:

  • Bars/Restaurants/takeout/delivery. Waaaaaay too easy of a trap to fall into in NYC. I know this is my #1 budget killer. 
  • I'd love to get rid of the internet at home but my better half won't go for it. I hate our provider, the cost is outrageous, the service crappy, and for as much as I need the internet at home, I could just tether from my phone.
  • My spending tends to occur in bursts and then I reel it back in and buckle down. I need to be cautious of the bursts when they are happening and put the brakes on instead of catching up after the fact.

Tapping into savings:

I did as mentioned above. It didn't really do much to my stress, but I was sad for the setback. 

 

Biggest mistakes made in overspending:

Having a live for today mentality. All sorts of travels/concerts/sporting events/dinners/etc. Being overly generous to family/friends.

 

Previous credit trouble:

I moved to NYC at the height of the recession. Credit got me by those first couple of years and then things stabilized and I had moved to a six figure income. Strangely, I kept running up more debt the more $$ I made. It was a fast life working 60-70 hours per week, paying for the conveniences that allowed you to work that much, then spending on whatever vacations/dining/entertainment you wanted because you felt like it was what you were working so hard for.  I had to get out of there and left the year before my BK. I managed to cover most minimums, so it wasn't really a savings issue, but when I went back to work a year later at a more nominal salary and an actual 40 hour/week schedule, I had dug a $100k hole of credit card debt that I wasn't getting out of.

 

 

Ch 7 Discharge May 2015: EQ 588/TU 552/EX 570
July 2017: EQ 681/TU 668/EX 671

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Re: The Savings Playground for June, 2017 -- summer break!

[ Edited ]

iced wrote:

- Other random comments: My stress is over whether or not I'll ever be able to retire, not the next 6 months. When I sit down and analyze it, the amount I need for retirement is one that, even if my balance sheet grows by $120,000/year every year for the next 30 years, I still won't reach. As it is today, it's only growing by about half that number. That's discouraging.

 

I don't know how so many people retire at all, let alone early.


Apologies for not really playing as my savings account is fixed at basically $750 with DCU; however, how are you figuring needing 3.6M in cash assets for retirement?  What are you expecting to be spending on?  Asset appreciation doesn't magically become zero at retirement, just withdrawals instead of deposits slowing top line growth.

 

Me I'll probably find a bridge club or similar, read some books, and continue trying to get some modicum of exercise when I can.  Just not expecting to have expensive hobbies but I have a pretty boring life haha.

 

To answer one question of my own financial setbacks:

  • What's the biggest mistake you've made in overspending and how do you work to avoid it now?

Impulsive spending - I never really spend more than I have or can reasonably expect to have as I make more than I rationally need by a large margin, but to give an example yesterday at work I got to try a virtual reality system... and it was simply amazing to the point I was seriously considering taking my spare bedroom and getting a Hive and associated high quality gaming computer all in for like $2800, but then, well, that's $2800 that's not getting dumped into my investment accounts.  Probably a year or so ago I would've done that without thinking knowing I could afford it but after analyzing my cashflow over the past 3 years, and then setting some goals... so, nah, maybe I'll relook at it for Christmas if I've been a good boy and the current gig and salary looks to continue past January.  Maybe.

 

Basically looking at where I'm at now, vs. the poor decisions I've made in the past, well... I could've walked away from my career in total and done something else like teach high school, whereas I can't make that justification now financially.  Life would be different and quite likely better if I hadn't done some rather dumb things from 1998 to call it 2016.

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 688, TU 4 758, EX 2 703, EQ 8 728, TU 8 762, EX 8 739 (6/12/17)
Goal Score:    EQ 5 750, TU 4 750, EX 2 750, EQ 8 800, TU 8 Blah, EX 8 800 (01/01/18)


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Re: The Savings Playground for June, 2017 -- summer break!


Revelate wrote:

iced wrote:

- Other random comments: My stress is over whether or not I'll ever be able to retire, not the next 6 months. When I sit down and analyze it, the amount I need for retirement is one that, even if my balance sheet grows by $120,000/year every year for the next 30 years, I still won't reach. As it is today, it's only growing by about half that number. That's discouraging.

 

I don't know how so many people retire at all, let alone early.


Apologies for not really playing as my savings account is fixed at basically $750 with DCU; however, how are you figuring needing 3.6M in cash assets for retirement?  What are you expecting to be spending on?  Asset appreciation doesn't magically become zero at retirement, just withdrawals instead of deposits slowing top line growth.

 

Me I'll probably find a bridge club or similar, read some books, and continue trying to get some modicum of exercise when I can.  Just not expecting to have expensive hobbies but I have a pretty boring life haha.


My retirement number is actually right around $4.625 million. We're currently between $900,000 to $1,000,000 in cash/retirement/investment savings, meaning we're about $3.6 million short of the goal, hence the 120k * 30 gap.

 

The short answer is that that's $185,000 * 25 (~75% of annual income multiplied by 25 on the plan of a 4% draw down annually). If the market continues to grow 4% and/or interest rates get back above 4%, we can live in perpetuity off the interest, but that's a risky assumption to make. Instead, I assume the following:

 

- Stock growth will be 0% - if it's a bear market for 20 years, I'm still boned, but it also shelters me from making assumptions about stock market growth thay may not happen. That is, better to assume 0 and be pleasantly surprised when it's 6-7% than plan on 6-7% and have it be 0, coming up short.

 

- Social security dies a horrible death before 2047, meaning all my contributions today are sucked up by the burgeoning mass of boomers retiring. It goes bankrupt and I get nothing.

 

- Medicare also dies a horrible death, meaning I'm paying 100% of my insurance costs out of pocket.

 

- I am no longer contributing to my retirement and am drawing off of it instead, which largely cancels out the Medicare expenses above. That is, I expect my health care costs to go up by about the amount I save each month for retirement. Today, that number is 24% of gross. However, this is further muddied by the fact I'm hoarding a HSA account and plan to maximize my contributions to it every year until retirement (my employer also contributes to it) while never touching it, so I may well have a reserve of at least $100,000 (more if markets do well) to offset some health care costs. 

 

I get that I'm planning a bit on the conservative side, but again - I'd rather be ready and not need than need and not be ready.

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Re: The Savings Playground for June, 2017 -- summer break!

Woo hoo!  It was just announced that we will be getting bonuses at the end of this month!  I'm not sure what the amount is going to be so can't really plan for how much will be put into my savings account.  Whatever the amount, it will push me closer to achieving my goal quicker so I am happy!!

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Re: The Savings Playground for June, 2017 -- summer break!

Ha, I just got the opposite news!  I just agreed to a deferment on payment for 60 days in exchange for 4.2% extra.  While I am glad to earn that kind of return, it means I have to totally cut my spending for the next 45ish days because I was expecting that income to pay for spending after the free float from the banks.  Doesn't spoil summer by any means but there were a few high spend items I was eyeballing that usually come on sale in summer.  Hoping those sales come around the 4th, it'll be close.  Most of my statements close the first week of each month, though, and this was a huge chunk of income for the quarter.

 

Congrats on your bonus!  Sock it away and pretend like it's not an easy way to buy more stuff, lol

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Posts: 116
Registered: ‎03-24-2017
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Re: The Savings Playground for June, 2017 -- summer break!


iced wrote:

Revelate wrote:

iced wrote:

- Other random comments: My stress is over whether or not I'll ever be able to retire, not the next 6 months. When I sit down and analyze it, the amount I need for retirement is one that, even if my balance sheet grows by $120,000/year every year for the next 30 years, I still won't reach. As it is today, it's only growing by about half that number. That's discouraging.

 

I don't know how so many people retire at all, let alone early.


Apologies for not really playing as my savings account is fixed at basically $750 with DCU; however, how are you figuring needing 3.6M in cash assets for retirement?  What are you expecting to be spending on?  Asset appreciation doesn't magically become zero at retirement, just withdrawals instead of deposits slowing top line growth.

 

Me I'll probably find a bridge club or similar, read some books, and continue trying to get some modicum of exercise when I can.  Just not expecting to have expensive hobbies but I have a pretty boring life haha.


My retirement number is actually right around $4.625 million. We're currently between $900,000 to $1,000,000 in cash/retirement/investment savings, meaning we're about $3.6 million short of the goal, hence the 120k * 30 gap.

 

The short answer is that that's $185,000 * 25 (~75% of annual income multiplied by 25 on the plan of a 4% draw down annually). If the market continues to grow 4% and/or interest rates get back above 4%, we can live in perpetuity off the interest, but that's a risky assumption to make. Instead, I assume the following:

 

- Stock growth will be 0% - if it's a bear market for 20 years, I'm still boned, but it also shelters me from making assumptions about stock market growth thay may not happen. That is, better to assume 0 and be pleasantly surprised when it's 6-7% than plan on 6-7% and have it be 0, coming up short.

 

- Social security dies a horrible death before 2047, meaning all my contributions today are sucked up by the burgeoning mass of boomers retiring. It goes bankrupt and I get nothing.

 

- Medicare also dies a horrible death, meaning I'm paying 100% of my insurance costs out of pocket.

 

- I am no longer contributing to my retirement and am drawing off of it instead, which largely cancels out the Medicare expenses above. That is, I expect my health care costs to go up by about the amount I save each month for retirement. Today, that number is 24% of gross. However, this is further muddied by the fact I'm hoarding a HSA account and plan to maximize my contributions to it every year until retirement (my employer also contributes to it) while never touching it, so I may well have a reserve of at least $100,000 (more if markets do well) to offset some health care costs. 

 

I get that I'm planning a bit on the conservative side, but again - I'd rather be ready and not need than need and not be ready.


Loving your plan! I'm one of those that believes you can never plan enough! I personally want to spend my retirement years living better than I do now. Assuming (hoping) I'll still be in good health, I want to travel as much as possible, volunteer my time for the greater good and drink A LOT of good wine Smiley Happy My prospective wine budget alone will probably require me to sock away $1M by itself LOL!


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Re: The Savings Playground for June, 2017 -- summer break!

[ Edited ]

ABCD2199 wrote:

 

Some things to discuss:

  • What credit union or bank do you lilke for a savings account?  Interest rate?  Ease of transfer?  Fees?  We bank at Chase/J.P. Morgan.  We are lucky enough to be part of Chase's Private Client group so we don't pay normal account fees, safety deposit box fees, etc.  We have managed accounts so interest rates are not applicable. 
  • What things have you cut from your spending habits to increase your Playground savings account?  How much has it helped you save over time?  I think that being happy with what you already have is the best way to keep your spending habits in check.  That in assessing your dining out, etc. needs and wants.
  • Have you ever considered tapping into savings for non-emergency related spending, and how did it affect your stress and goals?  We moved money to make a real estate purchase, did not affect our stress levels and iit was part of our long term goals.
  • What's the biggest mistake you've made in overspending and how do you work to avoid it now?  I monitor our accounts and my FICO score every morning and that helps keep things in check and on track..  
  • If you got into credit trouble before and can analyze it now, how much savings would have saved you the FICO destruction from your past dealings with The Bully?  I am not sure that having more cash would have prevent the FICO problems that I had.

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