I also don't know if we are high income according to some, but I'll also answer.
We do have a problem with discretionary spending-- especially when it comes to food. $50 on takeout or going out to eat a few times a week adds up. If I want something, I can usually buy it. We also have healthy savings we can draw upon in the event we overspend one month. I am really trying hard to reel it in, but then I go and spend $10 on a book here, $30 on makeup there, $17 at CVS there.... it adds up :/
Its especially bad on the months we get an extra paycheck bc that paycheck is sizeable and I feel like we are entitled to spend some of it on fun stuff.
DH and I have surplus income each month, but it's because we set ourselves up for a modest lifestyle and those are our general spending habits. We just don't spend a lot. We rarely eat out. We don't buy fancy clothes. Our house payment is affordable on one income. I'm a saver no matter how much is in my bank account DH is a bit more of a spender (but only when it comes to sports gear). IDK, that's just how it is.
When I was a kid, my dad used to joke that I had a "one way bank account" -- I only put money in, I never withdrew any! It's hard to change habits I've had for life.
Ditto not giving yourself access to much money. Immediately put money into savings/retirement/investments, and only keep accessible the amount that you are okay spending each month.
Not sure if we count either, but we have a lot of forced savings in terms of both retirement and monthly savings. We spend whatever is left over. Some months I wait to book travel because of how much I spent on clothes, etc. We just try to spread the spending around. I can't help but check our CC bill frequently. It is 5 figures right now so we will rein in the spending a bit this month.
We can't have "everything" but we do have left over money. I do have a loose budget that sets up my values. Each year we save most of my husband's bonus for a down payment (we have no debt, we save 10% for 401K and we have a at least 6 months of living expensis in a cash). And we pretty much spend the rest along the lines of what we value. My DH doesnt' want to pack a lunch so he buys one everyday. I like having a lot of stuff of the kids so I tend to but 1-2 small toys a month. These are all in line with our values. If we valued big trips then of course we'd make changes.
It can be difficult sometimes. I usually just have a set amount of spending money from each paycheck and then just transfer the rest to savings. But if I want or need something above that I just put it on a CC and then pay it off the next month. I've been spending a lot this summer (vacations, clothes, etc) so over the next few months I'm going to try to cut my discretionary spending.
We have tried and failed to budget many times. Our fixed monthly expenses are less than half our monthly take home (including our savings) so we tend to just do what we want with the rest without tracking. Our desires on a monthly basis are always less than our incomes, so we have yet to have a problem, but we keep a huge buffer in our checking account, just in case.
Post by dr.girlfriend on Aug 3, 2012 10:28:45 GMT -5
This is less suggestion and more confession:
I also don't think we're too high income, but we stayed relatively modest for fixed expenses (small house, one kid) and our income grew a lot recently thanks to DH more than doubling his income in a few years. We shamefully do not really budget.
I'd like to save a lot more. It is a total MM scandal, but we still get a huge tax refund and put that directly into savings, and also but any "extra" money (bonuses for DH, cash-out of vacation time for me) directly into savings. I'd like to put more of our checking buffer into savings routinely, but every time I start to do so I think of some big expense that is coming up (a trip, re-fing our mortgage, a new laptop for DH when his hard drive crashed) and putting it off. I really should divert some of our paychecks straight into savings. It's bad, I really like the "security" of having a five-digit buffer in our checking. It started out with an extra $500 in there, and now I get nervous if it gets down to four digits. We spend occasionally on electronics and modest vacations, but neither of us are super-spendy on a regular basis -- we prefer to eat at home, I'm not much into clothes-shopping, etc., and so we really try not to stress ourselves over the little spending (e.g., DH's iTunes habit, my morning coffee).
The main thing we do is stick to paying ourselves first. We save a large amount for retirement and have most of it automatically withdrawn. I know we spend too much on frivolous things and I'm trying to work on that, but paying ourselves first keeps it from getting over a level that I am comfortable with.
and honestly, the biggest thing that has helped us is automatic withdrawal of savings. I treat savings as a bill that has to be paid.
That being said, I dont budget to the penny, and if there is extra one month, I'll transfer that to savings as well. But recently, we'd had to transfer money the other way and we are trying to curb that. We DID have a lot of house repairs, though.
I don't think we are quite high earner category, but we are DINKs in a low to MCOL area and have a fair amount of extra income every month. I agree with those who said we set up automatic transfers so we don't see a portion of the money. Once we were comfortable with our budget and our easily accessible savings account, we set up automatic deposits to a brokerage account each month for long-term savings and investment. It's been almost 3 years since we started that and we haven't touched any of that money, it's like it doesn't exist each month, and we feel better if there are months when we don't save much outside of that amount, because we do that every month at a minimum.
I'm still working on not blowing the rest of the extra money each month, but we have expensive hobbies.
We recently started using AMEX to pay for everything we possibly can for the points. The first couple of bills have been sobering. $20 here, $50 there on top of bills can add up to a pile of money before we know it. I think that for most people, higher income leads to higher expenses (not saying that's right or good) so the issues scale.
We discuss all purchases over a certain amount and as along as we are saving retirement, to our regular savings and able to pay everything off and still have left over, we don't worry about it. We have a slush amount, and once that is gone, its gone, we wait until next month. I used to be more strict about it, but I had to learn to live a little, what am i saving all this for seriously? Not good to just save save save, work work work and have no fun at all.
I still track our spending because it got to be a habit when we were first married with less income and more debt. CC bills tell us when we've gone off the deep end. We withdrawl savings automatically and always pay off our CC bill with no struggle monthly....retirement is covered so as long as we are meeting our goals it is all good. This year has been about stock piling cash since we've been involved in the mortgage process for quite some time. I'm afraid we will go wild when we are off the radar of a lender, LOL.
Several things keep us in check. 1 - our income is really inconsistent so we live like we only earn a small portion of it. 2 - I just don't go shopping much. Don't see, don't buy. 3 - We don't care for indulgences like a $5 cup of Starbucks. 4 - Like a pp said, old habits die hard. We've only had this kind of income for the past 4-5 years.
I mean both of our parents had money growing up but they were all self made and made us earn our own as well. We both had jobs in high school and in college. H and I lived paycheck to paycheck and paid our own way through college. So I guess things that most people might indulge in, we've learned to not care for. $10 for lunch or $10 for a movie ticket is still $$ and it all adds up. I will admit though, we are car enthusiasts and definitely don't need all these cars but we don't spend on many other things.
I was talking to my brother the other day and found out how much they go out to eat...enough to lease a new higher end BMW, yet he says that he can't afford it every time he talks about wanting it. So now he's rethinking how he spends his money.
Pay yourself first. We have a certain amount of $ automatically transferred into savings every month plus we save most of DH's bonuses.
We also paid off all of our debt (mortgage plus SLs and car loans) so that helps with monthly cash flow. Our fixed expenses are very low. Because of this, I feel that all or at least most of our "wants" are met even though we save a lot of money.
Not sure what qualifies as "high earner," but at any rate, we don't stay within a budget. Our wants don't exceed what we bring in, so it kind of takes care of itself. What goes into savings may fluctuate from one month to another though.
This exactly. We use mint and keep a rough budget on there just to make sure we don't go crazy every month but it's not a big deal if we go over.
I'm not sure if we qualify as high income, but we currently have a fair amount of disposable income every month. That will change if/when we start TTC.
Our biggest challenge is eating out. We used to not have many friends in the area and it was pretty easy to keep that number in check. A couple dinners out a week and that number is out of control. We are focusing on not eating out if it is just the two of us this month.
and honestly, the biggest thing that has helped us is automatic withdrawal of savings. I treat savings as a bill that has to be paid.
That being said, I dont budget to the penny, and if there is extra one month, I'll transfer that to savings as well. But recently, we'd had to transfer money the other way and we are trying to curb that. We DID have a lot of house repairs, though.
Its a new month, time to start fresh
This is pretty much exactly our situation. I have money direct deposited into savings (outside of retirement savings) and that has really helped us. I don't see it, I can't get to it, I won't spend it. I move extra at the end of each month into our more liquid savings, and if necessary, move back into checking if we went a bit overboard one month.
I posted in the other thread, but this is an issue for us. We have no debt, max retirement, & it's easy to just "fritter away" the remaining money. I have lots of things that I want to save more aggressively for, & if we don't get a better handle on our discretionary spending, it's not going to happen.
We've been lucky with our ability to use bonuses/stock awards to cover anything outside of our regular budget, but it stings to see our monthly budget & know that we could be doing *a lot* more to fast track a major home remodel, or whatever.
Well, honestly, we don't really have a budget. We bring in enough, after retirement savings and the ESPP we participate in, to easily cover all of our bills and have plenty leftover for saving and investing, which we do pretty aggressively. Even when we were first starting off we never said, "We are doig to allocate $X to housing, $Y to other bills, and $Z to the extras." Budgeting down to the penny wouldn't be beneficial to our household because we wouldn't stick to it and we'd both be frustrated by it.
That said, it's absolutely easier to do all of our saving and investing now, compared to 10 years ago, as our income has probably doubled since we first got married. We definitely spend substantially more eating out, but we still discuss large purchases, we still make plans and save for big vacations and household projects. It helps that we are both "don't spend more than you earn" and "save save save" people, which has a ton to do with how we were both raised.
Well, honestly, we don't really have a budget. We bring in enough, after retirement savings and the ESPP we participate in, to easily cover all of our bills and have plenty leftover for saving and investing, which we do pretty aggressively. Even when we were first starting off we never said, "We are doig to allocate $X to housing, $Y to other bills, and $Z to the extras." Budgeting down to the penny wouldn't be beneficial to our household because we wouldn't stick to it and we'd both be frustrated by it.
That said, it's absolutely easier to do all of our saving and investing now, compared to 10 years ago, as our income has probably doubled since we first got married. We definitely spend substantially more eating out, but we still discuss large purchases, we still make plans and save for big vacations and household projects. It helps that we are both "don't spend more than you earn" and "save save save" people, which has a ton to do with how we were both raised.
Nonny - did we determine that we work for the same company? ;-) I know there is someone else on this board, but I mix up screen names. Are you on the east side, or in Seattle?
Post by sillygoosegirl on Aug 3, 2012 11:33:53 GMT -5
We have several expensive goals and those really motivate us not to spend too frivolously. But we are also the sort of people who, as kids, saved candy from one Halloween to the next. Also, we don't anticipate being high earners forever, and also don't want to ever forget how fortunate we are, which helps keep things in prospective.
I find it much easier to save now that we make more. We save more now than we earned when we were first married.
Not sure what qualifies as "high earner," but at any rate, we don't stay within a budget. Our wants don't exceed what we bring in, so it kind of takes care of itself. What goes into savings may fluctuate from one month to another though.
This. I don't think we're high income by any means, but I guess it's all relative and to some people we might be. We make savings (both general and retirement) a priority but even then there is extra that is available to be spent. We're good about it that it does not get spent, but some months vary more so than others. But we never go over what we take in for a given month.
DH and I have surplus income each month, but it's because we set ourselves up for a modest lifestyle and those are our general spending habits. We just don't spend a lot.
This is us exactly. We have plenty of discretionary income, but we rarely spend it. We just don't want a lot of things. We'd both rather have money in the bank than a house full of stuff. It's also nice that when we do want a big ticket item, or a new car, or a vacation that we don't have to plan and save for it.
Not sure what qualifies as "high earner," but at any rate, we don't stay within a budget. Our wants don't exceed what we bring in, so it kind of takes care of itself. What goes into savings may fluctuate from one month to another though.
This is how we tend to operate. We may only put $500 in savings this month, but some months put in closer to $2000.
Post by kimibrighteyes on Aug 3, 2012 11:46:01 GMT -5
A large chunk of money automatically goes into retirement/savings, so that helps a lot. I think we would spend a lot more on eating out, but having 3 young kids with food allergies makes us eat at home a lot (although our grocery bill is shamefully high - probably at least $1200 per month). I think it also helps that I don't always surround myself with people that are big spenders. I do have some friends that are like that, but I also have friends with modest spending habits. If I didn't, I might feel deprived. We put most things on credit cards - when I notice that those bills are extra high one month, we try to restrain our spending for the next month. Lately however, it has been a struggle. I don't have much time to shop, but I am finding internet shopping to be a little too easy. :-)
Nonny - did we determine that we work for the same company? ;-) I know there is someone else on this board, but I mix up screen names. Are you on the east side, or in Seattle?
I'm on the east side, but I don't know if the two of us have talked about it.
I know there is another person on this board, whom I've met in person and know their real name but whose screen name is escaping me right now, and we work at the same company.
i force myself to stay away from the mall where i like to spend my money.....
lately i have had to focus more on taking that discretionary income and using it to pay my divorce settlement, save for my wedding (I was able to pay for all of my part of it in cash) and pay off my motorcycle so then i will have no debt what so ever come SEP.
the rest goes in savings for my pool fund because next year i want to put in a pool.
once married FI and i will focus mainly on savings and paying off his house...if we stay at the current payment rate, it will be paid off in 3 years, but i think we can do it in 2.
We are high enough earners now that we have a lot extra. DH doesnt let me spend it though. I get a generous budget each month for personal items. Then the remainder gets automatically put into savings. We have savings accounts for everything under the sun - vacations, new cars, car repair, baby, house and general savings. We still spend a ton but at least we see our savings increasing each month.