Do you plot, plan, think of the future, -Do you Save?

[Trajan]

Another conversation here got me thinking, so I thought a private poll might be helpful.

Savings or ‘saving’ is iffy to define but I will try.

I personally think there is a difference between say a household account, short term saving(s) and long term ‘growth’ savings.

A Household account; is for the basics and nits and lice; rent/mortgage, groceries, eating out, running down to the store for an extension cord or some such unforeseen small spend, gas, cable/internet etc. etc.

Short term savings; is imho the middle ground and what I call, The Nut, for 6 months. I for instance try to keep a 6 month reserves that would cover my household savings for that term in case my wife or I lose ours jobs( which I did) or your car takes a huge dump, your kid needs braces, something unforeseen that would blowout your household account.


Long term savings; investment accounts, bonds, ira’s, annuities, a Whole life ins. policy, stock, 401 k etc etc. Something that you would only cash out in the event that you had a real catastrophe on your hands for example- massive medical bills, long term unemployment etc etc..... Or adding an asset, like buying a house etc.


So my question is basically; what if any forms of savings do you employ? And if not, why not?

 

[code1211]

When I was much, much, much younger, my savings plan was to have enough money to drink a little beer on the weekend.

When I had aged to the point at which I was only much, much younger, I always tried to have enough "room" on my one and only credit card to get to a hotel with some beauty for the weekend. If that hotel was in a tropical climate, so much the better.

When I had aged to the point at which I was only much younger, I tried to always stay ahead of the mortgage, maintain a zero balance on the credit cardS and keep around 5 grand in checking.

I am no longer younger than anything. When a person is still drawing breath in 2010 and can quote Everett Dirkson from personal experience hearing him being interviewed live on TV, that person is just plain old.

Now I have the mortgage behind me, the cars are paid off, and between the checking, savings, CD's and 401K, I'm actually hoping that I live long enough to spend it. Still, I want to have another lump of cash before I actually retire.

Life is funny. I thought that I would never have enough cash to retire. I went to bed in about 1985 and woke up the next day in 2005. Just living is a little like being Rip Van Winkle. You don't see it going by, but life just happens around you and suddenly you're old. Face is wrinkled. Energy is empty and bank accounts are full.

I've been lucky, though. I know it and am thankful for it. When I finally go out to pasture, I hope there's a good groundskeepper and an easy par somewhere on the course.

 

[iamwhatiseem]

Well especially after 2008, if anyone does not have at least a $1000 holed up - then they are either foolhardy - or are aware that the rest of us will bail them out.

 

[asterism]

Another conversation here got me thinking, so I thought a private poll might be helpful.

Savings or ‘saving’ is iffy to define but I will try.

I personally think there is a difference between say a household account, short term saving(s) and long term ‘growth’ savings.

A Household account; is for the basics and nits and lice; rent/mortgage, groceries, eating out, running down to the store for an extension cord or some such unforeseen small spend, gas, cable/internet etc. etc.

Short term savings; is imho the middle ground and what I call, The Nut, for 6 months. I for instance try to keep a 6 month reserves that would cover my household savings for that term in case my wife or I lose ours jobs( which I did) or your car takes a huge dump, your kid needs braces, something unforeseen that would blowout your household account.


Long term savings; investment accounts, bonds, ira’s, annuities, a Whole life ins. policy, stock, 401 k etc etc. Something that you would only cash out in the event that you had a real catastrophe on your hands for example- massive medical bills, long term unemployment etc etc..... Or adding an asset, like buying a house etc.


So my question is basically; what if any forms of savings do you employ? And if not, why not?

We generally pay ourselves one year behind. I say generally since life is always a balance between enjoyment and sustainability, saving for the future and "why are we working so hard if we can't enjoy it?" priorities. This year we've recovered from a financial disaster that started in 2007 and have decided to make some improvements to our house that will add to our quality of life. We bought nicer cars than we probably should have but figured that the bargains we struck and the notion that it's what we will drive for the next 5-8 years will be a good motivating factor if things head south and stay that way.

The only time we didn't have more than 1 year of living expenses was when we were digging into that "untouchable" money market account to pay employees during a severe downturn to weather the storm. We're finding that a lot of our fellow travelers did the same thing and are like us, vowing to never do that again. With all the uncertainty settled for the time being, we can start to look for opportunities. I hope it works. We won't ever risk the house again and we aren't going to upgrade anymore unless we do it with actual cash. That means we are probably here until we die, so we might as well make it into something we want. That's the dynamic of the WWII generation as I understand it, it's why old retirees in the 1980s lived in immaculate small 1950s houses with $100,000 kitchens and a vintage Corvette in the garage - but they still clipped coupons.

I am heartened by the notion that people who have never saved before in their lives (and some who have never not relied on credit cards for basic needs) are adjusting and making due. Demand side manipulation policies over the last 20 years or so have caused a bubble that burst big time. I think the hard part is over with regards to quality of life for those that are making to effort to concentrate on that. But to be honest, lots of folks are going to get fucked because they never cared enough to take a look around. I know one guy who kept his house and works 3 minimum wage jobs. He doesn't know it yet but he's about to get promoted. When we had coffee the other day he said he's happy but just too busy to enjoy Christmas this year - and then happy that he is that busy. That guy has it figured out. I think more people will be joining them as they forget about times gone by that won't return in their lifetimes.

Merry Christmas and Happy New Year everyone.

 

[finebead]

I am a saver. Paid off my house at age 35 (23 years ago, $200 to close, paid cash 150K for a 200K house during the oil bust in Houston), still in that house. I had zero savings then, but it mounted up quickly with no house note. Have paid cash for all cars, put 2.5 kids through college, and pay enough in taxes that the govt. loves me.

Maxed out my IRA, 401K, saved on the side. Wife did not work until the oldest kid went to college. We didn't eat out much, took one 1-week vacation a year (drove there, never took kids on a plane). Clipped coupons, drove one car 14 years, usually about 10 years. Didn't have cable tv for most of the kids lives, we got when they got into high school as I was closer to meeting savings goal.

I hit my number last year, can retire now, age 58. Only hitch is health insurance, can I get it and can I keep it? If I can get it and not be kicked off, I will retire in about 4 years. I'm healthy and enjoy my team at work, make good money, so see no reason to pull the plug too early.

 

[goldcatt]

After being laid off twice in one year, the short term savings have mostly gone for their intended purpose. I do have some longer term investments, not what I really should but better than many I know who either had none or have had to tap them to get by when their jobs disappeared.

I figure even with the awful year I had we're in much, much better shape than we would have been if there had been no planning ahead. That could have been incredibly ugly.

 

[uscitizen]

I have finished planning for the future. I just do my best to enjoy each days as it dawns.