Wednesday, December 15, 2010

Planning For The Future

When I wake up tomorrow I expect it to be raining. That would be wonderful. Work was ok today. Our state minimum wage is going up to $7.35 so I was calculating if I could survive on that. With my rent money and a part time minimum wage job I could definitely survive but I would have to live in this mobile home forever. I still haven't figured out what I am going to do about my long term housing situation. Maybe I should start digging a hobbit hole.

I should also have an emergency fund to last a year at least. That would take me 6 months to save up at my current job. Let's see, pay off mortgage in March, save six months more...that's September, then there is the car fund, the health savings account, travel fund, home improvements (a fence for the dogs), and the housing fund. Gee, I'm not going to be able to retire for another 10 years! I don't think I can make it that long.

11 comments:

Dave said...

Daizy, remember that you will be able to save more quickly once you have paid off the mortgage. And in theory (at least), you would not need as much of an emergency fund to cover those reduced, post-mortgage expenses.

You can't do at once all of those big things you want to do - quit working, pay off the mortgage, move out of the mobile home, and all the other less expensive things you listed. You can do some of them fairly soon but if you do then the others will have to be postponed or shelved altogether.

BTW I sent you an email last week. Did you see it?

Lizzie said...

It does soun like a trap but at the very pleast by being mortgage free you have broken the back of it.Dont owrry, home straight!

Dottie said...

If I were you I wouldn't have aspiration of a minimum wage job. There are plenty of fulfilling jobs that pay more than min.
After the new year you should start looking for a new job, at or close to (or even higher than) your current rate of pay. ( Don't sell yourself short!) Even though you may need to keep working for a few more years, you will at least have the freedom to leave a unsatisfying job for something more rewarding, even if financially it can't be a min. wage job and my still have to be full time. Change jobs every year if you feel like it.. whatever makes you happy until the day you can switch to part time or retire.
I remember hitting this "wall" when we paid off our mortgage. I thought it would change everything. Unfortunately, I needed to put the same "funds" into place and work several more years to generate post work income... Almost there!!

Petunia said...

Have you considered a yurt? Google them. It's really surprising what nice homes can be made from yurts.

Also, how much income can you reasonably expect to come from your 401k monies? When do you expect to begin drawing it? I don't recall seeing you factor that in when you talk about your retirement plans.

Anonymous said...

Not sure I understand Dave's first sentence regarding saving *faster* once your mortgage is gone. Maybe I missed that you were saving money in your budget, I thought all available funds from your salary after monthly expenses were currently going towards paying off the mortgage.

I agree with him in that you have a list that would be impossible for 95% of individuals to achieve. I mean you spent a good number of years working towards just the goal of paying off your rental property ... you would probably need to put in a similar number of work-years at your current pay level to take care of a mortgage on another house. Just keep your eye on the prize and once your house is paid off and you have a year's worth of living expenses you will probably feel an amazing decrease in the stress this or any other job produces. JUST being able to leave if you really wanted to will make many of those troubles just roll right off your back.

Daizy said...

Hi Dave, yes I was estimating $700 a month at a savings rate of $1400 a month which would be 6 months for a one year emergency fund. What I keep overlooking is that I need a maintenance fund for the rental. It isn't as fun to think about saving for that. Yes I got your email. I don't check that email account very often and don't get a lot of emails so it was a surprise.

Daizy said...

Lizzie, when I think that the mortgage used to be $104,000 it seems so small now. But I can't seem to get rid of it! I know...patience...

Daizy said...

Dottie, I am really bad at job hunting. I would like to have my own business someday. Not sure what it would be exactly. The minimum wage thing is just a safety net. They were supposed to build a grocery store near me and that was going to be my fall-back job but so far they haven't built it. I'll have to keep looking.

Daizy said...

Anonymous, nope, I'm not saving any money now except in the 401k. I put almost $1400 towards the mortgage every month and that $1400 would be what I would save for my years expenses. The rent money ($500 or so) would go towards all the other things I want to do because I know I couldn't save it all. I am just itching to start some of my other plans.

Daizy said...

Petunia, I guess would wonder how a yurt would stand up to a dog. I was thinking more concrete and steel. Yurts are very nice looking though.

I haven't included my 401k in my plans because I hope that it grows and provides me with plenty of income when I am 60. So my current plans only have to get me through 21 more years. Hmmm...that's a lot.

Dave said...

Anonymous, the first sentence in my previous comment assumed that the money being used to pay the mortgage could instead be saved.

This is what happened to me when I paid off my mortgage in 1998. My personal savings rate jumped from 35% to 55% once that big chunk of money went into my investments instead of the mortgage lender's coffers.