Tuesday, March 17, 2015

Our Financial History

While this is primarily a blog about where we are going financially, and how we hope to get there, I think it is important for readers to know our history as well.  When my husband and I married, we were both paying our bills every month and neither one of us had any debt.  He had some savings; I had none, but I made more money than he did.  He had always lived at home; I had been on my own (pretty much) since college graduation.  I was 28 when we got married; he was 33.  

About the time we got engaged, we began looking for a house.  We settled on one that cost about as much as we made in a year.  It cost about $30,000 less than the bank said we could borrow, and the total payment, with taxes and insurance, was only about 1.5 times as much as the apartment rent I had been paying.  The electric bill was less than I paid for the horribly inefficient heating/cooling units in my apartment.  Given our combined income, we were able to invest, and did so.  That was back in the era when bank CDs were paying more than our mortgage cost.

We were able to get a good start on investing before we had our first child.  While my job at that time offered a profit-sharing retirement plan, there was no provision for employee contributions.  My husband's job had no pension plan at all.  At that time we did our best to make the maximum contributions to IRAs.  Not long after I had my first child I switched jobs to one that offered a 401(k) and I started contributing to it.  While we did not get the earliest start to saving for retirement, we have saved something every year since then.  

When it comes to budgeting, saving and lifestyle, it is our basic philosophy that if you take care of the big things, you don't have to watch the little things as much.  We have always lived in houses that cost significantly less than what we were told we could afford.  We have never had a new car.  We take vacations, but could easily spend twice as much to go to the same area.  We don't have cable TV.  On the other hand, we buy what we want at the grocery store and pizza from Papa John's is a regular family treat.  When our last computer broke, I went to the store and bought a new one.  Because our lifestyle  choices in housing and transportation are below our means, we can splurge a bit on non-essentials (and cut back on them easily if necessary).

We are now in our mid-fifties and looking forward to retirement.

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