Future Financial Goals

I am thinking a lot about the new year and the intentions I want to set. I’m toying with the idea of committing to some kind of shopping ban or spending freeze. I kinda sorta signed up for an uber frugal month project this month on a site that I kinds sorta hate-read. But I can’t seem to find that glowing ball of enthusiasm and can-do attitude inside me. All I see is the smoldering ruins of past failure and regret.

I’m reading quite a few things about changing one’s financial life. It is recommended that one write down one’s goals so they can be revisited when the urge to spend is strong. The idea is that when reminded of your long term goals, it is easier to bypass short term pleasure.

The problem is, I don’t have any compelling long term goals. None that feel manageable enough to help me delay gratification.*

At lunch yesterday my husband and I chatted briefly about future financial goals. He has the “primitive” financial goals (his words) of saving enough for retirement and covering the bulk of our kids’ undergraduate education (I doubt we’ll manage either). He also really wants to pay back my parents the remainder of the $100K they gave us when we bought our house to avoid mortgage insurance, though he doesn’t feel compelled to increase the amount or frequency of our payments to do it faster (we have 10 more years on that loan).

We talked a little about the downstairs unit and if moving down there is a financial dream of ours. It doesn’t seem to be a goal that inspires either of us to drastically change our lifestyle. I, for one, suspect we won’t ever move down into that space, and most of the time I’m okay with that (especially after I watch an episode of Tiny House Hunters). Our 1,200 square feet doesn’t feel stifling, but a second bathroom sure would be nice (oh my god, do I want a second bathroom). Sometimes the idea of adding another 400 square feet feels unnecessary, even greedy. Sometimes I think that even with 1,600 sq ft we’d still be living in a house significantly smaller than most Americans–is that really so bad?

The thing is, our renter provides us with a significant amount of money. Right now we need it to pay our mortgage, but when my son is out of daycare (18 months!!!) we will easily have enough to cover our mortgage without that rent. And yet, if we kept getting that money we could save up for a new car in two years (ours has 5-6 years left on it, tops), and contribute more to our retirements and our kids’ college funds. Will that 400 sq ft of space ever be worth giving up that income? I doubt it. We’d also have to save up to build inside stairs connecting that unit to our home, which would require even more years with a tenant. By the time we could really afford to build and move down there our kids will be preparing to leave home.

So no, adding our in-law unit to our home is not a solid enough goal for me to drastically alter my spending.

Many people live well below their means so they can save up enough to pursue a dream job or just work far fewer hours. While I could see appreciating the opportunity to work part time or pursue a new job with less pay, I don’t have some dream career waiting in the wings. I will have to continue teaching for at least 20 years to secure my retirement, so just leaving my job is not an option. And even when I day dream about writing a book in the summer, I am not motivated to change my life to make that happen. It’s more a fantasy than an actual goal.

The only goal I am absolutely committed to is living abroad for a year or two. I want to do that more than anything else. My husband says I should start researching how much it might cost us to live abroad. Surely knowing how to comfortably live well below our means would give us a lot more flexibility to pursue opportunities abroad–especially if we could manage without my husband’s income for a couple of years. This does get me motivated to change my spending habits, but it is so far away that it still feels really abstract (also I’m not sure my husband is really on board to actually do it).

Mostly I just want to have a better relationship with money, one in which I feel in control, and not controlled. I am not carrying debt besides my mortgage, so I don’t have that weighing me down, but I have become accustomed to a certain lifestyle, one that requires I make a certain amount of money. So in a way, I am a prisoner of my spending, as the idea of living on less makes me feel uncertain, and frankly, scared.

I know I have come a long way with the money stuff. When I think of where I was when I confessed my spending to my husband after years of secrecy, I am reminded of how much I have achieved. But I’m still no where near where I want to be. Can I motivate myself to change my relationship with money for abstract reasons? Or do I need a concrete goal for which I can track achievement? Am I ever going to feel like I’m spending my money intentionally and in line with my values? Or will I always be second guessing my purchases? With my bigger financial goals so nebulous and seemingly unattainable, I worry I’ll never find out.

* I’ve been reading a lot about ADD in attempts to better help my daughter and one book I really identified with hypothesizes that ADD is fundamentally a disordered experience and understanding of time. That people with ADD struggle (or simply can’t) organize themselves within schedules, determining what time is necessary to complete which tasks and how a task must be started at a certain time, and worked on for a certain duration, to be completed. This may cause, and not necessarily be a symptom of, increased distractability. People with ADD find it hard to delay gratification because they don’t process time in the way most people do; the inability to accurately understand time makes the waiting required for delayed gratification such a burden as to greatly undermine the ultimate value of the goal that would later be achieved. While I know that I can work hard in the present to reach a future goal in areas of my life where I feel confident and able, I do think I have a harder time delaying gratification when I haven’t developed effect tools for doing so (like in the areas of spending).

Do you have any future financial goals that affect your current spending? Do you feel you spend intentionally, and in line with your values?

10 Comments

  1. So your husband’s stated goals were A) retirement B) children college C) repaid house loan. Yours sound less clear cut which makes them harder to quantify. So using his (assumption: you support these goals) goals have you charted out how much each costs and the time line on which those payments fall due? Might be clarifying and helpful to update each year or quarterly or whatever … like on “Grumpy ” with the mortgage payment postings. The visual reminder might help keep your impulsive/distracted/ADD tendencies constrained. Or not. People are all so different it is hard to know.
    The ADD thing is hard. You need to understand it in order to see good paths to compensations the ADD person needs to learn to implement around their specific manifestations. And solid information on ADD is still in infancy stages of existence and research. Sending support!
    It sounds like your lunch together was really worthwhile and helpful. Finding the same page, even if you view it differently, is really helpful. Just spending time together alone when you can actually talk about ‘things’ not daily hourly survival living is really wonderful. Hoping so much you are gather strength against the onslaught of returning to your classrooms and adding work back on top of the rest of your life!

    1. It really is tough when goals are far in the future and feel impossibly huge, or the consequences are vague. I find it hard to motivate for college savings because I figure they will get some kind of scholarship. But I am always on track for retirement because I know we really have no alternative but to provide for ourselves. Maybe thinking about the consequences of no retirement savings would help you?

  2. A CFP can be really helpful to see every few years. Make sure they charge by the hour or project and are not compensated by Oppenheimer or one of the other fund families.

    Bring your annual spending by category if you have it. And the principal balance, monthly P&I payment and interest rate of your mortgage and loan from your parents.

    And a list of your goals.

    A CFP should be able to give you a handle on how much you need to earn and save each year to meet your goals. If you can’t earn or save that much you can look at whether you want to cut costs to save more or whether you prefer to change your goals or some combo of the 2.

    Information is power. Sticking your head in the sand will only insure your goals get pushed out further or become non achievable.

    You got this!

  3. purpleandrose is right that your husband’s goals are nice and concrete, but they also don’t seem to involve doing anything differently than you’re already doing. That’s not always a bad thing – it’s nice to realize you’re already working toward your goals. I also really like that you realized you aren’t working toward moving into the downstairs unit. Now you can get the feeling out of your mind that you should be doing that and aren’t.

    I do really like th idea of having a goal that’s shorter-term, so you can see the outcome. Right now one of our goals is to go to Togo (where my husband is from) next year. That’s a nice goal to have. The other goals are to pay all bills on time, improve our credit rating, and pay off our credit cards. Those may sound basic, but they haven’t always happened, so it’s nice to be moving in that direction.

  4. Yes, definitely. Our goals are to save as much as we can for retirement and for our kids’ college. And also, recently, another goal has been to afford nice vacations. We are very disciplined and do a good job saving for these things – – I’ve been putting the max allowed away for my 457 plan for over 15 years. My husband’s employment has been a little more sketchy when it comes to whether a 401(k) is available but when it is he puts the max away too–he’s changed jobs a few times and sometimes they don’t have a plan or they make him wait a year. As to college we started 529 funds for kids when they were born and started saving modestly. Now that my first child is in school I’ve applied the amount I was paying for daycare to her college fund so there’s no difference. The amount we are paying for the afterschool program is roughly the same we were paying per month for her college fund so it comes out even. We plan to do the same with my younger child when she starts school.

    I do think coming from my background that this type of discipline is easier for me. When I was in college there was no college fund and I was always scraping by with grants, scholarships, work-study, and fortunately for me a tiny loan of a few thousand–they didn’t hand out loans like candy back then. I also think this helps motivate me to save for my kids’ college because I know what it was like to always have the constant stress of never knowing whether I could afford books, tuition, etc. the next quarter. And we’ve never had any parental support to fall back on. We know that we’re relying on just us to afford the mortgage, pay for college, etc. When I first started my current job the pay was very low based on the scale and I actually worked second job teaching at night for a while able to pay for mortgage and also pay for IVF. Salary is now much higher, but having done that, and having been a poor graduate student living on a research stipend, etc. etc., I haven’t forgotten what it’s like to not have much money. So it’s fairly easy for me to just make decisions like we will not to eat out hardly at all, which for some people might mean 2 to 3 times a week, but for us it means maybe once a month. A nice vacation is much more important to us than to be able to eat out all the time.

    We also have a relatively small house – – just under 1300 ft.² And that’s the whole thing–there’s no part that we are renting out. Would be nice to have a larger house, but we don’t want to overextend ourselves and be barely making our payments etc. So we choose to stay put. The house I grew up in was about 1500 ft.² I I thought it was plenty large so this doesn’t seem that small to me. We also refinanced to a 15 year loan a few years ago because I just can’t stomach paying all that interest even at the lower rate that it is, and we want to be done with our mortgage sooner. If we stick with our current mortgage we will have it paid off the year my oldest starts college which is nice.

  5. First, we have a budget and have had since I was in college. I know you’re trying to figure out what to spend, but I go the other way. As in here’s what I make, minus bills, minus what I want to save (which all comes out automatically), so what’s left is what we live on. Our savings go to retirement and kids’ college, and I budget temporary savings for car expenses and vacation. Basically, that part of the budget goes into our savings account so it’s there when we need it. One of my goals this year is to increase our cash savings by 5k. And in order to do that, I’m putting myself on a shopping ban for a month (or 2 or however long it takes). There is nothing I need, and so I am just refusing to go to Target or any of my other shopping triggers. I outlined what I could purchase (lunches with my running group, payday coffee treats) and what I couldn’t (running gear, washi tape, seasonal decorations) so I don’t feel like I have to not spend anything, but I do not want to just keep freely spending all the monies like we did for Christmas.

    Second, thinking about your in control vs being controlled statement. Is there a particular purchase (starbucks, manicures) or a particular store (like Target for me) that makes you feel out of control? Could you commit to not buying that item, or going to just that store, without trying to implement a full-on shopping ban? It might not save you all that much money, but it might help you emotionally/mentally to feel more empowered over your spending habits.

  6. How far away is going abroad, actually?

    Do you think your husband’s lack of interest in going abroad is related to his lack of interest in saving money?

  7. I think the conversation is a really good starting point and I’m so glad you had it. Its really important to have some sense of what you are (and AREN’T) saving for. From here, I agree with those above that recommend trying to quantify these goals. How much do you think you’ll need for retirement, and are you saving enough monthly that you will get there by the age you plan to retire? If not, how much do you have to increase, and where will that come from? If its going to come from daycare payments, you need to earmark that NOW so that you don’t just spend it on whatever. Re: the going abroad, YES, price it out, as best as you can. I think it’ll seem more concrete to your husband if you present him with a picture of what your lives will be like, and he can decide from there if its something he wants to commit to (i.e. we’d pay $xxx/month for a small apartment in the city, and $xxx for schools for the kids and set aside $x for a/b/c fun excursions)—the more specific you get with your planning, the more concrete it will also be for YOU so that you can look at your plan and decide you want to save that $25 instead of buying more clothes for your kids or whatever.

  8. Your comment about ADD and time has really gotten me thinking. Can you tell me what book you were reading? You’ve put me on the right track more than once for helping my own family through your investigations: SPD, convergence insufficiency, etc. Your struggles are heroic. I’m so inspired by your hard work, dedication and constant investigation. All the best in the new year.

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