Due to income and being self-employed with no SEP in place

the only thing we have available is the traditional IRA. The max contributions do change from time to time, as our government likes to do, so check back often on that. I am thankful we can do the traditional IRA. Ours is in mutual funds. After we max it out we max out the IRA contributions we put ours in a non-retirement mutual fund account. Both the IRA and non-retirement each have 12 different mutual funds. They are the same funds for each investment.

Your figures look correct

However, since we are still on baby step #2 (well actually fleshing out #1 again) we technically shouldn’t even be putting into anything for retirement. However, right now we are doing good to do the 5% and since we are both retirement age already it’s better than nothing. Prior to DR we were putting the max all in 401k (15%), so we at least have some in the bank. We won’t retire rich, but if we retire debt free we should be fine.

One thing to add

If that 10% of your gross is higher than the allowable contribution for IRA’s, then you would go back to your 401 (K) and top it off to whatever 15% would be.

Example: Put in 5% to get the company match. Then fund the roth IRA upto the limit of $5500 for each spouse. That may not get you to 15%, but it does for most people. If you still haven’t made it to 15% of your income, then you go back and add to the 401(k)to reach 15%. Anything left over goes into a regular savings/investing account.

So if you made $200 K for “simple math”, you’d need to save $30,000. You’d have $10,000 into the 401K, then you’d still need to save $20,000. Filling both Roth IRA’s (one for you ($5500), one for the spouse ($5,500)) would get you another $11,000 saved for a grand total of $21,000. You would still need to save $9,000, to reach the goal of 15% ($30,000), so you would go back to the company 401(K) and put in up to the company limit, which could be $17,500 or whatever the goverment decided. If there is still money left over that needs to be saved, then you’d have to find some other account to put it in like regular invested funds for the 1,500 left needed to save to reach $30,000 since you could only put in $7,500 more with the first $10,000 at your company.

Personally I don’t know anyone who makes that much but I wouldn’t mind having that problem. 🙂 I also think that after your income is over 250 K you can’t contribute to a Roth IRA and it depends on if you’re married or not. Married people have a slightly higher limit. There is an income limit restriction somewhere in that ball park, I’m just not sure where the cut off is. I was just using large numbers for the example to work.

If I’m wrong, then that’s embarrassing. I think I did it right.

Hey all!!

I have a question for everyone. My husband is 48 and I am 39. We have ZERO savings and ZERO retirement. He has the opportunity to do a 401(k) with his new job, but we were wondering what all y’all thought about this. Which is better, a 401(k) or a Roth IRA? We have nothing to use for retirement and its looming within the next 20 years!! We didn’t really think about it until we realized its coming closer and we have absolutely nothing for our future.

Any thoughts or opinions? I don’t know what to do and we really need to get a move on and get SOMETHING going!!!

I just went outside, among the flowering cedars

to take care of critters and didn’t think I was going to make it back due to the coughing spasms. I get the crud every winter, but it’s been a long time since it has hit me this hard for this long. Ds is running a week (#4) ahead of me and he’s just now getting off cold medications for it. So far dh hasn’t caught it. Sure hope he doesn’t.

What a gem of a human being he is, besides being so good at his job

Some of those family emotions run so dang deep, and can pop out at the worst possible times. You know my own family ties have been strained a lot of late, but the funeral a few weeks back put some things into perspective for me. I came home from that wondering why I live so far away from people that I do fundamentally care about, even if we quibble and have fundamental philosophical disagreements about things (sometimes a lot). And how to find ways to bridge that gap in ways that ALL of us can work with. So we’re tentatively planning to fly down there for a visit over Mother’s Day weekend, and my folks are planning to come up here this summer. We’ll see how that goes. In the meantime, I’m sending my brother and his family a bunch of videos about “life on the farm” so that we can reconnect with them and they can share in at least part of what we do here. Then last night my DH and I were talking about some of his family stuff, and his is so painful he just shuts it down rather than dealing with those still-raw edges, even after several decades. Potent stuff.

But I can say that I’m absolutely confident that you and your DH will eventually figure out how to secure DMIL’s better living quarters, no matter what SIL throws out next. And I know that WHEN SIL finally makes the wrong move and lands in jail, we’ll all be doing the Snoopy Dance with you. Hang in there.

I also worked in retail

which is the largest retailer in the United States, and our rule of thumb was…we could not approach anybody until they was past the p.o.s (point of sale) and that meant they had to be exiting the doors basically. I would contact the manager also and let them know, if that didn’t work, I would also call the head office/district office to inform them how their employees are handling their valued customers.

That has also been the rule in the other states where I’ve undergone that training

For the scenario we’re discussing, the most action that any store employee could have legally taken would have been to ask to see your receipt, to determine whether the milk had been paid for or not. If the cashier had accidentally overlooked it, the most they could have done would have been to simply allow you to pay for it or voluntarily leave it behind. But stalking you, laying in wait, and then forcibly taking something out of your cart, either before or after going through the checkout line, because of suspicions of theft? Any decent attorney representing you would have a field day with that one. Even going to small claims court without formal representation, the judge would be all over the store for inappropriate conduct. And any store manager should know that.

Besides that

even if she hadn’t told the cashier the stuff was there, it is part of the primary cashier’s job to check for anything left in or on the cart. If the cashier hadn’t rang it up it was not her fault. I know I do not lift heavy items off my cart anytime I grocery shop, but instead push the cart to where the cashier can hand scan them.

Add to it that the woman was squatted down and laying in wait for Helen, that would have me tearing the roof off the store. How embarrassing to be assaulted in such a manner.

Also, by the rules, at least here in okey, they cannot accuse you of theft/shop lifting until you have left the store. Because until you leave the store, no theft has occurred.

Wow, knowing more now about those details

I would second the strong suggestion to talk to the manager. Having worked retail a fair amount myself, we were taught certain theft deterrence or suspected theft response procedures. That employee’s behavior was NOT an acceptable set of actions. Not that you would do this, but that employee just exposed that store to a lawsuit for profiling, if you were so inclined. That employee should be required to attend or repeat Theft Prevention/Response 101, and that manager should be bending over backwards to apologize and restore your faith in that store’s customer service. If she did that to you, who else is she doing it to? I can guarantee that if she was that gung-ho about it with you, she’s already done it to other folks, and will continue to do so unless someone says something. I would have raised a royal, loud objection had that been me. I just have zero tolerance for that sort of over-the-top behavior.

I am reading Total Money Makeover right now

And according to what he says, you must be doing something right. Other people will look at you funny and make fun of you for living the way you live. Having said that, I think the store was way out of line and I would have asked to speak to the manager right then and there.

First of all Food Lion could be sued for such actions

They owe you MUCH more than an apology. I know from years in retail that her actions can get them sued. Now on to the frugal stuff. Remember the good old family ABCD, well they are at it again. C& D live in a portable building on A&B’s property. Well C&D are currently living with church friends because the septic isn’t working on the portable building and C is driving three times the distance to work (the only one of the 4 with a job) because of it—she’s often late which means that job too will probably go south soon.
A&B won’t help get the septic problem fixed even though it is their building (as in they are the landlords) and D is, well shall we say not willing to get his hands dirty. The reason A&B say they can’t get the septic fixed is because they don’t have any money. Yet they just bought a new used second car from one of those pay at the lot places….I know, I know see DR’s feelings on this.
Well this family is constantly giving US financial advice! According to them we are too tight with our money, that if they had the money we do they’d be living it up! They also think we are stupid for saving for things like car repairs and not replacing the truck, which is only 8 years old.
C was complaining to me recently that she and D are in a real financial bind and NEED a big influx of cash asap. I suggested that while D was at the library applying for jobs online (hint, hint) he check out The Total Money Makeover and both of them read it. She blew me off, and went on to complaining about how they never had any money. I tried to get her to understand at their age (early 30’s) they could get debt free, and retire young if they’d just do it. She laughed at me, stating that no one is ever totally debt free that there will always be car and house payments, then went back to complaining.
The next day I see on facebook that she and D had been at a fancy Italian restaurant for a fun night out the night before.
Me I just shake my head and tell myself 18-24 months.

Been living with that for years now, even before we started LL

My mom cried the first time she saw our farmhouse, and she still hates it because “I didn’t pay for four years of college so that you could live in THIS.” Oh, yes, I enjoy those conversations. And our friends regularly tell us that we need to “live a little”, like the guy who just paid good money to drive around in a Lamborghini. While I respect his right to spend his money his way, I’ll spend my money my way, thanks. But yea, it does get old.

Let me first tell my crazy story

I went to get groceries and I admit I looked rough. We are in the middle of a yard remodel. I had been hauling mulch, morter mix and etc. So, I get my groceries and everything doesn’t fit in the cart. I put the rest under. I get to the check out. I have the guy ring the bottom stuff first then put it back. As I am leaving a totally different cashier snatches my milk and makes a huge deal like I stole it. I went off. Then, later my new BIL asks my kids if they didn’t think I was too frugal. Mind you he is buries in debt. We are finally spending money on us and suddenly everyone is acting like we are some crazy frugal nut jobs. Anyone get this? I would have thought proving the program works would have shut them up. Mind you not that I care but curious what everyone else gets from others.

I also have some great books if you would like the

but also I trade with a couple of families that are different times in life, I no longer need diaper coupons, but the young lady down the street does. Our Commissary has a box that I can donate coupons I do not want and see if there is any I can use. On using them, I check with websites that match sales to coupons in the area, That has been a real help.

Honestly, take as much time with the books as you’d like

It’s time for me to start pulling out the gardening books anyway, even though we got snow today, and right at this moment, we’re being pelted with freezing rain. Gurneys sent our strawberries, potatoes and bamboo to us today. I have NO clue what I’m going to do with these right now considering my garden is still covered under snow. Anyway, enjoy, and no worries on when you get the books back to me.

OK… I need Couponing 101 help

I get coupons every week in the paper, in the mail etc. I am bad, I generally throw them away. I do this because I know of no one personally who coupons, and none of the coupons are for items I purchase, so what is the secret to making couponing work? If I mailed an envelope of coupons once a month to people would that be helpful? I do feel like I’m throwing food away, but….

I don’t think I’d go for A as you should have all that covered with your month’s budget

I would lean to B, especially if you could clear up/pay off a debt (then you’d be increasing your snow ball month to month which will ultimately help #4) Can’t remember, what’s your outstanding debt w/o mortgage and payday loan (LendMe1000 site)?

If your BEF is the size is should be an where you feel comfortable, I’d skip. HOWEVER, if you have nothing in retirement, for example, I could be sway in this investing in an IRA.

I like #4, but if you can kill the debt entirely, this will help this area.

Let us know what you guys decide. So happy that the money is indeed yours to keep. Despite the fact that you had to pay it in the first place, it’s so nice you have it back as one lump sum. It feels so different when it’s a big chunk instead instead of small payments.

That was one of my thoughts, to be sure

But I’m also thinking of DR’s recommendation to do whatever it takes to generate more income during the time folks are trying to pay off debt. For most folks, that would be getting a part time job to supplement their income. On a farm like ours, that means speeding up the pace to bring some new income stream into production. In other words, for every $100 we invest in the farm, we can then generate another $1000 (or more). So this becomes a really tempting way to spend the money – in ways that really dramatically boost our income. Hence the debate.

Actually, no, I haven’t really decided

I’ll get onto one option and think “yep, this is the way to go.” Then something else will occur to me, or someone here will give another suggestion, and I’ll think “aha, THAT is what we should do.” So keep the ideas coming. Even if I settled on X as the way to go, DH will probably have some additional ideas of his own. Having a bunch of options, makes it easier to choose which one(s) is/are the best.

Hey, everyone

I finally tracked down the details for our $1234 refund from our mortgage escrow account. In short, it was thanks to the insurance fiasco we’ve been dealing with, which thankfully is just about finished. At one point the mtg company was under the mistaken impression that we had been without insurance for a year, and they arbitrarily assigned a new policy (in arrears, which is dumb because we didn’t have any claims during that time). When I pointed out to them that according to their own records, we had full coverage for the entire span of time, they not only issued written confirmation of that, but they also issued us the refund for the amount that they used to pay for that unnecessary coverage. I was on the phone with the escrow gal for a good while, working through all the calculations for that coverage, our cancelled coverage and the new coverage we just lined up. After it was all said and done, I asked “soooo, it looks like we get to keep this escrow refund, free and clear. Am I understanding that correctly?” She said “Yep!”

So, we have an unexpected $1234 sitting here on my desk, staring at me. We’re going to talk about how best to allocate it this weekend. But I wanted your collective feedback.

We would seem to have four basic options to choose from in terms of how to spend it:
1) normal monthly household bills, including the mortgage, as a way to have an “easy” month
2) pad the snowball and pay off, or pay down, a few debts
3) put it in our BEF and/or other savings
4) apply it towards our ongoing investment in the farm, in terms of equipment/infrastructure/supplies needed to generate more income

I can see strong reasons to do any or all of the above. I have also thought about just dividing it up four even ways, and applying it to each category equally. But I really don’t see any clear advantage to any one option. Does anyone have any suggestion for how to spend it, and why? Sort of a fun dilemma to have……..

I won’t admit to being obsessed

I don’t know what’s wrong with me.

I’ve never been a big-spender, I’m frugal by nature. I’m the worst quilter in the world because I don’t buy fabric and I don’t “have a stash”!

We had avoided debt pretty easily, except our house, until we had so much car trouble and decided to throw up our hands and “be normal” for once and get a new car. We bought the cheapest one we could find and swore we’d pay it off early. That was last August and I’ve been obsessed with every extra dime we have going toward that car payment. We’ve paid almost $5k on it since then and now that my husband is working full time again, we will have it paid off in September. That’s four and a half years early! Whoo!

And now that our mortgage has switched hands, we have decided to keep rolling as much as we can on that rental house. We should have it paid off early 2015. Then my son graduates HS and I already have his future planned out for him!

Ok, here’s the “crazy lady” part…..

I have a 45-minute commute. Guess what I do on that commute! I listen to DR podcasts, sort of…. but I talk to him. I hold conversations with him, just like if I were calling his show. I get all kinds of good advice from him, too!!

I only hope that other commuters think I’m on the phone!

I have a similar gift

I’ll not call it a problem J My DH calls it “a bee in my bonnet”. I’ve started businesses, planted gardens, taken up painting, scrapbooking, home improvements, flylady, financial classes, reading, Dave Ramsey, the list goes on and on. Some have positive results, like beautiful scrapbooks we can enjoy for years, debt free lives, and an improved mind. While others cost money and don’t give much in return, like a dead garden and a box full of products I couldn’t sell.

I like it when I get obsessed with something because I become focused and gazelle. I like going at something whole heartedly and with passion!

Not much is buzzing right now for me. But I’m sure the next bee is just around the corner.

I love knowing your broker cares..

I was just on the phone with our broker on another matter and once we finished our business he politely asked me some questions about dmil. He is truly concerned about the financial situation she is in and wanted to reassure me that he is taking proper steps where dmil is concerned. He then asked how dh and I were doing emotionally with the whole situation. I surprised myself because I started crying. I apologized to him and said it was just she is the only mother I have left and this whole situation is killing both of us. That right now we don’t even know for certain where she is.
He said should we end up in court he will gladly testify for us. I told him how sil is opening charge cards in dmil’s name and maxing them and how she has cashed out the life insurance policy.. He is adding that to his reports. He is also putting a safe guard on the account in case she tries to use it for an asset for the cc. He says the woman has no idea how big of legal trouble she is already in and that if she makes another run at the money then his firm will be filing charges on her.
He guaranteed me that the money was going no where, and told dh and I to take a deep breath and relax that he is handling it now. I love that man!

I have come to realize I am obsessed

Yes I said obsessed, not possessed. I have always had an obsession problem. I would get on a kick and every spare penny I could come up with would go on whatever I was obsessed with at the time. Like so many people I’d get depressed I’d buy something, I’d have a windfall I’d celebrate and buy something, I always had an excuse to add to my stash. The look of despair on my husband’s face as I’d lug in bag/cage after bag/cage of whatever the latest obsession was would be horrible. But I was driven.
Craft supplies, food storage, material, yarn, genealogy, poultry of all types along with all the equipment needed to breed and raise them, all have been past obsessions of mine. I have spent hundreds of dollars on each one of those, thousands on some. To some extent I still am slightly obsessed with a couple of them (food storage and genealogy), but nothing like I have been in the past. In the past I would spend hours looking for “deals” on whatever the current obsession was. Then I’d tell myself that since I was buying the items on sale I was “saving” money. Now I only search for things I truly need and only buy those when they are truly on sale. In fact I’ve not spent a dime on genealogy in about five years. Food storage has been close to 10 months, and then it was on a 20% off sale for only things we would normally use and were completely out of.
Soon I’d have more fabric, patterns, yarn etc than I could ever use up in five lifetimes and slowly I’d become overwhelmed with having so much and my enthusiasm would slowly fade. The end result would be a cache of the item that would impress any “collector”, a more cluttered home, a deeper debt, and far less money in our budget. The only good thing I could say was I did have it all organized and would be willing to part with it whenever I got the opportunity, so I didn’t qualify as a hoarder.
It’s been quite awhile since I’ve had such an obsession, or so I thought. Then today when I caught myself obsessing over the fact that it would only take $31.67 to drop a month off the number of months until my little BOA account payoff. Not pay the bill off, but to merely drop one month off of that date. Changing the scheduled payoff date to September 15, 2016 instead of October 15, 2016.
I was seriously combing every expenditure left out of this pay period looking to see if I could possibly come up with that $31.67 TODAY! I was a little down emotionally and I needed a feel good fix. I wanted that money to appear in the budget somewhere, anywhere. I needed a sale, I needed to pay that $31.67 NOW! I was truly chomping at the bit to do it. And of course I found $35 in a budget tweak and I paid it. Then I started immediately looking at how much I’d need for another month drop on any of the bills. Again, not the entire pay off (that number is far too large), but just cut a month off of ANY of the bills with the trickle down effect from paying extra on that BOA account. That’s when I realized. I’M OBSESSED!!!
We are so close I can taste it, which sounds dumb considering how close we’ve been running on the budget since the first of the year. 18-24 months, I want it and I want it now! Talk about a spoiled brat attitude. LOL!
So I’m here to say I am a debt payoff-aholic.
This obsession will end differently, however. Instead of extra junk in my house I am selling items off to feed this obsession. Instead of going in debt further I am obsessed with getting rid of debt faster and faster. Instead of ending up with less cash in my pocket I will end up with more. Instead of seeing despair on dh’s face I see instead the joy when I give him the good financial news. Each little achievement puts him that much more closer to the retirement he wants so badly.
It is also not an obsession I’ll get tired of. It is not an obsession that will end badly.

So now I ask, are you obsessed too?