Friday, March 9, 2007

The Cost of Living

Despite the fact that I work in the financial business we have our taxes done by a professional. Not because it’s a particularly difficult return, far from it, I’m sure if we set our minds to it we could do it ourselves using a tax program. The fact is, I spend so much time dealing with other people’s money and taxes I don’t even want to think about doing my own return. Since the cost of tax preparation is a deduction from year to year, I figure we paid for his services once and now the fee just gets rolled forward. Or something like that.

D and I went through this year’s questionnaire last week and filled in the boxes for our earnings, attaching the 1099s and W2s. Where the hell did all that money go? Tens of thousands of dollars! We do all our banking online and if I glance at just a month’s worth of transactions its very easy to see where it all goes – groceries, gas and the on-going monthly bills eats most of it up.

I’ve been through some very lean times in my life, when I knew where every penny was and where it was going, my checkbook always balanced. Now I am lucky enough to know that, under normal circumstances, I don’t have to worry about how much money I spend, there will always be some left over. My sister and her husband don’t write anything in their check register for the same reason.

This is a huge life change. We aren’t very organized or frugal, we pay just enough attention to make sure we don’t pay bills late or go into overdraft. When did we get so nonchalant about money? When we no longer had to watch where every penny was and where it was going. I just got a substantial raise when I switched from hourly to salary, but I would bet you there won’t be a substantial increase in the money left over in the accounts from now on. We spend what we make.

Is this a bad thing? How many of you have a budget and stick to it? We put money into the savings account when we can, but inevitably it gets transferred back to checking when a big expense comes up. In the last two weeks D got new tires for his SUV and I had major service on my car that involved a new catalytic converter and a rental car for a week, but it will be paid for by the end of the month.

I’m in my early 40s and D’s in his late 40s, should we be more worried about retirement? We both have old and current 401ks and lots of life insurance. I spent the last 40 years worried about my past, I don’t want to spend the next 25 worried about my future.


  1. I so hear you. Living from pay cheque to pay cheque, I wonder how we will get ahead enough to survive when we are old and decrepit! It doesn't help to have had an ex- marriage that garnered me a whopping debt and a chip on my shoulder, both of which have lasted years and which I still carry. The here and now is a load-enough to carry! Let alone dealing with the past. Yegads.

    Thank you for your comment. It made me smile. Its good to hear from you. I wonder if playing 'catch-up' financially is the same as playing catch-up with rest. Its all about energy, isnt it? Having the resources to live life. Having the energy in reserve to extend, when needed, when required. Being able to say, 'Yes, I have the strength to do this', the resources to have the option to say, "YES!" To. Life. I see how you are saying 'YES' to Life. Misty is a result and manifestation of that. Well done, dear! Glad to hear from you.I have been thinking about you.... :)

  2. I think most people are in the position you/we are in. One thing we do is we've opened a few Mutual funds that automatically have money drawn from our checking account each month. That way when not much (or nothing) goes into savings I feel like it's OK because $X went to our funds and I sort of consider those our savings accounts. (We have a savings account, too, but we rarely contribute to it. I will be very sorry if/when the market collapses!)

    And we're the same way with our checking - we pretty much never log anything (but we pay for almost everything with our CC to get airline miles and then pay off the bill every month.) It's weird that at one point I knew every single penny we had (out of necessity) and now I do not (because I'm lazy and it's not necessary.) I've always said that if someone had my cc# and spent a small amount of money each month I probably wouldn't noice for years - sad. Don't worry about your later years - life is short and you never know what will happen later. Have a good time (within reason, of course) now - the future always sorts itself out. -Kym

  3. We don't really have a budget, but we don't worry about money either. We both log in to our banking information once a week each or so and discuss any large purchases (many of which are tax-deductible because I have a small contract business on the side).

    Darren dumps $400/month into RRSPs, I make lump sum payments twice a year (but will probably start spreading that out to take advantage of compound interest).

    We have some credit card debt, but a lot of its consolidated at 6.9%. We buy things we need, and when aware of it, we buy it in advance. In other words, Darren and I have pretty much the same attitude towards money that you and D do.

    Oh and we get accountants to do our taxes - especially with the small business.

    Of the two of us, I'm most prone to worrying about the future (damn, low-grade panic disorder). Darren is much more happy-go-lucky than I am and I get concerned that he's not aware of what's going on financially. But he is, and it shows when we sit down and crunch the numbers (usually about once a month).

  4. I (we) completely obsess about having enough money for retirement and every once in a while one of us will turn to the other and ask "how much money will we actually need to retire?" When it comes right down to it, I don't have a clue and it all depends on how long we'll live for and that's impossible to know as well. I just don't want to be living in a cardboard box somewhere when I'm 90 (can you tell that I obsess about this?)

  5. We're much the same way-we do stress a lot about retiring as the idea of eating cat food when I'm 80 is not appealing, I plan on being silver-haired jet setter.

    We are also fortunate enough to not be heavy on the budgeting, and to not stress too much about money. Some months (usually related to travel) we definitely over-spend, other months we go way under. We have a thick nest egg to catch us though, and it's not something I take for granted. I too used to know to the penny how much money I had, and before then I remember being really poor.

    Still, I fear the cat food, despite pension plans and savings.

  6. We should be stressing about retirement we both just turned 60. But with me chasing my horse dream, seems we dip into the retirement(what little there is of it) to pay unexpected horse bills. We'll both be working until we're dead. We worry about it sometimes but not enough to let go of the dream.