Satisfaction of saving versus beating down debt

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jeffysdad
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Satisfaction of saving versus beating down debt

Postby jeffysdad » Wed Jul 25, 2012 4:26 pm

Years ago I was up to my eyeballs in cc debt (about $35k). After a good period of card surfing for the lowest APRs and living in denial, I realized I had to buckle down and pay it off.

It took a while but I did it. I cut my budget to the bare minimum and plowed every penny into paying off the credit cards. Every step forward was supremely satisfying. Paying of a card made me ecstatic. I planned and schemed constantly to find ways to pay just a little more every month.

And then I was done.

Now I try to apply that same zeal to saving. I'm frankly doing quite well at it, but it's not nearly as satisfying as paying off the debt was. The only reason I can think of for this is that the debt had an end point, a time when I wouldn't owe any more. With saving, there is no end. I know I will have to save and invest with my current zeal until I retire -- if I intend to retire.

Has anyone else had a similar experience? How can I make saving more satisfying/fun?
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US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (Amazon.com, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).

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FastSRT8
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Postby FastSRT8 » Wed Jul 25, 2012 5:04 pm

Congrats well done!

jeffysdad wrote:Years ago I was up to my eyeballs in cc debt (about $35k). After a good period of card surfing for the lowest APRs and living in denial, I realized I had to buckle down and pay it off.

It took a while but I did it. I cut my budget to the bare minimum and plowed every penny into paying off the credit cards. Every step forward was supremely satisfying. Paying of a card made me ecstatic. I planned and schemed constantly to find ways to pay just a little more every month.

And then I was done.

Now I try to apply that same zeal to saving. I'm frankly doing quite well at it, but it's not nearly as satisfying as paying off the debt was. The only reason I can think of for this is that the debt had an end point, a time when I wouldn't owe any more. With saving, there is no end. I know I will have to save and invest with my current zeal until I retire -- if I intend to retire.

Has anyone else had a similar experience? How can I make saving more satisfying/fun?
Carpe diem quam minimum credula postero!

DoingHomework
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Postby DoingHomework » Wed Jul 25, 2012 5:39 pm

You should your story on GetRichSlowly!

For me, I find it helps to get excited about hitting miles stones. I remember when I hit $100,000 for the first time then half a million, etc. I'll tell you though, there was nothing like hitting that first billion! Keep it up, you'll see what I mean.

FutureBillionaire
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Postby FutureBillionaire » Wed Jul 25, 2012 8:46 pm

I get satisfied when I fill up numerous accounts. I have several checking and savings accounts for different purposes. When I see many of them grow, I feel like I have established different escape routes if I have a financial pothole in my path. I would try that if I were you.
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Plane tickets: CSP
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Hotels and other travel: Discover Escape, CSP
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Snowman
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Postby Snowman » Wed Jul 25, 2012 8:51 pm

Homework and Billionaire, what do you guys do for a living? and how do you manage to save. Currently, I take about 50 from my paycheck and put it into my savings account, and some months when I have more hours I put in a little bit more...but I'm curious as to what you guys do for a living.
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Money card
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Postby Money card » Thu Jul 26, 2012 9:37 pm

I guess I would say , buying cars and saving if you have kids, saving for college, if they want to go.

DavidNY
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Postby DavidNY » Thu Jul 26, 2012 9:43 pm

Great work! You might want to look into a reward checking account, which has decent interest rates providing a bit of an incentive to save, or TIAA-CREF, offering 1.25% APY without the hoops of a RCA.

NYC_Dweller
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Postby NYC_Dweller » Fri Jul 27, 2012 9:45 am

I had debt in my college days so I truly relate to the fantastic feeling of paying off a bill. As for savings - create short term goals. Once reached create a bigger goal. Here are some of my personal goals that got me to 500k cash (excludes investments and so forth, strictly cash in the bank):

- After college I wanted a Platinum card since it will show that I have a competitive credit score. I received the card.
- My first financial goal was to be a HSBC Premier member which needed 100k in their account
- 3 after college I became an HSBC Premier member by having that goal in the back of my head all the time
- 200k was next so I used the same savings/investment tactics for the first 100k
- 500k - brought 2 foreclosed properties and sold for profits during the housing market crash

Obviously there is a lot more to this then a few bullet points. Reaching 500k took me about 8 years. Currently that 500k grew substantially. I'm a believer in "it takes money to make money". Once I had a lump sum I knew I wanted to buy a house and sell it for profit without putting much into it. I lucked out during the housing market crash; especially being from NYC. People wanting/needing to sell their homes find it hard to turn down a cash offer. For example, my last investment property was selling for 525k by owner. They asked if I was a pre approved buyer I told them I am. I offered 475 and they laughed. I offered 475 cash no banks, and they accepted within 10 mins. I sat on it for 6 months and sold it for 540k.

Overall, putting a percentage of your check aside for savings will take a very long time to have a healthy savings. Invest money in something you know and good at. Create realistic numeric goals so you're not just saving for the heck of saving. Reward yourself once the goal is met.

DoingHomework
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Postby DoingHomework » Fri Jul 27, 2012 1:22 pm

Snowman wrote:Homework and Billionaire, what do you guys do for a living? and how do you manage to save. Currently, I take about 50 from my paycheck and put it into my savings account, and some months when I have more hours I put in a little bit more...but I'm curious as to what you guys do for a living.


Well, I have not actually reached a billion...

But if I have any secret it would be automating things. I started having automatic transfers from my checking account to mutual fund accounts over 20 years ago and still do. It added up over time. I've also worked pretty hard, stayed in school to get advanced degrees, and ended up getting promotions and opportunities at work because of that. And those opportunities led to a pretty good salary. Plus I live in a very low cost area so my living expenses are very low. But really, the automatic investments I think were the key.

DoingHomework
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Postby DoingHomework » Fri Jul 27, 2012 1:27 pm

Speaking of milestones, we are very close to hitting another major one. If the market goes up another 1% or so next week we'll be there! Of course it could go down after that. But with our automatic investments putting an upward bias on everything we should be solidly over the milestone by the end of the year, barring a major drop of course. It is fun to update Quicken every day at this point!



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