For the past few months, I’ve been in a strange place with my financial journey. My retirement needs are met, as are my daily living expenses, so all I need to worry about is saving for short- and medium-term goals. That’s great — except I don’t have any. I can’t decide whether this is a problem or not.
When I was younger, not having financial goals absolutely caused problems. Because I didn’t have anything specific I wanted to spend my money on, it didn’t matter to me how I spent it. Because I had no goals, one choice seemed as good as another. As a result, I spent my cash on comic books and computer gadgets and lots of Stuff that simply had no meaning or purpose.
As I developed financial discipline, however, I learned the joys of targeted savings. Using an online high-yield savings account, I split my money into several different subaccounts, each of which I designated for a specific goal.
My first targeted account (which was actually held at a local credit union) was used to purchase a Nintendo Wii. This was a huge deal for me since it represented the first time I’d actually intentionally waited and saved to buy something I wanted. (In the past, I would have simply bought it on impulse.)
Eventually I learned to use targeted savings for all of my big expenses. For instance:
- I saved for my Mini Cooper with a designated account at ING Direct. (ING Direct is my online bank of choice; there are lots of other good options though.) For the past few years, I’ve been gradually building savings in the same account so that I can afford a replacement car when this one dies.
- As I’ve traveled over the past few years, I’ve used targeted accounts to save for my trips.
- I’ve used targeted savings to save for other miscellaneous large expenses since 2007, including new furniture, season tickets to the Portland Timbers, and more.
Targeted saving is great, and I recommend it to save for your goals. So what’s the problem? Well, I’ve reached a point where I don’t have any specific goals.
This isn’t because of aimlessness or lack of focus; it’s because I’m (mostly) content with what I own and do, and I no longer have any big expenses I’m wanting to save for. Yes, I still have my emergency fund, my car fund, and my travel fund, but they’re each full at the moment. That means there’s room to put some of cash money into something else. But what?
Would it be silly of me to start a catch-all account for the cash I’d normally be using to target something specific? To start some sort of “dream fund”?
Obviously, this is a nice problem to have. This is the sort of problem that I could only dream about when I was still trying to get out of debt. But I suspect many people find themselves in a similar situation once they’ve established good habits and taken care of their basic needs — they have money to save, but nothing specific to save for.
So I guess for once, I’m coming to ask you for your advice (instead of offering advice of my own). What would you do in my situation? Is it okay to not have financial goals if you’re taking care of your responsibilities? What then should you do with your extra income, the income that could be saved for specific goals? Is this a pretty clear-cut case of where I should be donating money to charity? I’m curious to hear what other people do (or think) in this situation.
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Your own home in a future once fully retired to pay cash for in full? My goal, anyway:)
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How about a charity goal? I attempt to donate 10% of my income to charities of my choice and I get a lot of satisfaction being a part of something larger than myself. It’s also wonderful to contribute to my local community and see positive change.
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I also give 10% of my income away and I think everyone should no matter what you make or what your religion is. It makes my money and my life
More meaningful and fullfilling. Wanting to do thus is actually the only way I finally started budgeting. I makes me want to not spend- because I really value where that 10% goes. I donate to a ministry I have worked for and truly believe uses ever dollar to save lives and care for others. I think it’s good to give to a cause you are personally familiar with and meet the people your gift blesses. It is an amazing experience and makes that $ 3 coffee very unappealing. You can think of it as a karmic gift- the universe has lavished me with amazing resources and experiences (if you live in the US you likely make more and have more than most people will ever dream of). I pay the universe back the first 10% because I know I did nothing to deserve this great fortune and I want others to share in it
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I tried this and it didn’t work for me. I spent a year giving away a fixed amount every month to three charities I felt strongly about. (It wasn’t 10%; I didn’t feel I could take that much away from my family.) In the end, I didn’t see that it made the least difference. I had to stop after 1 year; I had to borrow money to replace our roof, and the money that had gone to charity went to pay back the loan. Now I volunteer at the library, which while it may not have the largest impact, feels like something valuable that makes a difference and makes me happy. All that donation didn’t make my life any better, and it didn’t seem to improve anyone else’s either.
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I donate A LOT of time. Personally, I think JD should donate some of his extra money or just quit working as much and volunteer more time. I DO NOT at all agree with taking necessities from a family for donating. A set percentage for every family is unreasonable.
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I definitely think that volunteering is an excellent thing. It’s also very frugal (spare time spent volunteering is not time spent eating out or whatever).
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If not donating maybe look into micro investing.
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I donate money and time. As you said, it gives another meaning to our lives.
I started donating only money, but it felt like something was missing, because I couldn’t really see what was being done with that money.
After a while, I quit donating money and started volunteering. It was great!! I really felt I was making a difference.
Nowadays, I’m volunteering and donating money and it feels even greater. =) I strongly recomend you do both, but if you can’t, I suggets you donate time.
Good luck and God bless us.
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I’d start investing.
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I agree with Steven. Hubby is retired while I still work because I love my job but we long ago reached financial independence. We still actively invest and lead a debt free, low consuming lifestyle.
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I concur. As you have no children of your own, you may not be interested in leaving a legacy at this point in your life, but that may change and building your investments with no specific goal in mind is not a bad thing.
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I would suggest putting money aside for high risk speculation. Try your luck at picking individual stocks, commodities, currencies etc…
It can be an educational hobby plus you might make some extra income. The downside of course is you could lose money, but it appears you can afford to at this point…
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Just because you have extra money doesn’t mean that you have to spend it or look for a way to spend it. I’ve been saving way beyond any retirement needs for several years without any specific goal in mind.
The ultimate result of surplus cash is freedom. The more you have saved, the more options you have some day in the future. Also, that money can be put to work earning you more money – investing is not just for retirement.
Down the road you can buy something you want, travel, donate to your favorite charity, whatever you want. Heck- quit everything and backpack around the country if that floats your boat. You now have the ultimate luxury – the luxury of freedom.
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Couldn´t agree more. I´m still getting out of debit and dream about this position.
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My sentiments exactly. More money equals more choices equals more freedom. You can always spend the savings later if you feel you have too much savings.
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While I still have goals to save for, I added a “Fun” column to my targeted savings a while back. A small percentage goes to this column every month to allow me some impulse purchases, things you look at and go wow, that’d be cool, but not something your normal wait 30-day and analysis everything self can’t justify.
Some people will immediately jump and say its wasting money, but I’ve found that the ability to drop a few euro here and there on strange things has brought a lot more “fun” to my life and I’ve actually ended up spending less out of my other targeted accounts.
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Lend to people who need it with microfinance, somewhere like kiva: http://www.kiva.org/about
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Become an angel investor for start-ups. You can easily lose your investment, or you can buy a chunk of a huge future success. While investing in the market can be lucrative, I’d imagine investing in start-ups and getting to know the people involved, people whose dreams you are directly helping, would be far more fulfilling.
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I like this idea b/c you would be investing both your time and money. I think that when I have the freedom to make this kind of choice I would like to become some kind of benefactor; my first choice is to work on conservation projects as a volunteer / benefactor. I think that that would be much more satisfying b/c you’re involved with the project in addition to giving money. Sometimes for me the money I donate doesn’t feel satisfying. The way I handle that is to give whatever amount feels right even if my saving side resists a bit. I’ve learned it will work out just fine. I, too, have targeted savings accounts plus money I always set aside for fun. I think that’s necessary much like eating cookies here and there enables one to maintain a healthy eating style.
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I’d donate. But, I’m in a spot where I can’t do much of that, so I’m always fretting at how *little* I’m able to give.
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Yeah. I know JD’s got weird issues about giving money to charity, but… seriously. When your problem is “I have so much money I can’t spend it all,” why not spend it on someone else? There are lots of people who could really, really use the help.
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We were in a “no goal” situation a few years back. We talked about whether we should spend more or save it for no targeted purpose.
Then a goal landed in our laps. (Specifically an opportunity for a one-year sabbatical with only one income in a high cost of living area.) And we had enough money to fund it. And that was eye-opening.
So now we figure that spending goals will come and it will be nice to be ready for them. Financial independence is a good thing to aim for in the mean time.
In the mean time, other goals have come to us– things we care about. Funding teenage relatives’ education. Helping keep a local non-profit from going under. When you have money, places to spend/give it will find you. And when you think, “How can I help”… you realize you actually can make a sizable difference just because you have money. I don’t think you actually have to go looking for ways to spend/give, though if you want to have a charity budget, by all means, go for it.
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This is what I lean towards as well. An opportunity fund, so that if you have the opportunity to go traveling to a place you hadn’t considered before, or you find a great condo, or …
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This is pretty much what I was going to suggest. You may not have a target now, but I bet you will eventually. Why not mark it as “seed money for future targets”?
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This seems like a great example of why you shouldn’t just spend money without a reason. Having it when it later turns out you need it is fantastic.
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I like the *idea* of multiple targeted savings accounts-but spliting the modest amount I am able to save 3 or 4 ways means each account grows *so slowly* that I lose all excitement. And once those 4 accounst total what one of the goals would be (Wii for example) I’d just pool it all together. So it ends up being a game of money transfers.
JD-did this ever happen to you in the beginning?
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I’m the same way, Crystal. Maybe I’m just dense, but I don’t really get why people divide up their money among three or more accounts for the purpose of short-term goals (trips, a new entertainment system, whatever).
How, exactly, does this work? Do you have subgroups in one general savings account?
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Targeted savings accounts are a psychological game that I need to accomplish our savings goals. We began our targeted savings maybe two years ago when I read about the idea here. It was really life changing for us.
Prior to our targeted savings accounts, we felt rich and we way overspent. Now that we’ve got our savings broken down, I feel much poorer and so we spend a lot less. (My husband pretty much just takes my word on how much we can spend at any given time). Currently, we’ve got an emergency fund, a vacation fund, a car replacement fund, and a tuition fund. Our e-fund and our vacation funds are fully funded. Tuition for next year will be fully funded by the end of next month, but our car replacement fund still needs work but we hope to have it fully funded by Christmas. By then we’ll be working on next year’s tuition and a new replacement car fund.
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Crystal, yes at times the diffused savings seemed to grow very slowly. When that happened, I would suspend saving for some goals to focus only on one thing. Or, as happened a couple of times, I would “borrow” from one account to pay another. So, yes, in some ways it’s just a game of money transfers. But it’s a game that works for me, and gives my money a sense of purpose.
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What a weird and neat problem. I’d take whatever money it is and invest maybe half in retirement or just for fun in the market (can you ever really have enough for retirement? I mean, who knows what’ll happen?!). And I’d take the other half and open a new savings account. And I’d let it build up without it necessarily being earmarked for anything at all. Then when you do see something in the future to use it for, you’re set. New house paid for in cash? Set. University fund for a neice or nephew? Set. Starting a small scholarship fund for students? Set. Spending extra on a vacation to rent a private island? Set. I think you can put that money in a savings account without an earmark and wait to see what comes up. Money shouldn’t stress you out, either having not enough or too much, so don’t let it! Put it away and just let it rest. (and I’d seriously put the other half towards more retirement, you never know)
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TB
Love the idea of the small scholarship fund! Maybe JD could even tie it into the volunteer work he’s been doing,offering it to children of backgrounds or circumstances he really cares about.
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Interesting conundrum. Do you have a couple months of emergency food saved up? Maybe look into some emergency prep that goes beyond money.
We are using SmartyPig to save in advance for daughter’s school tuition and a European vacation. More here —-> http://marriedwithdebt.com/2012/04/save-monthly-rule-7/
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If you’ve attained your financial dreams then pursue your non-financial goals even harder.
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I would either donate to charity or start working on making my retirement date earlier.
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JD, when you are rich, or have millions in the bank now, saving for anything is no longer as fun or rewarding.
Enjoy the windfall!
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“But I suspect many people find themselves in a similar situation once they’ve established good habits and taken care of their basic needs — they have money to save, but nothing specific to save for.”
I disagree… I think you’re in a very rare position. Most people never get a windfall like yours and don’t have an income anywhere near yours.
If I were you I would just stop thinking about money and live my life, but that’s probably hard to do when your job is writing about personal finance.
If you don’t want the money to just sit you could donate it, start a non-profit or a foundation, etc. Do something useful with it. Or set it aside until you come up with a good idea. Or split it and do both.
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“I disagree… I think you’re in a very rare position. Most people never get a windfall like yours and don’t have an income anywhere near yours.”
I could not have said it better.
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Combine saving, shopping and giving: Call a local food bank or “equipment needed” group (perhaps attached to another interest like neighborhood or people, afterschool/sports programs, or specific missions ie. petfood bank), find out their “most needed items”, pledge/save X amount, “game” getting the most value as you can out of the money you have to spend, show up with the mini cooper packed with needed items (or have it sent if you want anonymity).
More involved than writing a check without having to commit to schedule; still getting unused money where it can be used; still getting a tax deduction.
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Is it rare? Yes. But it’s hardly like JD is the only one in that position. For years my wife and I were saving with no real goal for the money. We traveled, ate out, bought what we thought we would most like, and still had money left over. Eventually that money was used for a house down payment and the start of our daughter’s college fund.
My advice to JD is: just save the money. Don’t worry that there is not a “goal”. There is no reason to spend money just because it’s there.
P.S. By “My retirement needs are met” do you mean that you could retire today? Or that the money so far allocated to retirement, if left for a few years to decades, will grow to that amount? Only in the former case would I consider that goal fully funded. In the latter case, keep saving for retirement, and if and when you get to the point that you could retire but choose not to, only then divert the money to other purposes.
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I think I remember you saying recently that you are open to having a baby in the future. Perhaps start saving for those expenses?
The other one I’m sure people would chime in for is to save for a big donation to charity. I know you’ve more recently become involved in charitable activities, so maybe you’re not comfortable with that sort of investment yet. But maybe you are, especially since you’ve grown into investing your time on kids, Spanish, and reading.
Good luck!
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I remember that too and that was my thoughts. If you might want a child in the future, saving for them now would be good. The expenses are small really when they are first born, but then there is schooling, sports, music, college etc.
Otherwise I think donating to charity would be good or look at retiring earlier.
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Donate and invest (and pretty much in that order).
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Turn it into passive income. My biggest savings goal right now is for investment real estate.
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Or if you don’t want the additional work of real estate, dividend-bearing index funds. That’s my favorite passive income stream. (Or just index funds that you could sell later, since if you don’t need the income stream there’s some good arguments against dividend investing.)
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Yeah, I think I’d switch my goal to early retirement/total financial freedom at that point. Though, I have a charity line in my budget already, and I think JD’s interested enough in various causes he’d enjoy doing some targeted giving.
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Dividend bearing index funds–never heard of that and I like it. Will call Vanguard this p.m. to ask about it…….
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I started using targeted savings accounts about four years ago. One of my accounts was a vehicle replacement fund. This fund was very handy when one of my vehicles was totaled as a result of a seemingly minor non-injury accident. The balance wasn’t large enough to meet my goal of paying cash for my next vehicle (which was planned for three years in the future), but it allowed me to cut at least two years off the loan for the new vehicle.
Regarding JD’s current situation: what about investigating a charitable investment account? I don’t know much about them personally, but I do know they allow you to contribute now (and take the tax break) and invest the contribution until you find some worthwhile cause or organization to support. I know Fidelity offers this. I imagine other major brokerage firms do as well.
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When I started out (40 years ago) my saving goals were pretty basic…buying a house and never having to go on welfare. I honestly never thought that you really needed a reason to save, it’s just what you are supposed to do. (You can guess that I had depression era parents.)
Now in retirement I have enough that when there is something I want to buy (newer car, big vacation, second home) I can buy it rather than needing to start saving – I never stopped. Like you my needs and wants are consistent with my savings/income so it all works out.
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You just start saving for the sake of saving just like barking for the sake of barking. The application works with diet, exercise, ceasing bad habits, etc. Now that it’s second nature and you couldn’t go back to your old ways even if you wanted to, you just do it cuz it’s what you do. It’s a very good place to be in life so— you just enjoy it. (Now, start picking stocks! It would make for some fun topic and blogging space)
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I would create a secondary fund and perhaps partition it: Charity, unexpected assistance to parents/children, a special vacation for family/extended family hosted by you, money for a celebration (anniversary? wedding), savings for a grandchild? Emergency charity fund for disasters?
It’s awesome that you have plenty of coverage for current and foreseeable needs.
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If I were in a similar situation, I’d put the money in an account labelled “future”. As was mentioned above, you never know when a goal will find you. Something will come up and I’m sure it will be nice to have that money set aside.
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I would start giving some to charity – maybe try $20 a month to see how you feel about it, and then if you want, increase it from there. You don’t need to start off making huge donations, although that’s always great too. Then I’d tuck the rest away to use it when the right opportunity comes along.
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The idea of making charitable donations is a good one, but as long-time readers know, I struggle with actually doing the donations. I’m sorry, but I just can’t make myself give the money most of the time. (I do give small amounts to people and causes I believe in, but I find it tough to make large contributions.)
Having said that, I have begun giving my time. This week I’ll spend nearly 20 hours donating my time to various charitable causes. I like it. I feel much better about being directly involved with volunteer work than just giving my money. Not sure why that is, but it’s true. And in my meetings with various non-profit folks lately, they tell me that’s just fine. Some people just prefer donating time to donating money.
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Not to sound too Yoda-esque, but it’s *precisely* because you have difficulty giving money that attempting it is a Good Thing, IMO.
In my world, when one grasps things too tightly, too greedily, with too much of a need for control, it highlights a need that should be acknowledged. Perhaps a need to learn how to be generous. A need to acknowledge your plenty in comparison to others. A need to let go.
I agree that time is a worthwhile donation, for sure. But I really do agree that there’s a deeper lesson here for you in terms of spiritual growth (and not in a really religious way, IYKWIM). Spiritual growth in that the lesson will be valuable for your heart, valuable for your connection to the world, valuable in allowing you to be engaged.
Giving that which is hard for you is quite simply good for your character. I encourage you to try it – even $100 a month. You can always stop later.
I’m a big believer in going where it’s hard, not just where it’s easy. YMMV.
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An interesting thing here is that lots of people criticize others for *just* donating money to charity, but less of their time; here, we’ve got a reversal, and you’re still catching grief! “Do what works for you.”
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Can you donate money that goes along with your time? I find that I sometimes get frustrated with just giving money, because I can’t see the good things that happen due to that money. But, having worked for a non-profit, I know where that money goes and how much money is needed (something has to keep the lights on). So sometimes I split the difference and donate items/money that help me continue my volunteer work. For example, I do a lot of invasive species removal at our local nature center. Removal or poisoning are the best options for killing the plants. Right now, we’re removing. In the fall, when we poison, I plan on buying some of the (expensive) poison so that we can get more done. Yes, it’d a donation of money — a donation that allows me to continue putting in my time.
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I completely agree with the first comment. Giving money to charity is as much about what it does to you as what it can do for others. The harder it is to give money away, and the more you resist it, the more you need to give money to something you care about selflessly! I find that giving away 10% (And adjusting my lifestyle by giving up things to make this possible without “stealing” from necessities) actually frees me from being controlled by money. it helps me to focus on what money really IS- a way to realize dreams and create things- instead of fetishizing it into something in and of itself. if you can’t give it away, it controls you.
Also, i find that giving routinely (by automatic bill pay) makes me invest in the things that matter. like the saying goes – where your money is your heart will be also. If your money goes to a car, that is what you will value. if your money goes towards something you care deeply about (feeding hungry children, providing a college scholarship, teaching immigrants english, helping victims of war, etc) you will find that you value it more too. that’s why i think something local and small where your money can make a big impact is ideal. you need to actually see your money at work in the lives of others. that is why i give to a small charity that i can work at once a year in Mexico. I see the cow they bought, I meet the children I helped to feed..it’s an amazing experience. I also find that I enjoy going to church a lot more if I give to it monthly. It creates an experience of ownership. Suddenly you are not a visitor but a member who is actively engaged in creating the community. Yes, giving time matters. but giving what you often value most- money- can be transformative in the right context.
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Be on the lookout for ways money can help drop keys to all the rowdy prisoners
You might come across something that inspires you to save.
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Sounds like the perfect time to dream about a charitable cause that you could be excited about “investing” in for the long term.
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I would do exactly that, save the cash in a dream fund. At some point, you can use it to buy your next house/home in cash or invest it in something you see great value in. We’d probably use it to buy more rental properties.
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How funny that so many people recommend picking stocks. Having read this blog for years, I can’t recall that activity ever appealing to JD much.
Charity seems like a good place to start, as do angel investing or microloaning, but it seems like one interesting way to use the money would be to travel the world and see how people manage money in other countries. How do people who live in poverty or borderline poverty manage their resources to secure some sort of future for themselves? Or, how do people from countries with robust social nets manage their money when health care and retirement aren’t factors?
Congratulations on finding your crossover point and the time to explore. Enjoy the journey!
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Like may other people said, I’d just save in general, because perhaps there is not a specific thing now, but there may be one in the future. I have an uncle who worked hard and paid off everything early. He didn’t have anything he wanted new and just put that extra cash to savings. Then, when he turned 60, he suddenly wanted to move to the Carpathian Mountains. Was able to and buy a house 100% cash and live very comfortably. That’s why we save to save. Maybe we don’t want anything special now, but in the 60, 70, 80 years of life, there will be something.
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His first name isn’t Vlad by any chance?
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No, just my Uncle Bram.
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I second the micro-finance loans (through Kiva or others) – I know J.D. is hesitant to contribute to many charities for a variety of reasons, but micro-finance can serve the dual purpose of helping others out and as an investment vehicle for yourself (and the risk factor is generally pretty low). I’d also look for (preferably local) charities related to personal interests, but maybe that’s a second step rather than a first.
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I don’t actually believe in saving because of inflation this days
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You’re absolutely right, saving is pointless given the inflation the Fed has baked into our future.
Um, except for the fact that inflation will be even harder on those without any savings cushion.
I’d say JD should diversify his savings by saving in “crazy” stuff. e.g., Perhaps save in inflation-protected vehicles like TIPS and gold (which aren’t normally a good investment, until you have extra money and want to protect your “normal” savings against inflation). Perhaps save in some “preps” like guns, ammo, and alcohol. You never know when your normal retirement savings will suddenly be inadequate, and “crazy” stuff will just as suddenly make perfect sense.
Don’t start with “crazy” stuff. But if you have “extra” savings, think about diversification into stuff you’d never consider under normal circumstances.
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Start-up funds for The JD Foundation to Promote Financial Literacy.
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THIS. +1.
Fund programs to teach financial literacy to middle and high school students?
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Hi, JD –
You have shared some of your family situation over the past few years, so I would make two suggestions:
First, make sure that whatever happens to your mother, you will be able to help out.
Second, perhaps start education funds for your nieces and nephews, as this may be a trouble for them given their parents’ situation.
For yourself, you may find that at some point you want to get a home or condo, so definitely start a small “future housing” fund.
Other than that, just save. Something wonderful will always come up, and you will be in the position to take advantage of it. Just because something is not on the horizon at the moment does not mean that something is not just over the horizon!
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I’d do a few different things with extra income, in your situation. Donate more to a charity of my choice. Save/invest for future goals. Bump up my e-fund.
And have fun with some of it.
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There has been some great advise from the previous comments. As for what I would do, half of the excess income would go towards an account for buying my list of goals. (An Excel sheet we put together of everything we would want to get (nice road bike, rebuilding the shed, etc.) and priced them all out and when we reach the amount for goal #1 we purchase it) The other half we put towards income replacement (dividends stocks, REITs, etc.) diversifying our income streams.
Of course we already donate at least 10% to charity and we covered all our other bills and retirement savings on top, so this is truly from the extra.
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I think you’re in a pretty enviable position. A lot of people always dream of finally being able to have “extra” money after paying off debts, funding retirement accounts, and building up savings.
I definitely like the charity idea, and the options are pretty limitless. Find what you’re passionate about and funnel your savings there. Personally, I would love to start a college scholarship at my alma mater to help future students.
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How about putting it into some more speculative investments. You don’t really need the money, so if you lose it no biggie, if you earn back on it you will earn bigger than just savings, and maybe you could pass it on to your next of kin?
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Yes to the dream fund. That’s fantastic you’ve met all your financial goals.
You deserve to have a slush fund for fun. Why create some sort of “rule” for yourself with your extra savings when clearly you’re good at managing your money? It’s fun just knowing it’s there. It’s your “emergency fun fund.”
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I’ve been out of the loop for a while, but is your divorce finalized? If not, aren’t those funds marital assets and you probably shouldn’t be doing anything with the funds at this point.
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My thinking exactly. I haven’t yet read every single comment, but Kris’ financial security should be at the top of your priority list. When your divorce is finalized, will she have all the things you outlined in this article? If not, there’s your answer.
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Give it to me! I have MANY ideas and will put it to good use.
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But seriously, from what you’ve shared here about your life, a couple of suggestions.
- Some kind of trust or something to care for your mom should something happen to you. Maybe this is covered by some type of insurance, I don’t know. But still, something to think about.
-Other investments/trusts to take care of yourself or family in an emergency, e.g., health bills the insurance will refuse to pay, as they tend to do.
- Early “retirement”. I’m not talking about quitting work (idleness is dull), I’m talking about being able to work in whatever line you choose without financial pressures. You want to go help the victims of an earthquake? Go teach English in Puno? Take a year to write your graphic novel? Open a comic book store? You don’t have to wait till you’re 65.
- Buy tickets, hotel and airfare for the 2014 World Cup in Brazil. (This is something I’d do, but hey, don’t mind sharing my plan if you give me the money– give me the money… this is a subliminal command… mhuahahaha… .)
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Haha. Actually, World Cup 2014 is on my list of things I want to do. So, believe it or not Nerdo, you’ve inspired a new savings target for me. Thanks!
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Hey, smart guy! Don’t forget my subliminal command!!!
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While you’re at it, book tickets and Four Seasons Hotel or something similar for the Olympics this year.
Why not?!
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These are great suggestions. I would include two more: 1) college funds for nieces and nephews, and 2) a house improvements fund. There’s always something broken on houses and it always costs at LEAST $10,000.
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I think it’s a place you’re in that actually makes sense. The thing is, most people don’t reach that point when younger, so it just seems like a foreign concept to be financially responsible yet lacking savings goals.
So, good for you that you’re in this position! It’s probably not a bad thing, and it’s understandable. Maybe it feels weird, but if you’re conditioned to be charging toward specific goals, it can be unusual to not have any specific ones all of a sudden.
Anyway, there’s no rush to come up with goals. Maybe just keep on living with financial responsibility, and take the time to think up your next goals. Be it charitable endeavors, a dream lifestyle, etc – I say just go with the flow and make some goals when they come to you.
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I think one of the conundrums of being single is figuring out whether to set savings goals based on your present situation or future one. Present me has too many savings goals (home, car, retirement, emergency fund), but future me will (hopefully) have a wedding and children to plan for.
If I was lucky enough to be in J.D.’s situation, I’d set up a fund for the future me — the potential for kids, another wedding, another home. It’s really hard to plan for those goals when you’re single, but I think it would be great to have a stash of money set aside when these wonderful opportunities come along.
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I’m in that spot right now. I’ve got my 6 month emergency fund all set, and I am slowly increasing it to a full year. I’ve got my travel fund on track, and I’ve begun saving for a new bedroom set. But, I’m in a serious relationship that might end in marriage, so do I start saving money for a wedding, and save for a possible maternity leave? Or do I use that money for something else, e.g., accelerating the furniture fund (I also need LR furntiure, too!) and go crazy paying off the mortgage?
I guess I should just start saving for the marriage scenario, and if it doesn’t pan out, use the money for a consolation trip to Hawaii!
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I’m not sure why you really MUST have a purpose. Save what you can and when a situation arises, you can decide what to do with it then. I now JD’s all about saving with a purpose, but my purpose is to cover those situations I couldn’t have forseen years earlier!!
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One of the Canadian PF bloggers I follow — Gail Vaz Oxlade — recommends a “ways and means” fund. It’s not an emergency fund, but a savings account for things you may not be able to anticipate in advance. (Like a family reunion, out of town wedding, trip with friends, great deal on a car a friend is selling, etc.)
It’s kind of like having a goal without having a goal
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Jen, FWIW, I would save for marriage because the last thing you want is to have to take a higher interest loan to pay for a wedding. If you just keep saving and then the relationship doesn’t work out, then you can just put the extra saved money directly towards the mortgage, new furniture, etc. all at once (or keep saving it!). But, once it’s applied against the mortgage, there’s no getting that money back, and once the furniture is purchased, it’s also difficult to get the same value back out of it. Good luck!
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Hmmm.. Sounds like a plan
I’ve already got $200 going straight into a savings account from each paycheck, so I’ll just let that keep going and ignore it until I need th money for something. In the meantime I’ll keep splitting my monthly surplus between directed savings and paying off the mortgage.
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I second all those in favor of using the money for charity, micro-loans, and angel funds. I see giving money to charity as a form of investment, not an investment for yourself but an investment for the community. Investing in the community won’t reap immediate or direct gains like retirement savings or targeted savings would, but those who give benefit none the less. With this in mind, I think that we should put the same amount of research on where to give as we would research which funds to put in our retirement accounts.
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JD why don’t you set up small sized charity target, example, “next earthquake fund” or a “AIDS fund”. Once yous et targets you can save for them. Once you have everything you should start thinking about millions others who need help.
Oh, what about your next marriage fund? If you decide to go for it in future…
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I agree. Is there a charity you would like to support more? Do you have any giving goals?
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Dont save to spend, save to invest! Too try and look for something to spend money is just pointless. Istead continue to save and invest, and suddenly when you do find something you want or want to experience you have money for it without needing to save up for it then.
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Isn’t it great to be in a state of financial freedom? I would give a little more to my church and I would probably have some fun by taking a little more risk in the stock market. If you are in your financial situation, goals are not as important because you are already disciplined with your money. Isn’t that the point of setting goals?
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“Is this a pretty clear-cut case of where I should be donating money to charity?”
Yes, obviously.
“But I suspect many people find themselves in a similar situation once they’ve established good habits and taken care of their basic needs — they have money to save, but nothing specific to save for.”
Yes and no. No, there are probably not *many* people in your position. You got a windfall that most folks never will (not that you didn’t work for it, but it wasn’t just good habits that got you there). However, the folks that *do* end up in your position do one of three things: give it to others, give it to their kids, or learn to have more expensive tastes in material things. I suppose a few also hoard it, but then it just ends up with their heirs anyway.
I guess you could go for #3, but I’m not convinced it would make you any happier (and isn’t that really the point?) I hate to quote Dave Ramsey, but I think he has a good point when he says “Giving is the most fun you can have for the money.”
Giving doesn’t have to be just cutting a check to a charity. As others have mentioned, you could start a scholarship fund. Or, you could find ways to create jobs. Hiring a housekeeper and gardener is a start. Maybe a personal assistant. Is there *any* cause you can get behind? For me, it would be shelter animals. I would host and fund a low cost spay/neuter event or clinic or something. Or, maybe there is a political cause you care about?
Honestly you NEED to find a cause you care about, something beyond just yourself. Not because you have some moral obligation to society, but for your own emotional/spiritual well being.
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I think Des is exactly right to tell you to think hard about what you care about, and recommending that you get connected to something larger than yourself. Try this – if you fast forward many decades to your final days in this world, what would you want people to remember you for? They will obviously remember you for your GRS work – but is that it? Or is now the time for you to get involved in a cause that you care about, and really try to make a difference? My parents always told me that you want to leave everything around you a little bit better than you found it – and you find yourself in a remarkable position to do that.
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Des, you know I’ve found that cause, right? I haven’t been shy about it over the last few months, although perhaps I haven’t been completely overt either. I’m passionate about immigration issues. I don’t care why or how people are here in the U.S., I want to help those that are here. This is a cause I believe in, so I’ve been volunteering time and energy in this direction, have been meeting with immigration organizations, etc. But I haven’t given any money yet.
I just want to point out that I have found a cause I believe in and I’m working to help with that cause.
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I also have a hard time donating money to charities. I didn’t have much money a few years ago, was in debt, and decided to give anyway. That charity has followed me with their mailings through various moves – nagging me for more money, bragging about all the lives they’re saving and all I can think is that my money has just created junk mail and dead trees – spending way more than I donated in the process of asking for more.
My suggestion (since you asked
) is to combine your volunteering with giving goods. I volunteer at a homeless shelter where I go bake with the women on a regular basis. I bring supplies and treats with me. Also, because of where I work I was able to donate some discounted goods to an animal shelter near me when they needed them.
I like knowing that my limited funds are being used for causes that I find dear to my heart and in exactly the way I want.
In your case maybe it could be ESL books or software? A couple computers?
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If that’s the case, then is it that hard to figure out a way to leverage your considerable means to further that cause?
Money where your mouth is, brotha.
Yes, of course charities are going to say that they are fine with you just donating your time. What *else* are they going to say? “No, your time isn’t good enough, give us your money!” Please. They would rather have your time than nothing, and insisting on cash makes them sounds (and feel) greedy.
But seriously, you have more money than you know what to do with and you still can’t bring yourself to give it away? Even to a cause you care passionately about? Have you spoken to a psychologist about it? Honestly, not hyperbole, that seems like an issue.
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Save for the sake of saving, you never know what you might want/need later on. Nothing wrong with not having goals.
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What about buying yourself more time? Outsource the bits of your life that don’t contribute to a sense of joy. I recall you hating doing your laundry; surely Portland has a pickup/delivery laundry service. Or maybe start a scholarship or grant trust to help other people pursue the passions you enjoy (traveling, learning foreign languages, blogging, etc).
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