Marvelous Money: Why save for retirement?

30 August 2013

Welcome back to Marvelous Money! We appear to have taken a bit of a summer hiatus, but we’ll just call that time to let the first seven posts sink in. (Missed one? You can find them all here.) So far we’ve covered emergency funds, managing joint finances, building a budget, and yes, how to spend money :) Now, it’s time to talk retirement.

Before we get into the nitty gritty, though, I thought it might be worthwhile to spend a bit of time on the WHY. Or, perhaps more importantly, the why NOW.

Because yes, everyone knows that theoretically they should be saving for retirement. But are you? I’m betting that if you see the reality of what starting now versus starting in ten years means for your future, you will indeed be motivated to take action. If you’re reading this in your twenties or thirties, you have an insane amount of power in your hand, and it’s called compound interest.

wonder-of-compound-interest

Let’s look at a few numbers. Let’s say you start saving for retirement at age 25. You put away $125 a month, and you earn an 8% average every year (around the average annual historical return of a balanced portfolio of stocks and bonds). After 40 years, at age 65, you have about $439k. Marvelous!

magic-of-compound-growth

Now, let’s say you start saving $125 ten years later, at age 35, with the same return. At 65, you have about $187k.

benefits-of-saving-early

Let’s go one step further, starting at age 45 and saving $125 a month. At 65, you’ll have just $74k. Yipes!

dangers-of-not-saving-for-retirement

Obviously, if you start saving later in life, you’d probably save more per month — if you can. But WE want to make our money work for us, don’t we? And I don’t know about you, but I think the demands on my money are only going to grow as I get older.

To go back to our example for a moment, let’s say you start saving for retirement at age 35 but want to end up with the same amount of money at 65 as the peeps who started at 25. To start ten years later, you’d have to save MORE THAN DOUBLE the amount per month — $293 versus $125.

saving-for-retirement

This gets at the question I pose in the title of this post: Why save for retirement? Fully funding your retirement means setting yourself up for financial independence. Not only will you have more flexibility later in life (when to retire, etc.), you’ll have more freedom throughout your life, as you need to save less money to reach the same goal.

Just one more example. Imagine you’re given two options: you can have one million dollars today, or a penny that doubles in value every day for a month. Which do you take? If you take the penny, after the first ten days you’ll have $5.12. Not too exciting. After 20 days, you’ll have $5,242.88, which is better, but still nowhere near one million. BUT WAIT, there’s more — by day 28, you’ve surpassed the first option with $1.34 million, and on day 30, you have $5,368,709.12. Marvelous, indeed!

marvelous-money-saving-for-retirement

The lesson? You can’t skip the boring part — and I guarantee saving for retirement might look boring for awhile. But the boring part? That’s your ticket to the exciting part, where your money truly starts working for you. The most growth comes at the very end.

So, here we are. You have to start. Time is the most powerful part of this equation, and it’s the ONLY part you can never make up. I know that there are lots of demands on your money, and maybe $125 a month seems like a lot right now. However, if you read this blog, I would be willing to bet that you’ve been spending $125 per month on something discretionary that you could redirect toward retirement savings. Fun? Nope, not always. But I don’t expect anyone to hand me my retirement, and I don’t think you should, either. As my Dave Ramsey friends like to say, if you will live like no one else, later you can live like no one else. And that’s the truth.

Much more to come on this topic in the coming weeks, but in the meantime, I would LOVE to hear from you. Where are you right now with retirement savings? Do you have a 401k or IRA? Do you contribute a set amount per month or year? Do you feel good about where you are? This will be super helpful as I plan future posts, so please chime in, friends!!

P.S. Since I’m asking you to share, I should, too: I opened my first IRA at age 19 (traditional) and opened a Roth a few years later. I’ve contributed a bit less than $125 per month over the last few years since we were focused on debt reduction, but the big goal for 2014 is to fully fund! More on all this soon!

The great area rug search

29 August 2013

We hung our gallery wall! Hooray! And we’re really pleased with how it turned out! But before I share it with you (though you’ll see a little peek here), I wanted to finish up another post that’s been sitting in draft for awhile.

We decided when we moved in that we didn’t want to jump into any big purchasing or decorating decisions — especially expensive ones — immediately, as we thought it’d be wiser to live in the house for a bit and see how we naturally used the space. I’m glad we made this decision. Very quickly, however, it became apparent that our first big purchase would need to be a rug for the living room area. We love the wood floors throughout the downstairs, but without any soft surfaces of any kind underfoot, the overall effect was pretty cold. Plus, I don’t think our cats approved :) We also wanted a large area rug to anchor the seating area and set it apart from the adjacent dining area.

So, the search began! I virtually visited all the usual haunts, including Pottery Barn, Crate & Barrel, Wisteria, Serena & Lily, World Market, Restoration Hardware, Lulu & Georgia, Overstock, Rugs USA, Ikea, eSaleRugs, and Layla Grace. One tip: Make sure to look at the baby, child, or teen version of a store, if one exists (like PB Teen or RH Baby & Child) — they often have lovely, cheaper designs!

Complicating the search a bit was the fact that I was kind of shopping for two rugs, even though we only had plans to buy one at the time. We are probably going to buy a rug for under the dining room table at some point down the road, and because the spaces are so close, I want the rugs to work together well. As an aside, this issue has actually come up a lot as I think through choices for this space, from lighting to curtains — it’s really like decorating one giant room in three parts as opposed to one room or three distinct rooms.

We would eventually like some sort of vintage Turkish/Oriental rug (kind of like this) for under the dining room table (all of those colors will help hide spills!), so I honed in on something simpler for the living room. I tried to keep my mind open and my search wide, so we ended up with options in several of the colors in our palette — which, coincidentally, is pretty much the same palette as this blog. I know what I like. More on that later.

Here are just a few of the options we considered:

colorful-and-inexpensive-rugs

A. Overstock, B. Layla Grace, C. Shades of Light, D. RH Baby & Child, E. Shades of Light, F. Overstock, G. Layla Grace, H. RH Baby & Child, I. Shades of Light, J. Shades of Light, K. Rugs USA, L. PB Teen, M. Rugs USA, N. Overstock, O. Rugs USA, P. Rugs USA, Q. Shades of Light, R. Overstock

This was such a hard decision, friends!! If we hadn’t had a deadline (see below), I think we probably would have been hemming and hawing still. A rug is visually such a large part of a room, and such a large investment, that we wanted to get it 100% right. Yes, you can return a rug, but shipping can get very pricy, and you often have to pay a restocking fee. We spent our time on this decision not because we’re overly concerned with how our house looks (I don’t think), but because, as with every other purchase we make, we wanted to be sure we were spending our money wisely on something we would love for years to come. We are trying to be good stewards of what we’ve been given.

We finally decided on the Surya Frontier Pale Blue Hand Woven Wool rug from Layla Grace, and I’d say we got it 90% right.* I’m particularly proud of the price — we pounced on a 40% off sale over the Fourth of July, and got free shipping, too! Our 8×11 rug was less than $500. (Dina posted about purchasing a rug for 75% off from Rugs USA over July 4th, so I made sure to sign up for all possible store emails and be ready with our decision in advance! Highly recommended!)

Before:

dark-wood-floors-living-room

And after:

red-and-blue-living-room

surya-frontier-rug

pale-blue-surya-rug

Anyone else purchase a rug recently? Did you find it as nerve wracking as I did??

*Though we are very happy with the look, I’m taking 10% off because it’s not as soft as I had hoped (duh, it’s wool). We don’t get down on the floor too much in this stage of our life, but I imagine it wouldn’t be the most comfortable for kiddos in the future.

Tips for hosting an adventure dinner party

21 August 2013

There are a few things I hope you’ve picked up after reading this blog for any amount of time: namely, the joy of fiscal responsibility, a deep appreciation for goals of every stripe, and a conviction that donuts are delicious. Also, this:

everyday-is-a-special-occasion

Kelly Cummings

YES! We are the kind of people who use our wedding china on a daily basis. The people who crack open the letterpress stationery for a quick note. And yes, we are the people who throw adventure dinner parties.

I’ve been reading the blog Oh Happy Day for years, and Jordan is the one who initially introduced me to the idea of an adventure dinner party. As far as I can define it, it’s a meal shared with friends and the trappings of an indoor occasion — table, chairs — on public property. So, a fancy picnic. I was immediately taken with the idea, as I have a deep love for creating memorable experiences for the people I love. I put it on my 101 list almost three years ago, finally checked it off (hooray!!), and would now like to share a few tips I picked up along the way.

hosting-an-adventure-dinner-party

1. Choose your location wisely. It must be said: don’t dinner party on someone’s private property unless you have their permission. Duh. Also, don’t break any laws, and I’d suggest not choosing a location that expressly forbids picnicking. In fact, I’d look for a place that DOES encourage it — because really, an adventure dinner party is just an elaborate picnic, so if picnicking is allowed, you should be in the clear. Try also to find a location that has parking close by, since you’ll be hauling a fair amount of stuff from your car. Also, a bathroom, especially if two of your friends are pregnant.

Once you’ve found your location, make a scouting trip before the big day — even if it’s a location you’re familiar with, you’ll see it with new eyes. We chose the NC Museum of Art’s Art Park as our location (we took our engagement photos there). Here I am on our initial scouting trip in our chosen spot:

nc-museum-of-art

There was even a path mown to it!

nc-museum-of-art-wind-machine

2. Plan a moveable menu. The more food that can be transported and stored at room temperature, the better. Bonus points for anything that packs down tightly and requires few or no utensils. We chose chips and salsa as an “appetizer” (just served them out of the bag and jar, respectively), and Cobb salad as the main course. We brought the pre-washed spinach and arugula in the boxes it came in, and all of the other ingredients — hard boiled eggs, turkey, bacon, tomatoes, avocado, blue cheese, vinaigrette — in mason jars. Guests could assemble as they pleased. We also packed watermelon mint lemonade in Weck jars and fruit skewers in a 9×13 pan with a lid.

picnic-drinks

3. Make your packing list and check it twice. You’re going to be (kind of) out in the middle of nowhere, so there’s no running back to the kitchen when you realize you forgot plates. Walk through the entire event in advance and make sure you have — and pack — everything you need. Think about clean-up, too. Among other things, we brought mason jars for guests to drink out of (with lids, so that we could just screw the lids on at the end of the meal and not worry about rinsing them or drips), wooden forks, plastic plates (I figured they’d be less likely to blow away than paper), and bug spray. We packed everything in our cooler and my oversize Bean bag.

giant-yellow-balloon

4. Get the right equipment. Because we could see ourselves doing this again, we bought a tote-able 6-foot table and two folding chairs from Home Depot to supplement the six folding chairs we already owned. Renting would also be an option. So would buying from Craigslist if you leave yourself enough time. We already had a surplus of mason jars, but they’re pretty cheap at Walmart.

5. Invite the right guests. You want people who will relish the experience, and be excited about something different… not think the obscure location and mysterious lead up are a hassle. Guys, I can’t tell you how grateful I am to have friends and a husband who appreciate things like adventure dinner parties!!

text-message-chain

6. Have fun with it. You’re creating an experience for your guests, so layer on the fun touches! Keep the location a mystery until the last minute, or text clues in the days leading up to the party. (I’d recommend giving them an estimate of how long it will take to drive to the location, though!) Bring a tablecloth. Send invitations in the mail. Order up a giant balloon to mark your spot. On that note, make sure you have a car large enough to transport said balloon — I have an SUV, and had to fold my seats down to fit it in! It wouldn’t even fit through the doors of our house!! We bought our 36″ balloon from Party City, and it was $6.29 to inflate it with helium.

pocket-invitation

I modified Amy Moss’s invitation template and had them printed at FedEx Kinkos — so cute!

Post-dinner we loaded everything back into my car, then walked over to the Museum’s outdoor showing of Moonrise Kingdom. We packed dessert boxes for everyone in turquoise berry baskets with cinnamon sugar kettle corn, chocolate chip cookies, brownie bites, and gummy bears :) One other note on food preparation — if there was any dinner party to take food shortcuts on, this is it. All of these goodies were purchased from Whole Foods!

dinner-party-in-a-field

7. Roll with it. The weather. Oh me oh my the weather. There were a plethora of angsty text messages flying between my and John’s phones the day before and the day of our dinner party. Suffice it to say, we didn’t definitively call holding the party outside until about an hour before the arrival time, BUT the weather turned out to be beautiful! We had sun!!

Also, make sure you’re okay with attracting some attention. There were bike riders and walkers moving past our location, and at first I was a little self-conscious, but as soon as everyone arrived they faded into the background. Remember, they’re not judging you, they’re either curious or want to BE you! :)

Finally, be flexible. When we arrived at the park, we discovered that the entire field had been mowed, meaning our private circle was no more. We made a quick decision to relocate under the tree, and it worked out wonderfully.

8. Clean up. Leave your dining room for the night better than you found it. Duh.

Friends, what do you think? Would you host an adventure dinner party? Have you ever purchased a giant balloon? :)

Life lately

16 August 2013

Goodness gracious, it’s been more than two weeks since my last post. I don’t like to comment on that sort of thing, because I try not to set up expectations for myself about how often I post, BUT, since I have been gone so long, I thought I’d do a quick update on what we’ve been up to.

The day after I wrote my August goals post we flew to New England for ten days. We spent the first evening with two dear friends from college in Somerville, and the next morning we took a long walk around their neighborhood. We even saw my parents’ first apartment — in an old schoolhouse!

blue-hydrangea-bush

That evening we joined many more friends from college at the wedding of another alumna. I was horribly, horribly homesick my first year of school, and Laura is the first person who made me feel at home at Wheaton. I am forever grateful to her and was so happy we could be there to celebrate with her and her new husband!

southern-wedding-guest-style

An early teaser from their photographer, Tyra Bleek:

wedding-by-the-ocean

As you can see, they had beautiful weather, and that turned out to be a theme of our trip, thankfully! We spent the next week in Maine, and enjoyed some of the most perfect conditions imaginable. Lots of tennis, walks, good food, games, and one very special visit from our friends Meredith and Michael. A highlight of our trip for sure! You can see their recap here.

maine-islands-in-the-summer

A few more of our snaps from the week:

double-rainbow-in-maine

Yes, that’s a gigantic double rainbow!

summer-on-a-maine-island

Since coming home we’ve hosted our small group for dinner, went out for a big dinner with my team at work, and tonight is our adventure dinner party! (Fingers crossed — the weather is still looking a little iffy.) So many good things and so much excitement — but I will say we’ll be happy to lay low the rest of the weekend :)

Back with more soon!

August Goals

1 August 2013

Welcome to a brand new month, friends! August is here, and it is going to be marvelous!

blueberry picking

Blueberry picking at Buckwheat Farm!

July was full and wonderful, capped off by our week long trip to Northern Michigan. Last month we also managed to organize the loft, which serves as a crafting and storage space for my shop. It had been a hot mess since moving day, but no more! Pictures to come soon! We also hung several pieces of art downstairs and have plans for several more. My bike is in the shop for its tune-up as we speak, and last night (squeaking in under the wire!) I submitted my life insurance application. We decided to postpone a rain barrel for the moment — for some reason I was under the impression that we could get one from our town for $10, but it’s actually $85 :(

August is shaping up to be quite busy — it’s traditionally one of the most hectic at work for me, and we’ll also be in New England for ten days. Therefore, my main goal this month is to spend the free time I DO have wisely, and then enjoy each minute to the full! Especially looking forward to lots of family time, boat rides, long walks, and lungfuls of the pine salt air that sings “Maine” to me. A few additional goals:

— Read To Kill a Mockingbird for no. 13 (my favorite book of all time — worth reading over and over!)
— Start the retirement series for Marvelous Money (whoo!)
— Host an adventure dinner party for no. 41 (WHOO!!)
— Help lead a service at the Island for no. 50
— Refinish our dining room table
— Hang our gallery wall!
— Hang our master bedroom curtains

You can see all of my 101 in 1001 goals here and my 2013 daily goals here. If you’d like to share your goals for August, I’d love for you to either list them in the comments or leave a link, and I promise I’ll check them out!