We've been talking about money a lot lately, Eric and I. It's really interesting to have these conversations, partly because I've never had to consult someone else about money before (though I did, and still will, ask my parents for advice), and partly because this is part of that feeling I've been having, that my adulthood has been taken to second gear. A year ago I would never have considered these things we're discussing. (Well, a year ago I was unemployed, but you know what I mean.) We've got a mortgage, a car payment, student loans, two jobs, a wedding coming up, hope of a kid in the not terribly distant future, college for said kid some fifteen or eighteen years later, retirement, entertainment, travel money. We really don't spend that much, compared to a lot of people. We don't drink; we don't buy expensive clothes or cars or TVs; we don't go out to eat a lot. As far as entertainment goes, we spend money on World of Warcraft and craft supplies, the occasional dinner at Applebee's or Aladdin's (and I hope Salaam, a new Mideastern restaurant I read a review of last week; it's only a couple of blocks away and we both like Mideastern food, so we're going to have to try it), DVDs and books, and food geekery. He wants an expensive computer, but if he gets it it'll count as a couple of birthday/Christmas presents and he doesn't get an upgrade for a few years. We could reduce our spending, but not by a whole lot. And we're thinking and planning and doing pretty well with it. I enjoy these discussions, not for the actual discussion necessarily but for the feeling that we're taking care of ourselves and we know, at least somewhat, what we're doing.
He's more debt-tolerant and risk-tolerant than I am, so that's something we're working out. He recently paid off the last of his credit card debt, and he's going to start making payments on his student loans (he doesn't actually have to start until 2009), mainly because I want to reduce the amount of interest we pay by any means possible. We're talking about investing in some stocks; I know little about this, but it's supposed to be a good long-term investment, so that's something we're going to work on for kids' college and such. (I'm okay with a bunch of stocks in my retirement, though. I think it's because I don't have to think about that money--Vanguard sends me a statement every once in a while and that's enough. And the statements have been getting bigger, so stocks can't be that bad, right?) I read about credit card arbitrage a little while ago at work, and mentioned it to Eric, so we're doing some looking at credit card offers and what it would yield, and what if we put the money into the stock market, and what if it tanked, and would our parents kill us for even trying it, and so on.
We wrote down our general savings goals. Right now we're thinking $8000 for emergency funds in liquid accounts, $200,000 for college in fifteen to eighteen years, $2,000,000 by the time we retire (in 40 years or so), $25,000 for two cars in about five years, and as much as we can for a house down payment by whenever the next time we move is. We haven't analyzed what it will take to actually make this happen, though (except for the first one, which we've already got). We still don't know exactly how much of our savings to devote to college, to house down payments, to future car purchases, and so forth, but we're trying to figure it out. It makes me happy that we do have a good amount of savings in safe places--my new money market account and CDs at the moment. (I have all the extra cash because I make considerably more than he does--thus the student loans so that he can teach at a school that pays real money.) It makes me happy that I know the various things we'll need money for and that I can think about them without feeling overwhelmed...well, except when I look at the dollar amounts.
I'm also trying to figure out how much I can give way and let him do what feels comfortable to him versus what seems to me to save more money. For example, I would like to save up for our next car so that we can pay with cash rather than having to take out a loan, and he thinks a loan is fine because it's a lower rate and shorter term than a house. But, again, we don't know how much we're really going to have to play with--if and when we do have a baby, we'll have to find out how much that costs, and once he's out of school we don't know how much he'll be making, and once we move we don't know how much I'll be making or what housing costs will be...the more variables we consider, the more there are to add in. But I'm feeling that it's manageable, at least right now. And that it's okay for me to want a $340 birthday present, and to wonder whether we'll be getting money for the wedding, as mercenary as that sounds.