Graduated Learning: Life after College

I got my degree, I got a job…now what?

Aimless personal finance November 30, 2018

Filed under: Personal Finance — Stephanie @ 8:26 pm

I’ve been seeing a lot of talk these days about FIRE (Financial Independence/Retire Early). I’d followed folks like Our Next Life for awhile. Then there was the controversial interview from Afford Anything with Suze Orman. And most recently some other personal finance pals Liz and Stephonee were featured in a story about FIRE. And reading that last article made me realize something: I’ve never actually considered FIRE as something I would do. I always assumed I’d follow the “standard” path of working my whole life and then retiring in my 60s.

To be honest, I haven’t really thought about any money related goals in a while. Ten years ago, I talked about how I felt like I just save for the sake of saving. We used savings for our big life changes (getting married, buying a house) and, for now, that savings is sitting there as a big emergency fund. And we did start 529 accounts for our kids, and have been putting a little bit in there.

But right now, I feel like I don’t really have any financial goals or plans besides “keep growing net worth”. And even then, I’m not being super aggressive or focused on it. Just putting money in our retirement accounts, paying our bills.  I haven’t been trying to do anything different or save or pay off a certain amount.

As I mentioned in my review of The Index Card, I feel like I got all of the early personal finance tasks figured out (start automating savings, pay off debts, etc) but now that those initial things are figured out, I feel a little lost.  I feel like I don’t know what I’m supposed to with our money to make sure it’s growing “enough”.

It doesn’t help that our net worth is stagnating now that we have two kids in full time childcare. I know that in a few years we’re going to feel so much richer when the kids start going to public school. But for now, even with good incomes, our monthly expenses are pretty high when you combine our mortgage and childcare payments.

I guess when I started on my personal finance path the unspoken goal was financial independence but I didn’t really realize it. My first step was getting a handle on what debts and assets I had. Then I had to figure out what to do with it. All I cared about initially was a positive net worth. Then I hit that goal and kept going. I read an article that lists the many steps to true Financial Independence. According to that article, we’re only at Stage 2, Stability, since we still have debts (our mortgage). So, it looks like we still have a long way to go before we reach financial independence. We make good money but like I said before, our high monthly expenses mean we’re not saving nearly as much of our income as we used to before becoming parents and homeowners.

So where am I going from here? I’m trying to figure out what we need to do to grow our wealth and limit expenses where possible. Trying to do #1GoodMoneyThing to improve my finances. My main need is to learn what to do with the money we already have saved: what’s the best way to invest without too much risk? That emergency fund I mentioned earlier? It’s all in cash (in a savings account). Even as I’ve heard countless people saying most of it should go into low cost index funds. But my fear was that it would lose money right when we might need it for a big repair or other emergency (yes I know, we’re “losing money to inflation” but I still feel better knowing the amount isn’t dropping).

I don’t think we are going to be part of the FIRE community. We enjoy our work, and still don’t have the amount of money to “live off of”. But we do like the idea of Financial Independence (the FI of FIRE). Knowing we’re secure financially is good for peace of mind.

So: help me! What resources have you looked to to get a better understanding of moving beyond the original personal finance steps? How did you learn about investing? How do you get past the mental hurdles standing in your way of making the right financial decisions for your family?

What goals did you set for your financial life? And how are you reaching those goals?


11 Responses to “Aimless personal finance”

  1. Alex (FinHealthy) Says:

    I love this post. You say that you are aimless, but I think you are doing great!
    My own personal belief is that most of your questions can be answered with your “why”. If you ask why you are pursuing a goal (FIRE or something else) it helps to show the meaning behind it. You build an emergency fund to reduce the stress and consequences of unforeseen events. You contribute to your children’s education funds so that they can attend higher education without being burdened by massive debt.
    You grow your net worth and move towards the FI part of FIRE to give yourself choices, the choice of how long to work and what kind you want to do. When saving for retirement, whether that be early, late, or never, you are saving for how you want to spend your time and energy. (I’ve never heard of anyone who has reached the RE and is just sitting on their front porch in a rocking chair.)
    I think what you’ve done is great. You are living a healthy financial life. And similar to the pursuit of health, it’s not about being healthy it’s about what you can do and how you feel. I want to be physically healthy so that I have more energy today and will live a longer happier life with my wife and daughters. I want to be financially healthy so that I have comfort, confidence, and live a longer happier life with my wife and daughters.
    Sorry, I sort of went on a rant here. That’s just my 2 cents.
    (Also I think the emergency savings is fine in savings. That’s what I do because if a recession hit and my income went down, a stock index fund would likely be down significantly too. I just look to put emergency savings into a high-interest bank account, and invest anything over 6 months to a year of expenses.)
    I know I didn’t answer all the questions, but I hope this helps. Personally, we are in a similar place. I’m a long ways from FIRE, but I’m in the stability stage and focused on living a healthy financial life.

    Liked by 1 person

  2. I felt similarly lost after paying off all my non mortgage debt. The mortgage seemed huge and FI so far away, it would be many years spent financially grinding to get there. The question is-what are your dreams? What do you ultimately want? Money is just a tool to help you reach your dreams.

    I learned about investing via the Bogleheads books, website and forum. I also read a ton of books on investing, ultimately settling on indexing because it was simple, straightforward, didn’t take a lot of time/mental energy, and had a high chance of success. I then set bigger goals, mostly around mortgage and college in the nearer term. I max my 401k and HSA as well. Once those goals are set I’ll focus more on after tax investing.

    Liked by 1 person

  3. In a way, I actually think it’s healthy to have a more “set and forget” style work your finances at this stage of life. Since you’re likely a ways away from FI, bring too focused on that goal can actually be more frustrating than helpful because then it’s too easy to lose sight of the good stuff happening right now.

    Liked by 3 people

  4. I didn’t set any goals for my financial life, like TLRE; says, I just had that “set and forget” for the longest time. The only time I ever made a goal was really just to put on my blog something tangible to head towards: 1M by the age of 32. But if it doesn’t happen, I’m not worried, because who expects to be a millionaire in their thirties? It sounds like you’re doing everything right– reading, saving, not hating your job 🙂 Those are goals I can get behind.


  5. Moriah Joy Says:

    I appreciate your perspective on this. When I first started my own financial journey, I was FIRE centered. I just wanted to grow wealth at such speeds that I’d be out of the workforce in my 30s, but now that I’m in a fulfilling career, I think working a little longer and reaching for FI and postponing RE might be a more fulfilling option.


  6. Mark Dias Says:

    Great post. I am just like you saved as much as I could. I retired early because of a neurological disorder. My wife still works but will retire next year. I have never considered FIRE either because we are in our 60s. I was like you saved when I can. Never felt rich enough to retire early until recently. I think the vast majority of people are like you


  7. When I was 33 I left my husband. I had 4 boys under 6 to support, a mortgage of just under 100K to service and cash in a joint account of $120. I closed the account and gave my ex-husband half. That was the boys’ and my starting point.
    I didn’t even discover FIRE till my very late 40’s. But I had one advantage. The kids were almost off my hands at that stage.
    Now? I’ve reached FI. I’ll pull the RE part in around 4 or 5 years. I’ll be 59 or 60.
    That’s still a good 10 extra years of freedom that I’ll enjoy.
    YOU? Little preschool kids are cheap – unless you’ve got daycare costs. You have. Put your head down, do what you can and struggle through. Elementary school kids are cheap. Brace yourself for secondary/high school. You have two huge advantages over my past self. You have 2 wages coming in. And you learned about this stuff early. Even though you might not feel like it – you’re still way ahead of the game. Just go at your own pace.

    Liked by 1 person

  8. Kate Says:

    I love this! Although I like to consider myself part of the FI community, we’ll probably hit our FI number around 45-55, a decade two after many of the FI folks. And I love what I do, so I’m unlikely to want to RE. Instead, I focus on improving a little every month, and increasing the flexibility in my career/work life.


  9. Having a clearly articulated idea of what your goals are, and why you want to achieve them, would be a great place to start.

    Financial Independence isn’t a goal in itself, rather it is a milestone that enables the pursuit of goals by giving you control over how you invest your time.

    Maybe that looks like spending more time with your kids, or being able to afford to take a lower paying yet more fulfilling job. Perhaps it involves slow travelling or volunteering or starting a business.

    Once you have identified your actual goals, the things that are important to you, that aimless feeling should subside because you have a tangible reason for that saving and investing you are doing.

    I wrote about this a little while ago, it may help you plan it out:


  10. Melissa Says:

    You don’t sound as aimless as you might think. You saved, you don’t have fire as an immediate personal goal so much. Your expenses increased with home and young kids. Sounds like for now you’re happy with financial security and saving for retirement.

    The real question is, how much cash savings do you really need. Part of that is how you feel, how much you need in case of job loss (taking into account average time it takes to find another job and a little more to fill in while you save again for random non job loss emergency expense.


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