I was just updating Quicken and noticed our retirement balance is a solid $75k. For now anyway.

This is actually my gross salary for the year. So one years' saved!

Of course, the interesting thing about measuring your goals in terms of salary, is that I for one, had already met this goal last year (maybe the year before). Likewise, in past years I way exceeded this goal (because my income was much smaller...)

So though $75k is a new milestone for me, I can't say the one year salary saved is a new or exciting milestone... It is turning into an impossible moving target that makes me feel a little at a standstill.

If dh returned to work tomorrow it would be a long road to save up one year of salary.

Which probably illustrates much why I so love the idea of measuring progress against "annual expenses."

I guess this idea particularly makes sense for us.

In school we both made $10k annually. Out of school we made $60k combined, and that quickly climbed to $100k.

But then we slowed down for kids and lived a couple of years on $45k (the years I took maternity leave anyway). But my full salary was a mere $50k when I had my first child. In the meantime, my income has ballooned to $75k rather quickly. Though a good chunk of the last decade we really made less than $60k. So it is hard to measure progress in terms of an ever growing income.

Of course, no complaints on the ever-growing income.

But our expenses, on the other hand, have remained rather steady. Probably a bit of a jump when we bought our first home (okay, a significant jump since we lived on pennies before that). & probably a bit of a jump when we had kids. But overall our expenses have remained rather steady and predictable. So we find that a much better measure of our forward progress.

We generally live on $50k-$60k annually (after taxes) so we are trying to grow our net worth half of that, annually. ($25k-$30k/year). If our income grows astronomically (possible, could double if dh returned to work) and our expenses remain the same (possible) than we really need to work on goals that support our lifestyle, not our income. So this is where a lot of our thinking on expenses comes in. Income means little to us. (Which is the ideal!)

But $75k is a milestone, indeed. Of course, I was wondering, recently, when our cash and retirement would hit $100k. I think we will probably hit it in 2009. Not so sure on 2008. But we'll see. (We have a fair amount of cash, in addition to our retirement investments).

We've also paid a good $90k off our house. So our more liquid assets seem to be neck and neck with how much we have invested in our house.

I expect that to change greatly in the future. Our goal in the nearer future is to put away $10k/year to retirement, in addition to 10% contributed at my job. So ideally our retirement will be growing $18k/year or so, plus investment returns, while we are only paying the minimum on our mortgage, about $4k principal every year.

I think our 20s was our decade of home ownership. & we have accomplished a chunk there. I would like our 30s to be the decade of retirement funding. Which is also why I don't sweat the mortgage prepayment. We worked very hard while young to keep our mortgage costs down (putting a chunk down and paying it off aggressively). That work will save us tens of thousands, if not more, in the long run. So it feels like it is off to the next battle - Retirement!

Likewise, I look forward to do the day our cash/investments far exceed our mortgage.

Well, we're getting there.

Anyway, I don't think we will put $10k to our IRAs anytime REAL soon. My goal is about $1500 this year, and $5k next year. But I think we may make it in 2011, when LM is entirely out of preschool. Working up to it. So though our goal is $10k/year, to IRAs, we got a ways to go.

Of course, in our 20s, retirement was only a mere afterthought, after the token 10% contributions we have always done. So I look forward to what we can do with retirement as the forethought. I expect to zoom ahead rather quickly... In fact, my roundabout goal has been $150k in retirement by age 35... (So doubled in 4 years?). Kind of aggressive, but doable.

I saw I had a pile of our old savings account statements and I thought I would really like to look through and see exactly where all our money went. Since I have joined here I say - oh it went to cars and IRAs and mostly our house of course. But it did dry up rather quick - where did it all go?

I thought - I want to find out. I woke up early this morning and decided to tackle it.

It was REALLY interesting. I started out a little dissapointed in ourselves as though we saved 80% of dh's paycheck, I saw $2k after $2k credit card bills (far more than we spend today and these days we put all our utilities and everything on card. I try to budget $1200/month on card).

I actually felt like maybe we weren't so great with our money before. Or maybe we aren't doing so bad now?

Then we sold our old home and deposited some cash. We didn't really make much off the home, but we paid a lot of cash to our second home, and therefore got some of our down payment back to cover that when we finally sold our own home.

We then pretty much did not touch the money for many man years. I didn't touch it through 2 maternity leaves (as the sole breadwinner). The transition to one income (even periods of no income) was absolutely seamless. I was impressed. I thought I remembered pulling much more money out for big one-time bills. But we never did!

Then we had our second son, and we went crazy. We spent like $25k in the course of a few months. Bizarre. I can't explain it.

I'll show some excel spreadsheets later. I feel better piecing exactly where our money went through the years.

I think you can also explain it that like 6 or 7 years of extreme frugality gets to you and you just snap or something. Throw in a big raise and you feel like you can spend far more than you should. Interesting. It is good to be back on the right track.