How do you decide on how often to 'treat yo self'?

[m-cubed]

Obviously for those with incomes too high for a Roth, a regular mutual fund account is a great way to have a long term luxury investment account. I love RunningwithScissors' idea to have a side job to save extra money, too! It's great to have current savings that can be used as well as the long term account I mentioned.

Actually, with a backdoor Roth, there is no income limit.

 

[dk168]

Just "treated myself" with a new alto saxophone!

The money was original planned for a stand mixer. However, thanks to Covid-19, I am unlikely to get involved with any large scale catering events for some time.

I thought about taking up the saxophone last September, in particularly a soprano sax. However, I already had a student clarinet at the time and thought I should stick with that instead of forking out a new intrument.

Now that I am progressing well with the clarinet, thanks to having upgraded to a better instrument, I thought I might as well dabble and double up with a saxophone, and opted for an alto sax as it is supposed to be easier to learn than a soprano.

See how it goes. The one I am buying should last me a few years before needing to upgrade if at all, as I may not reach Grade 8!!!

DK

 

[MRBXXXFVVS1]

One other thing to consider is if the urge to buy a bunch of sparklies is a phase, or if these pieces are ones you will wear and keep for the long term. I was in a sparkly binge phase a few months ago, but am now totally over it. My DH reminded me that I "had" to have that 7 stone band and studs, which could have been a new couch or bedroom furniture instead! It also depends on the opportunity cost of the funds. I personally, would never take on a side hustle to fund sparklies or luxuries, as I value my time more than material things. I just save and invest what I have and whatnot.

 

[diamondseeker2006]

Actually, with a backdoor Roth, there is no income limit.

You know, I happened to read about that the other day. The problem with it, which I didn't know, is that if you have other pre-tax money in a traditional IRA or rollover IRA, the total amount of your money in IRAs is counted in order to determine the tax you have to pay on the amount you withdraw to convert. So even though the money you are putting in the regular IRA to convert is after-tax (because you exceed the income level to contribute pre-tax), you'd still have to pay taxes on that money based on the total amount including pre-tax money. I am sure you must know this better than I can explain it since you know about backdoor IRAs! But it works best for those who have no other IRAs so that the after-tax money can be rapidly converted so no taxes are owed. But thank you for mentioning it, because it is a powerful tool for some!

 

[Missie1]

I use a very specific jewelry savings/spending plan. It involves two parts -- a focussed, long-term "wish list" and a designated savings account just for jewelry purchases.

Part 1: Wishlist

My wish list has evolved over time. It contains a few classic, very high quality jewelry pieces that I know I will get lots of use out of for the rest of my life, and that will make me feel like a queen. These are all "forever" pieces, not just fun for now or whimsy items. I enjoy taking time to research each one. I try on pieces many times at many vendors to nail down exactly what I want. I am 46 years old and by now I know my style and my unique aesthetic. Each piece on my list MUST complement my look AND my lifestyle. (I can admire a piece of jewelry, but not feel the urge to buy it if it does not fit both lifestyle and aesthetic.)

Part 2: The Sparkly Fund

I have a separate bank account I call my "Sparkly Fund." I can spend money from the Sparkly Fund on anything fun I want -- jewelry for myself, a trip for my family, artwork (my other big love), a special gift for my husband, etc.

I ONLY put "extra" money into the Sparkly Fund. This includes money I get for presents (birthday, Xmas) or unexpected windfalls (bonuses at work) and money from my "side hustles." I have several side gigs I have created and grown specifically to bolster the Sparkly Fund. I find when I crave a piece of jewelry, I work extra hard at these. A little creativity and some elbow grease can earn serious money! Also, I have found my side hustles have always added to my life and not detracted.

I never use money from my regular day job for the Sparkly Fund, I put my regular earnings into our family account and savings accounts -- normal bill paying, designated longterm and retirement savings, etc.

When do I know it is time to buy a piece of jewelry? When I have enough saved to afford an item on my wishlist. Its that simple. Doing it this way, I have zero guilt associated with buying jewelry. Also, I am not tempted to overspend. Lastly, it makes me NOT spend on impulse items. Sure, I occasionally see a marvelous jewelry piece on Instagram, not on my wishlist, that tempts me. For example, last week I saw an antique snake bracelet for about $6,000 that I'd love to own. Right now I have $9,000 in my Sparkly Fund -- I could buy it if I want. However, I know I REALLY REALLY REALLY want the items on my forever wish list and a snake bracelet is just not one of them. I am more than half way to my next major purchase, I know how hard I've worked at my side hustles to get here, so I don't want to blow money on anything but my wishlist items.

The only difficult decisions for me are which wish list item to buy next. I have months to ponder this because it takes time to save up. The jewelry items I want tend to fall into similar price categories. For example, I have two items on my wishlist that are very different but are both around $15K -- an eternity band and a diamond pendant necklace (I know very specifically which ones I want and have had them priced out with the vendors.) When I have $15K saved up, I calculate by this coming winter, I will have to decide if I want to pull the trigger on one of those two lovelies, or, if I will continue saving until I reach the next price category for the higher priced items on my list -- namely to upgrade my CBI stud earrings or a WF tennis bracelet.

Having a wish list of heirloom quality items I love keeps me on track to not make impulse buys, to save every penny I can, and to be inventive and work extra hard at side hustles. Ultimately, my life is enriched by all of these things.

I know this plan is not for everyone, but it works very well for me. I love to own only a few, super high quality items and I'm willing to focus like a laser beam on making them a reality without taking any extra money away from my family, our happiness or our retirement savings.

As a side note, my husband has really gotten into helping with some of my side hustles and they have turned into times we both enjoy. Bonus!

I am happy to share what I do for side hustles if anyone needs brainstorming help in coming up with ideas to fund their Sparkly Funds. The side gigs are not glamorous, but they are fun in their own way. I want us all to achieve our jewelry goals! It is very doable with creativity, patience and elbow grease.

I absolutely love this idea. I really need to finalize my long term goals in terms of jewelry and work towards it

 

[MRBXXXFVVS1]

You know, I happened to read about that the other day. The problem with it, which I didn't know, is that if you have other pre-tax money in a traditional IRA or rollover IRA, the total amount of your money in IRAs is counted in order to determine the tax you have to pay on the amount you withdraw to convert. So even though the money you are putting in the regular IRA to convert is after-tax (because you exceed the income level to contribute pre-tax), you'd still have to pay taxes on that money based on the total amount including pre-tax money. I am sure you must know this better than I can explain it since you know about backdoor IRAs! But it works best for those who have no other IRAs so that the after-tax money can be rapidly converted so no taxes are owed. But thank you for mentioning it, because it is a powerful tool for some!

I'm not an accountant or financial advisor, so please consult them, but I am very interested in personal finance. From what I understand the way to get around this is to first roll your Traditional/Rollover IRA balance into your pre-tax 401K if your plan permits this. Once this is completed, you can put after-tax dollars into a Traditional IRA and immediately convert it to a Roth IRA via the "back door" option.

Here's my "Maslow's" hierarchy of personal finance:

1) Bills and basic living expenses
2) 401K match
3) Pay off any credit card debt
4) 6 months living expenses
5) A bit of discretionary spending
6) 401K max
7) IRA max
Pay off all debt except mortgage (car and student loans)
9) 529 max (if you have kids)
10) A bit more discretionary spending
11) Brokerage account for saving and investing
12) Diamonds and sparkly things

*Often the interest rate on mortgages is low enough (and tax deductible) that you're better off investing in the stock market than paying off your mortgage, however paying off mortgage is guaranteed savings.

 

[m-cubed]

You know, I happened to read about that the other day. The problem with it, which I didn't know, is that if you have other pre-tax money in a traditional IRA or rollover IRA, the total amount of your money in IRAs is counted in order to determine the tax you have to pay on the amount you withdraw to convert. So even though the money you are putting in the regular IRA to convert is after-tax (because you exceed the income level to contribute pre-tax), you'd still have to pay taxes on that money based on the total amount including pre-tax money. I am sure you must know this better than I can explain it since you know about backdoor IRAs! But it works best for those who have no other IRAs so that the after-tax money can be rapidly converted so no taxes are owed. But thank you for mentioning it, because it is a powerful tool for some!

Yes, you have identified one of the issues, and I won’t pretend to understand it in detail. I didn’t have any other IRAs, just a 401K, so setting up a backdoor Roth was relatively uncomplicated. It won’t be for everyone, though.

 

[Sprinkles&Stones]

I have a budget that I set at the beginning of each year. In January, I write the number at the top of a new page in my budgeting notebook and subtract every time I make a purchase. When the balance hits zero, I'm done for the year.

Now this is a great idea!

 

[Sprinkles&Stones]

No real time limit or planned schedule. Opportunities tend to happen in clumps, in my experience. If I have the funds, I charge headlong.

#ShopsLikeTiger

Looove this! Life is short, right?!