help with saving for retirement; feel like i'm very behind!

[Random1]

My wife supported me during medical and residency. She did not expect to get paid back for it. We consider ourselves equal in our marriage including savings and spending and just life in general.

I think just reading this it is hard for someone to believe that you can struggle to amass a nice networth making 1m a year. I was never close to that number working, We are in are early 50s , and could chose to stop working. It is all about priorities and spending in life.

[childay]

Consider running projections on personal capital if the wife is into the numbers. Can be eye opening

[8arclay]

Honestly, YNAB is perfect for this. We've used it for years, and its excellent in increasing spending awareness. Set a monthly budget for wife, $5k/$7.5k/$10k whatever. Then, she sees through the app exactly how much she has spent/has left. Could be quite eye opening.

[omaralt]

thanks again for all the responses

just a bit of a background as well so you guys can understand where we come from

we both grew up middle/lower-middle class. Neither one of us grew up a big spender. We graduated and continued that track. two things changed for us:

the guy i bought my dental office from was a friend/mentor. He was 5 years older than me. He was a huge saver for the future. He drove his beat up camry to work everyday. He ended up getting stomach cancer and dying at the age of 36. This i think really affected me and her in the sense that tomorrow is not guaranteed. He ended up saving all his life and never enjoying it. You can clearly see the point where our spending gradually went up at year 5-6 after acquiring the practice when he passed away.

We also were very diligent about paying off the student and practice loan. And once those were paid off we were all of a sudden left with an additional ~20k/month that was now un-allocated. This led to a lot of the over spending as all of a sudden our account was much bigger than usual

[Hank]

I also am worried that my $1million income is not something i can do long term. I work like a dog and my body can only hold out for so long. I'm the only dentist with 3 hygienists and 3 assistants. I've gotten offers from dental DSOs to buy my office for close to $2million and i found myself strongly considering it. But i would rather simply start to slow down in another ten years and work 2-3 half days while bringing in $300-400k/year. So I really want to get our spending down and savings up in preparation for a lower income. I will probably look into getting an associate dentist to come and help me as well which would lower my income as i slow down.

You need an associate. Far better to practice one or 1.5 days less per week and be able to work five to ten years longer at a more reasonable pace. Also, swamp the fixed costs of your overhead.

How many operatories do you have? How many columns are you working and how many columns of hygiene? You mentioned a residency. Are you a specialist, or did you do a general practice residency or advanced education in general dentistry?

You’re under contract to buy the building for $350K. Any possibility to build more operatories if you want or need them?

Finally, I’d caution you about that $2 million buy out offer from the DSO. You aren’t going to get to cash a check for $2M and walk away from the practice. They’ll want you to work for a few years with earn-in or claw back provisions. Don’t plan on seeing much more than the first payment. Far better to have a practice buy in and subsequent buy out with one or more associate to partner dentists than to get entangled with a private equity backed DSO.

[artemis]

We also were very diligent about paying off the student and practice loan. And once those were paid off we were all of a sudden left with an additional ~20k/month that was now un-allocated. This led to a lot of the over spending as all of a sudden our account was much bigger than usual

That's why it's important to develop the habit of putting any pay raise or windfall primarily into savings, while keeping a small amount as "fun money." If you'd put say $15k of that "extra" $20k/month straight into savings/investments, you'd still have enjoyed a $5k/month lifestyle upgrade and would have felt very spoiled by comparison to your previous monthly budget, but you'd be much further ahead on your retirement savings. It's easier to not get on the hedonic treadmill in the first place then it is to get off of it later!

It sounds like your wife is onboard with the needed changes, though, and that's most of the battle. Good luck to the both of you!

[Anne]

Your comments that your wife feels she was bottled up and sacrificed everything for your family and that she “had 4 kids for you” are a bit concerning. Is this not the life she wanted? If it is then she didn’t sacrifice, she was working towards a shared goal. If it’s not, no number of Hermes purses, Chanel suits, or Louboutin shoes will make up for that. What you are describing is pathological spending. When it’s for status stuff it’s disguised as a “”reward”, “pampering” etc, but it’s still spending on material goods to try to make up for some sort of internal void.

[VentAlarm]

Your comments that your wife feels she was bottled up and sacrificed everything for your family and that she “had 4 kids for you” are a bit concerning. Is this not the life she wanted? If it is then she didn’t sacrifice, she was working towards a shared goal. If it’s not, no number of Hermes purses, Chanel suits, or Louboutin shoes will make up for that. What you are describing is pathological spending. When it’s for status stuff it’s disguised as a “”reward”, “pampering” etc, but it’s still spending on material goods to try to make up for some sort of internal void.

She said it better.

[altadoc]

for the record I think my wife deserves all this and more. She worked a miserable job while i was in dental school and residency to help pay for our living expenses. She then had 4 children for me and works hard in the home; so i have no problem spoiling her. My issue is that she doesn't know what she spends. When i tell her that she spent $15k last month she was blown away. A few years back we decided for her to have a budget of $4k/month. I made her her own bank account and simply transfer $4k/month there. However she still has our shared CC which she spends on like crazy. I'm not sure what the solution to that is, but i think shes starting to realize this is not sustainable. I will probably ask her to cancel her CC and have her use her debit card only for now and keep a CC on her for emergencies only.

Thanks again, i knew what needed to be done but needed a push. thanks

It's going to be ok. You've recognized you aren't satisfied with your current situation and want to make changes. That, in itself, is more than many professionals do until it's far too late. Step one is to sit down with your wife and track your spending. I'm not calling it a budget yet. For now, figure out what is coming in and what you are spending.

Spend some time discussing what you and your family value? Is it travel? Is it fast cars and faster boats? Is it being able to slow down and work sooner rather than later? Spend some time thinking about what money means to you. Then, take a deep breath, and ask if how you are spending your very hard-earned money aligns with your values. We all go a bit crazy at times, and that's ok.

If one of your values is to retire in 10-15 years, that will mean changing a few things. But when you get clear and have that meaning, it also becomes easier to say no to things that don't prioritize that value. It's a muscle. Build it back up!

[childay]

She said it better.

As usual

[mamaham]

Your comments that your wife feels she was bottled up and sacrificed everything for your family and that she “had 4 kids for you” are a bit concerning. Is this not the life she wanted? If it is then she didn’t sacrifice, she was working towards a shared goal. If it’s not, no number of Hermes purses, Chanel suits, or Louboutin shoes will make up for that. What you are describing is pathological spending. When it’s for status stuff it’s disguised as a “”reward”, “pampering” etc, but it’s still spending on material goods to try to make up for some sort of internal void.

agree completely. Spending can be an addiction just like anything else. Trying to fill a void and it just doesn’t work. Counseling (individual or joint) might be needed to get to the root of the issue.

[Tim]

financing it would be OK for someone who is smart with money, for him i would simplify things and get rid of fleas (and 74K is a flea)

Depends on what they do with the additional money that is borrowed. Smart.

[Tim]

thanks again for all the responses

just a bit of a background as well so you guys can understand where we come from

we both grew up middle/lower-middle class. Neither one of us grew up a big spender. We graduated and continued that track. two things changed for us:

the guy i bought my dental office from was a friend/mentor. He was 5 years older than me. He was a huge saver for the future. He drove his beat up camry to work everyday. He ended up getting stomach cancer and dying at the age of 36. This i think really affected me and her in the sense that tomorrow is not guaranteed. He ended up saving all his life and never enjoying it. You can clearly see the point where our spending gradually went up at year 5-6 after acquiring the practice when he passed away.

We also were very diligent about paying off the student and practice loan. And once those were paid off we were all of a sudden left with an additional ~20k/month that was now un-allocated. This led to a lot of the over spending as all of a sudden our account was much bigger than usual

Anne pointed out much of the "adjustment" problems. Yes a traumatic event occurred. No different than any other. Mortality is harder for some than others.
The behavioral finance reactions let's just say could be better. I think both you and your wife know that.
The simple answer is "fix it". Everything else is word salad rationalizing.

BTW, congrats on recognizing the real issues. Best of luck for both of you in dealing with them. Consider becoming a friend and mentor to help with your practice.
Just find a way to not use spending as an excuse.

[MPMD]

i'll weigh in here, i think the OP is in pretty serious trouble.

whatever the circumstances, upbringing, prior sacrifices your wife is spending $100k/year on consumer goods just for herself. you absolutely are not in a position where she should have more than 2 designer handbags. this thing about them holding value is hogwash. watches, shoes, and bags are not investments. if they were good investments you wouldn't be able to buy them b/c goldman sachs would have the world's supply sitting in a warehouse under armed guard. people don't go backwards on luxuries very often, certainly not if they feel "pent up." at the end of the day this is entitlement. tell me you are saving $200-250k into your taxable each year and i'll tell you a birkin is reasonable, it's not right now.

you have a large car loan and both drive luxury vehicles.

you are going to start saving a bunch of money -- great, but you are way behind and it's going to take a pile of money to keep up with that lifestyle.

the story about your friend dying of stomach cancer in their 30s is sad but you are weighting it far too heavily. you have 4 kids and a spendy spouse. you cannot afford any kind of YOLO mentality and it this point you can't even afford things like dream cars. you are far more likely to be 65, sick of working, and realizing you don't have enough to retire than you are to drop dead in the next few years. my kids and sad things make me spend less on stuff not more. i want them to be set if i die not have more toys.

sorry not trying to be harsh but i think you're in trouble.

[fatlittlepig]

I don’t think you’re in big trouble, U just need to have money directly deposited into investment accounts before it hits your checking account. All the major brokerages allow for this. Ur wife isn’t going to be spending money that isn’t there. Simple.