If I knew then...

[jdcat]

...what I know now. Boy oh boy.

We've sure made some mistakes financially. Things we didn't see until now.

We went very aggressive with our 401K contributions over the past few years. Our intentions were good but we sure put ourselves in a bind.

I sat down the other night with about six years worth of tax returns and the numbers that stared back at me told me we hadn't been as smart as we thought we were being.

We were putting between $700 to $800 a month into our 401K for the past few years. We should have been using that money to live on. I honestly don't think we'd be where we are today if we had done things differently.

And our withholding screwed us also. We've been getting around $3000 in Federal back every year. More money we could have used to live on and each month. Like $250 worth.

Like I said our intentions were good. We were looking toward the future. We don't want to struggle in our later years, but look what that's done to us in the present.

The ironic part of it all is that we actually borrowed from our 401K to pay off credit cards at one point. We're still paying off those loans.

Not feeling so smart now.

[LALADY]

You've just written my story. You're not alone.

[AngelinaCat]

Same here to a great extent.

[jdcat]

Now we'll have two bk's on our credit report. We're really truly going to be on our own this time around. No credit for us even if we wanted it. Which is a good thing, we'll be forced to save up for our next car and the kids' graduations and what not. In a sense I'm so looking forward to the challenge. I *want* to be financially independent and we'll have no choice but to be so from now on.

[OhioFiler]

I don't think it was a mistake for you to plow money into your 401K.

[AngelinaCat]

I don't think it was a mistake for you to plow money into your 401K.

No, but to borrow against it to pay down the ccs, IS. That is what we did trying to pay down our debt, and finally cashing it out altogether. We then incurred a heavy income tax penalty which we are still paying on.

[jdcat]

I don't think it was a mistake for you to plow money into your 401K.

For us it was. Raising three kids on one income with those kinds of contributions didn't leave us in a position to cover any unexpected expenses. Our furnace went out and we had to borrow from our 401K. Our refrigerator went out and we had to put the new one on credit.

We never took a vacation and never treated ourselves to anything on credit such as jewelry or high end clothing etc. We were buying groceries on credit many times. It shouldn't have been that way.

If we had taken a more balanced approached and contributed an amount that wouldn't have put us the financial edge I think we would have been ok.

I'm all for preparing for the future by contributing to ones 401K but the way we've been doing it backfired in our faces. We wouldn't have needed credit at all if we had not contributed so much for so long.

[OhioFiler]

For us it was. Raising three kids on one income with those kinds of contributions didn't leave us in a position to cover any unexpected expenses. Our furnace went out and we had to borrow from our 401K. Our refrigerator went out and we had to put the new one on credit.

We never took a vacation and never treated ourselves to anything on credit such as jewelry or high end clothing etc. We were buying groceries on credit many times. It shouldn't have been that way.

If we had taken a more balanced approached and contributed an amount that wouldn't have put us the financial edge I think we would have been ok.

I'm all for preparing for the future by contributing to ones 401K but the way we've been doing it backfired in our faces. We wouldn't have needed credit at all if we had not contributed so much for so long.

I will disagree. I think you would have just spent more and ended up with less savings.

[jdcat]

Ok.

For those that know me though they know that I am a total financial tightwad. Hubby has to plead for money for bait to go fishing. Seriously.

[jdcat]

And if I have my way, meaning if hubby doesn't get in my way...if our chapter 7 goes through and we're not converted to a 13...I plan on having our house paid off in six years with some very strict financial planning/saving. Hubby doesn't see it happening...but that's because he doesn't have the tightwad mentality that I do.

[OhioFiler]

Ok.

For those that know me though they know that I am a total financial tightwad. Hubby has to plead for money for bait to go fishing. Seriously.

What most of us do is live life based on what we have or want not what we need. Even as a "tightwad" you bought a lot you wanted but did not need. NOW you are choosing to live based on need. Part of need is saving for retirement! You were doing that correctly all along

[jdcat]

"Even as a "tightwad" you bought a lot you wanted but did not need."

I'm the type who doesn't want much. When I receive cash as a gift I usually take hubby and kids out to eat because I can't think of anything I want for myself. I wear jeans and tshirts, have never had my nails done or tanned, rarely have my hair cut, and own one ring. My wedding ring.

Don't get me wrong I like to have nice stuff but I know that that nice stuff is just going to get old and fall apart anyway so I don't worry about acquiring nice things. I never have. I'm more interested in learning/knowledge than possessions and appearances.

Contributing to a 401K is a need based decision I agree but like I said before there has to be balance. In our particular situation we were way off balance. It would have been different if I had been working instead of at home with the kids, my income would have offset some of the imbalance. But...well, here we are.

We still contribute, but not as much. There will be time for aggressive contributions in the future, but for now we need to focus on staying out of debt and that means using that income for living expenses now.