Author Topic: Case Study: The_Golden_Bee Has a Lot of Goals, But Less Time To Accomplish Them  (Read 11001 times)

The_Golden_Bee

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Life Situation:
We are a married couple who married late in life (3 years ago).  Iím 42 and my husband, Mr GB, is 52.  We have 2 very small kids and live in Bucks County, PA.  Before our marriage, we lived typical, American, consumerist lifestyles.  Fortunately, earning good salaries kept us from amassing much debt. 
Thus, on the plus side, we are still making pretty good money and we have no credit card debt and no car payments. On the down side, we havenít amassed much wealth either.

Gross Salary/Wages: $118,400 per year
Adjusted Gross Income: $80380.00
I make $38,400 as a freelance project manager working mostly from home. Mr. GB makes $80,000 as an attorney (only licensed in PA) working 1.5 hours from his office.  His job requires a lot of local travel.  He drives 1.5 hours to the office each way, and then gets sent all over southeastern PA to courts and depositions and hearings.  This costs us mucho dinero in time, gas, tolls and wear&tear on the car.  We do get some of this back from the firm, but obviously not his daily commute to the office costs.

Current Monthly Expenses:
Mortgage P&I: $854.33
Mortgage T&I: 383.72
Condo Fee: $158
Electric: $180
Student Loan: $117 (my husbandís)
Cell Phones: $152 (2 Verizon phones)
Internet and Basic Cable: $71 (I do mean very basic. $10 a month gets us 15 channels.  The other $60 is WiFi and modem)
Sewer: $33
Water: $20
Condo Insurance: $43
Auto Insurance: $135
Daycare: $640  (1 day a week for both boys. My client wants me in the office 1 day)
Life Insurance:  $171
Auto Related: $500 (this includes gas, EZPass and parking fees. We recoup some of this from my husbandís company, but it varies from month to month.)
Misc: $678
Food & Dining:  $400 (my husband eats out on the road a lot)
TOTAL MONTHLY EXPENSES: $4536.05


Physical Assets:
Appraised Condo Value: $169,000
2010 HONDA CRV SPORT WG:  $9090
2002 NISSAN CREW CAB PICKUP:  $4200
TOTAL PHYSICAL ASSETS:  $182,290

Pre-Tax Retirement Savings
Mr. GB:  $76,025
The Golden Bee:  $185,000
Total Pre-Tax Retirement Savings: $261,025
Other Investments: $ 13,688 (in low cost index funds)
TOTAL INVESTMENT ASSETS:  $274,713

Liabilities:
30 Year Fixed Rate Mortgage
Unpaid Principal Balance:  $169,879.69
Original principal balance: $171,110.00
Interest rate: 4.375%
Monthly payment (with escrow): $1238.05

Mr. GBís Student Loan
Outstanding Balance: $25,205.98
Interest Rate: 2.33%
Monthly Payment: $117.00
TOTAL LIABILITIES: $195,085.67

Specific Question(s):
Here are our three family goals:
1.   Financial independence by the time Mr. GB is 65 and The Golden Bee is 55
2.   Homeschool the boys (The Golden Bee to do this)
3.   Buy a house

Is it possible to homeschool the boys starting in 2018 (which will severely hamper my ability to earn a salary) while also becoming FI in 15 years and simultaneously buying a house in the next 5 years.  If yes, whatís the road map to get us there?  What do we attack first?  We are here for any face punches and we are ready to challenge and change everything we do and believe in order to accomplish our goals. 

ETA June 9, 2015:  Wanted to let all you kind people know that:
A) We cancelled comprehensive and collision coverage on our cars, raised our deductible to $5,000, and cut our premium payment in half. 
B) We switched to Republic Wireless!  Phones are on their way.  I can't wait to call Verizon and cancel the heck out of that $152 monthly bill.
« Last Edit: June 09, 2015, 07:36:00 PM by The_Golden_Bee »

matchewed

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Tackle your misc category and break down your food and dining into the wasteful and needed categories, get rid of the wasteful. You'd probably be able to save an additional $600+ a month that way.

$60 for internet? Go for cheaper.
With daycare there is no family close by?

Cellphones... can be much cheaper.

One obvious thing is for you and your husband to move closer to his job if it works for your job as well. The rest of his transportation costs should be absorbed by his employer.

So the big questions. If your income and savings don't change you could be FIRE in 18 years (source).

Let's say you can retain your income but save an additional $1k given the above suggestions that would make you FIRE in a little over 11 years.

I've left off house thing because well it depends on how much the house costs and how much the condo would sell/rent for.

The_Golden_Bee

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Hi!

Thank you so much for responding.  I am making all of your recommendations, "to dos."

1. Call Comcast and negotiate lower monthly charge
2. Move cell phones from Verizon to Republic
3. Daycare: no family close by, but I may be able to find a cheaper provider
4. That Misc category had a bunch of unexpected co-pays in it for a kiddo who got sick and needed multiple Dr. appts.  He's 100% fine now, but I am hopeful I can bring that category down considerably in June and onward.
5. Food & Dining is a big one.  I've got to get Mr. GB on board with brown bagging.

I'm looking to buy less house than we have now, price wise.  I want 3 bedrooms and a backyard in a freestanding structure for $165,000 or less with less property tax.  I'd leave PA in a heartbeat except that Mr. GB is only licensed to practice here.

I'm not sure what to do with the condo.  A real estate agent recently told me I could probably rent it for $1300 a month.  That's $61 in profit a month. 
Would you sell it or rent it in my shoes before moving closer to my husband's job?



matchewed

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Someone else will have to give advice on the real estate questions, not my forte. :/

curler

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I'm not sure what to do with the condo.  A real estate agent recently told me I could probably rent it for $1300 a month.  That's $61 in profit a month. 
Would you sell it or rent it in my shoes before moving closer to my husband's job?
That $61 in profit will go away mighty quickly once you factor in maintenance, vacancies etc.  If you can only rent it for $1300 a month I'd sell it.

Sibley

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Yeah, it makes sense to move closer to his job and cut down on that commute. You're in the office one day a week, he's there for 5.

Seriously cut down on the total food budget - get him to stop eating out unless it's on the company's expenses. He can pack a lunch. I don't have access to a fridge at work and I take lunch almost every day. An insulated lunch box and ice packs will do the trick.

Ok, cars. You have a SUV and a pickup, not the best gas mileages. There's an insane commute involved. 'Nuff said.

Ditto on Misc. Break that down/figure out what it is. Optimize.

frugaliknowit

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"...He drives 1.5 hours to the office each way".

This is nuts and would be my first item to tackle.  It's nuts financially and emotionally and is stressful (even if he gets some subsidy, which I believe is not per IRS code...).  As far as replacing the condo with a house:  The house will likely be MORE overhead, not less.

MDM

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Tackle your misc category and break down your food and dining into the wasteful and needed categories, get rid of the wasteful. You'd probably be able to save an additional $600+ a month that way.

$60 for internet? Go for cheaper.
With daycare there is no family close by?

Cellphones... can be much cheaper.

One obvious thing is for you and your husband to move closer to his job if it works for your job as well. The rest of his transportation costs should be absorbed by his employer.

So the big questions. If your income and savings don't change you could be FIRE in 18 years (source).

Let's say you can retain your income but save an additional $1k given the above suggestions that would make you FIRE in a little over 11 years.
+1.  All good advice.

The situation may be even better for you.  See attached.  It is a copy of the case study spreadsheet with numbers from your OP (and some guesswork).  You'll want to verify and modify if you make use of it.  The reason it calculates a shorter time to FI than Networthify is that adds the balance due on your loans to the "stash needed" rather than including the monthly payments in the "retirement expenses."

Of course, both the Networthify and spreadsheet calculations done so far assume you continue to work, and that is not your assumption.  To match your assumption better, you could predict your retirement savings and household income at the time you stop work and rerun the calculations with higher current savings and lower current income.

Time-dependent retirement planners are also worth considering.  See http://www.bogleheads.org/wiki/Retirement_calculators_and_spending for one list of those.  For starters you could look at these three:
http://www.cfiresim.com/input.php
http://personal.fidelity.com/planning/retirement/income_planner.shtml.cvsr
http://www.i-orp.com/

Quicken's Lifetime Planner is also decent.

Good luck!

The_Golden_Bee

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thank you all so much for chiming in!  The Golden Bee is very grateful! 

I was really torn about whether to sell or rent the condo, but it's clear that at only a $61 dollar profit, it will end up costing us money, rather than earning us any.

My lunchtime reading today is the cash flow spreadsheet.  I can't believe I am this excited to examine a spreadsheet :)

Thank you all so much!

ShoulderThingThatGoesUp

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In your other thread I think you mentioned moving to Exton from Quakertown. That's a very expensive area. But since you want to homeschool your kids, maybe you can find a lower-end school district nearby that would be cheaper to live in?

Alternatively, would living in Philadelphia and your husband taking the train to Exton make sense? It would enable him to not use a car for much of his southeast Pennsylvania travel, depending on the expanse of "southeast Pennsylvania" we're talking about.

The_Golden_Bee

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In your other thread I think you mentioned moving to Exton from Quakertown. That's a very expensive area. But since you want to homeschool your kids, maybe you can find a lower-end school district nearby that would be cheaper to live in?

Alternatively, would living in Philadelphia and your husband taking the train to Exton make sense? It would enable him to not use a car for much of his southeast Pennsylvania travel, depending on the expanse of "southeast Pennsylvania" we're talking about.

Absolutely! I'm new to PA, so I didn't know Exton was expensive.  I would definitely want to find a LCOL area near Exton, and since I do want to homeschool, I'm agnostic about the quality of the school district.

Also: there's a job Mr. GB wants west of Harrisburg.  He needs a new skill to qualify, which he is working on achieving.  If he can make that job move, his income would increase, and we'd all go out to Perry County.  The houses are much cheaper out there.

MayDay

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We are in a similar situation to you of possibly/hoping to be relocating, so not sure where or if we should move.

We ended up selling our house (under contract right now) and we are renting until we figure out where we are going to end up.  If we stay here, we will take our time to buy again in a better location.  If we move, we will be ready and able to move right away since we won't have to sell the house.  Might be an option to consider since this is prime house selling time. 

Who drives which car?  I would strongly consider selling the truck and getting a little sedan.  I have no idea how much you'd get for the truck, but we recently sold our 2003 Civic with 120k-ish miles for 5K.  It was solid with almost no maintenance needed outside std. stuff, and got great fuel economy.  If you can get at least 5K for the truck, you'll have plenty of choices of reliable fuel efficient cars to choose from at the same price point.  (ETA:  just saw its worth 4K.  Still, I bet you'll find a good replacement).

$640 a month for once a week daycare seems super expensive to me.  I pay 35$ a day for home daycare, so that would be about 280 a month for 2 kids.  Definitely shop around for this!  Since you only need one day a week your best bet might be another SAHM with similar aged kids, who wants to earn a bit of extra money but doesn't want to be tied down to full time childcare.  Heck, I'd put the word out among friends that you will pay 100$ a day for once a week childcare for your boys.  I bet you'll have tones of offers!  You could even break it up and do 2 mornings, so they come home and nap in the afternoon giving you more work time. 

Kris

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"...He drives 1.5 hours to the office each way".

This is nuts and would be my first item to tackle.  It's nuts financially and emotionally and is stressful (even if he gets some subsidy, which I believe is not per IRS code...).  As far as replacing the condo with a house:  The house will likely be MORE overhead, not less.

Exactly.  There is no reason to live that far from his job if you work from home. 

Also, just to nitpick: Your assets don't include "Condo Value: $169,000" unless that's the equity you would walk away with if you sold it today. 

I think the home location is the biggest thing for you to change right now. I would sell the condo, because you won't be making any real profit from it, and it will be a needless complication in your life.  But I would also very much be looking to find a replacement home much closer to your husband's job, but also cheaper than the home you have now if at all possible.  The amount you're paying in PITI and condo dues should be reducible.  I'm sure that with two kids, you may balk at that suggestion, but remember that a generation or two ago, families of four lived in houses that were much, much smaller than what the average American considers "adequate" today. And that's for no reason at all. 

The_Golden_Bee

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"...He drives 1.5 hours to the office each way".

This is nuts and would be my first item to tackle.  It's nuts financially and emotionally and is stressful (even if he gets some subsidy, which I believe is not per IRS code...).  As far as replacing the condo with a house:  The house will likely be MORE overhead, not less.

Exactly.  There is no reason to live that far from his job if you work from home. 

Also, just to nitpick: Your assets don't include "Condo Value: $169,000" unless that's the equity you would walk away with if you sold it today. 

I think the home location is the biggest thing for you to change right now. I would sell the condo, because you won't be making any real profit from it, and it will be a needless complication in your life.  But I would also very much be looking to find a replacement home much closer to your husband's job, but also cheaper than the home you have now if at all possible.  The amount you're paying in PITI and condo dues should be reducible.  I'm sure that with two kids, you may balk at that suggestion, but remember that a generation or two ago, families of four lived in houses that were much, much smaller than what the average American considers "adequate" today. And that's for no reason at all.

Kris,  I don't balk at all. In fact, I completely agree!  My budget for a new house is $130,000 or less.  We look forward to the communality and a kitchen garden.


ShoulderThingThatGoesUp

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Coatesville looks extraordinarily affordable: https://www.redfin.com/PA/Coatesville/411-Colina-Ln-19320/home/38325176

There are fixer-uppers for like $50k...

dandarc

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Whether or not this is optimal is another question, but you're definitely in the income / family-size territory of being able to pay no federal income taxes, if you so choose - just something to be aware of.

http://rootofgood.com/make-six-figure-income-pay-no-tax/

MustacheNY

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I think you guys are relatively well positioned if you make a few tweaks.

First, if you were to relocate and buy a slightly less expensive home $130,000 with lower taxes and you paid a 20% down payment, your mortgage would only be $743 a month for a 15 year mortgage which would have it paid off completely with no additional payments by the time you are 57.  Applying a little extra cash toward this would have this paid off by 55 for retirement. 

Expenses in new home closer to your husband's work, with you staying at home:

Monthly Expenses:
Mortgage: $750
Prop. Tax: $150
Maintenance(includes savings for bigger one time maintenance expenses): $100
Condo Fee: $150
Electric: $100 (You could definitely cut back some from your current $180 by keeping the house a little warmer in the summer, cooler in the winter, etc.)
Student Loan: $117 (my husbandís)
Cell Phones: $80 Assuming most expensive Republic wireless plan, could go down as low as $10/month for both lines.
Internet and Basic Cable: $71 (You could probably negotiate a little cheaper)
Sewer: $33 (In many cases Sewer and Water are included in the condo fees)
Water: $20
Condo Insurance: $43
Auto Insurance: $135 ( Do you have comprehensive coverage for both cars? I usually would suggest an even cheaper car that you don't require comprehensive insurance, but given the amount of time he spends on the road, a 5 year old vehicle is not unreasonable.)
Daycare: $350  (You might be able to get it even lower than this)
Life Insurance:  $171
Auto Related: $250 (By moving closer to your husband's work you should be able to slice this at least in half from 500=>250, since your husband's company should cover the work related travel that is not commute related)
Misc: $100 (Misc should be 0, but consider this a savings buffer for unexpected expenses such as doctor visits.)
Food & Dining:  $300 (Cut this down a little, to adjust for your husband eating out less)
TOTAL MONTHLY EXPENSES: $2820

Even if you include some additional expenses like clothing you are still around $3000 a month instead of the $4500 you were at before.  Based on my tax calculations, with your current salary if you both are maxing out your 401Ks at work you would be saving $3000 a month into your retirement accounts and still have around $1,700 a month for additional savings.
If you strip out daycare expenses, mortgage, and student loans, you are looking at less than $1800 a month, and even less if you strip out some of the auto expenses that you will not have as much of in retirement.  So let's say conservatively then you will need $22,000 a year in retirement income plus a paid off residence.
This equals a $550,000 investment nestegg at a 4% withdrawal rate and you guys are already halfway there with around $275,000 in investments.  With your current income and the adjusted expense reductions I believe you can accomplish without any real sacrifice to your current lifestyle, you should be able to save about $56,000/yr into investments and paying down of debt.

In fact, going one step further, you could actually retire now, still have your husband save $1500 a month into his 401k, and still have about $1000 a month of extra cash to put into investments.  Even without you working at all for the next 13 years, you should end up with an investment balance of around a $1,000,000 in 13 years.

The other additional component of the retirement puzzle will be social security.  Your social security benefits alone should come pretty close to covering all of your retirement needs without even having to rely on your savings to generate a lot of income.

In summary, buckle down, make a few small adjustments, and enjoy the fruits of financial independence. :-D
« Last Edit: June 04, 2015, 12:07:57 PM by MustacheNY »

The_Golden_Bee

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We ended up selling our house (under contract right now) and we are renting until we figure out where we are going to end up. Might be an option to consider since this is prime house selling time. 

I would strongly consider selling the truck and getting a little sedan. (ETA:  just saw its worth 4K.  Still, I bet you'll find a good replacement).

$640 a month for once a week daycare seems super expensive to me.  I pay 35$ a day for home daycare, so that would be about 280 a month for 2 kids.  Definitely shop around for this! 

1. I love the idea of looking for a SAHM looking to make a little extra money.  It never occurred to me to do that.  The issue I am running into is that storefront daycares really balk at accepting 1-day-per-week students.  We're charged a premium for being part-timers.  I am definitely going to ask around and see if any SAHM's in my mothers' groups are interested.

2. We will certainly rent near Exton if Mr. GB is not sure he will be staying at the firm long term.  If we're going elsewhere in a few years, I want to be able to pull up stakes cheaply.

3. I almost pulled the trigger on a secondhand Yaris yesterday for $3500.  I am totally on board with selling the Nissan and using the proceeds to fund a cheaper, more MPG friendly, car.


thd7t

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"...He drives 1.5 hours to the office each way".

This is nuts and would be my first item to tackle.  It's nuts financially and emotionally and is stressful (even if he gets some subsidy, which I believe is not per IRS code...).  As far as replacing the condo with a house:  The house will likely be MORE overhead, not less.

Exactly.  There is no reason to live that far from his job if you work from home. 

Also, just to nitpick: Your assets don't include "Condo Value: $169,000" unless that's the equity you would walk away with if you sold it today. 

I think the home location is the biggest thing for you to change right now. I would sell the condo, because you won't be making any real profit from it, and it will be a needless complication in your life.  But I would also very much be looking to find a replacement home much closer to your husband's job, but also cheaper than the home you have now if at all possible.  The amount you're paying in PITI and condo dues should be reducible.  I'm sure that with two kids, you may balk at that suggestion, but remember that a generation or two ago, families of four lived in houses that were much, much smaller than what the average American considers "adequate" today. And that's for no reason at all.
I agree there they don't appear to have any home equity, but the condo's value is $169,000.  That's the value of the asset that backs the mortgage (liability).  Home value-Home equity=mortgage.  I don't think that your nitpick is correct.

matchewed

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Also you keep saying you can't move outside of PA because your husband can't practice outside of PA, don't other states have reciprocity agreements with PA? Admittedly what I know about practicing law (let alone practicing law in another state) couldn't fill a thimble but out of curiosity...

The_Golden_Bee

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Also you keep saying you can't move outside of PA because your husband can't practice outside of PA, don't other states have reciprocity agreements with PA? Admittedly what I know about practicing law (let alone practicing law in another state) couldn't fill a thimble but out of curiosity...

No, matchewed, you're right.  He could move to a state with reciprocity.  In fact, he has applied to a few non-law jobs in other states that paid well and that were close to his skill set. 

To us, it seems his best opportunity for a good salary is in PA, because the laws around his specialty vary widely from state-to-state, and he'd be such a newbie in his field if we moved elsewhere.  That said, we aren't committed to PA beyond all reason.  If we could earn a good living elsewhere at a lower COL, we'd go.

matchewed

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Fair enough, not sure on the COL to salary ratio in your particular part of PA versus other opportunities, it's always something to explore if you guys are willing.

nyxst

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... and live in Bucks County, PA.   

YAY!!! Another Bucks County Dweller!!!!

nyxst

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Hi!

Thank you so much for responding.  I am making all of your recommendations, "to dos."

1. Call Comcast and negotiate lower monthly charge
2. Move cell phones from Verizon to Republic
3. Daycare: no family close by, but I may be able to find a cheaper provider
4. That Misc category had a bunch of unexpected co-pays in it for a kiddo who got sick and needed multiple Dr. appts.  He's 100% fine now, but I am hopeful I can bring that category down considerably in June and onward.
5. Food & Dining is a big one.  I've got to get Mr. GB on board with brown bagging.

I'm looking to buy less house than we have now, price wise.  I want 3 bedrooms and a backyard in a freestanding structure for $165,000 or less with less property tax.  I'd leave PA in a heartbeat except that Mr. GB is only licensed to practice here.

I'm not sure what to do with the condo.  A real estate agent recently told me I could probably rent it for $1300 a month.  That's $61 in profit a month. 
Would you sell it or rent it in my shoes before moving closer to my husband's job?

All of this is GREAT!  I switched from Verizon to Republic wireless and have never regretted it once!  Saved tons on cell phones in the last 2 years.   I pay for wifi in my house and use Netflix and the library for my kids' movie entertainment "needs".  Try looking in the middle of Bucks County for housing.  I don't know what your "neighborhood" requirements are, but Lower Makefield and Fairless Hills are nice areas and they have 3 bedroom houses with yards... near Sesame Place for local "vacationing" during the week too...  :) 

There are quite a few stay at home moms I met through my son's baseball team that take in other kids for low cost!
« Last Edit: June 04, 2015, 02:48:21 PM by nyxst »

ShoulderThingThatGoesUp

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Commuting to Exton from anywhere in Bucks County is insanity.

The_Golden_Bee

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Commuting to Exton from anywhere in Bucks County is insanity.

LOL!  Agreed.  I feel like the whole forum thinks that our location/mortgage/commute is the biggest hit to us financially.  So, that's first on our list to fix.  Another poster connected me to a real estate agent who can help us sell in Quakertown and move out to Coatesville/Exton/Downingtown.  So the fix is in progress!

The_Golden_Bee

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All of this is GREAT!  I switched from Verizon to Republic wireless and have never regretted it once!  Saved tons on cell phones in the last 2 years.   I pay for wifi in my house and use Netflix and the library for my kids' movie entertainment "needs".  Try looking in the middle of Bucks County for housing.  I don't know what your "neighborhood" requirements are, but Lower Makefield and Fairless Hills are nice areas and they have 3 bedroom houses with yards... near Sesame Place for local "vacationing" during the week too...  :) 

There are quite a few stay at home moms I met through my son's baseball team that take in other kids for low cost!

Hello Fellow Bucks County Resident!  I am so glad your experience with Republic Wireless has been good in our area. Coverage was a slight concern.

snuggler

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Bee,

You've received some excellent advice here.  I only wanted to add that it looks like you are renting your modem from your internet service provider.  You will save money in the long run if you purchase an affordable and reliable modem and send the Internet company theirs back.  Just make sure to get a receipt when you do return it to them, and to double check that they actually removed the charge on your next bill- I sadly know this from experience!

pbkmaine

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If you will be moving to Harrisburg in the near or intermediate future, don't buy another house. Instead, rent near DH's current job.

The_Golden_Bee

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Whether or not this is optimal is another question, but you're definitely in the income / family-size territory of being able to pay no federal income taxes, if you so choose - just something to be aware of.

http://rootofgood.com/make-six-figure-income-pay-no-tax/

This is an exciting possibility.  May I PM you with a few more questions about HSA and DSA specifically?

The_Golden_Bee

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Bee,

You've received some excellent advice here.  I only wanted to add that it looks like you are renting your modem from your internet service provider.  You will save money in the long run if you purchase an affordable and reliable modem and send the Internet company theirs back.  Just make sure to get a receipt when you do return it to them, and to double check that they actually removed the charge on your next bill- I sadly know this from experience!

Will do.  I had been planning on doing so anyway, but the advice to save the receipt and check the next bill is invaluable. I can see us getting burned just like that!

Trifele

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G Bee, you've gotten some excellent advice here.  I'll just add one thing -- getting a state law license by waiver (reciprocity) is way easier than taking the bar exam, but the bureaucratic process does still take time.   In the past two years I've gotten my license in two additional states by reciprocity.  One state took 4 months and one took 5 months.   Just wanted to make sure you factor that into your plans if you ever decide to pull the plug on Pennsylvania.   Good luck!   

Hey It's Me

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2. Move cell phones from Verizon to Republic

Rather than Republic, try an MVNO that will not make you buy new phones. PTel for me costs $20/month for their unlimited talk/text/500MB plan, which my mother has. I use my phone far less so a POGO option makes sense.

Hey It's Me

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Just to be clear, it seems like your monthly net income is $6700, and your expenses are $4536. What are you doing with the extra $2160/month?

One really quick way to move the needle quickly without making any big changes is to start maxing out any tax advantaged accounts available to you. Right now, between state and income tax, your husband and you are paying ~$17,500/year. With your AGI at 80K and your 401K balances, I'm assuming you contribute to your 401K, but not to the max, and your husband contributes marginally. By increasing your contributions this year another 26,000 (between the two of you, and between 401Ks and tIRAs), you'll save $10K in taxes that go directly to investments. That still leaves you $4530/month to cover all your current expenses.

Free $10K/year! Congrats on the bonus!

The_Golden_Bee

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Just to be clear, it seems like your monthly net income is $6700, and your expenses are $4536. What are you doing with the extra $2160/month?

Hi!

I mentioned in the OP that my husband just got a new job.  He lost his job in November 2013. While we were both self-employed, we bought our healthcare on the exchanges and it was ludicrously expensive -- family coverage cost us about $1500 per month.  That $2160 was covering that expense, and my student loan bill, which we just paid off. 

Now we get medical coverage through my husband's job, and my student loan is paid off, so that $2160 is a very recent - and WELCOME addition to our bank accounts :)

Hey It's Me

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That's great news! The health insurance system in the US is certainly insane. I was quoted $500/month as a healthy 22 year old who works out fairly regularly.

The rest of the tips still do apply though. It's always worth getting to know our tax system a bit better, because there are a lot of savings to be had. With your family structure, you could easily be paying close to no federal taxes with adequate tax planning, as dandarc mentioned.

The_Golden_Bee

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ETA June 9, 2015:  Wanted to let all you kind people know that:
A) We cancelled comprehensive and collision coverage on our cars, raised our deductible to $5,000, and cut our premium payment in half. 
B) We switched to Republic Wireless!  Phones are on their way.  I can't wait to call Verizon and cancel the heck out of that $152 monthly bill.

MDM

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ETA June 9, 2015:  Wanted to let all you kind people know that:
A) We cancelled comprehensive and collision coverage on our cars, raised our deductible to $5,000, and cut our premium payment in half. 
B) We switched to Republic Wireless!  Phones are on their way.  I can't wait to call Verizon and cancel the heck out of that $152 monthly bill.
Well done and best wishes for more to come!

Merrie

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What an exciting thread. It sounds like you are on the cusp of making some great progress.

dandarc

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That's great news! The health insurance system in the US is certainly insane. I was quoted $500/month as a healthy 22 year old who works out fairly regularly.
Dude - you should have seen the rates pre-ACA for healthy young folk.  I transitioned to a no-benefit employment arrangement in 2009 basically because I figured out that I could buy health insurance on the private market at $65 / month for a high-deductible plan - that $400+ health insurance the company was providing was a huge source of the discrepancy in that employer's full-benefits vs. no-benefits pay rate.

In my mind, the big thing the ACA has done is equalizing private market health insurance with employer-provided health insurance.  Getting away from employer-provided health insurance is a good thing, but those premium increases for certain segments of the population - ouch!

OP - Props on cutting those expenses!

Argyle

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I wanted to say one thing about the homeschooling and location.  I wouldn't move someplace with a poor school system just because you're aiming to homeschool.  You never know when your circumstances might change ó one kid really balks at homeschooling, or one kid is so keen to be on the debate team that he begs to be sent to the local school, or something comes up where you can't be home on weekdays for a while, or they simply reach high school age and need to try public school for a while.  You want to build flexibility and options into your location.  So you don't want to be in a location where the only good non-homeschooling option is a private school.  That would be the opposite of saving money!