The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Jags4186 on January 14, 2014, 04:39:16 PM
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Double the 401k contribution. Double the IRA contribution. Lower living expenses (?)
Am I missing anything? How has being married sped up/slowed down your living expenses? I know having children is awfully expensive, but it seems like it shouldn't be?
Educate the ignorant.
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Double the income. Double the DIY skillset, or, in areas where skills overlap, double the time available to DIY.
Safety net if the spouse works. Makes taking risks with a potentially high payoff make sense in a way they just don't for singles.
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Being social while trying to meet a prospective spouse is more expensive than being social with one's spouse. At least it works that way if you're both frugally minded.
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I have two kids, aged 4 and 1, and they aren't very expensive at all. And the additional exemptions I'm able to claim + the child tax credits i'm entitled to, lowers my tax burden to very close to zero. I'd imagine that as they get older they'll become more expensive, but i feel like the tax benefits will still more than make up for it.
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We go for 'specialisation of skills', meaning that we each only have to learn half the things we want to do ourselves. Sure, we both need to know how to knock together a quick pasta, but I've learnt more advanced cooking like breadmaking while he's learnt to lay tiles. I've learnt how to make gifts which we give to both sets of family and friends, he's learnt how to install shelves and cabinets.
Seems obvious, but with two people it's twice as easy to cover all the skills you want the benefit of. Even better that we naturally prefer different tasks so there's little overlap of preferred tasks.
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Definitely has helped us save on the socialization expenses. Agree with Rural that having both the spouses work is really good safety. Also, since both of us are in the same industry we would help each other out with networking and career advancement.
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We definitely have lower living expenses than if we were single living separately. It's a lot easier to shop/cook for 2 people, we can rent a one-bedroom apartment in Chicago for $700/month but it'd be pretty hard to find something as a singleton for $350, we share a car and are usually in it together, etc.
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We go for 'specialisation of skills', meaning that we each only have to learn half the things we want to do ourselves. Sure, we both need to know how to knock together a quick pasta, but I've learnt more advanced cooking like breadmaking while he's learnt to lay tiles. I've learnt how to make gifts which we give to both sets of family and friends, he's learnt how to install shelves and cabinets.
Seems obvious, but with two people it's twice as easy to cover all the skills you want the benefit of. Even better that we naturally prefer different tasks so there's little overlap of preferred tasks.
Hey look.. a team!! what a concept.
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Makes taking risks with a potentially high payoff make sense in a way they just don't for singles.
This definitely. I felt that I could ask for a higher salary when I was offered a new job because I knew that I could walk away if they didn't meet it. I have never negotiated a salary before and it wouldn't have even crossed my mind without the support and encouragement of my amazing spouse.
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I hate to say that I feel my 20 year marriage has actually lengthened the time it will take me to become FI and RE. Don't get the wrong impression, I love my wife very much. We, however have somewhat different views when it comes to money, saving and FI. My whole life I have always been more on the "mustacian" side of the fence while my wife is more on the other side. When my wife was working we were well on our way to FI and I was able to get her see the positives of company matching and maxing out her retirement plans. In 2010 she suddenly decided to take some time off and quit her high paying job to become a stay at home mom. I understand why she quit and support the reasons for quitting. I was more upset that she had no plan to get back into the workforce and put us back on track for early retirement. The original plan was for a 6 month break. Here we are in 2014 and she still has not gone back to work. Over the 20 years of marriage, there have been times when she did some very anti-mustacian spending and it still haunts me. She knows this and to her credit, she has made some very positive and surprising changes in spending behavior that have put us for the most part on the same page. As I get closer to retirement, it will be interesting to see what happens...stay tuned :)
If I knew then what I know now would I go back and change some decisions I made??? Definitely not. Although we may not see 100 percent eye-to-eye on money matters, we still love each other very much. How boring would it be if the two of us were exactly the same???
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My fancy, fashionista ex-wife actually lengthened mine. Doing MUCH better now.
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Two people means double the income and only marginally increased expenses. We still only occupy one house and drive one car, just like I would if I was still single.
My wife also brought assets to our marriage. My net worth chart in mint makes it very clear when I got married.
Doubling the tax advantaged space is nice (especially the extractable Roth IRA), but honestly I think it's a much smaller benefit than doubling the total amount of money coming in. By the same token, I can definitely see how marrying a non-working spouse would slow down the process.
Significantly, I think having a spouse has given me more of a reason to even consider an early retirement. Without a partner or a family, why not devote yourself to work?
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Not married, but as a happily cohabiting couple we save a ton of money compared to our single friends.
Rents on the types of places we would rent as a singles in Vancouver would be around $600, together we rent a slightly larger 1 bedroom for $732, so big savings there. Internet is cut in half. Food would be about the same. Cell phones would be exactly the same - maybe mine would be more expensive, since he wouldn't be kicking my ass to get a cheaper plan.
I think one big area of savings is going out - before we coupled up, both of us tended to go out with friends a lot more, and he used to eat out and drink alcohol (I never really ate out much, and have never been a drinker). We have way less desire to do that these days.
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Being married definitely helps me however having 3 kids is not the quick path to FI.
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For what it's worth having 2 roommates now means that if I get married my living expenses will actually go up, not down like a lot if yours seem to have...
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Significantly, I think having a spouse has given me more of a reason to even consider an early retirement. Without a partner or a family, why not devote yourself to work?
Umm... really?
Because I want to spend my time the way *I* choose. It's pretty much the same mentality for people with families, right?
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It hasn't. I'd actually be a lot further along if I wasn't married. When she was working, her income was very low, and now she's been out of work for months. Money that I would be saving if I was single is instead subsidizing her life (even my car insurance went up when I got married, my record was spotless but now I have her accidents and tickets affecting my rates). It's worth it, she's my best friend. However, looking purely at the financial aspect, I'd be better off single.
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Significantly, I think having a spouse has given me more of a reason to even consider an early retirement. Without a partner or a family, why not devote yourself to work?
Umm... really?
Because I want to spend my time the way *I* choose. It's pretty much the same mentality for people with families, right?
I agree with you, Nikki. I'm married but I still found that statement odd and biased against singlehood.
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My wife is naturally pretty frugal. I think that has helped, to a degree, reign in spending for myself. It also helps me visualize a better early retirement. Though, somewhat ironically, she doesn't exactly believe that we'd be able to retire "early" at all... but she's never sat down to calculate it.
We also have a kid, but aside from some city-sponsored activities that cost $40 per quarter, he hasn't been that expensive. I'm sure that will be different in the coming years, but oh well.
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Significantly, I think having a spouse has given me more of a reason to even consider an early retirement. Without a partner or a family, why not devote yourself to work?
Umm... really?
Because I want to spend my time the way *I* choose. It's pretty much the same mentality for people with families, right?
Being single means you have no meaning in life. How do you define yourself if not by your partner?
Lol sorry couldn't resist.......that being said.
Being married accelerated my path because my wife is naturally frugal. When we first got married I was not the most frugal person but we kept expenses low. When I found MMM and started changing my ways this further accelerated our ability to save and defined our goals of FI. Although, I realized the whole "tax benefit to marriage" was a sham. Why do people bring this up as a reason to marry? I guess this may be true if one partner is a stay at home.
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I think you are reading too much into Sol's statement.
I understand what he means, though. One of my primary drivers for FIRE is to spend more time with my wife and (future) kid(s).
Sure, I'd still want the freedom as a single person (he's not saying there is no meaning in life without a partner), but it's the time raising kids and with my wife that really drives me towards FIRE very quickly.
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I think you are reading too much into Sol's statement.
I understand what he means, though. One of my primary drivers for FIRE is to spend more time with my wife and (future) kid(s).
Sure, I'd still want the freedom as a single person (he's not saying there is no meaning in life without a partner), but it's the time raising kids and with my wife that really drives me towards FIRE very quickly.
I know I took it to far, sarcasm doesn't come off the best in text :)
While I do enjoy spending time with my wife (we do not plan on children), but that's not why I want FI. My main reason for achieving FI is the fact that I don't enjoy work. I know there's some high school guidance counselor BS saying do what you love and what not...but I can earn much more money in the field I am in (not to say I don't enjoy parts of the work I do).
That being said, even without my wife, my goal in achieving FI would be the same.
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Being married w/o kids allowed us to save big time. My $80K salary was completely saved, and his $26K salary was our living expenses. If we had waited to have kids a little bit, we would be in an even better position. But we knew we wanted kids and didn't want to put it off, and we certainly did not... we got married on January 8th and technically on January 9th, we were pregnant. I had a 3 month 100% paid maternity leave, so we had 1 solid year of dual incomes, which was nice.
Being married w/ kids, that's a different story. After our 1st was born, I spent a year at home and we lived on his modest income. We didn't save much, but with investment gains, our NW actually went up. Then I returned to work, and saving has begun again, but so have our living expenses. A 399 sqft apt. doesn't work so great for a family of 4, so we moved to a bigger place. Our living expenses have really gone up from the $26K we spent in 2008. We now spend about $42K, and only 8K is due to housing, so that means 8K is for other stuff that is costing us more... utilities have gone up, for sure (heat was included in our little apartment), inflation may play a small part. We definitely eat more w/ 2 additional heads in the house. Oh, preschool, that's $4-5K a year, and we have a few more years of that still. It's starting to make sense...
So, in summary, marriage helped, kids did not. Duh.
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I agree with the answers that've been given already: Two incomes, two people saving money, yet only marginally increased cost of living. Don't scan over the concept of two people bringing two different skill sets to the marriage. I'm good at skimping on day-to-day things (i.e., buying kids' jeans at Plato's Closet or finding new sources for groceries), whereas my husband is better at long-term investing and saving. Because we bring different skills to the financial table, we're stronger together than we'd be separately.
One thing I'd add: A spouse is an accountability partner. If you've set goals for your finances, your spouse is the person who'll "keep you in check" in moments of weakness when you're tempted to spend on something incongruent with your goals.
I'd say this is best/worst in terms of reaching FI:
Best case scenario: Married to a spouse with financial goals similar to your own
Bad: Married to a spouse whose goals differ from yours
Worst of all: Divorced -- this is one of the most expensive things a person can do
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I think it definitely helps to be married, the two incomes is the biggest help in our case. While paying off student loan debt, we basically lived on my income and used his to pay off the loans. Now we're paying grad school tuition for him out of pocket because we've become allergic to debt. But he specifically selected a grad school program that allowed him to continue to work part-time and go to school part-time.
By comparison, my sister is quite a bit younger than I am and still single. Her starting salary was about the same as mine when I was promoted, and she had much higher graduate school debt. She's appointed me her "financial advisor" so I know her budget and she consults with me before major purchases to make sure she can really afford things. She's still on the path to early retirement, but it will definitely take her longer to get there. I truly hope she meets a great guy and gets married, but he better be frugal and not mess up her plans. :)
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The biggest thing for me is that getting married made me think about the future and want to plan for it. Before that I didn't know if I'd ever get married and so my job was more important to me, having exciting experiences was also, and I had no desire to plan for kids I may not have and a home I may never buy. I also thought that it was okay to spend to meet people. So going out with friends (and spending a ton of money) and paying to look nice were a priority since I did want to meet someone (and i did!).
I don't think my mindset was correct at all - I totally think that single people can save for FI (and should). I'm just sharing where my dumb 24 year old mind was at :)
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One thing I'd add: A spouse is an accountability partner. If you've set goals for your finances, your spouse is the person who'll "keep you in check" in moments of weakness when you're tempted to spend on something incongruent with your goals.
I'd definitely second this. Even when my wife and I were spendy, we limited each other far more than we encourage more spending.
Because my wife's income potential is a lot higher than my career path would have been if I stayed single, it's accelerated FI. We had kids very early (married pregnant at 21 and had two more in short order), which definitely put us behind the eight-ball in our early twenties. If we had been Mustachians then, we would have been in a great position. Even with a late conversion to frugality, we're turning things around very quickly.
With Mustachianism and three kids, we'd probably have hit FIRE at 40. As it stands, I think we'll realistically be able to achieve it at 45, and that's only on 1.25 incomes (I homeschool so my income is only a 15-hour a week PT gig).
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I agree with the answers that've been given already: Two incomes, two people saving money, yet only marginally increased cost of living. Don't scan over the concept of two people bringing two different skill sets to the marriage. I'm good at skimping on day-to-day things (i.e., buying kids' jeans at Plato's Closet or finding new sources for groceries), whereas my husband is better at long-term investing and saving. Because we bring different skills to the financial table, we're stronger together than we'd be separately.
One thing I'd add: A spouse is an accountability partner. If you've set goals for your finances, your spouse is the person who'll "keep you in check" in moments of weakness when you're tempted to spend on something incongruent with your goals.
I'd say this is best/worst in terms of reaching FI:
Best case scenario: Married to a spouse with financial goals similar to your own
Bad: Married to a spouse whose goals differ from yours
Worst of all: Divorced -- this is one of the most expensive things a person can do
Without similar priorities.. Marriage is a nightmare. I can attest to that..
WIthout similar accountability practices and responsibilities.. it is nightmare as well.
I cannot tell you how many times I hear: "Well, you don't do xyz so why should I?"
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I agree that marriage is helpful for many of the reasons brought up here. One additional point: With two people, it's less likely that you'll end up with the expense of outsourcing something because you don't have the time. This includes everything from take-out or prepared food, to laundry, cleaning costs, etc. While neither of us ever paid anyone to clean up after us while we were single, the nature of both of our jobs meant that there were times when eating required relying on some level of convenience food (not necessarily take-out, but even more prepared groceries are more expensive). Even though we're both frugal, I definitely considered sending my laundry out during chaotic periods of back-to-back work trips, or illness, etc. He used to get his groceries delivered, which he technically didn't pay for, but he had to meet a purchase minimum, which provided a disincentive for spending less. With two of us, I can pick up the slack when my husband is busy, and he does the same. It's a lot easy to save money when you don't feel deprived, because there's no need or want for those types of short-cuts.
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We both definitely save more because of each other. As a very petite lady (and a lady who happens to have a physical disability)- I would be spending a LOT of money on services that I can't do myself (moving, assembling furniture, scrubbing floors, carrying laundry to laundromat- basically I can't do heavy lifting). My fella does all that for me so I save money there that I would otherwise be spending. Then on the other hand I make about 40k more than him a year so he gets that advantage. I'd say it all balances out :)
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Haven't read every post, but here's a quick summary of how marriage has worked out very well financially for us:
- Twice the income, with basically the same expenses
- Equal division of labor
- Complementary personalities bring more diverse skills to the table (For example, when it comes to purchases I'm a planner and she's a deal finder)
- Freedom to quit a job or look for a better one because you have a financial backstop. This both eliminates employment stress and also gives us flexibility to negotiate for higher wages.
- Emotional support for common ER goals. It's more fun to save as a team than to have noone to share the journey with.
- Mutual spending accountability keeps us on track
Admittedly we don't have kids so there are no family expenses like that for us.
And the biggest trick with making the most out of marriage when seeking FI is to stay married. Nothing kills the best financial plan more quickly than divorce. Easier said than done, I realize. But I do believe that FI and a strong marriage are mutually supportive goals.
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It has helped us immensely. He was working full-time and making a good living while I was figuring out my career and working freelance. I was making a good living while he was in grad school. Since we have been living together we have never had to take out school loans or had a period of not being able to save a decent amount each month because of this.
If either of us suddenly finds ourselves without a job, we will have the other to back us up.
Decreased housing/ utility/ food/ internet expenses. And the security of being able to add the other person to either of our company health insurance plans.
I could go on and on...
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I do not know why people say kids are expensive. Mine is but I choose some of those expenses (private school tuition). However, she'd be cheap if I sent her to public school.
Also, I find it disturbing to put a price on a human, but people do that for some reason. (shrug)
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...and to answer the question, my guess is marriage increased my time to FI. Due to DH's lengthy educational process, he was not earning $$ for many years. Then, he could only get jobs in his field in a certain geo area where I was not able to find decent employment. I am not complaining because it was a fascinating experience to live where we did and I agreed to do it.
If he had not had that career, we could have started off sooner with saving and lived in an area where the two of us could work at the same time. That said, he's frugal (practiced from years of being a poor grad student), and he came out of grad school with NO debt. So, we've been able to make up time fairly quickly.
Bottom line: Likely, it took longer, but I don't regret it. We have had some excellent experiences.
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I do not know why people say kids are expensive. Mine is but I choose some of those expenses (private school tuition). However, she'd be cheap if I sent her to public school.
Also, I find it disturbing to put a price on a human, but people do that for some reason. (shrug)
Determining how expenses increase for adding dependent a child is not the same as placing a $ value on said child or stating their worth. I'd certainly hope that someone would consider these expenses before purposefully having a child to which they have no means to pay them.
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I married a frugal man. He researches purchases to make sure we get good deals, he clips coupons, and he makes a good salary. He is not a shopper and he is a saver and investor.
I believe what the book The Millionaire Next Door said. Choice of spouse is very important in becoming wealthy.
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I understand the "lower expenses through efficiencies of scale" and psychological benefits, but I really don't get the "double income" argument. Your per capita income doesn't increase when you get married (edit, well it could I guess your employer values "family men" or whatever)
Sometimes I see someone say "oh, my net worth is $XXX at age YY" and I go "oh crap, I'm so far behind!" But then I find out they are married. If your GF/BF has the same net worth as you, you don't both magically double your net worth simply by getting married. No new money is created. So I personally think that only per capita net worth counts for married couples.
Put another way, before marriage:
Bob: My net worth is $500k!
Sally: My net worth is $500k!
After marriage:
Bob: My net worth is $1 million!
Sally: My net worth is $1 million!
Magic!
(end rant)
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My husband makes almost 3x as much as I do. So it might depend which one of us you're asking about whether or not marriage has accelerated the path to FI. ;)
But seriously, I agree with others that a big help is having an accountabil-abuddy in keeping spending in check. I sucked at not spending my money, but I'm pretty good at being reasonable with our money.
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I understand the "lower expenses through efficiencies of scale" and psychological benefits, but I really don't get the "double income" argument. Your per capita income doesn't increase when you get married (edit, well it could I guess your employer values "family men" or whatever)
Sometimes I see someone say "oh, my net worth is $XXX at age YY" and I go "oh crap, I'm so far behind!" But then I find out they are married. If your GF/BF has the same net worth as you, you don't both magically double your net worth simply by getting married. No new money is created. So I personally think that only per capita net worth counts for married couples.
Put another way, before marriage:
Bob: My net worth is $500k!
Sally: My net worth is $500k!
After marriage:
Bob: My net worth is $1 million!
Sally: My net worth is $1 million!
Magic!
(end rant)
Naturally in the second scenario they should be saying "OUR net worth is 1MM."
However the double income still makes a difference, even though per capita is the same, due to shared expenses.
That is, it might cost you 20k to live alone, but only 30k (50% more, not double) to live together (we're assuming no spending habits change, of course). Some stuff will stay the same (clothes expenditures, for example) whereas some will increase but probably not double (like food, or electricity). So even with 50% more expenses, with double the income, you end up saving more.
And say you needed 20k by yourself, and you had that 500k you mentioned, and want to FIRE, but you're comfortable with a 3% SWR. You need 667k, you're short 167k to be FI at a 3% SWR. Now you merge those 500k and marry. You now need 30k to live, instead of 20k, but you have a net worth of 1MM, which, at a 3% SWR, is 30k. Boom, instant FI, even though, yes, your expenses did go up, and yes, as you point out no money was created. You still managed to hit FI together, even though neither of you did alone, due to the economies of scale.
Thus a household net worth can make a lot of sense (moreso than counting net worth per capita in a house, even), though I understand it frustrates you as a single person.
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When XH and I got married, I'd say the marriage helped us get out of debt faster than we would have each done alone. The military paid each of us (and after I got out, paid him) extra for being married, otherwise that wouldn't have been true. But the extra housing income helped us pay off debt faster, and I encouraged him to paid off his consumer debt that he would have let linger for another 10-20 years if he'd gotten his way.
Fast forward 2 years, and his financial mindset was severely holding me/us back from working toward FI and RE. He verbally supported FIRE, but his actions didn't reflect.
Our divorce isn't final yet, but so far, it has 'only' cost me about a $12,000 hit in net worth (the value of his retirement accounts, plus lawyer fee, plus incurred housing/moving costs in the past three months). Once the divorce is final, I'll have about $1,700 a month in additional living expenses compared to when we were living together, but car insurance, food, gas (I moved much closer to work), mental and emotional stress, and frivolous spending will all significantly decrease, so that number is probably closer to $700-$800/mo in extra expenses. In the short term, the divorce is costing me (financially and emotionally), but it will be well worth it in the long term since I will soon be soley responsible for all life/financial decisions that affect me and I'll also be free to search for a partner with similar goals/aspirations as I do (financial and otherwise).
Long story short, marriage can significantly accelerate the time to FIRE if both parents have similar goals and mentalities. On the other hand, a partner who doesn't support you financially or in life can significantly hinder the time to FIRE (or any other goal).
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However the double income still makes a difference, even though per capita is the same, due to shared expenses.
Sure, shared expenses help. But the "double income" itself doesn't make a difference. If you got married to someone who lived across the country, you'd still have "double income" but you wouldn't reach FI any faster
(potentially some tax benefits that would count as lowered expenses)
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My fancy, fashionista ex-wife actually lengthened mine. Doing MUCH better now.
Hahaha...yep!
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However the double income still makes a difference, even though per capita is the same, due to shared expenses.
Sure, shared expenses help. But the "double income" itself doesn't make a difference. If you got married to someone who lived across the country, you'd still have "double income" but you wouldn't reach FI any faster
(potentially some tax benefits that would count as lowered expenses)
I think it's implied by saying "double income" that they mean "extra income coming in over the increased expenses" - in other words, the "shared" (extra) expenses is a hindrance to FIRE if they don't work (not saying they won't provide value, but it's a slowdown in FIRE time), and by saying "extra" or "double" or whatever income, one is implying that the extra income reduces their FIRE time due to it being larger than the expense increase.
Obviously living across the country you wouldn't get the shared expenses, so it wouldn't make sense to say "extra income" - but in the case where you're sharing expenses, the extra income (above and beyond the increase in expenses) does help FIRE time, thus why people list it.
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I do not know why people say kids are expensive.
Because they are expensive.
Also, I find it disturbing to put a price on a human, but people do that for some reason. (shrug)
I didn't put a price on a human. I just said they were expensive. I love my kids more than anything in the world. They are fantastic. It just costs money to feed them as well as provide simple basic stuff like medicine, school supplies etc as well as provide them with the opportunities that I want to give to them which in my mind is pretty frugal. I just pay for things like gymnastics, soccer and swimming lessons. There are additional costs as well for instance we need 2 cars and can't really get by on one car.
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I do not know why people say kids are expensive. Mine is but I choose some of those expenses (private school tuition). However, she'd be cheap if I sent her to public school.
Also, I find it disturbing to put a price on a human, but people do that for some reason. (shrug)
Determining how expenses increase for adding dependent a child is not the same as placing a $ value on said child or stating their worth. I'd certainly hope that someone would consider these expenses before purposefully having a child to which they have no means to pay them.
Right. I am not saying do not consider expenses before having a kid--although I did not and am a-okay.
Why not say old parents are expensive (they can be) or sisters or spouses? Seems like "expense" gets used a lot in relation to kids. In another thread, people were talking about the "expense" of kids. What about the "expense" of me? It just seems silly.
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In another thread, people were talking about the "expense" of kids. What about the "expense" of me? It just seems silly.
And yet the bulk of the insurance industry is based on that very premise. :-)
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They say there is no such thing as "The Marriage Penalty," (in terms of taxes) but I got married last year and I am no longer allowed to contribute to my Roth and for the first time in my life, I found myself in the 33% tax bracket (it's my husbands money. I didn't get a raise). Before you start saying "Oh, Boo-Hoo for her..." I have to admit that I married a spender. I am slowly bringing him around to the mustache ways, but it has been an uphill journey. When someone spends a lot of money, it doesn't matter how much they earn.
Know where your partner stands on financial issues, and know the tax consequences of your marriage so that you can appropriately plan for your future.
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Lots of stuff has already been covered but I don't think anyone has mentioned this: A higher stash (i.e. two stashes combined) can also lead to better investment diversification and the ability to invest sooner.
It can also be highly beneficial if you are in a "better to buy than rent" housing market. The Single might not be able to finance a home on a $30/k wage, but with a partner, their combined income is $60/k and they can get finance. (The bank does not care the single will sublet a room to a friend as they will generally not count this income, so the single keeps renting, paying a higher cost and not building equity.) [As an aside: Using Australian tax rates the couple on $30/k each (minimum wage) will pay almost no tax, a single needs to earn approx $85k to bring home the same amount of household income as the low income couple.]
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Why not say old parents are expensive (they can be) or sisters or spouses? Seems like "expense" gets used a lot in relation to kids. In another thread, people were talking about the "expense" of kids. What about the "expense" of me? It just seems silly.
I think the reason is pretty simple. You have to support your children assuming you are a standard parent who loves and cares for their children. Typically parents and family should be expected to take care of themselves financially. Personally I expect my parents and in-laws to contribute a lot more to my financial well-being than I will ever contribute to theirs.
I don't see the big deal about being honest about stating that kids cost money. MMM has one kid. I have 3 kids. I have extra costs compared to him.
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Lots of stuff has already been covered but I don't think anyone has mentioned this: A higher stash (i.e. two stashes combined) can also lead to better investment diversification and the ability to invest sooner.
It can also be highly beneficial if you are in a "better to buy than rent" housing market. The Single might not be able to finance a home on a $30/k wage, but with a partner, their combined income is $60/k and they can get finance. (The bank does not care the single will sublet a room to a friend as they will generally not count this income, so the single keeps renting, paying a higher cost and not building equity.) [As an aside: Using Australian tax rates the couple on $30/k each (minimum wage) will pay almost no tax, a single needs to earn approx $85k to bring home the same amount of household income as the low income couple.]
Great points.
Some investments have hard minimums that are much easier to accomplish with more (combined) income, despite it not actually increasing the per capita income.
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Getting married helped grow my net worth. The divorce, not so much.
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Why not say old parents are expensive (they can be) or sisters or spouses? Seems like "expense" gets used a lot in relation to kids. In another thread, people were talking about the "expense" of kids. What about the "expense" of me? It just seems silly.
I think the reason is pretty simple. You have to support your children assuming you are a standard parent who loves and cares for their children. Typically parents and family should be expected to take care of themselves financially. Personally I expect my parents and in-laws to contribute a lot more to my financial well-being than I will ever contribute to theirs.
Well, of course, for you. Others on this board have talked about helping their parents and others. A parent with dementia who needs $$ for daytime help is probably not going to get turned away by their kids if financial help is needed. That can be expensive.
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Why not say old parents are expensive (they can be) or sisters or spouses? Seems like "expense" gets used a lot in relation to kids. In another thread, people were talking about the "expense" of kids. What about the "expense" of me? It just seems silly.
I think the reason is pretty simple. You have to support your children assuming you are a standard parent who loves and cares for their children. Typically parents and family should be expected to take care of themselves financially. Personally I expect my parents and in-laws to contribute a lot more to my financial well-being than I will ever contribute to theirs.
Well, of course, for you. Others on this board have talked about helping their parents and others. A parent with dementia who needs $$ for daytime help is probably not going to get turned away by their kids if financial help is needed. That can be expensive.
Sure. And at that point I think it would be reasonable for them to say "having a parent who needs a full time nurse is expensive" - they're not putting a price on their parent (just like someone saying having a kid - which they support - is expensive isn't putting a "price" on the kid), they're just noting the impact on their budget. Which they clearly think is worth it, or they wouldn't do it, so if anything, they're saying the person's worth is above any price they're paying...
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It's hard to say for sure, but I don't think marriage has accelerated my path to FI. For one, I would not have had children if I hadn't gotten married, and our lifestyle is significantly bigger because of our children. (I know kids don't HAVE to be expensive, but ours are because of choices we have made relating to them). We have a much bigger house in a more expensive (safer, better schools) neighborhood, we have bigger cars (and two of them) because of children, and have spent a substantial amount over the years on childcare, healthcare, food, diapers, activities, etc. At one point, I ran a retirement calculator based only on out-of-pocket costs of raising my kids (not counting the larger house/car, the lost opportunity costs of being on the "mommy track" at work), and if invested instead, it would have amounted to an extra $4-5 million by age 67. So yeah, while I wouldn't say all kids are expensive, I would say mine very definitely are.
Even without kids, I think DH and I together have spent much more that we would otherwise have, probably even more than the dual incomes brings in. If I were single, I'd have a small apartment or a small condo somewhere, a small car that I didn't drive much (I hate driving). I also wouldn't travel as much if I weren't married, as DH is the one with wanderlust. We are more inclined to eat out when it's the two of us and we buy more when we're together than either of us do when alone--not sure what that's about. Just that we enable each other instead of holding each other accountable (hoping we can change that, but there's a 20 year history there). For a lot of years, we even had a "rule" that if one person splurged/overspent, the other got to overspend in the same amount. I know that's crazy, but it was the only way to alleviate major resentment when one spouse didn't stick to the budget.
So...lots to work with here, but not a marriage that is on a straight trajectory to FI!
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Why not say old parents are expensive (they can be) or sisters or spouses? Seems like "expense" gets used a lot in relation to kids. In another thread, people were talking about the "expense" of kids. What about the "expense" of me? It just seems silly.
I think the reason is pretty simple. You have to support your children assuming you are a standard parent who loves and cares for their children. Typically parents and family should be expected to take care of themselves financially. Personally I expect my parents and in-laws to contribute a lot more to my financial well-being than I will ever contribute to theirs.
Well, of course, for you. Others on this board have talked about helping their parents and others. A parent with dementia who needs $$ for daytime help is probably not going to get turned away by their kids if financial help is needed. That can be expensive.
Naw, I'm a sociopath :-)
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Naw, I'm a sociopath :-)
Is this a quicker way to FI ?
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Am I missing anything? How has being married sped up/slowed down your living expenses? I know having children is awfully expensive, but it seems like it shouldn't be?
In Canada, when two lower-income single parents are considered "married" (via sharing a home for a year), they lose a lot of cash benefits. Further, even though I am the only parent and only provider for my kid, I would no longer be allowed to submit my child care receipts on my tax return because my partner had the (ever so slightly) lower income. Finally, my half of the rent was higher sharing, because my kid and I can squeeze into funnier places, and can be further out of the city, and because BF likes more expensive places. So, it ended up much cheaper for me to be not "married".
Part of me would far prefer to be married, though. (This is more an emotional piece for me.) And I'm confident that if I were in a specific type of marriage, I could greatly accelerate the family's FI. I'm awesome for working, budgeting, saving, etc.
The other day I suddenly remembered a place we had found to live together. To me, it was perfect, albeit a bit costly. To him, the price was totally fine but he didn't want it -too far out, etc. Remembering this place the other night, I was crushed. So I'm always aware of this part of me that fantasizes about a marriage with a white picket fence where I get to be a housewife and we work together toward dreams.
Now kids, that's another question. Kids come with some expenses, of course, and my kid cost quite a bit (read: enormous amount) when I was first sorting out his disability-related challenges, but he's quite cheap now that I have his disability-related resources in place -and that's why I appreciate the government of Canada despite the weird imposed-marriage/child care deductions issues that block some avenues for me.
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In the short term, the divorce is costing me (financially and emotionally), but it will be well worth it in the long term since I will soon be soley responsible for all life/financial decisions that affect me and I'll also be free to search for a partner with similar goals/aspirations as I do (financial and otherwise).
Sorry to hear about the divorce.
But your life will accelerate once you're free of the drag.
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Ha ha, being married is the only way I would have ever thought becoming FI was possible because my husband gets paid so much more than I do. I joke that he earns the money and I save it.
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We used my salary to pay down my student loan pronto, then emergency fund - done, now we have slayed the mortgage (6 more months!)and have been continuing investing. My husband's salary is for bills and saving/investing.
Once my husband saw the progress that was possible through being frugal, rational, and planning, he was on board with me.
So yes being married to my second husband has accelerated our path to FI. My first husband just would not work with me on this.
As noted in previous posts it's handy to split skills. He has many skills in the house reno and the IT dept and I plan, organize, cook bulk from scratch, grow food etc.
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Hell yes, that's my answer.
I can't make my wife spend money, but she's done a damn good job earning money,
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I understand the "lower expenses through efficiencies of scale" and psychological benefits, but I really don't get the "double income" argument. Your per capita income doesn't increase when you get married (edit, well it could I guess your employer values "family men" or whatever)
Well, not "double income", but ...
Being married allowed my husband to take longer to finish his PhD. Okay, maybe this wasn't the BEST thing (2 extra years), but...
after his first year at his job, I sent him into his review with a review I had done on what the "going rate" was for his position in our town. His raise was small, he presented the info (as if he'd done it himself of course). The boss got all offended and gruff and "well you can look somewhere else" (small startup company) but...the next day had doubled the raise.
A few years later when it became clear to me (based on our talks) that this company was really sucky and going down, I strongly suggested he look elsewhere, particularly at a local company that we'd been aware of for years and which one of his former classmates was working. This guy tried to recruit him. So, he interviewed, took the job (about 5 months before the company went belly up). All in all - his salary has doubled in the last 12 years (since taking that first job) and the bennies at his current company (401k particularly) are amazing.
As much as I've always been a bit of a career woman, I've especially tried to support him in his job more and more since the kids have been born (it's sometimes hard for me). Fact is he makes 50% more than I do. It is to our mutual benefit for him to work as much as he can / wants to, to take on more responsibility, get more contracts - this improves his salary and raises. I have attempted to increase my own income in the same way, and it just hasn't been working for me (my company has issues, to say the least). That doesn't mean I've given up, it just means that I am patient. Or at least trying to be.
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While we do not have two incomes, partnership has allowed me to really progress in career and earnings, while we have a full time parent at home. SO is also really good with money and spends a good amount of time managing our money. Plus we push each other on the FI topics and goals - always good.
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I'd say I slowed it down for my husband, because I brought debt to the marriage when he had none, but being married and having more income in the house has enabled me to significantly speed up paying it off. Also, another vote for splitting skills. We balance our landlording pretty well with his handy repair skills and my people management ones.
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I think every relationship will have a different perspective on money. Here's mine:
With my wife and I, we have very contrasting and complementary approaches to our finances, and I believe by discussing (which of course is a euphemism for arguing) our decisions, we have found a common ground that ultimately is responsible for where we are today.
On daily spending:
Me: Don't sweat the small stuff; DW: Extreme frugality.
My wife is constantly hunting for deals, cutting coupons, inspecting receipts, haggling with service providers, etc. I've never worried about paying $40 vs $50 for groceries, but it is something she obsesses over.
On loans and debt:
Me: There is good debt and bad debt; DW: All debt is bad debt
We agree that credit cards are evil and pay the balances off every month. But we disagreed on the mortgage. Before she met me, she never thought she would own a house simply because the only way she would ever buy one is if she had the cash upfront. When we had our mortgage, the thought of that much debt ate away at her. There were nights she would lose sleep over it.
We accelerated our payments, and during the housing crash, she almost had an anyeurism when our ARM jumped from ~4% to 8%. We ended up paying off our mortgage soon after, much to my reluctance (I wanted to buy stocks during the downturn). Shortly after, interest rates were cut, and our mortgage rate adjusted down to ridiculously low levels.
Nevertheless, having the house paid off gives her peace of mind, and as they say, you can't really put a price on that.
On stocks and investing:
Me: High risk tolerance; DW: Risk averse
I've been investing since before 2000. I survived the dot-com bust, the housing market bust and plenty of other corrections and bear markets along the way. To my wife, I've been "playin' the market" which is no better than betting it all on black in Vegas -- and at least Vegas is a lot more fun!
After we married and as our investable cash grew, I was able to get her involved in the stock picking process. It is a very good exercise to discuss stocks with another person. If I am interested in a company, I have to distill the thesis down to a few sentences. So I have to force myself to understand it well enough to explain it to her in the simplest terms possible. If the business makes sense to her, thumbs up. She has a certain sensibility about these types of things, and we are pretty happy with our portfolio.
We have been very fortunate and her attitude towards stocks has thawed out a bit.
So to summarize, being married has accelerated our path to FI because our approaches to financial management have ultimately been complementary. Her strength is to manage costs in order to increase savings and investable cash. My strength is having the patience and risk tolerance to invest and grow our cash. This "push-pull" between us seems to have keep us on the correct path.
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It has not for me - I am a saver, spouse is a spender. I've gotten to pay all bills and try to save while spouse pays personal bills and doesn't really save (other than what job 'default' savings happen).
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They say there is no such thing as "The Marriage Penalty," (in terms of taxes) but...
"It is mathematically impossible for an income tax system to have all three of these features simultaneously: joint filing for married couples; marginal tax rates that increase with income; and independence of a couple's tax bill from their marital status."
http://en.wikipedia.org/wiki/Marriage_penalty
http://ask.metafilter.com/237767/Whats-the-sense-in-the-marriage-tax-penalty
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1. Dating seems to be wicked expensive, between the activities, meals, clothing/beauty treatments, etc. Married people can and should date their spouse, but it seems to be cheaper.
Yeah, we've laughed about that many times! We used to go out to eat constantly, to movies and events. Now we agree NOT to purchase gifts for "holidays" like Valentine's Day and our anniversary. Also we no longer enjoy going to crowded restaurants on Mother's Day and so forth -- instead, we splurge at home on crab legs or a good steak for the grill, and we enjoy a nicer meal in the solitude of our own home.
I married a frugal man. He researches purchases to make sure we get good deals, he clips coupons, and he makes a good salary. He is not a shopper and he is a saver and investor.
I believe what the book The Millionaire Next Door said. Choice of spouse is very important in becoming wealthy.
I didn't marry a frugal man, but I realized that he liked money and he was trainable. He caught on quickly and has surpassed me in certain areas.
I used to have a poster in my classroom (lost it somehow when I moved schools) that listed 30 things to do to increase your chances of lifetime happiness. #1 was marry the right person, and it went on to say that something like 80-90% of your personal happiness would come from this one decision. I think it's true.
Why not say old parents are expensive (they can be) or sisters or spouses? Seems like "expense" gets used a lot in relation to kids. In another thread, people were talking about the "expense" of kids. What about the "expense" of me? It just seems silly.
You're equating "expensive" with "not worth the cost". That's not true.
For example, my house was expensive, but I'm glad I own it.
Those antibiotics I took when I was sick a few weeks ago were expensive, but I am awfully glad they were available to me.
Quality shoes are expensive, but they last a long time and keep my feet from hurting after a long day at work.
Many things are expensive, yet totally worth the cost.
To use your own example, in the last few years of my grandmother's life she was unable to drive and called upon me on a very frequent basis to do errands for her or take her places. She was a lot of work -- wheelchair in and out of the car, help in and out of the bathroom. Towards the end she kind of forgot that money was "a thing", and she started expecting me to pay for everything too. Other times she'd call me up and said, "I wish you'd cook me a pot of chicken and dumplings. And a batch of those cookies with white chocolate chips and cranberries." Two hours later, I'd be at her house with the requisite meal. Though I spent more than a few dollars on gas, lunches, pedicures, groceries, medicine, and pillows and drawer organizers and washcloths and all sorts of other things that she wanted RIGHT NOW, I regret not one single penny. Oh, and 2/3 of the things she had me buy, she had me return the next week! Still, I took good, good care of her right up to the end. Was she expensive? Oh, yes! Was she worth it? Oh, yes! She did so, so much for me when I was younger, and she was one of my best friends in the whole world. I'd spend any amount of money if I could call her up right now and say, "Would you like to go out to lunch tomorrow?" And if I could, I'd take her to the pedicure place she loved where the little Korean woman always asked her, "How you doing, Mama? You warm enough, Mama? I not too rough on you, Mama? You really 100 years old, Mama?"
Great. You made me cry.
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Being married impeded my path to FI, due to the spending habit of my previous partner. This had nothing to do with our divorce, which at the time also appeared expensive. A few years later I realised somewhat to my surprise since I was now sole decisionmaker about where the money went, that I was actually financially better off. ( I don't receive any spousal support, and didn't "get the house", although have received a small amount of child support, below that amount required by Australian law). It took a couple of years to see this, but as I say it was completely unexpected and turned out it was one of the best parts of being divorced.
Task specialisation is not limited to couples. We have naturally developed some task specialisations: son is our tech expert, and gets selected for tasks requiring tallness and physical strength. He's the best in the household with tools and machines. Daughter is our sewing machinist, and is the best in the household at detailed tasks. I like to think I'm the benevolent dictator. I recall living in group households as a single, and again some task specialisation worked within the household, albeit ad hoc.
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I may be taking the title too literal, but aside from possible tax implications, most of the things mentioned in this thread don't seem to have anything to do specifically with being married, but more so having (a) long term comitted partner(s) and combined finances
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We're not officially married yet, but for the purposes of this thread I would say we are (since the tax aspects don't seem to be getting addressed too much).
For us, I would say being together has been a benefit to both of us, BUT that is largely because we are pretty much on the same page financially. First, the basic stuff: both of our rents went down when we moved in together--even my partner who was in a houseshare with 4 other people saw a decrease in his rent. This was in part because we both have FI as a goal and were willing to move into a studio rather than a 1 or 2 bedroom apartment. If one of us had been insistent on more space or a "better" location, our rent would have gone up!
I
Also, having two people means we can push each other to do better. For example, when we moved in here I investigated the internet options and the two mainstream options were going to be $40-50/month. My partner thought that was highway robbery, so I did some more research and we wound up going with a FreedomPop account for $15/month, which works fine for our needs. If I were on my own, I probably would have just sucked it up and paid the $40-50 and not thought to look further, if he'd been on his own he probably would have sucked it up and paid the $40-50 because he wouldn't have had time to chase down that savings as his job requires much longer hours than mine. I would say some of our other utility costs have gone down a bit though the savings are probably only on the order of a few hundred dollars a year right now. Another random thing: we both get a lot more thrifted clothes now--I saw how he was able to score great work shirts and such at the thrift store and started using it more myself. Likewise, I can make thrift shopping a more efficient experience for him because I'm good at going through the racks (which he's not so keen on) and bringing him a continuous stream of stuff to try on (this is harder for him to do for me as there's so much more variation in women's clothing and sizing, sigh).
In short: if you're both into FI/frugality, being in a partnership can provide you with all sorts of little boosts and savings, which DEFINITELY add up!
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I do not know why people say kids are expensive. Mine is but I choose some of those expenses (private school tuition). However, she'd be cheap if I sent her to public school.
I don't think kids are expensive, per se, but as I pointed out, there are opportunity costs. My kids don't cost me that much more... but since a SAHM parent is a priority for us, the lack of my husband's income does not accelerate FI. I don't think it can be argued that having a kid while working on FI slows the path a bit.
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My wife was able to drop her health insurance and get on my 100% employer paid program. Beside that we can enjoy things together that are free. I never liked going for a walk alone. Now we do it together and talk about or day. Also pretty sure I wouldn't live long enough to reach fire without her. She has defiantly helped me to calm down and become a better man.
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I hate to say that I feel my 20 year marriage has actually lengthened the time it will take me to become FI and RE. Don't get the wrong impression, I love my wife very much. We, however have somewhat different views when it comes to money, saving and FI. My whole life I have always been more on the "mustacian" side of the fence while my wife is more on the other side. When my wife was working we were well on our way to FI and I was able to get her see the positives of company matching and maxing out her retirement plans. In 2010 she suddenly decided to take some time off and quit her high paying job to become a stay at home mom. I understand why she quit and support the reasons for quitting. I was more upset that she had no plan to get back into the workforce and put us back on track for early retirement. The original plan was for a 6 month break. Here we are in 2014 and she still has not gone back to work. Over the 20 years of marriage, there have been times when she did some very anti-mustacian spending and it still haunts me. She knows this and to her credit, she has made some very positive and surprising changes in spending behavior that have put us for the most part on the same page. As I get closer to retirement, it will be interesting to see what happens...stay tuned :)
If I knew then what I know now would I go back and change some decisions I made??? Definitely not. Although we may not see 100 percent eye-to-eye on money matters, we still love each other very much. How boring would it be if the two of us were exactly the same???
That's awful your wife quit her job to raise your children. Same with bearing and birthing them. Did she charge you for the labor? I feel for you.
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Lets see.. When I met my (totally hot redhead Wife) I was busilly paying off the mortgage with the extra rent I was making above my salary.
I was planning on clearing the debt within 7 years.
My Wife showed up an was not convinced that I was doing the right thing.. She didn't know anything about finances either but she knew a guy who did and so she set us up an appointment.
I still wasn't totally sold on the investing idea.. but I did make some contributions to mutual funds and quickly realised that the best way to save was tax free.. ala.. 401k.
So I continued to pay off the house but max out the 401k.
When the house was done it seemed logical to flip to saving.
I emigrated to the US in 97 with a 160k mortgage and not much savings... Due mainly to the great recession and the subsequent recovery our NW is now $1.4M.
So just the fact my Wife pointed me in a different direction made all the difference.
Frank
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He keeps me in line, and I keep him in line. We make financial goals together, and doing it as a team makes it 10x easier! Gentle nudges for the win :) (similar to a face punch, but they occur before the antimustachian act!)
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