Author Topic: *Updated* Reader Case Study - House Hunting when SO was laid off.  (Read 15463 times)

afuera

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Edit:Thanks for all the help everyone!  Got some face punches and got some great advice.  See edits below :)

I'm 24 and my husband is 26 and we live in Houston, TX.  My husband and I are both engineers and had a pretty healthy savings rate of around 60% while still enjoying plenty of overindulgent spending on bars, trips, random amazon things.  But then, last month my husband was laid off.  Hoping for a little help trimming the fat from our pretty chubby budget.
Trying to follow the "How to Write a Case Study Topic" format.

Life Situation: Married filing jointly (24 and 26), no kids.  Living in Houston, TX (renting).

Gross Salary/Wages: My salary is 95K.  (8000/mo before deductions). 
Husbands salary was around 75K when he was employed but he was in O&G so with this market, not sure when he will find work.

Pre-tax deductions: Total: $862
Dental: $19
Vision: $6.00
401K: $600
HSA: $240

After-tax deductions: Roth 401K: $120

Other Ordinary Income: No other ordinary income
Qualified Dividends & Long Term Capital Gains: I don't think these are significant...?
Rental Income, Actual Expenses, and Depreciation: N/A
Taxes: $783
TX Withholding - $498
TX EE SS - $230
TX EE Medicare - $782

Adjusted Gross Income: $4400/mo
Husband's Unemployment for 6 months: $2000/mo

Current expenses: Total- $2970
Fixed - $1880
Rent - $1265 (Thanks for the tips guys, we will be relocating to a cheaper apartment when our Lease is up 7/1.)
Transportation - $90 (Husband play rugby, a lot of out of town games)
Utilities - $125 (Includes water, trash, insurance paid to the apt. and electricity paid by us separately.)
Car Insurance: $138 (1999 Toyota Corolla, 2013 Mercedes C250-Selling the Mercedes today!!)
Subscriptions: $200 [ $130 to ATT (just switched to Project Fi so that should be closer to $60 soon), $60 for internet, $8 for Netflix).

Flex Spending - $1085
Groceries: $400 (Realized we can make some changes here.  Not first priority but definitely room for improvement.)
Entertainment: $50 (typically 5K registrations, bowling or Topgolf once a month with friends).
Restaurants and Bars: $150 (1st priority to try and spend less.)
Pets and Home: $125 (dog food, cat food, and vet bills mostly)
Alcohol: $125 (Did I mention my husband plays rugby?  This is actually much less than just a year or two ago.) For clarification this is just on alcohol from the liquor stores, mostly 6 packs and nice bottles of whiskey.  I know this is high and we will keep working to bring this down as 2nd priority. (P.S. When I drink wine, I only get box wine)
Unexpected: $150 (Anything from spontaneous adventures, to car repairs, to shoes or clothes replacement)

Saving - $1250
[this number was closer to $4000 every month before my husband lost his job and when he is reemployed (hopefully soon!) this will bump back up]


Assets: ~$105,000
$43,000 in online savings account (earmarked for house down payment).
$3,500 in Roth IRA
$30000 in my 401K
$26000 in SO's 401K (stagnant until he finds another job).
$2500 in HSA

Liabilities: $0 (no debt :))


OK so I think I included everything.  We really only started saving early last year after I discovered MMM.  I really want to retire by the time I'm 35 since I've only been working full time for a year and a half and I'm already sick of it and want to sleep in and chill with my hubby and my pets.  We were on track to be there before my husband was laid off with our ludicrous income level and ludicrous spending and I'm now realizing that I may have to make some more cuts for that to happen, depending on how long I am the sole wage earner for the family.
Let the face slaps commence.  I'm not sure I'm ready but I need them.

« Last Edit: October 24, 2016, 11:46:41 AM by trappedinmyoffice »

PhysicianOnFIRE

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #1 on: February 15, 2016, 03:58:10 PM »
I won't punch any faces.

2 things that stand out are the 2013 Mercedes and the fact that your husband's income is 0.  Does he have unemployment checks coming in?

The restaurant / bar spending of $150 a month sounds frugal enough to me.  For many couples, that's a typical weekend.

You've got a great nest egg started at a young age.  I think the key to continuing on your FIRE path will be for your husband to bring in some income, even if it's not in O & G.  Something is better than nothing.

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #2 on: February 15, 2016, 04:20:19 PM »
No unemployment coming in yet.  He was laid off 1/25 but i'm letting him take care of submitting claims and all that because I really have no idea.  I know his income won't be 0 indefinitely but I thought it best to be conservative since it could be 2 weeks or 2 years until he finds a job.
We are actually getting ready to sell the Mercedes but were considering a vehicle that isn't very mustashian.  We want to buy a used 2006-2010 Subaru Forester due to the fact that we take frequent road trips with friends and our dog (60lb Airedale Terrier) and we would like our friends to not be trampled in the back seat by our dog.  I know anything other than a small tranny hatchback is frowned upon but the pros outway the cons for us right now.

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #3 on: February 15, 2016, 04:23:32 PM »
How much unemployment does your husband collect and how long will it last?  What industry is your engineering job in and how likely are you to lose that job?

Oil is a highly cyclical industry, and you need to be prepared for a long period of unemployment for your husband, as it does not look like the industry is going to recover soon.  In your shoes, I would start looking at ways to re-home that 2013 Mercedes, as it appears to be paid for and it's worth a fair amount of money.  That's especially true if your job is at risk.  The higher the risk to your job, the faster I would cut all unnecessary spending.

Can your husband apply his engineering degree and skills to any other field?  If he does not want to go through this two or three times in his career, he might want to consider a different field, one he could easily transition into.

Another Reader

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #4 on: February 15, 2016, 04:31:48 PM »
The pros do not outweigh the cons right now.  Unless your husband will be back to work in a few months and your job is safe, you really cannot afford a second car.  Your timing in NOT buying a house is a big help.  Ask some of the folks that went through some of the previous oil busts about all the see through office buildings in Houston and vacant foreclosed houses the last time around.

There are a number of oil and gas people older than you over at early-retirement.org.  Many have been through this scenario more than once.  You might want to ask them what to expect from this downturn and how to handle it.

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #5 on: February 15, 2016, 04:59:07 PM »
You're in pretty solid shape so long as you put off the house purchase until he finds another job. Problem is, oil and gas isn't coming back anytime soon. That's great news for most of us, but not great for you. Your SO needs to diversify into another field for a while, and maybe come back once oil returns to $100+/barrel. That could be a really long time.

I spent a year unemployed after the .com crash in 2001, and that taught me three things:

1. Apply for unemployment immediately upon losing your job, because it's there for people in your situation and you paid for it indirectly through your employer,
2. Nobody is irreplaceable, and nobody is calling you to offer you a job, no matter how good you are at what you do,
3. Hustle, and take any gainful employment while you look for something better, whether that's painting somebody's apartment (did it), bagging groceries (did it), or making pizzas (did it!).  He's already had a month off, it's time to get serious.

Good luck and let us know how it ends.

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #6 on: February 15, 2016, 06:08:30 PM »
How much unemployment does your husband collect and how long will it last?  What industry is your engineering job in and how likely are you to lose that job?

Oil is a highly cyclical industry, and you need to be prepared for a long period of unemployment for your husband, as it does not look like the industry is going to recover soon.  In your shoes, I would start looking at ways to re-home that 2013 Mercedes, as it appears to be paid for and it's worth a fair amount of money.  That's especially true if your job is at risk.  The higher the risk to your job, the faster I would cut all unnecessary spending.

Can your husband apply his engineering degree and skills to any other field?  If he does not want to go through this two or three times in his career, he might want to consider a different field, one he could easily transition into.

The unemployment is about 2k a month and runs out once he hits about 12.5k, so in about six months time he will no longer receive unemployment.
I am currently in the chemical industry in a very secure job.
He has some experience and plans to change industries, but the bulk of his experience is applicable to O&G.
It would be hard to cut down to one car due to the fact that my husband would need a ride while completing interviews and his later work commute. Houston is a huge car-centric city with limited public transit compared to other large cities.
Thanks for the early-retirement.org tip, i will give it a look.

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #7 on: February 15, 2016, 06:21:42 PM »
Curious why you have listed both a normal 401(k) and a ROTH 401(k)  - which one is for your husband's previous job?  Also, withthe reduced income you will now qualify to deduct expenses for a tIRA - use that to reduce your taxable income.

Otherwise... no real face-punches here.  I would seriosuly rethink the mercedes C250; selling that and purchasing something reliable and older will put you on better footing.

Finally - your Husband is 26.  Even though his "experience" is all in O&G, if ever there was a time to get experience in a different field (perhaps one that is less cyclical) now is that time (when he's young).    He might have to start by taking a large paycut - but it even a $40k/year job would put you both back on the fast tract to FI, and it could be something he likes better. 

MayDay

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #8 on: February 15, 2016, 06:27:34 PM »
My H's company in Ohio just hired a guy from Houston.  Laid off from O&G, couldn't find a job in Houston since every other person is laid off right now, so the whole family is moving up here.

Long story short, are you guys open to relocating?  Because my understanding is that things are tough in your market right now. 

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #9 on: February 15, 2016, 06:44:08 PM »
Curious why you have listed both a normal 401(k) and a ROTH 401(k)  - which one is for your husband's previous job?  Also, withthe reduced income you will now qualify to deduct expenses for a tIRA - use that to reduce your taxable income.

Otherwise... no real face-punches here.  I would seriosuly rethink the mercedes C250; selling that and purchasing something reliable and older will put you on better footing.

Finally - your Husband is 26.  Even though his "experience" is all in O&G, if ever there was a time to get experience in a different field (perhaps one that is less cyclical) now is that time (when he's young).    He might have to start by taking a large paycut - but it even a $40k/year job would put you both back on the fast tract to FI, and it could be something he likes better.

I listed the regular 401K and Roth 401K under deductions because i put 15% in traditional 401K and 5% in Roth 401K through my employer.  My husbands 401k is the one with 26000 (traditional).  I also have a Roth IRA with vanguard.
We are going to be selling the Mercedes but are still trying to determine what to replace it with.  We have a big dog and really don't want to shove her into a MMM approved tiny hatchback especially since our backseat is typically partially filled with friends.  Houston is very spread out and difficult to get around without a car.

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #10 on: February 15, 2016, 06:48:59 PM »
My H's company in Ohio just hired a guy from Houston.  Laid off from O&G, couldn't find a job in Houston since every other person is laid off right now, so the whole family is moving up here.

Long story short, are you guys open to relocating?  Because my understanding is that things are tough in your market right now.

We are not really open to relocating since I love my company and 90% of our plants/business is in/around the Houston area.  My position here is very secure and Houston has a large variety of jobs in other industries where he could work so we wouldn't want to leave.

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #11 on: February 15, 2016, 07:17:14 PM »
Once you have sold the Mercedes you can probably have your pick of a lot of cars that people will be forced to sell.

Since everyone else is looking at the same jobs your husband is considering, in your shoes, I would prepare for a long bout of unemployment.  Starting to cut back now will put you in better shape if he does not find something before the unemployment runs out.   Relocation is something you could consider if the downturn lasts for several years.  When he does go back to work, the good news might be that house prices have tumbled to the point where it makes sense to buy.

ShoulderThingThatGoesUp

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #12 on: February 15, 2016, 08:05:38 PM »
Note that OP's job is likely helped by low energy prices, so she is secure and Houston is a good place for her.

OP, you might as well wait on the house until the foreclosure waves start.

Does your husband have a plan for what jobs to apply to? What was his major in college? Does he have a PE license?

Noodle

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #13 on: February 15, 2016, 08:35:00 PM »
It might be easier to make one car work while Husband is unemployed than you think--for instance, if you are in an office all day, have Husband drive you to work, (or to a bus/light rail stop), and then he has the car all day to do his interviews. It would be worth running the numbers to see if occasional Uber or Zipcar + your car are cheaper than two cars. Being a one car family doesn't have to be a permanent situation--my brother and his wife have switched back and forth between being a one and two car family for years depending on how life ebbs and flows. Of course, if you have to have the car all day to visit plants or whatever, then you will likely need a second vehicle given the Houston geography + climate.

Depending on how long unemployment lasts, you might also look around at the rental market to see if there is something better out there. Houston has a ton of rental units coming online in the next year or so because a housing shortage incited a building boom during the big growth spurt. Now with flat job growth, there will be fewer people looking to rent--and many of those units were upscale ones aimed at the top of the market. So the older units should be even cheaper.

What is your husband doing for health insurance? Is he included in yours?

Are the utilities averaged over the year, or what you are paying right now?

Does your grocery line include all your toiletries, cleaning supplies, paper goods?

Your budget is fairly reasonable right now, so it's about how aggressive you want to be--obviously you can revisit the alcohol, restaurant and entertainment spending. Happy hour, potlucks, being proactive about searching out free entertainment. Does your husband cook? With more free time to shop and cook, that might drop groceries a bit... Since gas is so cheap right now, it might be worth looking at whether occasional trips to Aldi's, the produce market on Airline, or some of the ethnic markets in Bellaire would help on the grocery front.

Frankies Girl

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #14 on: February 15, 2016, 11:11:56 PM »
OP - so sorry the husband got laid off and you've gotten a lot of good advice so far, but gotta ask: why are you so hung up on the idea that a hatchback is the only "MMM approved" car? He isn't going to come to your house and smack you for buying a sedan, and most folks around here are open to sedans and even small SUVs (like the Subaru Forrester, a highly rated vehicle) as long as you're buying a used one and not being silly about having to have a brand new one with the accompanying loan, high insurance and instant depreciation hit off the lot. 

But since you're down one income - that's the kicker really. If you can't afford a second car right now (and I would try to make the one car thing work), the dog isn't going to die riding in a smaller car (my family has had great danes in hatchbacks - they love it and it looks hilarious), or your existing car which is a perfectly fine size, and I assume your friends have their own mode of transportation so could meet up with you instead of you driving all the time - or hey, what about they take a stint at driving you and yours for a while?

There are compromises, you just have to stop instantly blocking out things in your mind because it's not the way you've done it in the past.

I drive a Nissan Rogue - a small SUV - and I live in Houston too and used to commute about 25 miles one way every workday. I saved up for and bought one at a really great price and it has been vital to hauling quite a bit of junk and other trips. I don't have to justify my purchase to anyone else since I:  1) paid cash outright and could easily afford it and the insurance; and 2) plan to drive it until it falls apart.

In other words, would you need to take out a loan to buy another car or would a car purchase hurt your current expense/income input/output? Then don't buy another vehicle or buy a basic cheaper car until you can save/earn more money to replace outright with something better (after the husband finds work especially).

And I agree about Noodle's posting on rent. I live on NW side of town and there are beautiful apartments for under $900 easily. If you're using the "everyone drives everywhere" excuse for needing a second car, then you can move further out to get cheaper nicer apartments/houses to rent if the unemployment stretches out farther than a few months.

Good luck!

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #15 on: February 16, 2016, 06:24:32 AM »
OP - so sorry the husband got laid off and you've gotten a lot of good advice so far, but gotta ask: why are you so hung up on the idea that a hatchback is the only "MMM approved" car? He isn't going to come to your house and smack you for buying a sedan, and most folks around here are open to sedans and even small SUVs (like the Subaru Forrester, a highly rated vehicle) as long as you're buying a used one and not being silly about having to have a brand new one with the accompanying loan, high insurance and instant depreciation hit off the lot. 

But since you're down one income - that's the kicker really. If you can't afford a second car right now (and I would try to make the one car thing work), the dog isn't going to die riding in a smaller car (my family has had great danes in hatchbacks - they love it and it looks hilarious), or your existing car which is a perfectly fine size, and I assume your friends have their own mode of transportation so could meet up with you instead of you driving all the time - or hey, what about they take a stint at driving you and yours for a while?

There are compromises, you just have to stop instantly blocking out things in your mind because it's not the way you've done it in the past.

I drive a Nissan Rogue - a small SUV - and I live in Houston too and used to commute about 25 miles one way every workday. I saved up for and bought one at a really great price and it has been vital to hauling quite a bit of junk and other trips. I don't have to justify my purchase to anyone else since I:  1) paid cash outright and could easily afford it and the insurance; and 2) plan to drive it until it falls apart.

In other words, would you need to take out a loan to buy another car or would a car purchase hurt your current expense/income input/output? Then don't buy another vehicle or buy a basic cheaper car until you can save/earn more money to replace outright with something better (after the husband finds work especially).

And I agree about Noodle's posting on rent. I live on NW side of town and there are beautiful apartments for under $900 easily. If you're using the "everyone drives everywhere" excuse for needing a second car, then you can move further out to get cheaper nicer apartments/houses to rent if the unemployment stretches out farther than a few months.

Good luck!

Thanks for the tips!  It would be hard to make the 1 car thing work since I frequently make day trips from my office to plants all over the city (mileage reimbursed by the company of course). We can afford the second car since selling our Mercedes would get us plenty of cash for the Forrester (A few used, 2006 ones on craigslist are really catching our eye) and still leave 12-15K in our pocket depending on what it sells for.
And our lease is up July 1st.  We were planning to have a house by then but if my husband is still unemployed then we will find a cheaper apartment.

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #16 on: February 16, 2016, 06:30:34 AM »
OP - so sorry the husband got laid off and you've gotten a lot of good advice so far, but gotta ask: why are you so hung up on the idea that a hatchback is the only "MMM approved" car? He isn't going to come to your house and smack you for buying a sedan, and most folks around here are open to sedans and even small SUVs (like the Subaru Forrester, a highly rated vehicle) as long as you're buying a used one and not being silly about having to have a brand new one with the accompanying loan, high insurance and instant depreciation hit off the lot. 

But since you're down one income - that's the kicker really. If you can't afford a second car right now (and I would try to make the one car thing work), the dog isn't going to die riding in a smaller car (my family has had great danes in hatchbacks - they love it and it looks hilarious), or your existing car which is a perfectly fine size, and I assume your friends have their own mode of transportation so could meet up with you instead of you driving all the time - or hey, what about they take a stint at driving you and yours for a while?

There are compromises, you just have to stop instantly blocking out things in your mind because it's not the way you've done it in the past.

I drive a Nissan Rogue - a small SUV - and I live in Houston too and used to commute about 25 miles one way every workday. I saved up for and bought one at a really great price and it has been vital to hauling quite a bit of junk and other trips. I don't have to justify my purchase to anyone else since I:  1) paid cash outright and could easily afford it and the insurance; and 2) plan to drive it until it falls apart.

In other words, would you need to take out a loan to buy another car or would a car purchase hurt your current expense/income input/output? Then don't buy another vehicle or buy a basic cheaper car until you can save/earn more money to replace outright with something better (after the husband finds work especially).

And I agree about Noodle's posting on rent. I live on NW side of town and there are beautiful apartments for under $900 easily. If you're using the "everyone drives everywhere" excuse for needing a second car, then you can move further out to get cheaper nicer apartments/houses to rent if the unemployment stretches out farther than a few months.

Good luck!

Thanks for the tips!  It would be hard to make the 1 car thing work since I frequently make day trips from my office to plants all over the city (mileage reimbursed by the company of course). We can afford the second car since selling our Mercedes would get us plenty of cash for the Forrester (A few used, 2006 ones on craigslist are really catching our eye) and still leave 12-15K in our pocket depending on what it sells for.
And our lease is up July 1st.  We were planning to have a house by then but if my husband is still unemployed then we will find a cheaper apartment.

Missed the part where you have to drive around for your job, so a second car would make the most sense, and you're looking at a decent 2nd vehicle... sounds like you've got a good plan in place. :)

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #17 on: February 16, 2016, 06:35:24 AM »
It might be easier to make one car work while Husband is unemployed than you think--for instance, if you are in an office all day, have Husband drive you to work, (or to a bus/light rail stop), and then he has the car all day to do his interviews. It would be worth running the numbers to see if occasional Uber or Zipcar + your car are cheaper than two cars. Being a one car family doesn't have to be a permanent situation--my brother and his wife have switched back and forth between being a one and two car family for years depending on how life ebbs and flows. Of course, if you have to have the car all day to visit plants or whatever, then you will likely need a second vehicle given the Houston geography + climate. This is exactly the situation we are in.

Depending on how long unemployment lasts, you might also look around at the rental market to see if there is something better out there. Houston has a ton of rental units coming online in the next year or so because a housing shortage incited a building boom during the big growth spurt. Now with flat job growth, there will be fewer people looking to rent--and many of those units were upscale ones aimed at the top of the market. So the older units should be even cheaper. Lease is up July 1st so we will definitely start looking for better options.

What is your husband doing for health insurance? Is he included in yours? Luckily, last year I decided my insurance was better than his so I moved him over to my medical, dental and vision (and got an extra $500 from my employer for HSA :))  Sooooo happy we did this now.

Are the utilities averaged over the year, or what you are paying right now?  The trash, water, gas and insurance are pretty much fixed through the apartment.  Our electric bill has been between $40-$60 each month recently but it is sure the rise over the summer months as we start using the AC again (really haven't used heat at all since there are quite a few days this winter where it gets past 70 degrees and even breaks 80).

Does your grocery line include all your toiletries, cleaning supplies, paper goods? Yes.  We get everything from Costco, HEB or Walmart

Your budget is fairly reasonable right now, so it's about how aggressive you want to be--obviously you can revisit the alcohol, restaurant and entertainment spending. Happy hour, potlucks, being proactive about searching out free entertainment. Does your husband cook? With more free time to shop and cook, that might drop groceries a bit... Since gas is so cheap right now, it might be worth looking at whether occasional trips to Aldi's, the produce market on Airline, or some of the ethnic markets in Bellaire would help on the grocery front. He does cook.  I don't remember the last time I went out for lunch (when it wasn't a company-covered lunch) and we eat at home almost every night.  We could definitely cutback on some fancy snacks and prepackaged healthy foods that make my lunch uber convenient but I will do my best to cutback on the restaurants/bars/alcohol before I start cutting the grocery budget.

nereo

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #18 on: February 16, 2016, 06:46:32 AM »
FightingForFIRE - serious question here: why exactly are you looking to purchase a home? 
As a relatively recent home-owner myself I"m not trying to talk you out of it, but I'm curious about your reasons. 
Have you run a good "Rent vs. Buy" calculator like this one (click link) to see under what circumstances owning is better than renting?

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #19 on: February 16, 2016, 07:11:45 AM »

Current expenses: Total- $2970
Fixed - $1880
Rent - $1265 already addressed by others- I would consider a cheaper apartment instead of buying, because even if your husband gets a new job, he won't have any idea of how secure it is after only a few months
Transportation - $90 (Husband play rugby, a lot of out of town games) when one of us was unemployed, even though we could afford things like this, they got cut. Why? Because the unemployed person literally had no obligations (after a workday full of applying for jobs) to prevent them from finding a cheaper way to work out.
Utilities - $125 (Includes water, trash, insurance paid to the apt. and electricity paid by us separately.)
Car Insurance: $138 (1999 Toyota Corolla, 2013 Mercedes C250)
Subscriptions: $200 [ $130 to ATT (just switched to Project Fi so that should be closer to $60 soon), $60 for internet, $8 for Netflix). $60 seems high for internet. Are there cheaper options? We were surprised at how well Netflix works even with a lower upload/download internet package.

Flex Spending - $1085
Groceries: $400 This seems high, even if you include home supplies. We live in a much HCOL area, and are down to $200-250 for both. Do you have an ALDI or other cheap supermarket? Also, now is the time to stop prepackaged food- the unemployed spouse can prepackage things into tupperware/ziploc bags for you. You will never have as much time to do this stuff as when you don't have a job.
Entertainment: $50 (typically 5K registrations, bowling or Topgolf once a month with friends). If I were you, I would make one entertainment budget and have it include restaurants and bars. Personally, I think that if you are serious about early retirement, then $100 is a really healthy monthly entertainment budget for two. It makes you get creative and have fun without spending exorbitant amounts of money. Just order one entree and split it at a restaurant, or even better- go out just for ice cream instead of a full meal. Run your own route instead of paying a 5K registration. Bowl when there are specials instead of at the most expensive time of the week. Invite your friends over for dinner, and they will likely invite you back in the future.
Restaurants and Bars: $150 (I know we should cut immediately but we feel deprived when friends go out and we don't, we rarely eat out on our own.  I know there are cheaper alternative (cooking and drinking at our respective apartments) but we always spend around this much no matter how hard we try). I mean this in the nicest way possible, but you sound really complainypants when you say you "feel deprived." If you want to actually feel deprived, go live like most of the world does. Or even how the poor in America does. Otherwise, fess up to the fact that you are just prioritizing eating out over early retirement.
Pets and Home: $125 (dog food, cat food, and vet bills mostly) Not terrible, but have you priced out other options lately? I was recently surprised to find an even cheaper supplier for my animals' food. The unemployed spouse could look into this with all of that free time.
Alcohol: $125 (Did I mention my husband plays rugby?  This is actually much less than just a year or two ago.) This seems really high to me, especially with the other $150 restaurant and bars budget. How much of this is at bars? Do you buy boxed wine? If not, why not try it? There is some really great stuff out there.
Unexpected: $150 (Anything from spontaneous adventures, to car repairs, to shoes or clothes replacement) We personally cut out all spontaneous adventures and shoes/clothes replacement when one of us is unemployed. The first priority is getting back to work. And you shouldn't need any clothing replaced (besides perhaps an interview outfit) if you are unemployed.


Assets look good considering you only started saving early last year. However, there is a lot of fat to trim here, if you want to accelerate early retirement. The real question is whether that is what you truly want. You have presented a lot of other priorities that make me question how important it really is to you. What is more important to you- even earlier retirement (if you trim this fat now), or lots of luxuries (expensive out-of-town rugby, a car with a special space for your dog to chill when you are driving friends around, and restaurant experiences)?


ShoulderThingThatGoesUp

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #20 on: February 16, 2016, 07:25:48 AM »
And I agree about Noodle's posting on rent. I live on NW side of town and there are beautiful apartments for under $900 easily. If you're using the "everyone drives everywhere" excuse for needing a second car, then you can move further out to get cheaper nicer apartments/houses to rent if the unemployment stretches out farther than a few months.

Good luck!

And the OP's job clearly involves the east side, mostly, so I would expect there is some seriously cheap stuff out that way.

I feel that your husband should at least be earning enough to pay for his rugby expenses. A "crappy" job while he searches for a good one would leave plenty of time for interviews, would show good work ethic to the companies he's interviewing for, and would help out your savings rate.

Noodle

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #21 on: February 16, 2016, 08:45:41 AM »
Well, the husband will have unemployment insurance coming in for six months, which wasn't in this case study. (Where's the severance? Was it a lump sum that is already in the savings account?) So he would need to run the numbers to figure out whether a low-paying job would balance out the loss of unemployment compensation. (If that paperwork isn't done already, he really needs to get on it. 2K/month is small potatoes next to his old job, but still a nice addition to the family coffers.) As others have said, it's not charity or social services. The state of Texas makes his employers pay because they know perfectly well that the economy is cyclical and they would rather the employers insure against that than having a bunch of new people on the social services rolls. Not taking unemployment is like not using your medical insurance because employers pay for it. (OP may know this perfectly well...it's just a public service announcement.)

The other area which is not in the budget is all the one-offs--things that aren't regular expenses like food or gas, but not emergencies either. For instance, your registration and inspection on two cars. Haircuts. Dry cleaning for the interview clothes. I don't see anything for gifts...I mean, it's perfectly fine not to give gifts when money is tight, but y'all are at the age when a lot of people are on the wedding circuit. $150 a month seems a bit low for two people to cover everything that's not already in categories. I just bring it up because I took up tracking again last year, and I discovered that while I have got the monthly stuff pretty well dialed down, and I am good about keeping the strictly fun stuff low key, it's the irregular but necessary things that mount up.

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #22 on: February 16, 2016, 09:10:16 AM »
FightingForFIRE - serious question here: why exactly are you looking to purchase a home? 
As a relatively recent home-owner myself I"m not trying to talk you out of it, but I'm curious about your reasons. 
Have you run a good "Rent vs. Buy" calculator like this one (click link) to see under what circumstances owning is better than renting?
Main reason we want to buy is to finally have a place that is our own that we can settle down in and work on. We have been together close to 6 years now and are quite sick of renting and all the shenanigans that apartments pull. We want private space and not have to worry about other people not picking up dog poop around the apartment complex, blaring loud music or stomping.  And we want a yard for our dog so she can go outside via doggy door while we are at work (not problem currently with my husband at home). 
With my company very centrally located in Houston and my desire to stay with them (really a great company and I feel lucky to work here), we don't plan on leaving the city for at least 10 years.

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #23 on: February 16, 2016, 09:22:06 AM »
Well, the husband will have unemployment insurance coming in for six months, which wasn't in this case study. He has applied for unemployment, nothing has come in yet but he will have about six months (~12K).  Plan on putting whatever we get into savings since we can cover expenses and a bit of saving with my income(Where's the severance? Was it a lump sum that is already in the savings account? Severance was a lump sum (~5K) that is already in savings) So he would need to run the numbers to figure out whether a low-paying job would balance out the loss of unemployment compensation. (If that paperwork isn't done already, he really needs to get on it. 2K/month is small potatoes next to his old job, but still a nice addition to the family coffers.) As others have said, it's not charity or social services. The state of Texas makes his employers pay because they know perfectly well that the economy is cyclical and they would rather the employers insure against that than having a bunch of new people on the social services rolls. Not taking unemployment is like not using your medical insurance because employers pay for it. (OP may know this perfectly well...it's just a public service announcement.)

The other area which is not in the budget is all the one-offs--things that aren't regular expenses like food or gas, but not emergencies either. For instance, your registration and inspection on two cars. Haircuts. Dry cleaning for the interview clothes. I don't see anything for gifts...I mean, it's perfectly fine not to give gifts when money is tight, but y'all are at the age when a lot of people are on the wedding circuit. $150 a month seems a bit low for two people to cover everything that's not already in categories. We put all those one-offs in the unexpected category.  Track all spending using Learnvest (First one I tried back in the day and I really enjoy the user interface).  Sometimes we go over on the unexpected but other times we are well under.  We average about $150 so it balances out. I just bring it up because I took up tracking again last year, and I discovered that while I have got the monthly stuff pretty well dialed down, and I am good about keeping the strictly fun stuff low key, it's the irregular but necessary things that mount up.

ooeei

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #24 on: February 16, 2016, 10:00:34 AM »
FightingForFIRE - serious question here: why exactly are you looking to purchase a home? 
As a relatively recent home-owner myself I"m not trying to talk you out of it, but I'm curious about your reasons. 
Have you run a good "Rent vs. Buy" calculator like this one (click link) to see under what circumstances owning is better than renting?
Main reason we want to buy is to finally have a place that is our own that we can settle down in and work on. We have been together close to 6 years now and are quite sick of renting and all the shenanigans that apartments pull. We want private space and not have to worry about other people not picking up dog poop around the apartment complex, blaring loud music or stomping.  And we want a yard for our dog so she can go outside via doggy door while we are at work (not problem currently with my husband at home). 
With my company very centrally located in Houston and my desire to stay with them (really a great company and I feel lucky to work here), we don't plan on leaving the city for at least 10 years.

I vote to wait on the home, even if you have to get a 6 month lease at a new apartment (or renew the current one).  Houston is a big place.  I'm imagining a situation where you buy a house 20 minutes away from work, and your husband gets a job offer 60 minutes away in the same direction.  If you waited on buying a house, you could get a house between the two jobs.  If you already bought it, you're both commuting an extra 20 minutes in the exact same direction because you wanted a house a few months sooner.

I find it hard to believe your dog would go outside using the doggie door much during the summer anyway, so you've got quite a few months before he's missing out on the nice fall weather.

zephyr911

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #25 on: February 16, 2016, 02:07:42 PM »
It would be hard to cut down to one car due to the fact that my husband would need a ride while completing interviews and his later work commute.

So... have him ride to work with you, use the car all day, and pick you up at the end. Come on OP, think outside the box. ;)

ShoulderThingThatGoesUp

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #26 on: February 16, 2016, 02:11:09 PM »
It would be hard to cut down to one car due to the fact that my husband would need a ride while completing interviews and his later work commute.

So... have him ride to work with you, use the car all day, and pick you up at the end. Come on OP, think outside the box. ;)

Right. You certainly can't justify a Mercedes right now! (Hint: Nobody can justify a Mercedes.)

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #27 on: February 16, 2016, 02:54:36 PM »
It would be hard to cut down to one car due to the fact that my husband would need a ride while completing interviews and his later work commute.

So... have him ride to work with you, use the car all day, and pick you up at the end. Come on OP, think outside the box. ;)
I need my car to travel during the day for my job (support several different plants around Houston). Mileage is reimbursed by the company.
Right. You certainly can't justify a Mercedes right now! (Hint: Nobody can justify a Mercedes.)
We are selling the Mercedes as stated in a previous comment

zephyr911

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #28 on: February 16, 2016, 02:59:49 PM »
It would be hard to cut down to one car due to the fact that my husband would need a ride while completing interviews and his later work commute.

So... have him ride to work with you, use the car all day, and pick you up at the end. Come on OP, think outside the box. ;)
I need my car to travel during the day for my job (support several different plants around Houston). Mileage is reimbursed by the company.
Right. You certainly can't justify a Mercedes right now! (Hint: Nobody can justify a Mercedes.)
We are selling the Mercedes as stated in a previous comment
Man, we suck. Does anyone even read the things you say before responding? Sorry ;)

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #29 on: February 16, 2016, 03:06:37 PM »
It would be hard to cut down to one car due to the fact that my husband would need a ride while completing interviews and his later work commute.

So... have him ride to work with you, use the car all day, and pick you up at the end. Come on OP, think outside the box. ;)
I need my car to travel during the day for my job (support several different plants around Houston). Mileage is reimbursed by the company.
Right. You certainly can't justify a Mercedes right now! (Hint: Nobody can justify a Mercedes.)
We are selling the Mercedes as stated in a previous comment
Man, we suck. Does anyone even read the things you say before responding? Sorry ;)
Nope.  Also to the OP, you should sell the Mercedes.  Has anyone mentioned that yet?
:-)

dycker1978

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #30 on: February 16, 2016, 03:17:44 PM »
I just have one thing to say.  Why has nothing really been said about the eating out/bar expense? $275 a month to eat and drink out.  This forum really has gone soft in regards to face punches...

This can be cut.  This is not a need. 

snuggler

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #31 on: February 16, 2016, 03:21:36 PM »
FightingForFIRE - serious question here: why exactly are you looking to purchase a home? 
As a relatively recent home-owner myself I"m not trying to talk you out of it, but I'm curious about your reasons. 
Have you run a good "Rent vs. Buy" calculator like this one (click link) to see under what circumstances owning is better than renting?
Main reason we want to buy is to finally have a place that is our own that we can settle down in and work on. We have been together close to 6 years now and are quite sick of renting and all the shenanigans that apartments pull. We want private space and not have to worry about other people not picking up dog poop around the apartment complex, blaring loud music or stomping.  And we want a yard for our dog so she can go outside via doggy door while we are at work (not problem currently with my husband at home). 
With my company very centrally located in Houston and my desire to stay with them (really a great company and I feel lucky to work here), we don't plan on leaving the city for at least 10 years.

I totally get this. I really do. But, you two should seriously think about delaying the purchase of a home. What if your husband finds an amazing dream job in North Dakota (or another similarly far-away state)? What if the offer is so great you wouldn't have to work? What if he doesn't get a job for several years? What if he gets one close to your work, and you find a house there, but then he absolutely hates it and wants to get out?

Have you ever considered renting a condo/townhome? Or really anything that is not owned by a real estate company? I've found them to have much nicer landlords, thicker walls, and people who take more responsibility for the building, its grounds, and their pets. It has seriously helped me reduce all of the things that you are complaining about the renting process.

And remember- even if you purchase a home, you could have loud neighbors or neighbors who let their dogs go to the bathroom all over your property. Happens all the time.

Dicey

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #32 on: February 17, 2016, 08:00:46 AM »
Right. You certainly can't justify a Mercedes right now! (Hint: Nobody can justify a Mercedes.)
While I agree that the OP has a hair on fire emergency right now, I disagree that "Nobody can justify a Mercedes." In fact, I call total BS on that statement. Once a person gets to FIRE and can afford it, they are free to drive ANYthing they want.

Back to you, OP, a lot of people are in crisis mode, due to the current oil situation. I'd consider selling the Mercedes out of state. Still plenty of Silicon Valley millionaires who practice their own brand of frugality by buying clean, used Mercedes via the Internet. Ditto for SoCal. Since DH has the time, this might be worth looking into.

In the same vein, I understand your desire to buy a house, but in real estate, timing is everything. As long as the oil market is down, real estate prices will reflect that. Due to more stringent mortgage requirements in the last few years, it may take a little longer to see the effects this time, but you can be positive it will happen. Would you rather buy a gigantic shiny thing at full retail or wait for it to be 40% off? As others have pointed out, your location is up in the air until DH lands his next job. Instead of whining (Sorry, but you are.) that the you wanna buy a house, you should be on your knees in gratitude that you don't own one right now.

What you want during layoffs is maximum flexibility, which is what you have. For now,  focus on the excellent advice of smart people like Snuggler, and disable whatever Real Estate porn you are currently enjoying. You will get through this setback just fine, but future you will be a lot happier (and wealthier) if you get the timing right.


afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #33 on: February 17, 2016, 08:45:40 AM »
Right. You certainly can't justify a Mercedes right now! (Hint: Nobody can justify a Mercedes.)
While I agree that the OP has a hair on fire emergency right now, I disagree that "Nobody can justify a Mercedes." In fact, I call total BS on that statement. Once a person gets to FIRE and can afford it, they are free to drive ANYthing they want.

Back to you, OP, a lot of people are in crisis mode, due to the current oil situation. I'd consider selling the Mercedes out of state. Still plenty of Silicon Valley millionaires who practice their own brand of frugality by buying clean, used Mercedes via the Internet. Ditto for SoCal. Since DH has the time, this might be worth looking into.

In the same vein, I understand your desire to buy a house, but in real estate, timing is everything. As long as the oil market is down, real estate prices will reflect that. Due to more stringent mortgage requirements in the last few years, it may take a little longer to see the effects this time, but you can be positive it will happen. Would you rather buy a gigantic shiny thing at full retail or wait for it to be 40% off? As others have pointed out, your location is up in the air until DH lands his next job. Instead of whining (Sorry, but you are.) that the you wanna buy a house, you should be on your knees in gratitude that you don't own one right now.

What you want during layoffs is maximum flexibility, which is what you have. For now,  focus on the excellent advice of smart people like Snuggler, and disable whatever Real Estate porn you are currently enjoying. You will get through this setback just fine, but future you will be a lot happier (and wealthier) if you get the timing right.

Ow, I definitely felt that punch.  We are definitely grateful to be mortgage free and debt free right now.  I might still be too optimistic that hubby will be employed soon in a stable job that he likes (if not loves).  But point taken.  How long do you think we should wait for house prices to drop? 6 months? 1 year? 2 years?  Owning is definitely the end goal for us and we do want to be smart about it.
« Last Edit: February 18, 2016, 07:07:41 AM by FightingForFIRE »

MayDay

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #34 on: February 17, 2016, 08:52:24 AM »
I would highly suggest changing your mindset about how soon he will be employed.  It is important to be optimistic- but at the same time, you need to be realistic. 

Depending on how long the oil prices stay low (and a lot of signs are pointing to a LONG time) yes there may be jobs in other sectors, but ALL those laid off O&G people are competing for them. 

Realistically, he may be unemployed for a long time, or have to relocate.  You need to face that this is a real possibility.  Is it a foregone conclusion?  Of course not.  Some O&G people will certainly get other jobs in Houston.  But LOTS will not.  You need to hope and work towards your H being one who gets a job quickly, but you need to plan for the scenario where he does not. 

In other words, it is completely insane to even remotely consider buying a house until he has a new job.  DO NOT DO IT. 

Re. your eating out and alcohol expenses:  If your H being laid off is not reason enough to cut this down, then you (and your friends) have bigger problems.  Yes you can "afford" it as in not being in the red, but certainly now is the perfect time to reset some patterns and expectations with your friends, and switch to more staying in and less going out. 

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #35 on: February 17, 2016, 09:04:38 AM »
I would highly suggest changing your mindset about how soon he will be employed.  It is important to be optimistic- but at the same time, you need to be realistic. 

Depending on how long the oil prices stay low (and a lot of signs are pointing to a LONG time) yes there may be jobs in other sectors, but ALL those laid off O&G people are competing for them. 

Realistically, he may be unemployed for a long time, or have to relocate.  You need to face that this is a real possibility.  Is it a foregone conclusion?  Of course not.  Some O&G people will certainly get other jobs in Houston.  But LOTS will not.  You need to hope and work towards your H being one who gets a job quickly, but you need to plan for the scenario where he does not. 

In other words, it is completely insane to even remotely consider buying a house until he has a new job.  DO NOT DO IT. 

Re. your eating out and alcohol expenses:  If your H being laid off is not reason enough to cut this down, then you (and your friends) have bigger problems.  Yes you can "afford" it as in not being in the red, but certainly now is the perfect time to reset some patterns and expectations with your friends, and switch to more staying in and less going out.

We are not planning to buy a house until he has a job.  There were comments to wait even after that since prices will most likely to continue to drop.
And this post is my attempt at being realistic and planning for a scenario where he won't find a job since I included no income for him besides unemployment. 
Hubby would become full-time SAHD before we relocate.  Our plan was always for him to stay at home with kids (when they happen) and I would continue working until I could retire.  I love my job, its very secure, pays well, and 90% of our business is right here Houston.

Eating out and alcohol expenses our 1st and 2nd priority (see edits on original post.)  Not trying to justify those expenses I know they are high.
« Last Edit: February 17, 2016, 09:08:18 AM by FightingForFIRE »

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #36 on: March 15, 2016, 03:32:34 PM »
Update: 3/15

I'm 24 and my husband is 26 and we live in Houston, TX.  My husband and I are both engineers and had a pretty healthy savings rate of around 60% while still enjoying plenty of overindulgent spending on bars, trips, random amazon things.  But then, last month my husband was laid off.  Hoping for a little help trimming the fat from our pretty chubby budget.
Trying to follow the "How to Write a Case Study Topic" format.

Life Situation: Married filing jointly (24 and 26), no kids.  Living in Houston, TX (renting).

Gross Salary/Wages: My salary is 95K.  (8000/mo before deductions). 
Husbands salary was around 75K when he was employed but he was in O&G so with this market, not sure when he will find work.

Pre-tax deductions: Total: $862/pay period = 1725/month
Dental: $19
Vision: $6.00
401K: $600
HSA: $240

After-tax deductions: Roth 401K: $120/pay period = $240/month

Other Ordinary Income: No other ordinary income
Qualified Dividends & Long Term Capital Gains: I don't think these are significant...?
Rental Income, Actual Expenses, and Depreciation: N/A
Taxes: $783
TX Withholding - $498
TX EE SS - $230
TX EE Medicare - $782

Adjusted Gross Income: $4400/mo
Husband's Unemployment for 56 months: $2000/mo

Current expenses: Total- $2970
Fixed - $1880
Rent - $1265 (Thanks for the tips guys, we will be relocating to a cheaper apartment when our Lease is up 7/1.)
Transportation - $90 (Husband play rugby, a lot of out of town games)
Utilities - $125 (Includes water, trash, insurance paid to the apt. and electricity paid by us separately.)
Car Insurance: $115 (1999 Toyota Corolla, 2007 Toyota Highlander2013 Mercedes C250)
Subscriptions: $200 [ $130 to ATT (just switched to Project Fi so that should be closer to $60 soon), $60 for internet, $8 for Netflix).

Flex Spending - $1085
Groceries: $400 (Realized we can make some changes here.  Not first priority but definitely room for improvement.)
Entertainment: $50 (typically 5K registrations, bowling or Topgolf once a month with friends).
Restaurants and Bars: $150 (1st priority to try and spend less.)
Pets and Home: $125 (dog food, cat food, and vet bills mostly)
Alcohol: $125 (Did I mention my husband plays rugby?  This is actually much less than just a year or two ago.) For clarification this is just on alcohol from the liquor stores, mostly 6 packs and nice bottles of whiskey.  I know this is high and we will keep working to bring this down as 2nd priority. (P.S. When I drink wine, I only get box wine)
Unexpected: $150 (Anything from spontaneous adventures, to car repairs, to shoes or clothes replacement)

Saving - $1250
[this doesn't include the 401K contributions listed above.]


Assets: ~$105,000$121,000
$43000$55,000 in online savings account (earmarked for house down payment).
$3,800 in Roth IRA
$33000 in my 401K
$28000 in SO's 401K (stagnant until he finds another job).
$2500 in HSA

Liabilities: $0 (no debt :))


OK so I think I included everything.  We really only started saving early last year after I discovered MMM.  I really want to retire by the time I'm 35 since I've only been working full time for a year and a half and I'm already sick of it and want to sleep in and chill with my hubby and my pets.  We were on track to be there before my husband was laid off with our ludicrous income level and ludicrous spending and I'm now realizing that I may have to make some more cuts for that to happen, depending on how long I am the sole wage earner for the family.
Let the face slaps commence.  I'm not sure I'm ready but I need them.

This is my 1 month update/journal of my progress. 
We sold the Mercedes for $23,000!  We bought a 2007 Toyota Highlander of craigslist with 100K miles for $10,000. 
Net profit: 13K + $20 every month due to lower insurance.
Made some changes to the budget, will post an update at the end of the month to show month-to-month comparison.

Axecleaver

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #37 on: March 17, 2016, 08:39:45 AM »
Great job! It feels good to take control of those things. A year or two from now you'll look back and shake your head at what you used to consider "reasonable spending." I certainly do.

How is the job search going?

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #38 on: March 17, 2016, 01:24:00 PM »
Great job! It feels good to take control of those things. A year or two from now you'll look back and shake your head at what you used to consider "reasonable spending." I certainly do.

How is the job search going?
No interviews yet.  He's been unemployed a little less than 2 months. There is a job fair close to us in a few weeks that he signed up for.  Just keeping my fingers crossed for now.

mm1970

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #39 on: March 17, 2016, 01:37:40 PM »
FightingForFIRE - serious question here: why exactly are you looking to purchase a home? 
As a relatively recent home-owner myself I"m not trying to talk you out of it, but I'm curious about your reasons. 
Have you run a good "Rent vs. Buy" calculator like this one (click link) to see under what circumstances owning is better than renting?
Main reason we want to buy is to finally have a place that is our own that we can settle down in and work on. We have been together close to 6 years now and are quite sick of renting and all the shenanigans that apartments pull. We want private space and not have to worry about other people not picking up dog poop around the apartment complex, blaring loud music or stomping.  And we want a yard for our dog so she can go outside via doggy door while we are at work (not problem currently with my husband at home). 
With my company very centrally located in Houston and my desire to stay with them (really a great company and I feel lucky to work here), we don't plan on leaving the city for at least 10 years.
I would also wait on buying the home, especially if other posters are right about the wave of foreclosures to come.  Hindsight is 20/20 for me, we bought near the peak, and our next door neighbors bought at the bottom - their house was $288k less than ours.  So yeah.  I'd watch the market for awhile (a year or so) to feel it out.

I think you are lucky to have such a great job that you like (and $95k, at your age, my god.  I'm a Chemical engineer and I don't even want to think about what age I was when I hit that number...probably 39?  Ugh.)  Is your husband's degree in something similar?  I think 26 is a great time to try something new.  I changed industries at age 27.


afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #40 on: March 17, 2016, 02:43:58 PM »
FightingForFIRE - serious question here: why exactly are you looking to purchase a home? 
As a relatively recent home-owner myself I"m not trying to talk you out of it, but I'm curious about your reasons. 
Have you run a good "Rent vs. Buy" calculator like this one (click link) to see under what circumstances owning is better than renting?
Main reason we want to buy is to finally have a place that is our own that we can settle down in and work on. We have been together close to 6 years now and are quite sick of renting and all the shenanigans that apartments pull. We want private space and not have to worry about other people not picking up dog poop around the apartment complex, blaring loud music or stomping.  And we want a yard for our dog so she can go outside via doggy door while we are at work (not problem currently with my husband at home). 
With my company very centrally located in Houston and my desire to stay with them (really a great company and I feel lucky to work here), we don't plan on leaving the city for at least 10 years.
I would also wait on buying the home, especially if other posters are right about the wave of foreclosures to come.  Hindsight is 20/20 for me, we bought near the peak, and our next door neighbors bought at the bottom - their house was $288k less than ours.  So yeah.  I'd watch the market for awhile (a year or so) to feel it out.

I think you are lucky to have such a great job that you like (and $95k, at your age, my god.  I'm a Chemical engineer and I don't even want to think about what age I was when I hit that number...probably 39?  Ugh.)  Is your husband's degree in something similar?  I think 26 is a great time to try something new.  I changed industries at age 27.

Yea when I showed my parents my offer letter they were dumbstruck.  I chalk it up to a combination of hard work and right place/right time.
My husband is a Mechanical Engineer.  He is looking into changing industries since he never really wanted to be in O&G that was just the job he found after he graduated.  Hard part is that everyone wants someone with 5+ years of relevant experience and he is sitting right at 3 years.  When he applied for a job requiring less experience then that he was told he was overqualified.

Dicey

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #41 on: March 17, 2016, 03:52:26 PM »
Happy to see such rapid improvements!

To answer "How long should we wait?" is very tricky. It depends on too many factors for me to predict. I am concerned that your firm's business is concentrated in Houston, which is so O & G dependent. Your company could face trouble as the effects of the current situation ripple out. Keep saving, keep watching. This could be a bloodbath and you'll stay much cleaner sitting on the sidelines. It's so unlikely that home prices will rise rapidly in your market that I'd consider cramming yourselves into a tiny rental and really ratchet up the savings. Your future self will thank you for living like a college student for the next year or so.

Sorry, another small facepunch today (and a funny to temper it). You used the words "liquor store" which was fingernails on a chalkboard to this mustachian. For Pete's sake, woman, buy your liquor at Sam's or Costco! If you're not a member, the savings on booze will make it pay for itself in no time. This way you can cut down your spending, but not sacrifice your actual drinking, lol! (Reference to lower right of list, lolz.)

Based on the rapidity of your response, I have high confidence that you will reach your goals.


mm1970

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #42 on: March 17, 2016, 05:01:05 PM »
FightingForFIRE - serious question here: why exactly are you looking to purchase a home? 
As a relatively recent home-owner myself I"m not trying to talk you out of it, but I'm curious about your reasons. 
Have you run a good "Rent vs. Buy" calculator like this one (click link) to see under what circumstances owning is better than renting?
Main reason we want to buy is to finally have a place that is our own that we can settle down in and work on. We have been together close to 6 years now and are quite sick of renting and all the shenanigans that apartments pull. We want private space and not have to worry about other people not picking up dog poop around the apartment complex, blaring loud music or stomping.  And we want a yard for our dog so she can go outside via doggy door while we are at work (not problem currently with my husband at home). 
With my company very centrally located in Houston and my desire to stay with them (really a great company and I feel lucky to work here), we don't plan on leaving the city for at least 10 years.
I would also wait on buying the home, especially if other posters are right about the wave of foreclosures to come.  Hindsight is 20/20 for me, we bought near the peak, and our next door neighbors bought at the bottom - their house was $288k less than ours.  So yeah.  I'd watch the market for awhile (a year or so) to feel it out.

I think you are lucky to have such a great job that you like (and $95k, at your age, my god.  I'm a Chemical engineer and I don't even want to think about what age I was when I hit that number...probably 39?  Ugh.)  Is your husband's degree in something similar?  I think 26 is a great time to try something new.  I changed industries at age 27.

Yea when I showed my parents my offer letter they were dumbstruck.  I chalk it up to a combination of hard work and right place/right time.
My husband is a Mechanical Engineer.  He is looking into changing industries since he never really wanted to be in O&G that was just the job he found after he graduated.  Hard part is that everyone wants someone with 5+ years of relevant experience and he is sitting right at 3 years.  When he applied for a job requiring less experience then that he was told he was overqualified.
Definitely have him keep trying.  Honestly, the overqualified part is BS on the part of the hiring manager, especially if it's a different industry.  It's code for "too expensive".

I can't speak for O&G or Houston, but 2-3 years is the PERFECT time to look for a new job in semiconductors.  You go from someone who knows very little and is totally green, to someone who understands the processes, wafer handling, the product, how to run experiments, how to analyze and present data, how to read SPC charts - pretty quickly.  At least if you were lucky to have a good boss (I was a very good boss!)  Within the industry you'd be lucky to get a 4% raise each year, but a different company is more than happy to give you 10-20% for that experience.

afuera

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #43 on: October 24, 2016, 11:45:15 AM »
HUBS GOT A JOB!! *happy dance*
He got the offer letter today with a start date of 11/14!  His ~10 month stretch of unemployment is finally over!

nereo

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #44 on: October 24, 2016, 11:50:28 AM »
HUBS GOT A JOB!! *happy dance*
He got the offer letter today with a start date of 11/14!  His ~10 month stretch of unemployment is finally over!
awesome, congrats! I know what an emotional rollercoaster that can be, even when you are financially ok.

onlykelsey

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Re: *Updated* Reader Case Study - House Hunting when SO was laid off.
« Reply #45 on: October 24, 2016, 11:50:44 AM »
Congrats!

ysette9

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Re: *Updated* Reader Case Study - House Hunting when SO was laid off.
« Reply #46 on: October 24, 2016, 01:06:21 PM »
Congratulations to your husband! What kind of job is it? I imagine that must have been a long, hard stretch for him. How has your progress been on the financial front in the meantime? We are all cheering for you here. Keep us posted.

Axecleaver

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Re: *Updated* Reader Case Study - House Hunting when SO was laid off.
« Reply #47 on: October 25, 2016, 07:09:59 AM »
Great to see a happy update on this story! Did he stay in O&G or move to a different field?

Dicey

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Re: *Updated* Reader Case Study - House Hunting when SO was laid off.
« Reply #48 on: October 25, 2016, 07:34:29 AM »
Details, please!

mm1970

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Re: Reader Case Study - House Hunting when SO was laid off.
« Reply #49 on: October 25, 2016, 12:58:43 PM »
HUBS GOT A JOB!! *happy dance*
He got the offer letter today with a start date of 11/14!  His ~10 month stretch of unemployment is finally over!
Great news!!

 

Wow, a phone plan for fifteen bucks!