Case Study - Doing well, but need moderate face-punching?

[testtest]

Long time MMM lurkers, and whoa, has this site changed our lives over the years. Thanks, everyone. You have been legitimately instrumental in altering our trajectory towards financial security, which naturally translates into many other safeties and comforts, even generationally. Some of the greatest lessons have been from the case studies of the people with their whole lives in a dumpster completely on fire just pouring on more fuel; I think we realized that could be us if we didn't pay attention, so we've been paying attention. Figured we're due for our own case study to check in with the community, so here goes...

Mid-thirties couple with a young child (under 5) in fairly HCOL city. Wife would like to RE yesterday, husband really just wants FI so he can tell everyone what he really thinks, but does like working. Husband would be happy to work a satisfying, lower paying, perhaps part time job after (or as part of) RE. Numbers below are for both of us. We pool everything, cause, y'know, we're a fucking team.

Life Situation: Married filing jointly, one human dependent (under 5 y/o), and a few furry family members whom we take good care of. We live in a fairly HCOL city.

Gross Salary/Wages: Husband gross $91,300, Wife gross $86,500 (total gross 177800). Please note that our income has been increasing rapidly over the last few years, we have not always had this high income. Our monthly income after deductions is about $8,160

Individual amounts of each Pre-tax deductions: Maxing both our 401ks to $18,500, total $37,000. Also max dependent care account for $5,000 pre-tax. We pay for childcare out of pocket monthly, so it could make sense to add this 5k to our income post-tax, if that makes sense.

Other Ordinary Income: None.

Qualified Dividends & Long Term Capital Gains: None.

Rental Income, Actual Expenses, and Depreciation: None.

Adjusted Gross Income: 177800 - 37000 - 5000 = $135,800 AGI

Taxes: Federal, state/local, and FICA.  I don't have a stub in front of me, but we have a normal tax situation (all W-2 income, no crazy deductions). I use a total 28% tax rate, so just multiply our AGI by 0.72 to get our net of $97,776. As I mentioned above, it could make sense to add in the 5k (97776 does not include this) because we pay for childcare every month, then get a 5k check at the end of the year which goes into the "general fund".

Current expenses: Some figures rounded for ease. We've been using Mint for years so we do have pretty good data. I can get more granular as needed. Per month:
Natural Gas: $60
Electric: $55
Trash: $25
Cell: $28 (this may change soon...might be leaving Republic Wireless after a great 5 year run for Google FI. Might change to be ~$50)
Car payment: $291
Fuel: $100
Car insurance: $135
Internet and Netflix: $80
Water: $85 (crazy high in our area)
Food, groceries work lunches: $1000 (I know this is a bit high)
Roth IRA: $916 (two maxed Roth IRAs)
Childcare: $1100
Mortgage (PITI): $1360, what's the value of splitting out PI and TI for case study?
Misc.: $250, there's always something, car needs exhaust testing, renewal of a membership (art museum, zoo), doctor/vet visits. This is not the fun category. Calling it 250 average.
Fun: $100, for how much money we have, we don't spend a great deal on fun. Calling it 100.

Total monthly expenses: $5,585

Approximate monthly dollars remaining per month: 8160 - 5585 = 2575 * .9 = $2,300 (let's assume I'm wrong by 10%, and round down).

Expected ER expenses: We figure our normal, comfortable spend is around $40k, where we don't really have to think about it. Our assumption is that we'll have a paid off house in retirement (and no childcare expenses, of course). So if you take that 5585 and remove house and childcare you get a number that fits into 40k. Add a little in RE for whatever hobbies, but we're pretty happy keeping to ourselves. I run my FIRE expense estimates and guesses around 60k often - I'm way more comfortable with a bigger cushion - and we don't count anything for SS.

Assets:
Total 401k: $102k
Total Roth IRA: 31k
529: $4k
Taxable: $1k
Cash: $40k
House: $366k
Car 1: $12k (paid off)
Car 2: $18k (making payments)
Total Assets: $574k

Liabilities:
House: -$166k at 3.5% fixed
Car 2: -$7.5k at 2.9% fixed

Total Liabilities: $173.5k

Net worth about 400k.

Specific Question(s):
Sorry some of the numbers are fudgy. You can facepunch me for that, that's alright. I'm trying to provide broad strokes here, though, and the couple hundred bucks one way or the other isn't going to make a massive change. It feels like "we're there" in terms of income, and we recognize there has been some lifestyle inflation. There are some projects we've deferred around the house as we've been working to max retirement accounts (when we were earning less), so those will be expensive (roof, etc.). Our current plan is to accumulate some more cash and ladder some CDs; the market seems really inflated now and while our 401ks and Roths are 100% equities because of our relatively young (not gettin' any younger, though!) age, we'd both feel more comfortable with a lower volatility hedge. We also plan to build out that taxable account, of course. Advice of what to fill it with is welcome. Hedging in this way, for us at this time is not market timing, as we want the hedge to feel more comfortable with our total allocation. Funding the tax advantaged accounts was a priority and 100% equity exposure feels like the right thing for that space; now that we have that, we want to build out the hedge to reduce volatility.

Yes, I know we can cut back on groceries. Please, please, someone, punch me right here in the middle of my face. We feel super rich so going out for lunch during work isn't a big deal, but it becomes a big deal if your peers punch you in the middle or your big, fat, lunch-at-work face, so give it to me, I deserve it.

We won't be cutting back on the childcare expense. You're welcome to suggest it, but it just isn't going to happen till public school. We really like where our child is at right now, and will change to public school so that expense will drop off eventually. We have talked about private high schools, and would welcome input on people's experiences in that regard (either as student, parent, teacher, etc.). We do want to provide significant dollars towards post-secondary education if our child goes that route, so we consider those amounts (unknown, but significant, potentially) in our calculations. Was the education and / or experience valuable later in life? Did you value your public school experience?

Regarding FIRE, I like to imagine us with a paid off house, 60k annual draw on 2M for a 3% SWR, with Husband possibly even still working at that stage; super safe. Wife would want to stop working asap, I figure when the child goes off to college? 50 seems like a pretty early retirement, to me. Husband tells wife she makes too much money to stop working now and that she needs to keep at it for a while yet. Wife is willing to continue to work, and recognizes that her income provides significant gains for our family. She is willing to keep working. We are close and live close to our families and would be very disinclined to move, say, to a LCOL area to reduce expenses. Thoughts on this WR, total nest egg, mortgage in retirement?

I know this doesn't fit particularly well with the MMM mantras, but I would like a bigger house. Our house is...small. Not tiny, but small. It's cute, we're all happy here, but as child gets bigger and has friends over, I think everyone will want some space. And there's the animals too. Note that we do love our little house and have talked about keeping this place and buying something else, then coming back to it (renting it out in the meantime) when we're old, or something. There are a few ways to do this, including swapping with family, which would be doable in some number of years (6-10) for some number of years (10ish). Thoughts on saving for a second place in ~7-8 years? Pull money out of current place to assist with down payment on new place? Is > 20% down a good idea? We might find ourselves looking in the 850k neighborhood and the thought of a 600k mortgage is...scary. We could afford to have a smaller mortgage, and, while we're capable of doing the math, what are the community's thoughts? I think I sense some punches approaching my face.

Please note that 6 years ago we were earning about 1/3 of what we're earning now and probably had ~$0 net worth. So facepunch if you will, but some pats on the back are warranted, too, I hope you agree humble brag humble brag.

[wordnerd]

You do seem to be doing well, especially once you eliminate childcare and move the Roth IRA into your savings category (I don't see a situation where that isn't saving). The main issue I see is that your goals seem misaligned. Wife wants to retire "yesterday." You (I'm assuming you're Husband) want a bigger house. Your net worth is $400K, and your FIRE number is $2M plus a paid off house.

So, if you want a bigger house and to have Wife FIRE ASAP, something has to give. Your current savings rate is about is about 43% (I'm moving the Roth IRAs to savings for my calculations). If Wife quits, you eliminate childcare and her salary. Now, your savings rate is somewhere around 30% (I fudged how much H's take-home would be; don't know your tax situation). Is H willing to work an commiserate amount of time longer to get to FIRE and let her quit now? What happens to the numbers when you add a bigger mortgage? Would moving to a LCOL area make the numbers work better for a bigger house and Wife FIRE-ing (especially if the schools are good and you can avoid private high school)? All things to think about...

Finally, I'd encourage you to reexamine whether you need $2M plus a paid off house to FIRE. Right now, you spend about $42K (not including childcare--presumably not a FIRE expense--and the Roths), and that includes mortgage principal and interest. Obviously, healthcare is the big unknown, but another thing to think about...

[testtest]

Really appreciate your comments. I made a couple updates to the post so the same questions won't be asked, because certainly some clarification will be helpful.

Wife is willing to continue working. 86k in mid-thirties...still plenty of working life. It's not her favorite thing, but it provides the family a lot of future opportunity and safety net, so she's an active participant in that. If the income were lower, maybe we this would be different.

We're close with our families and they both live nearby (parent, siblings, etc.). We'd only move for work, which would really only be for money, and since we already make good money, this won't likely happen. We would prioritize staying near our families above almost everything else; moving for money would have to be some kind of crazy money opportunity, which would only mean we could shorten our working lives and move back to be close to our families again.

The paid off house +2M is a loose target. I could see owing a couple hundred thousand on a mortgage or having a paid off house and 1.5M. I'm kind of hoping someone will do a bunch of sexy new  math that we never thought of a say wife can stop working at X, husband at Y, with D dollars and $ SWR, and everything will be fine. You're telling me nobody has built that calculator yet?

[former player]

I wonder if your expected retirement spend at $40k is a bit low.  Apart from your misc. category I'm not seeing anything in your budget about house maintenance or capital replacements (eg phones, computers, cars, etc.).  (I suppose once the car is repaid the car payment could be repurposed into a "car replacement" fund - would it be enough?)  Also, nothing on clothes and shoes and haircuts - or are they "fun", or hiding in your groceries budget?  You mention animals, what are their expenses?  Will there always be animals?  What about holidays and travel?  What about medical expenses, now and in the future?

It's too early to be thinking of a bigger house.  Optimise the way you use the current one first.

Any plans to help your little one with college in due course?

You are doing pretty well with the incomes and maxing the retirement savings.  If you want a plush life in early retirement somethings going to have to give a bit.

[MDM]

Mortgage (PITI): $1360, what's the value of splitting out PI and TI for case study?

The Principal and Interest payments stop when the mortgage is gone, but the Taxes and Insurance remain as an expense.  The spreadsheet associated with the case study sticky makes that distinction in the "time to FI" calculation - and it can be worthwhile to make that distinction in any other projection as well.

[testtest]

Mortgage (PITI): $1360, what's the value of splitting out PI and TI for case study?

The Principal and Interest payments stop when the mortgage is gone, but the Taxes and Insurance remain as an expense.  The spreadsheet associated with the case study sticky makes that distinction in the "time to FI" calculation - and it can be worthwhile to make that distinction in any other projection as well.

Thanks MDM, I don't know why that wasn't obvious to me. TI costs us around 450/mo.

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[testtest]

I wonder if your expected retirement spend at $40k is a bit low.  Apart from your misc. category I'm not seeing anything in your budget about house maintenance or capital replacements (eg phones, computers, cars, etc.).  (I suppose once the car is repaid the car payment could be repurposed into a "car replacement" fund - would it be enough?)  Also, nothing on clothes and shoes and haircuts - or are they "fun", or hiding in your groceries budget?  You mention animals, what are their expenses?  Will there always be animals?  What about holidays and travel?  What about medical expenses, now and in the future?

It's too early to be thinking of a bigger house.  Optimise the way you use the current one first.

Any plans to help your little one with college in due course?

You are doing pretty well with the incomes and maxing the retirement savings.  If you want a plush life in early retirement somethings going to have to give a bit.

You're probably right about the 40k being a little low. I think the miscellaneous category should be widened to include the other items you mentioned, maybe to 650 from 250. Haircuts are cheap for us, nothing fancy (or frequent). Clothes are similar, we do buy good (fancy) things, but not often. In RE, I don't expect that cost to persist to the same degrees. There are a lot of things that are irregular expenses, but always crop up (emergency room visit, dog dental event, etc.).

This miscellaneous category becomes a significant anomolous expense, I see.

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[Ben Kurtz]

Car 1: $12k (paid off)
Car 2: $18k (making payments)

You own a bit too much car for your own good. My general rule of thumb is that if you don't have a family net worth of over one million dollars, you should limit the value your car fleet to 10% of your gross yearly income, and -- this applies to high earners -- ideally less than $10,000 in the aggregate. You have around $30,000 worth of cars, which is much higher than $10,000 or even $17,000. It's not just the interest on the car loan (your interest rate is low); it's the fact that a more valuable fleet means higher yearly depreciation and insurance costs. It's been decades since you've needed to cycle through relatively new cars in order to have safety and reliability, so I'm pretty evangelical about my automotive rule of thumb. I have a seven-figure net worth and my family's sole car is an ancient Volvo station wagon I bought for three figures (not a typo). It's in great shape, very reliable, and even has heated seats! (My wife's one luxury demand in the automotive department.)

While your savings rate is good and this car situation is not a complete anchor around your finances (like it can be to some other families), it is still holding you back. Getting to my ideal level would require two trades, which is probably more bother than it's worth for you, so I would suggest a compromise solution: trade the $18,000 car down to something in the $5,000 range and leave well enough alone. You'll be within my "10% rule" even if you are not within the better "but no more than $10,000" rule. But before you do that, take a good look at your commute and travel habits and see if it isn't possible to drop down to a one car family -- could you do it with public transit? An electric bike? A Vespa-type scooter (I generally don't advocate full-size motorcycles unless that's already your thing -- too expensive and dangerous for the average man). That would add several points to your annual savings rate and be a huge win. Read some of the blog posts about commuting and cars in general -- Pete really gives a good sense of just how wasteful cars can be, which applies even to an automotive setup that most normal Americans would deem prudent or even "frugal." More wealth than you perhaps think is disappearing into your cars.

I won't dwell too much on the grocery and food budget, because you see the overspend there, other than to say: set a few small goals in that department and stick to them. Build some momentum to keep you motivated to make progress.

With respect to your small house, would there be any ways to make it functionally bigger? Reconfigure your internal space to suit your needs better (e.g. open plan living/dining room and/or kitchen)? That would require some renovation expense but be much cheaper than a new, bigger house. Put a shed in the back yard and move some stuff into that? Build an extension, detached garage or backyard studio? Convert (part of) an unfinished cellar into a stereotypical basement rec-room? Some of these depend on lot size and local zoning ordinances, but if an additional 500 sq ft of living space would improve your happiness a great deal, there are often cheaper and easier ways to obtain that than moving to a new and much bigger house. Spend time exploring these options before immediately leaping to a solution which involves doubling your housing cost.

Finally, to the bigger picture point: My "FIRE" rule of thumb for a young family is to set a goal of $1,000,000 in productive investments, in addition to owning a paid-off house. That doesn't mean everyone quits work the moment the net worth meter turns over that last dollar; it means that you set it as a goal and evaluate your position once or twice a year as you build towards that goal and reach it. With that setup you could sustain a lavish $60,000 ex-housing burn rate on a single low-stress part-time or seasonal job -- earn $25,000 to $30,000 per year and pull the rest out of investments at a very safe 3% to 3.5% SWR. Your investments will almost certainly outpace your withdrawals over the years, meaning one day you'll wake up and notice that you have no financial need for the job any more. Or you figure out that you are comfortable with full FIRE and do it. Or you could be so comfortable working in your high-paying job that the wife retires to by a stay-at-home (or community volunteer-oriented) mom while the family builds towards a $1,500,000 or $2,000,000 investments goal. The point is that your plans and your goals don't have to be fully locked in at this early stage. I am in favor of setting as a goal a financial scenario that would allow most families to FIRE fully if they felt really strongly enough about it, while being very open to the idea that when you reach that stage you are not somehow duty bound to FIRE and quit your job, just because of a spreadsheet you made five or ten years earlier.

[OkieM]

I agree with previous posters, too much car and too much cash.

If you are going to work at a reduced rate you can drastically reduce your FIRE number. $2 MM and a paid off house with some work income? That’s the like the FAT fire people that never end up pulling the trigger. “Oh I really need a 2.5% SWR, now”.

Also, I went to both public and private schools at various times, my brother went private all the way through. It’s not compatible with FIRE at all unless you start a business and are super rich. Here is one story from when I first started going: We had lived in a normal upper middle class type neighborhood but my dads business became very successful and we moved to the fancy neighborhood and I started at the fancy school. We had been living on my moms teachers salary for years so Christmas was nice but nothing fancy. This had been fine in suburbia. I came home and told my dad that I must be a bad kid because Santa only gave me like 1/10 the presents of the other kids. He clearly felt bad and there isn’t much you can do there except spend more next year. And that never ends - clothes, events like concerts, CARS. I did not like private school and switched to charter schools. I turned 16 and drove a hand me down Ford Ranger. It was great. I would have been a laughing stock at my brothers school. They had to go with a Tahoe and put a little money in it for cool features. If you don’t do this, your kid will not fit in unles they are some gregarious super star or can pretend they are on a sports scholarship and are expected to be poor.

Find a good charter school that’s focused on academics. The only advantage to private is if you want your kid to be friends with rich kids.

[Ben Kurtz]

I'll second @Ben Kurtz's input because Ben is always on point.  Especially re: cars.  At the very least, plan to spend less on your next set of cars.  It's a huge savings.  Cars are a liability - a literal money pit.  (And this is from someone who *likes* driving, even though I drive an old beater.)  (Sidenote, @Ben Kurtz , I am asking you for personal financial advice before I ever hit FI/ER and decide to call it quits.) 

Always happy to lend a hand / facepunch!

[jlcnuke]

I'd just like to mention that you repeatedly talked about "wife retiring early" and husband continuing to work (ostensibly because FIRE is not possible at that point, so husband thus is stuck working since wife retires early). Consider strongly how resentment might build in such a situation, especially when there are no kids at home to take care of etc and husband comes home from a particularly crappy day/week/month at work.

[Nick_Miller]

I don't get the "too much car" and "too much cash" comments. I really don't. Sure, maybe a little less car would be smart, and yes you might be able to shave down the emergency fund by $10K or so, but those are NOT the major issues I see. I mean, those are freakin' blips on the radar compared to the whole...

"My wife would like to retire yesterday, we only have $130k in investments, and we're considering taking on a $600k mortgage."

THAT is like 95% of the analysis, as I see it.

Taking on such a huge mortgage is going to pretty much keep your wife working for many, many, many years to come. She might grow to feel trapped, and with transaction costs of selling/buying homes, with all the associated costs and emotional connections to "home," it's a pretty hard decision to undo.

And I cannot begin to imagine the feelings of resentment that would bubble up if you said yes to both "get the bigger home" AND "let wife retire" decisions. I mean, that locks the husband into working for decades. And if there's a downturn, or a flat market on the horizon (I'm not saying there will be, but it must be considered), hell, he might have to work until "standard" retirement age of at least 62, or longer.

I can't imagine working until age 62 while my wife has spent the last 25 years plus "retired" with just one child.

I'm just suggesting that early retirement and getting a huge house appear to be very different paths to me.  But it's the main decision mentioned in your post. I won't fuss at you for having $30k in car or $40k in cash. Those are not big issues math-wise.

[slappy]

You are considering buying a bigger house for when your one child has friends over? That doesn't seem right. As others have said, are there any renovations that you can that cost less than buying a new house? How many friends do you expect the kid to have over at once?

[testtest]

This is the OP.

So relieved at Nick Miller's response! Totally agree that there's a little too much car and a little too much cash but it doesn't matter at all in the scheme of things. Could I sell a car I love and downsize to a POS I hate a retire a few months earlier? Yeah. Would I resent this forum for it? Probably.

So, about the wife retiring yesterday thing...that's not in the cards. We're a team. I like working. I'm a busybody. She doesn't love working, or at least not the stress that comes with earning what she earns. She's been asking what our number is, and once we hit that number, she'll either retire or transition into something that she finds satisfying. It could be PT, but as someone pointed out, even a little bit of income in FIRE pads the accounts / timing / lifestyle / sleep at night quite a lot. I expect I will continue to work just because I like it.

I really don't think I'm in the wrong forum, but FAT FIRE does sound good to me. Not for the luxury as much as the security. And I want to leave the kid a legacy. If we can help him fill his IRA when he gets his first gas station / burger flipping job, why not? Are we, as thoughtful, cognizent, sensible, generous, community-minded parents capable of raising a kid that is both well off financially AND socially engaged and decent? We think so. I want to work anyways, I just don't want to HAVE to work. Spouse and I are PARTNERS, though; she won't actually quit until we can both reap the rewards.

I would think that property should change some positions? Spouse isn't really looking to retire right now, that was just a figure of speech.

I think as long as we're > 50% savings rate we're killing it. Most importantly, eeking an extra 7500 bones out of the fleet, which we really enjoy, is not on the table, despite it being rational, math-ish based advice.

There are probably a couple things we could do to the house to get more years out of it. There are also family discussions about whether our aging parents could make use of it (lower upkeep, no stairs, quiet street) in a house swap type temporary situation. Part of the set of considerations we have for a new house has to do with our parents, too; will any of them live with us? Is there a bedroom on the main / without stairs? Is there enough land to build an ADU? Part of what we look for in a larger house is all the options that it affords in the future, not just space for our kid to play with friends.

Is the only goal of anyone here to retire literally as soon as possible, or are there some fatter-FIRE sensibilities as well?

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[OkieM]

As far as fat fire, it just depends on the person. I quit my job at very lean numbers knowing that I would do some entrepreneurship or contract work as a norm. So there was no reason to wait because the worst thing that would happen is I’d have to go back to a 9-5. It was quit and have a good chance of never seeing a 9-5 again or keep working at a 9-5. The logic seems simple to me.

I do think a lot of the fat fire stuff is about fear or not liking change. People always seem to be finding excuses to work longer because they now need a bigger pot of cash because of some low probability event. To me this defeats the whole point. You are forgoing to consumption to buy freedom, yet you don’t grasp the freedom so what is the point? You might as well be a more normal consumer with a 10-15% savings rate.

[testtest]

You make a decent point except this: the person with 10-15 SR still HAS to work. The other person already IS financially independent, they're just afraid to pull the trigger. If they got fired or something, and actually did the math, or got a taste of back to back to back to back Saturdays, they could be done working if they wanted. They already earned their freedom, they just haven't taken it. The first person hasn't earned their freedom yet, they just bought a bunch of stupid shit.

Sounds like you took a calculated risk and it worked out. That's a win!

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[Ben Kurtz]

Is the only goal of anyone here to retire literally as soon as possible, or are there some fatter-FIRE sensibilities as well?

If you fancy yourself on track for "fat FIRE," especially with your automotive habits and some of the house plans you are discussing aloud publicly, you are being -- not to mince words -- a touch delusional.

A $400,000 net worth is a good start, but if you keep on over-consuming automobiles and housing you will be moving away from accomplishing FIRE, fat or otherwise, on a reasonably quick timetable. Don't confuse "overspending" with a "fat FIRE" approach.

Many of the semi-regular posters on this forum -- myself included -- seem to have exceeded their "minimum FIRE" numerical thresholds but still work regular high-earning full-time jobs. That can be driven by a mix of motives: desire to fatten the nest egg and mitigate risk, a specific unusual financial goal, a desire to keep doing a job that is truly enjoyable or socially beneficial, sheer inertia and fear of change, what have you. This is not a forum populated mainly by people seeking to pull the rip-cord at the earliest possible moment, who then carry through on that plan.

Could I sell a car I love and downsize to a POS I hate a retire a few months earlier? Yeah.

Do your sums.

Running and regularly refreshing a $30,000 car fleet until such time as you and your wife are no longer fit to drive will likely cost you over a year on your FIRE date, relative to running an appropriate sub-$10,000 car fleet.

Yes, it's a personal choice. Work more, earn more and spend more if that will truly make you happy. But your cavalier assumption that your happiness will be materially affected by running and older, cheaper car is one of the fundamental assumptions that the main blog is meant to challenge. It belies the fact that you are not yet fully on board the FIRE train, fat or skinny.

To put the automotive habit into context, I earn more than you earn, save more than you save and am worth far more than you are worth. I also drive around in an ancient Volvo station wagon that I purchased for three figures. It's comfortable, reliable, spacious and even has heated seats (my wife insisted). Go outside and meditate one day in the sunshine and ask yourself what you are really looking for in a house and a car, and once you've figured that out put your thinking cap on and figure out how to get those qualities as efficiently as possible. Part of the answer might be to sit and wait: if you don't need extra room in your house just yet, and you are not sure whether or when your parents might move in with you, the best answer is probably to wait until you know these things better, rather than buy too big a house just in case.

[Laura33]

Part of the set of considerations we have for a new house has to do with our parents, too; will any of them live with us? Is there a bedroom on the main / without stairs? Is there enough land to build an ADU? Part of what we look for in a larger house is all the options that it affords in the future, not just space for our kid to play with friends.

Buy what you need, when you need it.  If you buy what you think you'll need at some as-yet-undetermined point in the future, at best, you're paying extra for things you don't need yet; at worst, you will guess wrong and have to try again when that future actually arrives.

A house is a consumption item, so evaluate it in that light.  As with everything else, you can have some of the stuff you want -- big house, new car, FIRE, college funds -- but you can't have all of it.  Figure out which of the various "or"s are the most meaningful to you and your family, acknowledge and accept the tradeoffs that come along with that choice, and go live your life.

[civil4life]

You asked about feedback for private schools.

I went to parochial school from k to 12.  My siblings did k to 8.  I am personally much better off than my siblings, but that has nothing to do with our education.  We are very different people.  I am much more motivated and self driven.  However, I am sure that if I had went to the public high school I would have ended up in the same place as I am now.  I attended the local state university for my undergraduate degree.  That being said I enjoyed the extra riger that I got at the parochial high school.  In the state that I grew up it was very reasonable for parochial school.  My parents were middle class making maybe $70k ish in the 90s.  I received a few scholarships for high school too.  I live in a different state now.  Most of the public schools in the area have more rigorous programs than my parochial high school.  The cost of private school is insane where I live now.  If I had a kid I would not even consider it. 

I think it is a combination of your local public school system and your kid.  If your kid is average or even slightly above average they more than likely will not gain more from the private school unless there is a significant difference in the offering of the public school.

I think outside of extreme situations of school system or kids capabilities you are no better off with private school over public.

[MustacheAnxiety]

+1 for a large public school
I went to a good public school with about 600 kids per graduating class.  Assuming you 2 smart, hardworking parents raise a smart, hardworking kid, a big school will give said kid the chance to be in advanced classes with the other hardworking, smart kids.  So I don't think a private school will offer much, even for an exceptionally talented kid.  Full disclosure, I was public schooled K-grad school.

That said, I did transfer from a middle of the road grad school to a fancy-pants (but still public) grad school.  The middle of the road school had a group of kids that didn't think it was cool to work hard and the fancy-pants school had a group that thought they did not need to work hard because they were already at a fancy school.  I suspect similar distinctions without a difference would be found between public and private high school.

Also +1 for some good old fashioned (even if super artificial) suffering to help the kiddo become a good adult. 
We had a lot of wealthy family friends that sent their kids to the best private school starting at preschool.  And the majority (7 of 8) kids ended up floundering in college and beyond.  No horror stories, but not getting into the colleges they wanted, followed by not getting great grades in silly majors, followed by not getting good jobs, and needing/expecting parental money into their 30s.  I don't think this had anything to do with private school, exactly, but something to do with the mentality of wanting only the best, nicest, easiest path for your children.  If private school is the right call for your area, try to balance it out with letting your kid have the character building experience of no car or a crappy car, no cell phone, and having to get a crappy part time job.  These character building opportunities are also available for public high school students.

No real thoughts on the budget that haven't already been said.  Mostly it seems like you could benefit from some better tracking and maybe a follow up case study.

And since you requested it, a pat on the back for raising your income so much in a relatively short time :)