Author Topic: Case Study - Death by 1000 lawn cuts  (Read 4107 times)

pawnjohn

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Case Study - Death by 1000 lawn cuts
« on: January 17, 2019, 03:29:13 PM »
Reader Case Study- Death by 1000 Lawn cuts

Been following MMM for about 9 months now, having found the blog after making several poor financial decisions, and have read every post from the beginning. I have started making changes to my spending/saving, outlook and mindset on finances & life. My goal now is to get my risk adverse wife on board in hopes of opening her eyes to the possibility of FI/ER. Also  looking for some good ole' face punches to go along with the great advice I've seen given out here.

Looks like more poor title/word choice caused some confusion about my intent. I do not believe my wife is a problem/in the way of getting to FIRE. The only reason I believe it is a possibility is because of her and her ability. My goal is to get objective advise to make changes where possible/appropriate and to use the numbers to illustrate that early retirement is not only possible, but a realistic goal.

Life Situation: Married with 1 child (6 month old). Wife is 27 and I am 28. I work in healthcare and she is a self-employed attorney (started right out of law school: 1.5 years in).

Gross Salary/Wages:

Me - 35K
Moved my wife's income to the adjust gross.


Individual amounts of each Pre-tax deductions:

Wife has none currently.
Me:
403B - 228/month - Employer matches up to 7% of my salary.
Insurance - 360/month - Went with high insurance during pregnancy/birth in order to have no deductible and minimize birth cost. Hoping to drop to High Deductible plan in couple years once baby appts/shots spread out (would be about 100/month)

Total - 588= 7K/year

Other Ordinary Income:

40K - Profits from Oil/Land Business with dad. Automatically invested and unable to access due to agreement with dad.

5-10K - Coaching, ATC services, and odd jobs. These are random/amounts very so I do not include them in future calculations. 


Rental Income - None yet. Looking into when out of non-mortgage debts are erased. I would like to look into owning a few rentals once our debt emergency is taken care of in hopes of bringing in 2-3K/month once we retire.

Adjusted Gross Income:

Me- 28k Wife - 50k

Edit: This 50K is an estimate based on my wife's take home pay from last year ($40K). I conservatively increased her income to 50K based on what she would have at minimum earned last year if she did not miss 3.5months due to missed time at work for pregnancy complications/birth of our child. With regular increased business and more time working, I am very confident that she will actually exceed this estimate. (Based on her january income it will be more like 70K+)
Total = 78 or 6500/month (minus my taxes)

Taxes: 4K from my job last year. These I do not know due to additional income + wife now being self-employed.  One major thing I will need to zone in on as time goes on.

Edit: I have the taxes taken out from my employer, but do not have the numbers for my additional income or my wife's income. I do know that my additional income has quarterly estimated payments that typically result in a refund back. My wife has also make some payments, but I do not have the exact numbers. Our 2019 plan is to discuss this in more detail and come up with a plan that will optimize our taxes and make sure we are both on the same page.

Current expenses: Red = further break down
Monthly:

Mortgage – 1135

T+I – 545

Food – 500 - Definitely need to cut. Grocery bill can be reduced and need to eliminate eating out
 Groceries - $400
Eating Out $100


Gas – 150
This is what we have been averaging last couple years. Came in about $125 last year. Should be less this year with more fuel efficient car and decreased commute
Child – 150
This was a conservative estimate since I didn't now what costs would look like. It does include occasional payment to gma for watching her regularly.

Utilities (gas/electric/internet/trash/Netflix/prime) $275
gas - 21 (water heater runs on propane so only buy 1-2 times/year.)
electric - ranges from 120-180 (150 average. Been trying to find ways to lower this (keep house at 80 in summer and 65 in winter. Hopefully higher/lower as baby grows)
trash = 19
netflix - 8
prime - 10
internet - 45
total =  253


Car Insurance- $134
Need to shop around. Switch to liability where possible.
Service/Parts for Cars - 25

Pets - 150 2 dogs and 1 horse (horse is at mother-in-laws so we split costs)
pet food is $50/bag 1.5 bags per month. Dogs both have allergic reactions to other foods. This has led to decrease in vet bills.
grooming for 1 dog - 50 as needed. (need to start cutting ourselves and just do more often)
ferrier for horse - 40 as needed.
yearly vet bills (need to track these costs better)
 

 
Healthcare – (doctor/dentist/eyecare/pharmacy) 75

Business exp (wife) - 50
Drop box 10
Fax 8
Shipping and other random expenses - 30
These should all move to business account. Kept in budget so far because this was what it was last year.

Life insurance: 70

Donations: 60



Misc – 250

Total (no non-mortgage debt payments) – 3,600 (44K)


Edit: Added a couple expenses I originally missed. Expenses are rounded up (64 is rounded to 70; 43,200 is rounded to 44). This is done to make number more easily readable/added for here and to account for my own personal errors while setting our budget. I also wanted to error on the side of caution so that any mistake is benefiting us. Our mint account has our budgets set to the dollar amount of our actual budget.



Debts Payment
s

Car payment – 205

Lawn mower payment – 108

Student loans - $1000

Credit Card – $100 (changes based on excess that can be applied to balance below)

Debts Total – 1400 or 16,800/year


Assets: Amount & description

Employee 403B- 6k

Personal IRA – 94K

Taxable Account – 97K

2012 Ford Focus – Paid off. Mint values @ 5k approx.

Cash = 36K – 15K for emergency fund (wife’s minimum amount) 21 to be applied toward debts below. 

Total = 238K


Liabilities:

House: 236k @ 3.75% - Bought 2018. Listed here because of how new it is for us.

Car: 10,500 @ 6.25% - Bought new/stupid car. Lost this battle with wife. Have to wait until March to re-finance for a lower rate.

Student Loans: 189K @ (various between 3-6.5%)

Credit Card – 4200 @ 18.5% (currently applying excess monthly expenses to get rid of asap)

Lawn Mower – 4104 @ 0% - Financed 48 months differed interest. Being paid at rate so that no interest will be accrued.


I've set our FIRE number conservatively at 40K/year or 1M saved/invested. With her possible large income growth (100-150K), and the mild growth at my job, I would like to see us pay off all non-mortgage debts in under 5 years and reach FI in around 10-12. My wife feels that these numbers are unrealistic and would lead to us to lead a life of missing out/not doing fun things like travel, etc in order to achieve either.

The above numbers are my optimistic stretch goals for debt repayment and FI. I'm optimistic that with some smart cuts/money choices and the additional income from my wife's income (dramatic increase potential) and my income (minimal increases) we can accomplish these goals. A more realistic timeline is 6-7 and 12-15.
How are we doing?
Is this even a remotely reasonable goal?
Where are some areas we could use some improvement?
My wife's biggest fear is healthcare, given that our current insurance covers everything we have needed it for so far. Any good techniques for this or statistics I can show her on how overrated over paying for "good insurance" is?


The other consideration involves education. I work through a near by Medical School/University and part of my benefit package includes tuition reimbursement at the University (52k/year) or 40% (20K) at any other University for my children once I accrue 7 years of service (will be 3 years in March). The issue here is that my daughter is only 6 months old now, and I must remain employed every semester she would draw the reimbursement. This leaves my working career a minimum of 22 years. This averages out to about 9,500/year benefit if she does go to the University and 3,600/year if she goes anywhere else. Given that cost of my commute (actual cost + time) is currently 6-7K and could be as much at 10K+ if I move positions or am transferred to a different location; I do not believe doubling my possible working career would be worth those extra costs.
« Last Edit: January 22, 2019, 11:12:22 AM by pawnjohn »

Civex

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Re: Case Study - Getting the wife on the FIRE train
« Reply #1 on: January 17, 2019, 05:45:42 PM »
Welcome!

Congrats on joining the cult and congratulations on your little one! We also have a little one under 1 and they sure do make you reassess everything.

So, from reading your case I see two things that are preventing/slowing your path to FIRE. The first is your/your HI income in comparison to your debts. Your spending is in my opinion is reasonable-I'm sure more frugal mustachians will come along and give you budget slashing tips, but you need to boost your income/s to support the level of student loan debt, mortgage, and consumer debt. I know very little about attorney income, but I'm assuming that your wife's income will grow as she becomes more experienced and establishes a base. Do you anticipate that your income will grow? If you are in healthcare, do you have the opportunity to build from your current position? At 35k, I'm assuming you work in a position similar to a med tech, LPN, pleb, lab, or environmental services. If so, can you piggyback off your current position into a higher paid one; often times paid by the employer? Say LPN->RN program, or move from your position in the facility to one that offers more growth? I would focus on career and income development before extreme budgeting, especially with a new baby.

The second thing isn't mentioned as much in your post, but more in the title, is that FIRE needs to be a team goal that you and your wife aspire to. Personally, I wouldn't push too hard right now-everything is 10x more difficult with a baby and I'd worry you may alienate your partner.

Reader Case Study- Trying to get my wife on the FIRE train

Approx 85K or 7k/month total.

Liabilities:

House: 236k @ 3.75% - Bought 2018. Listed here because of how new it is for us.

Car: 10,500 @ 6.25% - Bought new/stupid car. Lost this battle with wife. Have to wait until March to re-finance for a lower rate.

Student Loans: 189K @ (various between 3-6.5%)

Credit Card – 4200 @ 18.5% (currently applying excess monthly expenses to get rid of asap)

Lawn Mower – 4104 @ 0% - Financed 48 months differed interest. Being paid at rate so that no interest will be accrued.


I've set our FIRE number conservatively at 40K/year or 1M saved/invested. With her possible large income growth (100-150K), and the mild growth at my job, I would like to see us pay off all non-mortgage debts in under 5 years and reach FI in around 10-12. My wife feels that these numbers are unrealistic and would lead to us to lead a life of missing out/not doing fun things like travel, etc in order to achieve either.

How are we doing? Better than most our age and by posting on MMM-moving in the right direction
Is this even a remotely reasonable goal? I don't think with your current income it is reasonable, or even relatively possible. Using current salary after tax of $74k x 5 years=$370k-current non mortgage liabilities ~$210k=$160k/5 years=$32k/year and your current expenses are $41k
Where are some areas we could use some improvement? Focus on career and income development
My wife's biggest fear is healthcare, given that our current insurance covers everything we have needed it for so far. Any good techniques for this or statistics I can show her on how overrated over paying for "good insurance" is?


The other consideration involves education. I work through a near by Medical School/University and part of my benefit package includes tuition reimbursement at the University (52k/year) or 40% (20K) at any other University for my children once I accrue 7 years of service (will be 3 years in March). The issue here is that my daughter is only 6 months old now, and I must remain employed every semester she would draw the reimbursement. This leaves my working career a minimum of 22 years. This averages out to about 9,500/year benefit if she does go to the University and 3,600/year if she goes anywhere else. Given that cost of my commute (actual cost + time) is currently 6-7K and could be as much at 10K+ if I move positions or am transferred to a different location; I do not believe doubling my possible working career would be worth those extra costs.
This is too far in the future to give much thought to-it sounds great, but way too many things could change in 18 years.

marty998

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Re: Case Study - Getting the wife on the FIRE train
« Reply #2 on: January 18, 2019, 03:25:17 AM »
Oh my god... you financed a $4000 lawnmower??? Holy crap.

Do you have a football field for your backyard? You are never going to be FI if you make a habit of these types of purchases.

Take the $21k excess cash, pay the car and the credit card now. Don't fight with the wife over the emergency fund, that is not the hill to die on.

Dee18

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Re: Case Study - Getting the wife on the FIRE train
« Reply #3 on: January 18, 2019, 06:40:09 AM »
You have a serious debt emergency:  $400,000+ of which $200,000+ is non-mortgage.

I agree with others that increasing your income is important. If you do not yet have a college degree your university probably will let you take classes for free part time.  Is there a degree path you would like?

You need to calculate out how much you are actually going to have to pay to cover those student loans and discuss it with your wife. Then together you need to cut back on every expense you can.  Even a 20% cut in food expenses, which should be possible, will help.  You also need a “buy nothing new” year.  Nothing.  You mention $150/month for the child.  That must include some new clothes or toys, neither of which are necessary.  I used to find clothes for babies and toddlers with the tags still on at my local thrift store. 

The big purchases of 2018, house and lawnmower, suggest to me that with a baby on the way you went for the whole American dream all at once, before you were in a solid financial position.  Many people do that and it can work out fine as long as you buckle down now on financial issues.  Figure out what the miscellaneous expenses are and try to redirect that to your debt. With a 6 month old you have all the entertainment you need right at home.

RWD

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Re: Case Study - Getting the wife on the FIRE train
« Reply #4 on: January 18, 2019, 07:10:48 AM »
Oh my god... you financed a $4000 lawnmower??? Holy crap.

This stood out to me too. Our lawn mower cost less than his monthly payment...


Current expenses:
Monthly:

Gas – 150
Car Insurance- $134
Pets - 150

At the national average gas price and 30 mpg you are driving 24k miles per year! You need more efficient vehicles and/or reduce your driving.
Your car insurance is higher than ours (and we have more expensive cars). Shop around.
What pet(s) do you have? That expense seems high (we spend less than $20/month on our cat).

Marley09

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Re: Case Study - Getting the wife on the FIRE train
« Reply #5 on: January 18, 2019, 07:43:58 AM »
Hello pawnjohn,

I wanted to jump in with my 2 cents here. 


Gross Salary/Wages:

Me - 35K
Wife- 50K - this an estimate based on growth from last year. Conservative estimate due to her working from home while taking care of our daughter. (Made approx. 40k in first year of employment while missing significant time due to pregnancy sickness/complications and birth of child)

To clarify, will your wife be working from home, taking care of your child and trying to grow her business?  This seems like a daunting feat.  I have a 2 and a 4 year old and when they are home with me, the only time I can get anything accomplished is when they are napping. Will you be sending your child to daycare or do you have a relative lined up for childcare?  If so, you will need to add this to your monthly budget for future childcare costs.


Insurance - 360/month - Went with high insurance during pregnancy/birth in order to have no deductible and minimize birth cost. Hoping to drop to High Deductible plan in couple years once baby appts/shots spread out (would be about 100/month)

Barring any family health issues, you can probably look into a HDHP in 2020 to decrease your healthcare costs (if this is offered by your employer), but overall you are only paying slightly more a month than I am for my HDHP, so I don't feel that this expense is too out of line.


Other Ordinary Income:

Adjusted Gross Income:

Me- 28k Wife - 50k

Total = 74 or 6100/month (minus my taxes)

Taxes: 4K from my job last year. These I do not know due to additional income + wife now being self-employed and not making payments through year. One major thing we will need to zone in on as time goes on.

The bolded part stuck out to me here as a HUGE concern that needs to be addressed ASAP!!  I am not a CPA, so maybe someone more knowledgeable can jump in on this, but it seems like you are setting yourselves up for a large tax bill and maybe fines at the end of the year.  She should be paying estimated taxes quarterly to the IRS.  Please look into this sooner rather than later.

On another note, at your estimated AGI you are sitting right on the cusp of the 12% and 22% bracket (assuming MFJ).  Say your wife makes $51k and you make 28k in 2019, this will bump you up from the 12% to the 22% tax bracket. Keep this in mind at the end of the year when you have a better idea of wifes total income; you can look to increase your pre-tax 403b contribution to keep you within the 12% AGI bracket.

The above poster stated is perfectly that you went after the American dream all at once, but a few notes from what I saw:
1. It seems that you had a very small down payment for your house- are you paying PMI?  How much is that a month?
2. Car Insurance- $134- this seems high- did you shop around for your coverage?  Did you use a broker who has access to multiple carriers?
3. Credit Card – 4200 @ 18.5% (currently applying excess monthly expenses to get rid of asap)- pay this off ASAP!  Why are you paying 18.5% interest when you have $21k in your efund?  Pay it off then take the amount you were paying on the credit card monthly and use that money to replenish your efund.
4. Lawn Mower – 4104 @ 0% - Ouch! Even at 0%.   How many acres do you have?

-Marley


OliveFI

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Re: Case Study - Getting the wife on the FIRE train
« Reply #6 on: January 18, 2019, 08:53:30 AM »
This is an interesting case study. I think your first priority is paying off your debt and considering your wife's potential tax liability.

(1) Can you sell the lawn mower? Is it really necessary? If you have so much property that you need it ... is it expensive to carry from a tax perspective, can you downsize? I live in a HCOL area with high taxes so a lot of land scares me in that regard. Can you get a smaller mower and let some of the grass grow?

(2) You said you and your wife need to zone in on her quarterly tax payments. This is SO important. While I was in law school I worked as an independent contractor and did not prioritize this. The tax liability I accrued was like $4k and took me a long time to pay it off because its not just $4k in a vacuum ... it is $4k plus any current quarterly tax estimates (plus life expenses). If you file jointly the IRS may even keep some of YOUR tax return to pay off any of her liability. When you aren't making a lot ... you want to avoid accruing more debt.

(3) I assume the arrangement with your Dad is related to some type of oil & gas lease royalties? When can you access this money? Could you use some of it to solve some of your debt emergency? Have you discussed this with your dad? This could be helpful if your wife doesn't want to use the emergency fund to pay the credit card debt.

(4) Is your wife still interested in running her firm now that she has had the baby? Make sure you discuss this at length. If she isn't sure you need to focus on raising your income right away (you should do this anyway if FIRE is really a goal).

Nick_Miller

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Re: Case Study - Getting the wife on the FIRE train
« Reply #7 on: January 18, 2019, 08:59:24 AM »
Fellow attorney here, and really I mostly wanted to contribute to the "your wife's business plan" side of the analysis.

As has been said already, growing a business from home while looking after a young child is SUPER difficult.

I don't know what area your wife practices in, but most areas require you to go out and meet with clients at least sometimes, even if you're meeting them at coffee shops or the like. And business development requires you to go out and meet potential referral sources, marketing folks, etc. I just don't see how someone could do all of this with a 6-month old. 

I mean, starting and growing a law practice is super challenging. Some folks are working 80-hour or 90-hour weeks for those first few years to get some momentum going, and frequently they are working at a loss for those years. You said your wife earned $40K last year - was that gross? Surely she has some expenses, like malpractice coverage, bar fees, advertising, technology, subscriptions for research, continuing education, etc.

I just anticipate some VERY stressful times at home if she is truly gung ho about growing a business in an uber competitive field while also being the primary caregiver for a baby/toddler. Would she be able to work long-term out of your home? Some areas, like probate or contract work, might he more friendly to that set up, but any kind of litigation, or criminal work, or BI/work comp, etc., would be a huge challenge. Is she trying to grow her income with the idea of moving your daughter to day-care when she gets to be a bit older? I'm just trying to figure out her 5-year plan because that is a HUGE part of this whole analysis.

And I personally I would keep at LEAST $15K in cash as your wife wants, and frankly I would probably bump it up to $20K, unless she has a separate "war chest" of money that is a business asset.
« Last Edit: January 18, 2019, 09:05:49 AM by Nick_Miller »

pawnjohn

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Re: Case Study - Getting the wife on the FIRE train
« Reply #8 on: January 18, 2019, 09:01:55 AM »
Thank you all for the responses!

Increasing my own personal income is a huge priority. My income typically grows 3-5%/ year until I max out the salary range for my position. I have been taking several career development courses/classes in order to move into a supervisor/administrative position either in my department or another within the University. A jump into one of those roles would see a 20-30% increase in income and open the door to high level positions with experience or provide a more distinct path towards furthering my education more.

I currently have both a BS and MS degree in a field that I ended up not enjoying. I then took a pay cut to move into my current field. Although I could make about 10K more in my degree field, I would lose the flexibility and growth that my current lower salary position offers (my degree field is rather static in terms of growth opportunities). Due to my past poor degree choice, I am hesitant to invest into a new career/field without a deep dive into the benefits/drawbacks and a clear career path.
     One way that we have managed to mitigate child care costs is through spreading my vacation time out to basically work 4 days per week and then my wife works in the evenings while I spend time with our daughter. Taking online course/new job would either dramatically increase child care costs/time with her or would cut into my wife's ability to increase her income.



You have a serious debt emergency:  $400,000+ of which $200,000+ is non-mortgage.

The big purchases of 2018, house and lawnmower, suggest to me that with a baby on the way you went for the whole American dream all at once, before you were in a solid financial position.  Many people do that and it can work out fine as long as you buckle down now on financial issues.  Figure out what the miscellaneous expenses are and try to redirect that to your debt. With a 6 month old you have all the entertainment you need right at home.


This pretty much nails it. Several of these large, financially poor decisions in succession is what led me to look into financial management and then down the FIRE rabbit hole.




The second thing isn't mentioned as much in your post, but more in the title, is that FIRE needs to be a team goal that you and your wife aspire to. Personally, I wouldn't push too hard right now-everything is 10x more difficult with a baby and I'd worry you may alienate your partner.

I absolutely agree with this being a team goal. I initially pitched the idea after fulling reviewing our debts/spending habits and showing her a breakdown of where we were doing well and where a lot of our wastes were. I think the idea of possibly retiring early was the biggest shock to her that anything else. She has been slowly coming around and jumping more into spending less and actively attacking our debt emergency. We have started by cutting cable, doing all our own home/car maintenance and repairs, using less electricity/heating, and cut our food expenses in half by eat out a lot less, not buying lunches at work, eating less meat (not at every meal; vegetarian dinners several times a week), and buying more staples in bulk.

My main focus has been to try and live by example instead of just preaching at her. I figure that if I'm not buying stupid things, eating less, and discussing different savings options; then these habits will continue to rub off on her. 

Laura33

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Re: Case Study - Getting the wife on the FIRE train
« Reply #9 on: January 18, 2019, 09:14:47 AM »
Are you actually tracking expenses?  There are an awful lot of rounded figures here that suggest that these are more hopeful wishlist items than an honest reflection of your spending.  Because really, if you were consistently spending $3400/mo. while bringing home over $6K net, you wouldn't have CC debt, and you wouldn't need to have financed a lawnmower, right?  It sounds to me like you have jumped into a lot of expensive stuff over the past couple of years -- kid, wife's new firm, house, etc. -- and are just now sitting down to come to grips with what all of that means.  So order of priorities:

1.  Track your expenses.  You have a lot of moving parts and are chasing a bunch of different stuff.  You need to know what you're working with.  Your wife also needs to track her income and business expenses separately -- as others have suggested, I would not assume her business grows this year if she is taking care of a baby/toddler without paid help, and she needs to document business expenses so you can take the appropriate tax deductions.

2.  Come to grips with estimated taxes.  Your wife must pay estimated taxes every quarter, or she will owe interest and penalties even if she pays the right total amount by the end of the year.  Do your taxes for last year now.  Figure out what taxes, interest, and penalties you will owe from her work.  That is very likely to suck up a big chunk of your available cash.  Hire an accountant if you need to, ASAP.  And then use those figures to plan your estimated tax payments into this year's budget.

3.  Assuming you have extra cash left over after (2), pay off the CC ASAP. 

4.  In 6 months or so, once you have a better sense of how much your wife is actually able to work and how much you are actually spending, come up with a realistic budget.  Look up the "investment order" sticky to figure out how to prioritize whatever you have left. 

In sum, your issue right now is not getting your wife onboard to FIRE -- it is getting the ship righted and heading in the right direction.  Once you get to (4) and know what you're dealing with, that's a really good time to talk to your wife about what you want your lives to be, whether the choices you are making now are sending you in that direction, and what changes each of you may be willing to make to align your current spending with your future plans. 

Nick_Miller

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Re: Case Study - Getting the wife on the FIRE train
« Reply #10 on: January 18, 2019, 09:57:19 AM »
Another element that really complicates your wife's attempt at starting up a practice is that your family needs money NOW. She doesn't have the luxury of time or the luxury of having a cash reserve to live off of for a few years while she grows her practice. It's a very tough spot to be in. I would be so stressed I couldn't see straight.

With that gigantic student loan gorilla in the room, she can't afford to even go 75% with her law practice (and 75% would be admirable while looking after a 6-month-old!. She has to give 100% and she has to be as profitable as possible as fast as possible (which is not always the same thing as building your practice to be profitable over the long haul).

Has she given thought to taking a salaried position somewhere?

It would seem easier to find a job that pays at least $60K+ for a first year associate than it would to grow a law practice, right out of law school, out of her home, and while caring for a baby, with the pressure to bring in $ every month with your debt situation.

I guess I'm saying that your family needs more money coming in right this second, and it's not clear to me how her running her own firm, given the above, is the most efficient way to get there.
« Last Edit: January 18, 2019, 09:59:15 AM by Nick_Miller »

pawnjohn

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Re: Case Study - Getting the wife on the FIRE train
« Reply #11 on: January 18, 2019, 10:32:09 AM »
I started the last reply before several more of you came in asking more questions, so in order to not have a super long post I thought I would break it up.

On our mower - We own 5 acres of land that all must be mowed with a lot of trees. A large section will be used for gardening/green house to produce most of our food. Selling and getting a different/smaller one would be an optional, especially as more of our land becomes less "mowable."


On my wife's business/taxes:

Her focus is on trust/estate planning, tax law, family law, setting up new businesses and filing tax returns. She is also in-house counsel for a corporation from our town and a local tax office. She is partnered with the tax office and has been working there for over 10 years, so they have become almost a second family to us, and has been building a "client list" since she began law school that having been filtering in. She rents a small office from from the tax office and they share front office staff/software which allows her overhead to remain low. They also both refer clients back and forth. During tax season, my wife helps by compiling and filling tax returns that come into the tax office. They are also in talks of doing a "profit sharing" from the tax office due to the increase in profits her partner saw last year.

For child care, our plan is for her to work from home with our daughter as much as possible. She is able to take her into work with her and regularly does. If she has a meeting, someone from the office will watch over our daughter while she has her meetings. They also have a dedicated "child space room" from when the tax office owner's children were younger that will be used as our daughter gets older.
My mother-in-law also keeps her for 2 mornings during the week so that my wife can go in for meetings/work in order to have more focused time. She has been talking about decreasing her own work in order to have her an additional full day as well.
Due to way my vacation accrues (per pay period) and the amount of vacation I receive (4+ weeks), I have been able to basically drop down to 4 days per week in order to spend more time with our daughter and so my wife can go into work. I typically work 1 full week per month to maintain 10+ vacation days incase I would need to take an extended time off. I also am able to use sick time for all doctors appointments and use those full days off so my wife can go into work.
She will also go into work on some weekends (usually 1/2 days) if she needs to catch up and will work during the evenings while I play with our daughter/after she goes to sleep.
With all these options, we feel that she can grow well enough for the first few years, while still having lots of time for our daughter, and when she turns 2 or 3, we would look into enrolling her in a pre-school program at our local church, or with one of the child care businesses she works for at a discounted rate.

On her income/taxes:

I should clarify that what I listed is what she was able to transfer into our personal account, not her gross amount. She keeps a certain balance in her business account for expenses and taxes. Her and her partner have discussed how she should plan her taxes, but I am just not 100% on the details. This is something we have been discussing in hopes of getting a better balance in order and to pay off our debts.


On some of our expenses:
Gas- this is one area that should be coming down. $150 was our budget last year and we came in under. I've been slowly trying to reduce my ridiculous commute. I was commuting 35 miles/60 minutes each way 3+ days a week early last year. I have now gotten established at a much closer location and my commute now is only about 15 miles/20 minutes each way. I have also switched to a more fuel efficient car that will hopefully lower the cost as well. My wife also drives less now that our daughter has been born and she has been working from home more.

Insurance - We are going to shop around for our insurance and drop to liability on my car only, since we carry more than enough in our e-fund if this one was totaled.

E-Fund - We are going to keep 15k in the efund and then use the other 20k to pay of the credit card, car, and then use the little remaining on student loans. I was just given access to a saving account from middle/high school that my dad put money from jobs/work during that time period for me. I just need to close that account and transfer the money into our personal account.

Are you actually tracking expenses?  There are an awful lot of rounded figures here that suggest that these are more hopeful wishlist items than an honest reflection of your spending.  Because really, if you were consistently spending $3400/mo. while bringing home over $6K net, you wouldn't have CC debt, and you wouldn't need to have financed a lawnmower, right?  It sounds to me like you have jumped into a lot of expensive stuff over the past couple of years -- kid, wife's new firm, house, etc. -- and are just now sitting down to come to grips with what all of that means.  So order of priorities:

1.  Track your expenses.  You have a lot of moving parts and are chasing a bunch of different stuff.  You need to know what you're working with.  Your wife also needs to track her income and business expenses separately -- as others have suggested, I would not assume her business grows this year if she is taking care of a baby/toddler without paid help, and she needs to document business expenses so you can take the appropriate tax deductions.

I have been tracking our expenses for a couple years, even before discovering MMM or any financial websites mostly for observation so that I would know of any patterns we developed. These numbers are from our 2018 spending, in what was our most expensive year yet. A big part of our cc debt was due to starting up her business before she was able to start practicing.

zoe2dot

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Re: Case Study - Getting the wife on the FIRE train
« Reply #12 on: January 18, 2019, 10:54:48 AM »
+1 to getting your taxes sorted out

Everyone has silly things they spent money on (me=horseback riding).  Yours is a lawnmower.  Your silly hobby is a LAWNMOWER.  Get ready to duck because there are some major face punches coming your way.  Can you sell it and buy a cheaper one in cash?  It’s almost too easy to go after you for that one. 

You get Netflix OR Prime, not both.  (To be frank do you really need either?) 

Pets 150*12 = $1,800 a year (how is this a real number? what are you pets eating? are they sick?)
Food 500*12= $6,000 a year (does this include eating out?  is this the number AFTER you said you made cuts?)

You posted your expenses.  Break them down (what is your gas bill? internet?) to get better feedback.  In my case study I found the little dollars really added up.

Do you have a budget?  Flesh it out budget.  Travel? Gifts?

Is your cash in a high yield savings account? 


zoe2dot

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Re: Case Study - Getting the wife on the FIRE train
« Reply #13 on: January 18, 2019, 10:56:39 AM »
p.s. rename your thread if you can - it could be "DEATH BY A THOUSAND GRASS CUTS" :) Your focusing on your wife when you still have a lot of work to do in general.  It's way too easy to redirect this stuff onto a spouse (sometimes deservedly, sometimes not). 

Nick_Miller

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Re: Case Study - Getting the wife on the FIRE train
« Reply #14 on: January 18, 2019, 11:11:08 AM »
On my wife's business/taxes:

Her focus is on trust/estate planning, tax law, family law, setting up new businesses and filing tax returns. She is also in-house counsel for a corporation from our town and a local tax office. She is partnered with the tax office and has been working there for over 10 years, so they have become almost a second family to us, and has been building a "client list" since she began law school that having been filtering in. She rents a small office from from the tax office and they share front office staff/software which allows her overhead to remain low. They also both refer clients back and forth. During tax season, my wife helps by compiling and filling tax returns that come into the tax office. They are also in talks of doing a "profit sharing" from the tax office due to the increase in profits her partner saw last year.

For child care, our plan is for her to work from home with our daughter as much as possible. She is able to take her into work with her and regularly does. If she has a meeting, someone from the office will watch over our daughter while she has her meetings. They also have a dedicated "child space room" from when the tax office owner's children were younger that will be used as our daughter gets older.
My mother-in-law also keeps her for 2 mornings during the week so that my wife can go in for meetings/work in order to have more focused time. She has been talking about decreasing her own work in order to have her an additional full day as well.
Due to way my vacation accrues (per pay period) and the amount of vacation I receive (4+ weeks), I have been able to basically drop down to 4 days per week in order to spend more time with our daughter and so my wife can go into work. I typically work 1 full week per month to maintain 10+ vacation days incase I would need to take an extended time off. I also am able to use sick time for all doctors appointments and use those full days off so my wife can go into work.
She will also go into work on some weekends (usually 1/2 days) if she needs to catch up and will work during the evenings while I play with our daughter/after she goes to sleep.
With all these options, we feel that she can grow well enough for the first few years, while still having lots of time for our daughter, and when she turns 2 or 3, we would look into enrolling her in a pre-school program at our local church, or with one of the child care businesses she works for at a discounted rate.

On her income/taxes:

I should clarify that what I listed is what she was able to transfer into our personal account, not her gross amount. She keeps a certain balance in her business account for expenses and taxes. Her and her partner have discussed how she should plan her taxes, but I am just not 100% on the details. This is something we have been discussing in hopes of getting a better balance in order and to pay off our debts.


Okay, so it looks like she has a pretty strong support system with help from different angles. Definitely more support than I assumed from reading your OP.  She sounds like she has been working hard, and it sounds like she has a plan for possibly transitioning to that daycare program in a few years. I still think she's under a lot of pressure to bring money in consistently, but it sounds like she has many of the logistics figured out that can make it doable.

pawnjohn

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Re: Case Study - DEATH BY A THOUSAND GRASS CUTS
« Reply #15 on: January 18, 2019, 12:35:22 PM »
p.s. rename your thread if you can - it could be "DEATH BY A THOUSAND GRASS CUTS" :) Your focusing on your wife when you still have a lot of work to do in general.  It's way too easy to redirect this stuff onto a spouse (sometimes deservedly, sometimes not).

Done. This is definitely a misunderstanding due to my poor word choice/ability to explain myself. I most definitely do not want to make it out that she is the problem/in they way of ER, when in fact she would be the main reason it would be possible. I am very aware that there are many ways that I need to drastically improve, and why my focus is on improving my poor habits/low income and letting the work speak for itself.

My intent is to get some fresh, more skilled eyes to look at where we could make some of those improvements. Then we can make those adjustments we need to in order to live our most optimal lives. Best case is that when she sees the difference between our income vs spending and how quickly it could work to demolish our debt emergency, then we could invest that difference and reach FI way before we would have ever thought possible.

Again, it's not that she is "against" retiring early, or that I think "she" is the reason behind why we couldn't get there. Like most people, I just don't think this idea has ever really crossed her mind, and I am hoping to enlighten her about the possibilities. 

 

Gail2000

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Re: Case Study - Getting the wife on the FIRE train
« Reply #16 on: January 18, 2019, 12:57:34 PM »
Posting to Follow

pawnjohn

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Re: Case Study - Getting the wife on the FIRE train
« Reply #17 on: January 18, 2019, 01:11:29 PM »
Quote
Okay, so it looks like she has a pretty strong support system with help from different angles. Definitely more support than I assumed from reading your OP.  She sounds like she has been working hard, and it sounds like she has a plan for possibly transitioning to that daycare program in a few years. I still think she's under a lot of pressure to bring money in consistently, but it sounds like she has many of the logistics figured out that can make it doable.

Yea, the devil really is in the details and I was attempting to not overwhelm with my first post. She is in the unique situation with her work situation and ability to bring our daughter to work with her. The support system to allow her this opportunity was definitely something we discussed and spent a lot of time planning out. Also, as our daughter gets a little older, there are a few other family members that have expressed interest in watching her as well. It is also one reason I passed up the opportunity at a job with a 20% pay increase (the main reason being a potential health issue with our daughter that we luckily avoided).

Another aspect I failed to mention is that she has a referral agreement with her Uncle who is also an attorney in the city near by. He refers her any family/estate/tax clients he receives and she sends him criminal/PI/civil clients she isn't able to take on. They each give the other a cut of anything that is referred. Considering he is overloaded and is at the point in his career that he only takes cases that interest him, he has been referring her quite a bit of work.

There is definitely pressure there, but that pressure is nothing compared to the anxiety she would have if she had to send our daughter to daycare.

Cassie

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Re: Case Study - Getting the wife on the FIRE train
« Reply #18 on: January 18, 2019, 01:36:30 PM »
I am assuming that the horse is where the majority of the pet food expenses are going. Actually I just became aware that many dog food companies are selling food that causes diet induced heart problems which can be fatal. Purina Pro Plan is one of the 3 companies that have proven their food to be safe for dogs. We groomed our dogs to save money but you still need to take them somewhere to have their anal glands expressed if they are small dogs. The ear hair has to be pulled out or they get infected. I wasn’t saving that much money after I paid for that.   We spend 300 month for food so you can definitely reduce that.

CalBal

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Re: Case Study - Getting the wife on the FIRE train
« Reply #19 on: January 18, 2019, 02:00:40 PM »
I am assuming that the horse is where the majority of the pet food expenses are going. Actually I just became aware that many dog food companies are selling food that causes diet induced heart problems which can be fatal. Purina Pro Plan is one of the 3 companies that have proven their food to be safe for dogs. We groomed our dogs to save money but you still need to take them somewhere to have their anal glands expressed if they are small dogs. The ear hair has to be pulled out or they get infected. I wasn’t saving that much money after I paid for that.   We spend 300 month for food so you can definitely reduce that.

I also just want to say, I don't think $150 is necessarily a lot for pet expenses, depending on the animals, their ages, their needs. For example: I have 2 young cats and a senior (16-yo) dog. My dog eats special food (Purina Pro Plan, in fact) and takes anti-inflammatory medication for arthritis - other than this, she is healthy (basically like a reasonably healthy 80-yo person who takes medicine for arthritis). The cats don't eat special food but do get quality food. They go to the vet for yearly checkups/shots/licensing and as a super senior doggo goes 2x per year to make sure her bloodwork is ok since she is on meds. Cats may also get a dental every few years to stave off dental problems later in life (which is more expensive to have surgery then). Not to mention any emergency visits that may come up.

My costs for them for food + medication alone is $150/month. Regular scheduled vet visits is around $50/month more (averaged over the year). Plus extra for litter, toys, etc.

I may not get another dog when my girl passes away. Or, at least, maybe not right away. That's a decision every person needs to make for themselves. My costs would certainly go down a lot. No one should think having animals is cheap. I see too many posts where people spend (or say they spend? Maybe they don't break out some of the things I do) almost nothing on their pets. Either they are feeding them incredibly inexpensive (ie not very nutritious) food, or not keeping up with preventative care/vaccinations, or not taking into account that young healthy animals turn into old not-so-healthy animals. When you adopt a pet you are committing to their care, for their best interest, for life. Don't let anyone make you feel guilty about committing to the care of an animal, or how much it costs.

pawnjohn

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Re: Case Study - Getting the wife on the FIRE train
« Reply #20 on: January 18, 2019, 02:10:00 PM »
Looking at 2018 expenses our pet costs breakdown to:

Pet Food & Supplys = 93/mo or 1112/year
  This includes their food (Blue Buffalo Basics) @ $54 and any toys/treats they would get. As well as ferrier costs for the horse (every 6-8 weeks). My mother-in-law covers the horse feeds.

Vet Bills - 40/mo or $479/year - This is for annual check-ups for all three animals and monthly heartworm for our dogs.

Grooming = 13/month or 150 - Only 1 of our dogs needs grooming and goes as needed.

Total comes to $146/month.

Cassie

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Re: Case Study - Getting the wife on the FIRE train
« Reply #21 on: January 18, 2019, 02:17:29 PM »
Blue Buffalo is one of the bad foods.  I fed it at one time.   I found out that only 3 big companies run feeding trials (humanely) on dogs and hire PhD nutritionists to make sure the formula are safe. Dog Advisor is written by a dentist who recommended unsafe food all the time. Yes pets are expensive. At 1 time I was spending 450/month on pet medications for 3 old dogs. 2 passed and our big old dog’s medications are 130/month.

ysette9

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Re: Case Study - Getting the wife on the FIRE train
« Reply #22 on: January 18, 2019, 02:54:02 PM »
With the debt you are carrying it feels to me that it is really important that your wife’s career takes off. As a professional myself I absolutely cannot imagine trying to balance a career with a baby, and it only gets harder the older they get. Honestly, they balance is going to mean that both the kid and her career will suffer. You need her to kick lawyer ass and bring in the bacon so that +\-$150/month in pet food or eating out is small potatoes. She has invested enormously in education and now she needs to make sure that this investment pays off as much as it possibly can.

Have you considered staying home with your child until she can go to school?

As others have mentioned, your lawn mower is beyond ridiculous. I also think you have no business owning a horse. How much do you even get to ride it considering she is working some on the weekend and you have a baby?

Evasion

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Re: Case Study - Getting the wife on the FIRE train
« Reply #23 on: January 18, 2019, 04:19:32 PM »
I just came here to point out you have a 4k lawn mower and a a horse. Deal with this first as a symbolic thing maybe? This type of things would really get in the way of FIRE at your income level.

Cassie

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Re: Case Study - Getting the wife on the FIRE train
« Reply #24 on: January 18, 2019, 04:25:59 PM »
I understand your wife wanting to spend time with the baby.  It sounds like you guys are making things work.  Sometimes when you start making small cuts it feels good and you can move on to bigger changes.

brooklynmoney

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Re: Case Study - Getting the wife on the FIRE train
« Reply #25 on: January 19, 2019, 07:21:11 AM »
Agree with ysette9 that you should consider staying home.

spjulep

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Re: Case Study - Getting the wife on the FIRE train
« Reply #26 on: January 19, 2019, 07:27:00 AM »
Wife has a $150k income potential, is watching the baby during the day at work, building her business in the evening, and she is the problem here? Even if she has help from coworkers, that sounds insanely stressful and distracting. Free her up to focus on income growth in whatever way makes sense for your family.

Gin1984

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Re: Case Study - Getting the wife on the FIRE train
« Reply #27 on: January 19, 2019, 04:09:38 PM »
Your wife should consider a solo 401k. But the biggest thing I came on here to say is to leave your wife alone. She is staying home four out of five days to watch your daughter, AND building up a law business at the SAME time.  YOU can look for ways to save money, YOU can do some voluntary hardships but she already has enough. If she wants to go out to eat, fine.  It is costing you less than daycare.  You can sell some of the taxable account and use that to pay off debt/max out her solo 401k.

Gin1984

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Re: Case Study - Getting the wife on the FIRE train
« Reply #28 on: January 19, 2019, 04:11:38 PM »
Wife has a $150k income potential, is watching the baby during the day at work, building her business in the evening, and she is the problem here? Even if she has help from coworkers, that sounds insanely stressful and distracting. Free her up to focus on income growth in whatever way makes sense for your family.
The only reason I would disagree with this is that he likely is providing health benefits for the family and at their current asset level, I personally would not give up employer health benefits.

ysette9

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Re: Case Study - Getting the wife on the FIRE train
« Reply #29 on: January 20, 2019, 03:54:52 AM »
Wife has a $150k income potential, is watching the baby during the day at work, building her business in the evening, and she is the problem here? Even if she has help from coworkers, that sounds insanely stressful and distracting. Free her up to focus on income growth in whatever way makes sense for your family.
The only reason I would disagree with this is that he likely is providing health benefits for the family and at their current asset level, I personally would not give up employer health benefits.
I agree with you that benefits are an important thing to consider, but I think sacrificing her career potential for health coverage is short-sighted. She isn’t super woman. It is just impossible to provide quality child care and grow an intensive, professional career at the dame time. I can’t even work effectively at home when the nanny is there because my kids want me/need me/are thrilled to interact with me. What may be possible with a small baby is definitely not with a toddler.

MDM

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Re: Case Study - Getting the wife on the FIRE train
« Reply #30 on: January 20, 2019, 04:30:36 AM »
2.  Come to grips with estimated taxes.  Your wife must pay estimated taxes every quarter, or she will owe interest and penalties even if she pays the right total amount by the end of the year.  Do your taxes for last year now. 
Yes, too late to do anything about 2018 other than shoot for maybe a late February filing and payment instead of waiting until April 15.

For 2019, it would probably be easier to handle taxes via withholding from his wages, rather than having her do estimated tax payments. 

Dee18

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Re: Case Study - Getting the wife on the FIRE train
« Reply #31 on: January 20, 2019, 05:54:34 AM »
You can go ahead and make a payment for 2018 taxes even before filing.  This would limit interest and might help avoid penalties.  When you receive a letter from the IRS saying you owe back taxes, interest, and penalties you can often negotiate the penalties. 
« Last Edit: January 22, 2019, 12:28:19 PM by Dee18 »

Gin1984

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Re: Case Study - Getting the wife on the FIRE train
« Reply #32 on: January 20, 2019, 09:01:46 AM »
Wife has a $150k income potential, is watching the baby during the day at work, building her business in the evening, and she is the problem here? Even if she has help from coworkers, that sounds insanely stressful and distracting. Free her up to focus on income growth in whatever way makes sense for your family.
The only reason I would disagree with this is that he likely is providing health benefits for the family and at their current asset level, I personally would not give up employer health benefits.
I agree with you that benefits are an important thing to consider, but I think sacrificing her career potential for health coverage is short-sighted. She isn’t super woman. It is just impossible to provide quality child care and grow an intensive, professional career at the dame time. I can’t even work effectively at home when the nanny is there because my kids want me/need me/are thrilled to interact with me. What may be possible with a small baby is definitely not with a toddler.
And I'd say the best idea would be to get a nanny or send the child to daycare but it looks like mom does not want that.  And if she is the most conservative one, giving up employer benefits may, again, be something she does not want.  In my opinion, given all she is under, her wants need to be paramount even if it is fiscally suboptimal.  She is managing now, if she feels she is not, she can change things. Until then, I would not force her to have a change with a new business and baby.

Cassie

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Re: Case Study - Getting the wife on the FIRE train
« Reply #33 on: January 20, 2019, 11:15:58 AM »
She is enjoying her baby and all the money in the world won’t buy that time back.

ysette9

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Re: Case Study - Getting the wife on the FIRE train
« Reply #34 on: January 20, 2019, 05:17:00 PM »
I think we are all doing a good job of projecting here. OP: what does your wife want? Have you had an honest conversation about her ability to balance these two very tough, very demanding responsibilities? She has a lot riding on her to keep your family financially sound.

Gin1984

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Re: Case Study - Getting the wife on the FIRE train
« Reply #35 on: January 20, 2019, 09:29:22 PM »
I think we are all doing a good job of projecting here. OP: what does your wife want? Have you had an honest conversation about her ability to balance these two very tough, very demanding responsibilities? She has a lot riding on her to keep your family financially sound.
I am basing my statements on
Quote
There is definitely pressure there, but that pressure is nothing compared to the anxiety she would have if she had to send our daughter to daycare.
To me that sounds like the mom does not want to send the child to daycare at this time.

ysette9

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Re: Case Study - Getting the wife on the FIRE train
« Reply #36 on: January 21, 2019, 03:24:47 PM »
Fair enough. I had missed the above statement. Ok that case I think he should consider even more staying home instead. I certainly felt anxious sending my first baby to daycare initially but felt great leaving both of my babies with my husband when I first went back to work.

pawnjohn

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Re: Case Study - Getting the wife on the FIRE train
« Reply #37 on: January 22, 2019, 09:28:43 AM »
Wife has a $150k income potential, is watching the baby during the day at work, building her business in the evening, and she is the problem here? Even if she has help from coworkers, that sounds insanely stressful and distracting. Free her up to focus on income growth in whatever way makes sense for your family.
Wife has a $150k income potential, is watching the baby during the day at work, building her business in the evening, and she is the problem here? Even if she has help from coworkers, that sounds insanely stressful and distracting. Free her up to focus on income growth in whatever way makes sense for your family.

I tried to address this in another post, but I probably should edit my original post/title. Again, this is probably due to my poor wording/ability to express my thoughts in a coherent manner, but I do not think my wife is the problem, even remotely. She is the only reason that I even believe FIRE could even be an option. I do not wish to badger her about HER spending or stress her out about her income. The reasoning for my title isn't that she is the problem, it is because (like most people) the option of retiring early and not working until our 60-70's has never occurred to her before (nor myself until finding MMM)
 The purpose of my post is to 1) Have better/more objective minds look at where there is opportunity to decrease our spending to make it more efficient, and 2) Use that advise to come up with realistic numbers to show her how FIRE is a possibility.


You can go ahead and make a payment for 2018 taxes even before filing.  This would limit interest and might halo avoid penalties.  When you receive a letter from the IRS saying you owe back taxes, interest, and penalties you can often negotiate the penalties. 
We actually have made a few payments for 2018. I should have said that I am not sure how much we will be paying total for 2018 because I have not discussed this in detail with my wife. Given her knowledge, the fact that she works with a tax office, and my own limited understanding of taxes in general; I have let her handle her tax situation. For 2019, we are going to discuss the best plan going forward so that we are both on the same page.


Have you considered staying home with your child until she can go to school? 


I have, and am more than willing to stay home instead. As others have guessed, right now my wife feels that the insurance benefits/costs from my employer outweigh the benefit of her being able to work full-time. Adding in the time she is getting with our baby, her being home more is drastically more valuable overall.


Quote
Sometimes when you start making small cuts it feels good and you can move on to bigger changes.
This is exactly what I would like to accomplish. I would like to make marginal cuts overall, large cuts where needed, and drastic changes where appropriate (my income/mower/etc) with the hope that things clear up and make our goals more visible. The trick is walking the line of where she draws the line between frugal and cheap (missing out/enjoying life).

I think we are all doing a good job of projecting here. OP: what does your wife want? Have you had an honest conversation about her ability to balance these two very tough, very demanding responsibilities? She has a lot riding on her to keep your family financially sound.

 This is a great question. Right now, she wants to stay at/work form home and use the various avenues I've previously mentioned to continue with this set-up. If/when she feels overwhelmed/stressed from balancing the two, we will look into doing something different (day care/me staying home).

Another option I'm looking into is the possibility of going part-time (2-3 days per week) so that I can still maintain our health coverage/benefits (although at a much higher rate), and give her additional full-day time to further grow her business. This would have to a lateral transition to a different position and would limit my ability to increase my own income. I think the trade-off would be worth it (I'm looking at 50-70K max without a drastic career change vs her 150k+ potential).


In regards to our horse, I would definitely agree that we currently cannot afford a horse and are not able to ride nearly enough, she is my wife's horse from high school. She broke and trained her before even purchasing her, so there is no way we will be getting rid of her. I will say that the financial and time-investing required for horse ownership are the reasons we have not gotten another horse and would not be getting one if something were to sadly happen to our current one.

MrThatsDifferent

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Re: Case Study - Death by 1000 lawn cuts
« Reply #38 on: January 26, 2019, 01:17:48 PM »
I’m not an accountant and I’m sure you’re on top of this, but I would’ve thought that your,wife working from home and her own business would allow you to claim a lot of what you have, even portions of the lawnmower and car as business expenses? You should be expecting a fat refund, I’d imagine.

Also, just an observation, you seem concerned that the 22 year timeframe to work to assist your daughter with college is too long. Perhaps, depending on what you want to do with your life. To keep it in perspective though, that means you’ll retire around 50. That’s pretty damn good and will probably be at least 20 years before your peers. Make smart choices now, get rid of that debt and build your stache, and consider easing up on any pressure. You don’t need to be retired at 40.

waltworks

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Re: Case Study - Death by 1000 lawn cuts
« Reply #39 on: January 27, 2019, 09:49:20 PM »
Why did you buy a house on 5 acres of land that you have to maintain? That's not just a money suck, it's a life/time suck. Mowing 5 acres... it boggles the mind. 

I'd sell the house (and the lawnmower, and the horse) and move into a place that makes sense for a family with a lot of debt and not much income. You can buy a house in 5 years when you have money.

-W

remizidae

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Re: Case Study - Death by 1000 lawn cuts
« Reply #40 on: January 27, 2019, 10:08:16 PM »
I’m not an accountant and I’m sure you’re on top of this, but I would’ve thought that your,wife working from home and her own business would allow you to claim a lot of what you have, even portions of the lawnmower and car as business expenses? You should be expecting a fat refund, I’d imagine.

LOL no, you cannot claim a fancy lawnmower as a business expense just because someone works from home. Maybe whatever small portion of the car usage is actually for work, maybe a home offfice if you have a room that is exclusively for work. But neither of those is going to be huge.