Author Topic: Case Study - want to retire in 50s (sorry posted twice - thought it didn't post)  (Read 2333 times)

nurseyface

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Hello everyone!

I'm new to MMM and FIRE but I'm very motivated and inspired!

Here's our situation:  I'm 41 and my husband is 40. We live in small town in Western Massachusetts. We have one  5-year-old son.  I am a nurse and my husband is in retail management.  I make $65,400 and he makes $105,000 before taxes.  I will be getting a $3/hour raise as soon as our union contract negotiations are completed. We take home about $8800.  We don't go on fancy vacations nor do we shop a lot or go out much.

Our monthly expenses:
Mortgage: $1604 (30 year mortgage, 4%, 26 years to go)
Mortgage Insurance: $135
Cars: $730/month (considering selling one and bringing our payment down to ~$530/month)
Car Insur: $125/month
Gas: $150/month
Groceries: $500/month (already cut down $300/month)
Alcohol/entertainment: $400/month
Phones: $158/month (I'm switching to Cricket from AT&T tomorrow so we'll see if it decreases our bill. he can't because he just got a new phone from AT&T because his old one died. We're still using smart phones)
Cable: $114.  We just have internet, Netflix and spotify -It's going to decrease to $55/month once our town finishes running the wires for internet.
Electricity: $100/month
Heat/gas: $135/month
Water/sewer: $15
Union dues: $82/month
Life insurance: $58
Clothes: $150 for all of us
Miscellaneous (art supplies - husband's an artist), haircuts, random stuff: $125/month

Debt:
Total credit card debt: 23,300 (currently using snow ball method to pay off debt) - pay around $1000 month
Mortgage: 239,000
HEL: $357 - paid off in 2020
401k personal loan (husband): $21000 (when we bought our house).  It's at 4% for 20 years. They won't let you pay more each month since it's a payroll deduction - you can only just pay it off. $120/month ?
Personal loan for home maintenance: $800 through 2019
Student loans (me): $1049/month, total remaining $54,566
Second small student loan: $20/month - $2500 left (I've been kind of ignoring this and paying the minimum bc the interest rate is like 2%)

Now, retirement is a sore spot.  I have about $16,000 in a 403b and I contribute 3% to get the 2% match.  I've cashed out 401ks in the past because I was young and stupid. I think my husband has about $60,000 in his 401k. 

We are just building up a small savings using YNAB but we're really concentrating on paying off our debt aggressively.  I did start using YNAB and undebit and they are amazing and have helped me rethink and restructure our finances.  MMM helped me really meditate on our expenses and get motivated to get out of debt and retire earlier than I thought I ever could.  According to undebit, we can have all of our debt paid off in about 6-7 years if all goes well.

Tell me what you think!  I am I interested in these questions: debt first and then retirement?  Be less aggressive with debt and put more in retirement?  I was thinking, debt gone, then get really aggressive with retirement.

HALP!





« Last Edit: June 12, 2017, 01:26:53 PM by nurseyface »

Vindicated

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Welcome Nurseyface!

In regards to what you should focus on, read through the Investment order on the second post on this thread.

https://forum.mrmoneymustache.com/investor-alley/investment-order/

Other things:

Mortgage:  I'm not familiar with your area, but that seems pretty high.  If you guys could move closer to work and get a smaller mortgage, your FIRE plan could be drastically accelerated.

Cars:  Yes you pay a lot.  This is my biggest problem too, due to poor decisions in the past.  However, selling and getting cheaper cars is a great option if you're not upside-down.

Alcohol / Entertainment:  Find cheaper entertainment.  That's very very high.  Spend ~$200/mo which includes "eating out" along with going out with friends.  Plenty of free fun to be had!

Phone:  We switched to Sprint, and it dropped our payment to ~$60/mo.  Many on here recommend Google Fi or Republic, but I haven't taken that step yet, so I can't offer advice there.

Cable/Internet:  AT&T had a promotion for $30/mo for 12 mo in April.  Maybe it's in your area too, and still going?  We have that and Netflix, and check out videos from the Library if we need something different.  So, our cost is $40/mo for internet/Netflix.

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You've got a lot of work to do, but you've taken the first step!  You're here!  Good luck on your journey!

ETA: Link to Investment Order thread.
« Last Edit: June 12, 2017, 02:05:22 PM by Vindicated »

nurseyface

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thanks Vindicated!  Great suggestions!

Where is the Investment topic?  I can't find it.

Vindicated

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thanks Vindicated!  Great suggestions!

Where is the Investment topic?  I can't find it.

I meant to link it originally, but forgot.  It's linked in my first post now.