How much longer do I have to work in tech?

[determinedcat]

Yikes, @Novik. I hope your husband can extricate himself from ChaosCo soon. Feelings of obligation are such hardy little tentacles!

Update: My husband tried to break up with SPACE today. His reasons were: 1) he couldn't convince his wife that SPACE had reasonable work/life balance, and 2) their offer was too low. The recruiter immediately countered by offering him 33% more stock options, and scheduling a phone call with the head of HR on Monday. I think/hope/pray that he still intends to decline, but the door is slightly ajar.

It's funny how well hubby's indecisiveness is working out for him. All of the companies are throwing more money at him now, even if he doesn't want it. I'll have to remember this in case I'm ever lucky enough to be the target of a bidding war.

[lhamo]

If he does end up taking this job can you set some firm boundaries about what sorts of expections/demands on the part of the company will due up his resignation letter?

[NaN]

Did I read that right? $820/month rent for 2 bdr in Oakland.

[determinedcat]

@NaN That's my half of the rent. The rent is $1650. Housing costs are going to go way up in a few months...

@lhamo I like your idea about setting boundaries! It would be good to establish an agreement and maybe even put it in writing.

As of January 1, the hubs still hasn't decided where he wants to work in a month. SPACE remains one of his top choices. We talked to the Head of HR before the holiday break. Although she's implemented a lot of positive changes to address burnout, employee morale was at -66 (on a scale of -100 to +100) back in October, and is now sitting at -27. :O

[determinedcat]

A SPACE Odyssey (x-posted in my journal)

Hubs is in a strange new phase of the job hunt. Despite all the red flags, he was planning to accept the SPACE offer, when they cut his equity down to 20,000 shares -- 1/5 what they originally offered.

The Chief People Officer (CPO) at SPACE just quit less than a year into her tenure. She seemed really competent and was overseeing some much-needed changes, like official performance reviews and equitable compensation. They are hinting that she left to join the Biden administration, but it's fishy that she left so soon. The company is supposedly on the verge of a major liquidity event, so why would she leave before her stock vested?

Hubs had numerous conversations with the CEO, the CFO, and the recruiter of SPACE this past week. The CEO has suspiciously perfect hair and a cleft jaw, and blames the company's troubles on the former VP of Engineering. (That VP is still at SPACE, but has been demoted.) The CEO promised hubs that we would be "very well taken care of" financially, and bragged about the company's access to cash. The CFO has been at SPACE less than a month and claims that "no one here is overworked". She has extensive experience in taking companies public, but wasn't able to tell a convincing story about why SPACE equity will be worth anything.

Now for the present dilemma. SPACE offered hubs 75k stock options, which he negotiated up to 100k options before the break. Now, SPACE is moving to RSUs (restricted stock units) and wants to switch hubs' offer to *20k* RSUs. They claim that 20k RSUs are the same thing as 100k options, which just can't be true. It's common for an RSU grant to be 10-20% less than an equivalent option grant because RSUs don't cost anything to exercise. This grant is 80% less than the original grant.

The equity is the whole point of joining a scrappy, hard-charging startup like SPACE. They are offering hubs 215k in cash comp, which is lower than all his other offers. Joining SPACE means a lower salary, longer hours, and limited benefits; to be competitive with his other offers, it needs to have the potential for a big payout in the future. Hubs' other offers are worth between 350-400k/year.

Hubs tried to negotiate for more equity, but SPACE isn't budging. Their VP of Finance even claimed that the 20k RSUs were the equivalent of 100k RSUs because of the AMT. This is where it gets tricky, because neither my husband or I are tax experts. However, we think that the VP is either lying or doesn't know what he's talking about.

I feel sorry for hubs because he really is excited by the work. One of his projects would be calculating the rocket's optimal fuel injection rate, so that it doesn't run out of fuel and oxygen at the same time. Another project is controlling fuel slosh as the rocket orbits the earth. He jokes that he'll come to SPACE and work for them as a hobby on the weekends.

The recruiter asked hubs,"Do you want the fame and your name on the rocket? Or do you just want a high comp?" I don't understand why there has to be a dichotomy. He deserves both. Especially if he has to work 12-hour days with a young son at home.

He turned down their offer on Friday for the second time. The recruiter counteroffered with a higher base salary, but refused to give any more equity.

We are talking to a tax expert today...

[seattlecyclone]

Now, SPACE is moving to RSUs (restricted stock units) and wants to switch hubs' offer to *20k* RSUs. They claim that 20k RSUs are the same thing as 100k options, which just can't be true.

Sure it can. Options have a strike price. RSUs don't. If the strike price at vesting time is 20% below fair market value then five options will have equivalent value to one RSU share. If the discount is more, the options will be better (pre-tax). If less than 20% discount, the RSUs will be better. Options are often priced at the current value, so you'd expect them to be worthless unless the company increases in value.

Are the options ISOs? AMT is much less of a big deal than it used to be. You would have to have a pretty stratospheric income from these shares to be subject to it (certainly possible with a successful startup), but the AMT you pay on ISOs is refundable in future years when you have non-stratospheric income.

[lhamo]

For me the HR person leaving is a HUGE red flag.

[seattlecyclone]

To be a bit more concrete about the AMT, let's look through an example. Suppose the two of you have $500k of W-2 income each year aside from the SPACE stock vesting. You're married, filing jointly, claiming the standard deduction. Suppose that you vest $1 million of SPACE stock value over two years. Assume the options and RSUs do indeed have identical pre-tax value: either you vest $500k worth of RSUs per year, or you vest ISOs where the market value exceeds the strike price by $500k. In the case of RSUs you sell them right away for no capital gain or loss. In the case of ISOs you hold them long enough to get the advantageous tax treatment (there's no AMT on ISOs sold in the year of exercise), and sell them for $500k over your strike price the next year.

I plugged these scenarios into the 2020 forecast spreadsheet from http://excel1040.com and this is what I got:

Scenario 1: RSUs. $500k vesting in Year 1 and Year 2, then you go back to your previous income in Year 3.
Year 1:
AGI $1,000,000 (all taxed at regular income rates)
Tax: $297,973

Year 2:
AGI $1,000,000 (all taxed at regular income rates)
Tax: $297,973

Year 3:
AGI $500,000
Tax: $115,910

Three-year total: $711,856

----------------------------------

Scenario 2: ISOs. Vest options worth $500k over strike price in Year 1 and 2. Sell the Year 1 shares in Year 2, sell the Year 2 shares in Year 3.
Year 1:
AGI $500,000
Regular income tax: $155,910
Additional AMT income: $500,000
AMT: $128,380
Total tax: $244,290

Year 2:
AGI $1,000,000 (including $500,000 capital gains)
Regular tax: $214,840
AMT: $29,450
Credit for prior-year AMT from Form 8801: $0 ($128,380 carried forward)
Net investment income tax: $19,000
Total tax: $263,290

Year 3:
AGI $1,000,000 (including $500,000 capital gains)
Regular tax: $214,840
AMT: $0
Credit for prior-year AMT from Form 8801: $110,550 ($47,280 carried forward)
Net investment income tax: $19,000
Total tax: $123,290

Three-year total: $630,870, and $47,280 of AMT credit to be used in future years

This is just for income taxes. The ISOs have the added advantage of no payroll tax. ISOs are riskier in a few ways. The fact that there's a strike price and more shares magnifies your upside and downside. The fact that you have to pay AMT up front before you liquidate the shares and then need to hold the shares for a year holds a risk of the stock price cratering in the intervening time. The Form 8801 credit can only pay you back to the extent that your regular tax exceeds your tentative minimum tax. If in Year 3 you decided to FIRE instead of keeping your corporate jobs, it could take many years to recoup the $150k of AMT you paid. I still have a bit of AMT credit left over from when I exercised some ISOs in 2013-2014, and I'm not sure if or when I'll ever get to apply it. If your regular income went the other way and you ended up earning even more than $500k W-2 income in Year 3 the difference between regular tax and tentative minimum tax could narrow and you would also take longer to recoup your AMT.

For me the HR person leaving is a HUGE red flag.

Agreed. Maybe she was wealthy already so she could afford to leave stock on the table to be a high-level government official, but I wouldn't bet on that.

[determinedcat]

Sure it can. Options have a strike price. RSUs don't. If the strike price at vesting time is 20% below fair market value then five options will have equivalent value to one RSU share. If the discount is more, the options will be better (pre-tax). If less than 20% discount, the RSUs will be better.

@seattlecyclone Yes, it depends on the strike price. In this case, however, the strike price was so low as to be entirely negligible. When hubs started negotiating with SPACE, the strike price was 33 cents. Then SPACE raised another funding round with a preferred price of $10 and switched over to RSUs. Hubs went from 100k options at 33 cent strike price to 20k RSUs with a supposed value of $10. Taxes aside, it seems like the difference between $1MM and $200k and I simply can't believe they are the same thing.

Thanks so much for the AMT analysis! This is what I love about the MMM forums. We just got back from a long road trip with the baby and I'm not thinking terribly clearly, so I'll take a closer look at it later.

Now for the good news: after weeks of intense deliberation, hubs FINALLY accepted an offer! He's going to work for one of the self-driving companies. They are also switching from options to RSUs, and are letting him choose which form of comp he prefers. He can have either 60k options or 20k RSUs. The strike price is much higher; I don't recall the exact amount, but he'd have to pay $400k to exercise all his options. At any rate, I'm very relieved that he didn't go with SPACE.

[Dicey]

Whew! I didn't realize I'd been holding my breath. Good to have a decision made.
.

[Novik]

All that extra kerfuffle from SPACE really raised more red flags. Glad you've got the choice made either way. When does he start?

[determinedcat]

The Tax Squid Cometh

	Paid	Due	Difference
Federal	169,730	324,014	154,284
State	78,915	105,032	26,117
Total	248,645	429,046	180,401

In my mind, the "tax man" doesn't have a human form. It's more like a cephalopod, with sucker-laden tentacles to ensnare and suffocate its struggling victims.

After last year's windfall, I knew I'd need lots of cash to cover the resulting taxes. My company withheld around 22% from my acquisition proceeds. This is the "supplemental" or "bonus" tax rate, much lower than our 37% marginal rate. I dutifully stashed $100k in a high-yielding savings account and hoped it would be enough.

I called up a CPA a friend had recommended. His secretary seemed to question why I needed his services -- "are you sure you can't just do it on TurboTax?" So I signed up for TurboTax Live and chatted with one of their tax experts, a friendly Texan attorney. He told me that I wouldn't have to pay estimated taxes in January because I'd already paid > 90% of the prior year's taxes. It was like getting a short-term loan from the government! Take that, Cthulhu.

Then I browsed the California FTB website and noticed that the estimated tax exemption only applies to couples making less than $1 million a year. The hubs and I made a combined $1.2M last year.

I grabbed our yearly paystubs and a fistful of chocolate-covered almonds, then logged back into Turbotax. Our tax bill was a whopping $180k! Even worse, I was responsible for all of it. I briefly accused my husband of not withholding enough from his paycheck, but he defended himself with numbers and logic. With much sighing and whimpering, I paid $26k to the California FTB.

Last year, I made $984k. My federal and state taxes total $429k, for an effective tax rate of 43.6%.

I'm debating whether we need an accountant. I've scheduled a few initial consultations with CPAs, but my gut feeling is that our tax situation isn't very complicated, even if we pay a lot of money in taxes. Most of the folks I talked to charge $360/hour or $2k/year for an unlimited retainer. TurboTax Live, for $140, is starting to seem like a very good deal! EVEN IF INTUIT IS AN EVIL EMPIRE.

I am also regretting not having exercised my options earlier for that sweet long-term cap gains tax rate. Why didn't I exercise one year ago after learning about the merger? That's a topic for another post.

[MaybeBabyMustache]

PTF, to say "hi" to a fellow bay area tech person. And, the taxes. . . my husband informed me yesterday that he doesn't think he had nearly enough withheld in 2020, as we also crossed over the $1M mark. I'm afraid to even look, but need to start planning how much we owe. *shivers*

[determinedcat]

Over the last few months, we've really committed to moving to Alameda. It seems like the perfect place to raise a young child in the Bay Area. It's very safe, the sort of place where you see kids riding their bikes alone. There's a long strip of beach where our dog likes to hunt rock squirrels and toddlers go digging in the sand. My husband used to work there, and many of his coworkers have since settled there and raised families. Alameda moms plant big gardens, bake sourdough bread, and have backyard parties. They tote their children around in cargo bikes and send them to forest school.

We're looking at the West End of Alameda (we call it the "WeWe"), close to the ferry terminal and the 51 bus to downtown Oakland. I'm hoping for a 20-minute commute to my company's Oakland office. My husband will have a 45-minute commute, but he'll enjoy biking to the ferry and back.

Because of COVID, housing prices are unusually high and rents unusually low. We're checking out open houses and trying to get our preapproval renewed, but will likely end up renting for at least one more year. I like the idea of a 1-year trial run; we can learn more about the different neighborhoods and elementary schools before making a longer-term commitment.

[lutorm]

I didn't find this thread until today, so I see I missed the boat on recommending another SPACE company for your husband... We're hiring like crazy but I don't think we'd be able to compete with that comp and you'd likely have to move. Congrats on a great outcome!

[determinedcat]

Now in the thick of the housing hunt. We made our first serious offer this week, offered 47% over asking, and were outbid by $15k(!) Since our lease is up in July, we're starting to look for short-term rentals. Hoping that supply (and prices) will improve in the next 6-12 months.

This weekend, I worked on my own version of the NYT "rent vs. buy" calculator. Instead of using a flat rate (e.g. 6%) for house appreciation, I made up different scenarios based on the historical values of the Case-Shiller index. I concluded that, if 2008 were to happen all over again, renting is financially more prudent than buying.

But it's not all about money. We want the baby to have a backyard to play in. We need an extra room (and bathroom!) for my elderly father. Apartment living just won't do it for us. Nor can we easily rent a comparable house; there are few single-family homes for rent in this area.

So: YOLO. We now have close to $3M sitting in stocks. We might as well enjoy some of it. Unlike stocks or BTC, a house is an asset you can actually use while it continues to appreciate in value.

[Dicey]

Holy shit! That's an impressive income and tax bill. Theregore, I'll give you the same advice I just gave to my brother. You can afford to ride through a downturn. As long as you have the stomach for it, go ahead and buy what you want. He's now in escrow and I hope you'll find something suitable soon.

This is completely different advice than I'd offer a first time homebuyer, but neither of you are in that category. Good luck!

BTW, if I was shopping in Alameda, I'd work all my contacts. I would also draft a letter saying who you are and what you're looking for. Print up a bunch and drop one on every doorstep that looks promising. They or someone they know may be interested in selling. It's a small island, it could pay off.

Fun fact: HGTV is airing reruns of Curb Appeal The Block, many episodes of which featured Alameda homes.

[determinedcat]

We bought a house, y'all, and I'm already experiencing Buyer's Remorse due to the price. Our new house is a gorgeous, nicely renovated Victorian on Alameda's East End, close to the main shopping street (Park Ave). We made a pre-emptive offer before the seller had the chance to set an official offer date on the MLS. Then we accepted the sellers' counteroffer of an additional 57k.

With 600k down, monthly payments including homeowner's insurance & taxes are 7.5k/month. Our pretax *base income* (without company stock) is around 36k/month, and our brokerage balance is still around $2M so.... I guess we can afford it???

[MaybeBabyMustache]

Congrats on the house purchase! The market is definitely insane crazy right now.

[Simpli-Fi]

I guess you guys decided to stay in high pressure tech for the time being...because that $2M isn't enough to make your living expenses FI.

[determinedcat]

@Simpli-Fi Yep, that's right. Our base expenses are now 11,640/month, or ~140k/year. That's before accounting for non-essentials like travel, charitable donations, etc. We don't spend much on clothes or transportation, since neither of us commute by car. According to the 4% rule, we'd need a NW of at least 3.5MM to cover the basics.

Essential Expenses

Mortgage	5,300
Property taxes	2,000
Nanny	1,760
Food	1,500
Home insurance	230
Baby's 529 Plan	550
Utilities	300
Total	11,640

Prior to buying the house, our net worth was $3M, with $2M in brokerage accounts and $1M in retirement. Now we have $600k invested in the house (including a $100k gift from my mom).

Net Worth (1000s)

Brokerage	1,500
Retirement	1,000
Home equity	600
Total	3,000

I think we're not too far away from being bare-bones FI. With the expensive new house and our plans for a second baby, I've committed to waiting until our net worth hits at least $5M. One never knows, but I suspect we won't have to wait more than 5 years. We expect to make at least 2.6M over the next four years, or around 1.3M after taxes.

[FIwithKids]

Congrats on all the life changes in the past year, just caught this thread now and was fun to see the choices made on job and location.
I’m a former Bay Area tech employee. But went through the same process you did about work life balance, family, money….we ended up moving to SoCal (San Diego) and are soooo happy we did.
Getting away from the Bay Area puts the crazy culture into perspective, especially with kids.
I got 50% more house for the same money (so $1m for a 2 bedroom apartment in San Fran city became a 3 bedroom house with a pool!). And the weather, and travel, and mindset of people is just so refreshingly normal. You realize life is not about the best gadget or VC funding round…it’s about your lifestyle and your family.
Career wise - you’ve made that first big boost from options, so you have the big start you need in $, now ride the appreciation wave that money generates money in index funds. Careers are possible in tech with strong salaries here (and other cities you could choose from across the USA). Some start up culture but just not even worth comparing the Bay Area and the exits are not there (unless you talk Biotech, but that’s not your fields)
Also did the IVF route as am over 40 (late 30s when we chose to go baby route…again the Bay Area tech culture really pushed us away from kids) - baby 3 on the way now !

So my point is - get away fro a bit from the tech culture rat race because you’ve got the amazing base of $3m. Downshift to enjoy kids, and index investing on top of good tech roles that pay $$150-250k in a slower pace work life balance environment will give you the ability to love nicely, have a good savings rate, and be out the race in 10 years with a $5m net worth to life the FatFire (or very chubby fire) lifestyle with your kids….
Ah that downshift also means time to pursue hobbies and passions like your writing…

Congrats again on the choices

[determinedcat]

Oh, the tyranny of small chores! We are theoretically at the point where money should be able to solve everything. We made over $1M last year and are on track to exceed $1.1M this year, barring major fluctuations in the market. Yet here I am, doing 2-3 hours of housework every day. The toddler's taken to tossing food on the floor for the dog, so the kitchen floor is perpetually sticky. Our beautiful shady back yard is cursed with an infinite supply of dry leaves. Now that we have a back yard, the kid plays in the dirt and generates more laundry.

My husband does his share, but focuses less on housework and more on the dog+baby. When our nanny leaves at 6, he becomes the primary parent until the baby's 8:30 bedtime. Then he comes downstairs and cleans up toys, or tidies the kitchen. It's also his job to make the bed, though I always have to push him to do it in the morning.

I made a weekly chore schedule that I try to stick to, and that my husband follows sometimes.

It isn't enough. It's never enough. We moved to a beautiful house, but our furniture is crappy. I fall asleep thinking about the paintings balanced precariously on our bookshelves that haven't been hung properly. I despair because the baby doesn't consistently respond to his name. I long, above all things, for someone to come and clear away the endless supply of leaves.

But I hesitate. We won't make this kind of money forever, and I don't want my son to become the kind of partner who doesn't help around the house. He loves following us around with a broom or a shovel. This is the most impressionable time in his life.

[Abe Froman]

...

Also, we had the baby! Donor milk has been the biggest unexpected expense. I only produce 6oz/day, and the baby requires close to 30oz. Because of COVID, we're being extra careful and getting pasteurized milk from the milk bank. It costs around $4 *per ounce*. That's $32 for each meal. It truly is liquid gold.

So I am going to ask the Mrs to bust out that old breast pump. Side hustle baby, side hustle. Nods and grins.

[determinedcat]

The breast milk donors don't get any compensation. The $4/ounce price is supposed to cover costs -- of pasteurizing & bottling the milk, and testing it for diseases. After the baby was a little older, we started getting free donations from the "Human Milk 4 Human Babies" group. The baby is now 14 months old, and has never been sick.

P.S. There's always male lactation https://slate.com/technology/2011/05/male-lactation-can-a-33-year-old-guy-learn-to-breast-feed.html

So I am going to ask the Mrs to bust out that old breast pump. Side hustle baby, side hustle. Nods and grins.

[determinedcat]

2 Year Update and Draft 2023 Review

I had the rare opportunity to review our finances while we were on vacation this last week. I could have relaxed in a hammock and read a book, but instead I reflected on the "three pillars" of our financial life (Salaries, Net Worth, and Expenses). The cost of VHCOL housing and childcare gives me constant low-level anxiety, but I also love where we live. We are also unusually well-positioned to fund our (expensive) lifestyle. We have tech jobs that pay well and offer great WLB with continued room for growth.

Since I last posted here, we've gotten a little better (still not great) at managing our shared finances. My husband refuses to use aggregators, but we've consolidated most of our expenses into a single credit card. I have a separate card for fun stuff and he has another 1-2 cards for travel hacking. I've stopped using Personal Capital for net worth and just track everything in a spreadsheet. My goal going forward is to update every 6 months.

Summary

Gross Salary: $784,573.98
Net Salary: $423,045.01
Expenses: ~$220k (80% on housing, home improvements, and childcare)
Savings/Investments: ~260k (200k post-tax + 60k pretax in 401ks + employer match)

Liquid Net Worth: ~$3M
Total Net Worth: $3.5M
Ballpark FI Number: $5.5M

At the current burn rate, we'd need to work another 5-7 years to achieve full FI, although my goal is really CoastFI. If our kid(s) switch to the local public schools and thrive there, our expenses will be closer to $170k/year and our FI timeline will be even shorter.

Salaries

We both work in tech and have earned over $700k/year ever since my company was acquired in 2020. In 2022, I got promoted to Senior Software Engineer and transferred to a platform team with reasonable deadlines. My manager is planning to put me up for promotion to the next level in 2024. DH was also promoted in 2022 (to Staff) and works for a company that’s remote-friendly and has (nearly) unlimited PTO. He’s also insanely talented at his job, and always gets glowing reviews despite putting in 60% effort. Though DH’s job also has equity compensation, it’s virtually worthless, which is why I don't count it in our NW calculations. His company went public in Nov 2021 and the stock never recovered from the 2022 bear market.

DH salary - $273,138.00
My salary - $258,054.00
My RSUs - $253,381.98
Gross Salary - $784,573.98
Pretax Deductions - $54,633.90
Taxes - $306,895.07
Net Salary - $423,045.01

Net Worth

Our liquid net worth is around $3M. Our total net worth, including home equity, is $3.5M. It’s approximately back to where it was in November 2021, before Russia invaded Ukraine. The main difference is that we have a big cash buffer (TIPS, CDs, and savings accounts) that’s equivalent to 1 year of expenses. Since we both work in tech, I decided to exchange my RSUs for cash to hedge against possible layoffs. We’d be worth more today if I had invested in index funds instead, but I feel more secure knowing that we have a big stash.

Other things to note:
- DH has a large position in his previous employer’s stock (381k). I keep urging him to sell it and reinvest, but it’s been one of his best performing investments. Back in 2021, he sold around 300k for our down payment (600k).
- Our brokerage accounts are mainly invested in index funds.
- DH has a pet Student Loan that he doesn’t want to pay off because the interest rate is low and he thinks it improves his credit score (by increasing the average age of his accounts).
- Zillow says that our house is slightly over $1.9M, which is what we paid for it. I’ve marked it down to $1.8M to account for transaction costs. We live in a 4bd3ba house in a safe, highly walkable VHCOL area with above-average public schools.

Net Worth Breakdown
Retirement - 951,487.44
Employee Stock - 381,109.26
Brokerage - 1,372,283.80
Cash - 229,570.50
529 Plan - 40,400.86
Student Loan - (598.69)
Liquid Net Worth - 2,974,253.17
House - 1,800,000.00
Mortgage - (1,246,849.74)
Total Net Worth -3,527,403.43

Major Expenses

Around 50% of our expenses ($107k) went to housing and home improvement. $92k of that consisted of fixed costs (mortgage, insurance, and property taxes). We also spent $13k installing double-paned windows in our south-facing office and $2k on a custom couch.
- The windows: We feel some buyer’s remorse. The previous windows rattled in their frames and were poorly insulated against heat and noise. We could have solved this by hanging thick curtains and sticking shims in the window frames, or getting premade Marvin windows. Instead, we hired a local company to replicate the original Victorian wooden windows with double-paned glass. This replication was so successful that we hardly notice the difference, except for some noise reduction. It makes me wonder what, if anything, we achieved.
- The couch: $2k is the most we’ve ever spent on a single item of furniture. We usually get pieces on CL or off the street. This couch looks gorgeous and seems very durable. My only regret here is that we didn’t spring for a bigger one.

Another 30% ($60k) went to childcare. $30k was preschool tuition for the current school year and the other $30k went to a nanny/daycare.
- Our 3yo son just started at an amazing Spanish immersion Montessori school. We were initially daunted by the price and the 20 minute commute. There were cheaper local options for $20k, but we believe this school is a cut above the rest. The school strongly values teaching kids to be independent, and our son gets lots of lessons in music, art, and cooking on top of academics. We will re-evaluate this every year. We don’t have a public preschool program in our area, and our son isn’t eligible for public kindergarten for another 2 years.
- Our son was never happy at that daycare. Towards the end, as he became more verbal, he started telling us that a specific daycare worker was “bad”, which was a bit disturbing. In retrospect, we should have gone 100% with the nanny (whom he adored) and saved ourselves $10k.
- We saved $16k for our son this year, investing $10k in TIPS and $6k in a Vanguard 529 target date fund. I would like to fund the vast majority of DS's college expenses, since that's what our parents did for us. I'm not sure whether to consider this an expense or an investment (since the actual expense hasn't happened yet).

Food, at $1,358/month, was the next biggest expense. I know this sounds absolutely absurd for a family of 2 adults and 1 toddler. It’s probably even higher because my dad, who lives with us, often treats us to takeout. His favorite activity is visiting various ethnic restaurants.
- We spend $653/month on restaurants. In a typical week, we’ll buy breakfast at the bagel store at least once. I commute to work 3x/week; sometimes we eat leftovers, but more often we buy lunch separately. Then, we dine out as a family 2-3x/week. It’s nothing fancy – usually just tacos, burgers, bagels, or pizza – but it adds up.
- We spend $484/month on groceries (CostCo, Safeway, the farmer’s market). We probably toss out 40% of the food that we buy because we don’t eat it in time.
- $142/month goes to fueling my coffee shop habit. This is one vice I never plan on giving up. I buy a latte every day, except for the 3 days that I can get my fix from the cafe at work. DH makes his own coffee at home.

Once I have the final numbers, I'll post a final update on our expenses that includes the remaining 15% (~$30k for travel, utilities, shopping, and everything else) in a separate post. I estimate around $8k in travel this year, but I need some additional info from DH.

[STEMorbust]

Y’all are in a great spot. I had to comment to say that it hurts me inside to hear that you throw out 40% of your groceries because they go bad. Seems like a great opportunity to be a bit more mustachian.

Also I wouldn’t sweat the spend on the windows. I can see that paying off (and then some) in terms of home value.

Congrats on the highly successful trajectory.


Sent from my iPhone using Tapatalk

[Malum Prohibitum]

Given the stock market returns since your last post, I am guessing you ended the year over $4 million in net worth.

Has the husband's company's stock price still not recovered from 2022's decline?