Author Topic: I think I'm doing everything right... not quite sure how to proceed  (Read 2605 times)

JenWins

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Long time lurker, first time poster.


Life Situation: Single, age 32 female, no dependents


Gross Salary/Wages: ~$85,000 plus bonuses, paid biweekly

Individual amounts of each Pre-tax deductions:
per check:
401k: $711 (max)
HSA: $132 (max)
health/dental: $80


Other Ordinary Income: none


Adjusted Gross Income: ~$62,000


Taxes: ~$700/check including federal/local/payroll


Current expenses: this is averaged over 2018
Rent: $350/mo - I have a wonderful unicorn situation here.  I'm renting a room from a lovely couple.  It includes utilities, internet, and a big dinner every night if I'm home for it (no obligation). It's a nice big house in a quiet suburban neighborhood.  I unofficially have my own private bathroom.  They lost their young kid to cancer years ago, so it's almost like I'm their weird surrogate daughter.  I feel like I'm helping them out just by living there.  Out of context it probably sounds unhealthy but I promise it all pretty much works. :)
Groceries/toiletries: $75/mo - I don't usually eat a bunch apart from the big meal for dinner so this is basically rice and beans, salads, and snacks at work like tuna.
Gym: $40/mo - I go every day on my way to work.
Sauna: $200/mo - I go most days either before work or during my lunch break since it's walking distance from work.  I know it's expensive but it truly makes a huge difference in my life, physically and mentally.  Probably would buy a home sauna if I had my own place.
Dating: $300/mo - This looks inflated just because I lumped in pretty much anything I wouldn't have otherwise bought (clothes etc) and some nights in hotels.
Medical expenses: $45/mo
Non-owner car insurance: $35/mo
Travel: $340/mo
Cell phone: $30/mo - Ting
Other: $80/mo
Expected ER expenses: (optional, if relevant)
I'm really not sure.  Pretty similar probably apart from rent.
Assets:
~$470k in VTSAX/equivalent across 401k/IRA/taxable
no car or real estate
Liabilities: none


Specific Question(s): Now that I'm just past the 4% rule for my current unsustainable long-term living expenses, I'm not really sure what my goals should be, or what ER expenses will look like.  I like my job, but probably wouldn't do it if they weren't paying me well for it.  I want to travel more post-ER, maybe even full-time for a couple years, but I know that's really generic.  I might move in with a partner eventually, might not? Probably don't want kids.

let me know if I left anything out!
« Last Edit: December 28, 2018, 03:22:29 PM by JenWins »

former player

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #1 on: December 28, 2018, 03:14:29 PM »
Hello and welcome.

So, retirement and health accounts maxed, monthly net income about $5k, monthly expenses about $1.5k?  Assets of $470k at 4% would provide a monthly income matching your current expenses, although those are artificially low on rent, utilities and food.

What do you do now?  Anything you like, of course.  The trick is to work out what that might be.  The main areas for potential development would seem to be 1) finding a job that really engages you, 2) finding a hobby or other interest that really engages you (based on your expenses you do seem a bit short on interests outside of work - and yes, I realise that is a rather anti-mustachian thing to say) and 3) creating new friends and family relationships - which your dating shows you are probably already working on, although looking for friendships rather than dates might be another way to go.

(If you find out the meaning of life, do please let me know.)

JenWins

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #2 on: December 28, 2018, 03:30:06 PM »
Thanks for posting, former player.

1) I could maybe find a job that engages me more.  I work in a pretty in demand STEM field but right now my job is perfect in terms of location/commute and I really don't want to buy a car.
2) I do have some hobbies, but they're things like photography and reading that don't really cost me anything.  Travel too, but that's mostly either solo trips or with my sister.
3) I have been bad at making friends since college and don't really have too many local friends.  Would like to change that.

marty998

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #3 on: December 28, 2018, 04:13:59 PM »
She may not appreciate me dropping her name here but you might do well to talk with someone like @MonkeyJenga.

Similarly she has reached her FIRE goal at a young age, changed careers, making a difference the best way she can. Might give you some ideas.

Freedomin5

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #4 on: December 28, 2018, 06:12:45 PM »
You're in a good place financially.

You do need to start thinking about what your ideal life looks like, post-FIRE. Then figure out how much you need in your stash to fund that life. Your current stash supports your current life, which you have already established is not a long-term situation.

We are in a similar situation in that our rent/food/phones/transportation -- basically all daily living expenses are artificially low because we live in a developing country and the company provides many of those things for free as part of the benefits. However, when we FIRE, we plan to move back to our developed (HCOL) home country. Our expenses are going to be significantly different. Therefore, when calculating our stash, we need to use projected FIRE expenses. Obviously, those are rough estimates, but at least it puts us in the ballpark.

MrThatsDifferent

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #5 on: December 28, 2018, 07:16:08 PM »
Youíre doing great, especially at your age. I think youíve built your 4% scenario around your current life, have you tried building it around your RE life? Build a budget and see what that looks like. Take in health care, living expenses, etc.

Otherwise you just need to do some thinking about how much longer you really want to work? If you did 4-6 more years, youíd still be fairly young, pad your stache to give you enough to cover most scenarios, especially as a single partner. And I guess thatís another thing, when you meet your partner, youíll want someone with your same financial values, otherwise that could impact your financial plan. You want a partner that compliments what youíve achieved, not diminishes it. All the best!

Gin1984

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #6 on: December 28, 2018, 07:20:39 PM »
Are you eligible for a Roth IRA? If you are, you may consider that for $5500/year.  Other than that, I'd make sure you have enough in cash to move out to a "normal" living situation (check Craigslist for costs) and set things on autopilot. 
Then I'd focus on the next steps, where you want to go after you FIRE and what steps you can do now?

reeshau

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #7 on: December 29, 2018, 04:24:07 AM »
A couple shorter-term points:

Do you have a formal lease for your current situation?  It sounds very personal, but given how important the low rent is for savings, and the location, I would think some security in the arrangement would be important, too.

Also towards security:  you don't mention any kind of emergency fund.  If you really don't have one, it should be a top priority:  first, to sustain your current expenses, but then also to sustain expenses with market-based rent and utilities.

JenWins

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #8 on: December 29, 2018, 01:22:39 PM »
Wow, thanks again for all the replies!  I really feel loved!

I've been thinking more about what a post-RE budget would look like.  Obviously the main things that would change are rent and groceries.  My groceries/toiletries line item would probably increase to about $200 (+125) either way.  Rent is harder to say.  I could find an apartment around here that would probably be around $1000 in rent and maybe $200 in utilities (+850)?  Or if I moved in with a partner it would be about half that (+250).  If I remain single, I could also find a roommate in a 2 bedroom for about $1300 rent and probably a bit higher utilities, $250.  That would be $775 total (+425).

That's +975 if single living alone, +325 if moving in with a partner, or +450 if moving in with a roommate.  But I could also have a home sauna with either of the first two options, so they would really be +775 and +125.

My most expensive budget moving out of here would be $775 higher per month and the least expensive would be only $125 per month higher.

So I'll need a stash somewhere between ~490k and ~680k assuming nothing changes besides my living situation.  That only puts me at like 1-3 more years of work.  Not too bad.  A partner would definitely make everything easier.  Maybe that dating line item isn't so bad. ;)

I am eligible for a Roth IRA and have been using it.

There is a formal lease for my current situation and it renews once a year.  I get the feeling though that I'll be able to stay as long as I want.  And I do like it.

I keep 20k in my checking account, so that's probably fine for an emergency fund right?  Works out to just over a year of current expenses.

MrThatsDifferent

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #9 on: December 29, 2018, 03:12:18 PM »
Good analysis and sounds much more on point. Iíd aim for the higher target and plan your life without the expectation of a partner, not that you wonít find one, but I think itís best to have that FI all around so that if ever that relationship ends, youíre still covered, no matter what. Never let yourself become vulnerable to anyone or anything, thatís the magic of FI.

reeshau

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #10 on: December 29, 2018, 04:14:34 PM »
I keep 20k in my checking account, so that's probably fine for an emergency fund right?  Works out to just over a year of current expenses.

Typical advice would be 3-6 months of expenses.  Given your below-market rent, the fact that you have your financial house otherwise in order, I think 3-6 months of your worst-case post-FI budget sounds reasonable.  The emergency could be that you need to find a new place.  (I know you said your landlords would be fine, but something could happen to them. Any renter should think about / be prepared if they have to move)

brooklynmoney

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #11 on: December 29, 2018, 08:11:22 PM »
Congrats on finding such a great living sitch and your growing stash. No advice, but a q. What company did you get non owner driver insurance from? I donít know where you live but thatís so cheap. Iíve been quoted more like 1k a year before.

JenWins

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #12 on: December 30, 2018, 11:10:46 AM »
It's through State Farm, and it's pretty close to what it was years ago when I had an old car (liability only).  I think insurance in general is pretty cheap in my area (MCOL midwest).

I definitely won't count on a partner but it's good to at least have an idea of what that would look like.

I'm thinking of starting a journal here: Is there a particular kind of format people usually use? I've never done something like that before.

Intrigue

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #13 on: December 30, 2018, 12:41:16 PM »
All I have to say is... Congrats :)

JenWins

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #14 on: December 30, 2018, 03:00:47 PM »
All I have to say is... Congrats :)
Thank you! :)  I can't exactly talk to most people I know in real life about this kind of thing so it feels good to air all this here.

Intrigue

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #15 on: December 31, 2018, 07:30:21 AM »
Haha, I know the feeling !
I tried a few times and they all though I was weird. I do not understand why people don't realize that they're doing it wrong... haha. 9 to 5 until 65 just seems wrong to me but I didn't know how to invest before reading this blog. It's really fun having people who believe the same thing as you do and that are generous enough to answer your questions !

Good job on reaching such a nice stash so young. If you keep it up, u'll be independent for life really soon with or without a bf.

For your hobbies, they're all solitary. Finding "group" hobbies like FAHQSTV mentionned might move some money from the dating budget to hobbies/dating ;)

P.S. I had to google what a unicorn situation is and now I understand why they call it unicorn... First time I heard about it. Kudos to you :P


reeshau

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #16 on: December 31, 2018, 07:19:13 PM »
All I have to say is... Congrats :)
Thank you! :)  I can't exactly talk to most people I know in real life about this kind of thing so it feels good to air all this here.

Have you looked at the Meetups and Social Events topic here?  You might be able to kill two birds with one stone.

Brother Esau

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #17 on: January 01, 2019, 09:22:54 AM »
All I have to say is... Congrats :)
Thank you! :)  I can't exactly talk to most people I know in real life about this kind of thing so it feels good to air all this here.

Yeah, most of us have that problem ;-)

Linda_Norway

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #18 on: January 03, 2019, 05:26:27 AM »
https://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/to-the-young-ones-make-sure-you-marry-someone-with-similar-$-values/

I think you should estimate for higher living expenses in the future. You have a very sweet deal now, with even a free healthy dinner. If they ever end this deal, you will probably get higher expenses. But on the other hand, if you would stop working, you could perhaps move to a cheaper location, as you aren't tied to local friends and family(?).

JenWins

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #19 on: January 03, 2019, 01:56:56 PM »
P.S. I had to google what a unicorn situation is and now I understand why they call it unicorn... First time I heard about it. Kudos to you :P
Umm, I just Googled that too and I probably don't mean what you think I mean!  I just meant that it it's a rare find! :p

Group hobbies and looking at the meetup threads are good ideas!  Thanks, everyone.

JenWins

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Intrigue

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #21 on: January 03, 2019, 08:40:32 PM »
P.S. I had to google what a unicorn situation is and now I understand why they call it unicorn... First time I heard about it. Kudos to you :P
Umm, I just Googled that too and I probably don't mean what you think I mean!  I just meant that it it's a rare find! :p

Group hobbies and looking at the meetup threads are good ideas!  Thanks, everyone.

Haha, not judging whatever it is. As long as everyone is happy about it, it's a win-win-win.
Since you don't know how long it will last, you should continue piling up so you won't care what happens next.

You'll be FI by 35 !!

Roots&Wings

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #22 on: January 04, 2019, 06:24:47 AM »
Sauna: $200/mo - I go most days either before work or during my lunch break since it's walking distance from work.  I know it's expensive but it truly makes a huge difference in my life, physically and mentally.  Probably would buy a home sauna if I had my own place.

Unsure if you've checked out portable infrared saunas, but they're usually less than $200 outright and take up very little space. I love saunas too!

JenWins

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Re: I think I'm doing everything right... not quite sure how to proceed
« Reply #23 on: January 05, 2019, 06:33:47 AM »
Sauna: $200/mo - I go most days either before work or during my lunch break since it's walking distance from work.  I know it's expensive but it truly makes a huge difference in my life, physically and mentally.  Probably would buy a home sauna if I had my own place.

Unsure if you've checked out portable infrared saunas, but they're usually less than $200 outright and take up very little space. I love saunas too!
I've seen those too!  I love my current setup though since when I go during lunch I can usually count on a few coworkers wanting to go in with me (and they can for free with my membership).