New to the workforce, thinking about FIRE, where to go next?

[23andfrugal]

Hi everyone! Long time lurker, first time poster. The Frugalwoods got me into FIRE, and I've been on the path for a year (started 1/1/18). I hit my goal of saving 65% of after-tax income last year, and now I'm thinking about where to go next - financially, career-wise, and geographically. I live with my boyfriend; we haven't combined finances but are looking at getting engaged soon so I'll include his numbers as well.

I'm 23F, he's 24M, no kids (1-3 in the future). We live in a rural part of the Southeast (LCOL) and commute to small cities - more on that in a bit. I work in data, he works in landscaping. Both college grads, no student loans.

Gross Salary: $55k me, $30k him

Assets (me):
$50,000 - money market, 1.25% (looking to get this invested; been hearing to wait on the market a bit? I'll do ETFs when I do)
$45,000 - 16-mo CD, 2.5% (I have this set aside for a house, which I hope to buy in about 4 years)
$11,000 - ROTH IRA; max every year
$4,000 - ROTH 401(k) through my employer; I contribute enough to get the match

I drive a 2011 Corolla my parents helped me buy (in cash) when I graduated college. She's got about 70k miles on her now; I'll keep her as long as I can.

Assets (him):
$16,000 - savings account, low yield.
He's not yet eligible to participate in his company's retirement plan but will be soon.

He bought a 2015 Subaru for $15k last year, in cash. He'll drive it its whole life as well.

Liabilities:
No debt for either of us. We're both still on our parents' insurance.

Shared Expenses:
Rent                                          $500/month for a 2BR/1BA house. We rent from a friend of mine, moved in August :)
                                                                   This is half the going rate for comparable rentals.
Utilities (electric + water)            $70/month (average - lower in spring/fall, higher in winter: home has no central heat or air;
                                                                  we heat with space heaters and cool with fans)
By choice, we have no cable, Internet, Netflix, etc.

Individual expenses: these are all mine; I track better than he does, but if anything mine are a bit higher.
Groceries                                   $100/month
Gas                                           $100/month (25 miles to work - flipside of the cheap mountain home. Public transport is nonexistent)
Eating out                                  $50-75/month
Shopping                                   $50-75/month
Car insurance                             $120/month (100/300 coverage; cheapest I could find)
Phone                                        $35/month
Car repairs/service                      $30/month (averaged over the year)
Urgent care/meds/etc.                $15/month (averaged over the year; I was sick a lot last year)
Gifts/birthdays/etc.                     $15/month (averaged over the year)

Month-to-month spending varies but I averaged about $1250/month last year. With the lower rent, I expect that number will be lower, and I'm well on track for a sub-$1k month in January.

I should note here that, while these are my expenses now, there will be some lifestyle inflation along the way. Nothing obscene, but at some point I would like to live in a larger home (maybe 2,000 sf), with heat/AC, have a proper TV + cable/streaming so we can host football watch parties, etc. Plus the assorted home expenses, plus kid(s). I/we will also be responsible for my/our health insurance in the next couple of years.


Goals:
We'd like to get married in the next couple of years
Buy a house around 27/28 (buying is non-negotiable - we want to be homeowners and don't plan to sell once we buy)
1-3 kids (I'd prefer the lower end), starting around 30
I'd like to be FI mid-30s but continue to work part-time. I'm a writer and photographer by nature, so hopefully I could monetize those passions, or at least do something where I can be outdoors much more than I am now

***Immediate questions/situation:***
This is where things get a bit complicated. As I mentioned, we live in a rural part of the SE US, near some small cities. Our future is most likely in this state, though probably not exactly here - he's from a different part of the same state about 2/3 hours from where we live now. We like that area along with a coastal area about 4 hours from us now; hopefully "home" will be one of those.

I'm from the Northeast and would like to move back for 2-3 years before we settle down - spend time with family and friends, share my hometown with 24andfrugal. But that would be $$$, especially because our rent right now is so low that the increased cost would be magnified. I think I'd be able to break even, but wouldn't get the 15-20% jump one typically wants with a new job. My part of the Northeast is more expensive than anywhere in the state we live now, even the coastal areas.

Due to circumstances at work and not feeling challenged, I've been looking for a new job for a while: in my hometown, in his hometown, in the coastal area we both love, and remotely (which would be ideal, but hasn't panned out yet).

Question 1: Should I keep looking for work in/moving back to my HCOL hometown, or throw away that dream and start setting up my long-term future in the LCOL Southeast?
Question 2: Without giving too much identifying info, there's a career path I can go with my degree that is more fulfilling, but pays less than what I make now. Plan is to wait until FIRE/almost FIRE and pursue it then. Should I do that, or try to get into it sooner? (starting salary @$45k)

Lastly,
Question 3: How am I/are we doing? What can be better? Are we on track?

[reeshau]

First, congratulations on your progress so far, and your impressive set of accomplishments and questions.  You are quite ahead of the game, and in a position to live your life as you wish.  It is quite natural, once having attained some degree of control, to struggle with what that means.

First, a few points:

Assets:
Regarding your comments after your money market account, waiting for the market is a form of market timing, which is a loser's game.  My advice is, if any of this money isn't needed for 10 years, it's a no-brainer to put it in now.    Probably even for 5 years, but that may depend on your risk tolerance, which seems quite conservative right now.

You mention getting married in a couple of years: how will this be funded?  I could see a destination for some of your MM money right now being similar to your house fund.

Expenses:
Rent:  Do you have a formal lease with your friend?  It's nice to get a deal, but you should understand how long that deal is good for.

You have a larger life planned for FIRE--do you have a budget for that?  You are in an unusual circumstance in this case, so you have to couch all the standard advice / calculators / case studies in that your FIRE number is a multiple of your higher-cost life, not your current life.  (But good on you that you can live leaner now, to kick up your savings)  If this is still just a dream, then know you won't be able to plan FIRE until you have put a number to it.  And remember that this larger life isn't just wants, but needs, too: you will need to include not just employer-provided insurance costs, but full-on ACA-type insurance policies, for a long time.  Also, consider what you need to qualify for social security and medicare.  You need 40 "credits" (working quarters) for a minimum qualification; if you are taking time off for your children along the way, this may come into play.

Questions:

1)  Anything is possible, but it is certain that moving back home for a while will cost you some years of FIRE; particularly because you don't think you could match the higher cost of living with a commensurate pay raise.  So, question back to you:  is it worth it?  Unfortunately, you can't quantify this until you get your base case worked out, but you could play around with it in this way:  "It would be worth working an extra X years, to have this time close to family."  Start at 1, and keep going until that sentence makes you choke--you have found a boundary!

More importantly, though: if you are on the path to marriage, what does your boyfriend think of this?  Does he have any connections / reason to be in the Northeast?  2-3 years is a significant commitment; by your description, he doesn't seem to have signed up to a FIRE lifestyle yet, but what would be the similar litmus test question for him?  Bottom line:  maybe you should think of it as a seasonal thing first, before you commit your dreams to such a long time.  Bonus question:  Has he experienced a Northeast winter storm yet?  Would he still be on board for a long-term stay after one?

2)  Similar to question 1; ask yourself "working this fulfilling job is worth working an extra x years." Start low, keep going, see how you feel.  Some people find they don't ever want to stop working--that would be the upper limit.  There is no wrong answer; the idea of all this is to lead an intentional life, rather than getting sucked into "normal" behavior.  You need to sort out your intention.

3)  As I started with, you are doing great.  We don't know how your boyfriend is doing.  While you have to start somewhere, please do make sure you understand where he is--it could be a deal-breaker in your relationship.  But it seems like you are headed toward great things, living your life very intentionally.

[MrThatsDifferent]

One of the things I’ve learned from this forum is to start detailing what my different options will look like and then evaluating those options. So, break down questions 1 & 2 and build budgets for all the scenarios and also build out what your growth plan will be for each scenario. It’s also helpful to work out where you want to end up? If you work out that your family can survive on say $35k/yr, then your end goal is 25x that. Combine that info with the different budgets to make an informed choice.

You’re clearly doing great with your savings. Read more of MMM’s advice on investing and JH Collins. I’d out that money you have saved (not for the house) in a Vanguard account and just let it grow.

Your partner’s income is quite low for a college graduate, what can he do to improve that?

[ysette9]

Congrats on your great start and savings rate. If I had found something like MMM when I was 23 I would have been FI several years ago instead of looking at another 2-3 years. (Not complaining, just pointing out the power of knowledge).

Honestly, my opinion is that you are only 23 once, and if you have dreams and desires, you should find a way to make them happen while not blowing up your financial future. This is the only time in your life when you get to make unilateral decisions about where you live and how you handle your money.

When I was 19 I had this dream to go back to Europe for a couple of years and just live and work before starting my real adult life. Somehow I got on the straight-and-barrow path of college, internships, career, serious boyfriend, and while that was a great path that set me up for a lucrative career and a fantastic mariage, that itch was never scratched. I would now love to do an international adventure but it is much more complicated when you talk about two professional careers, two little kids, school considerations, etc.

Point being: don’t ignore the future goals, but it isn’t fair to Current You to ignore your desires. A good man can wait a bit (we lived in separate states for a while when I did a job assignment). You can save 65% now so you can take a year or two to follow some other goals and have a temporarily reduced savings rate. It is just that balance between short-term and long-term goals that you alone can figure out.

[Dee18]

You are off to a great start and you have many choices.  That is wonderful, but it can also be hard to choose.  You say you want to be in the northeast for a couple years to be with family and friends.  Do you think you will really want to move back to the South to buy a house and have kids?  (I, and many others I know, did not spend that much time with my parents in my late 20's and early 30's.  But once I had the first grandchild frequent visits became the norm.)  Are you planning to work full time once you have a child?  If so, your SO's income is not so critical; if not, it is.  I agree with others that while you are young and do not own a home, whatever you decide is fine---that includes where to live and what kind of work to do.  Just keep investing as you go.

[23andfrugal]

Thanks everyone for the replies so far! Keep them coming!

A few points I can touch on:

My boyfriend:

A lot of you have asked about my boyfriend - whether he's down with FIRE, and whether he wants to move to the Northeast. He doesn't track his expenses as detailed as I do (a product of his ADD, which we're working on) but he and I have very similar attitudes regarding money and spending. He's currently saving about 50% of his after-tax income and is a very eager learner, if a bit more of a novice. I have no worries about him being spendy. His income, unfortunately, isn't something that is easy to change/raise. Low $30ks is the norm for his field/degree (arborculture) in this part of the country (for reference, teachers here also start at $30k). I do plan to work after kids (if either of us stayed home, it would most likely be him), though I recognize sometimes people change their minds after the fact.

As for moving to the Northeast - we would go together, in case that was unclear. It wouldn't be something he would do on his own, but he is willing to come with me for the timeline we've discussed (2-3 years). I think part of what made that reasonable for him was the commitment that we'd come back to the Southeast at that time - which I am willing to do. My parents have expressed a desire to move to wherever I end up (I'm an only, so no other immediate family is an issue) and the high-tax political climate of where I'm from all but makes FIRE, and possibly even homeownership, out of reach. My parents pay $12k property tax on their home. I can't and won't do that. So to the extent that I want to buy a home and settle down in my late 20s, I pretty much have to commit to moving back here.

I should note that we met in college at our alma mater, so I have emotional and social ties to this area as well, which would make it easier to move back here permanently.


Future spending:

This has been the trickiest part of planning for FIRE and life in general, both because of the (modest) lifestyle inflation I have planned as well as macroeconomic inflation. I'm not sure of the best way to take future costs into account. And I have no idea how to plan for healthcare - part of the appeal of part-time work is being able to get coverage through an employer (plus I like having a ob, just not the 40-hour aspect of it). Where would you guys recommend I start in terms of figuring out how much money I'll need at 30, 40, 50? Is it safe to pick some number like $25k or $30k (2x what I spend now) and inflate it at 2-3%/year?

[ysette9]

Don’t sorry about inflation for now as that is baked into cFIREsim and the 4% rule (of thumb). What is most important is that your investments outpace inflation, which should be the case if you have any substantial part of your portfolio in stocks. If you save all of your retirement money in cash or CDs then yes, inflation will eat you for lunch.


As for healthcare, that might be a long time off for you, but people now use and plan to use ACA (Obamacare) which will guarantee you can at least be able to purchase health insurance on the open market and not be rejected for random reasons you have no control over.

I agree that trying to estimate your spending out years from now and many changes in lifestyle is hard. The best you can do is to take a wild stab in the dark and save as much as you possibly can in the interim. The more you save now, the more and better options you will have later, regardless of how much your future spending ends up being.