Author Topic: Not trying to FIRE, can you help us with our budget anyway?  (Read 1672 times)

memorytoast

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Not trying to FIRE, can you help us with our budget anyway?
« on: October 07, 2018, 01:48:21 PM »
Life Situation: DH (31) and I (26) are somewhat mustachian, but not looking to FIRE, just to be financially responsible. We have some other out of the box aspects to our situation too:

One, weíre religious Ė not christian - and many of our expenses/financial decisions are made in accordance with our religious values. We give away a significant portion of our income to charity, regularly spend money on our just about monthly religious holidays, and support religious institutions in addition to our regular charity. I get that many people here would not agree with those decisions and would argue with me that if we saved more in the long run we could give more support to these things, but those categories arenít ones Iím asking for feedback on.

Two, along the similar lines, one religious commandment we take seriously is having children. Weíve been married 4 years and not yet conceived, so weíre heading to a reproductive endocrinologist later this month. Thank G-d, in general weíve been healthy and barely visited the doctor at all since weíve been married, but I expect our medical expenses will jump drastically in the coming year. We may be able to get some financial support from our religious community, but weíre not sure how much. 

Three, my husband is a self-employed handyman and his income fluctuates wildly from month to month, but Iím just averaging out what he makes, and I deducted what we set aside for self-employment taxes (since we file jointly his tax rate is about 15%). 

Other than that pretty usual. I teach in a religious private school, (I make more there than I would in public school, but itís not about the money).  Occasionally, I do some online tutoring on Chegg.com (but only made $115 in the past year, because itís really sporadic.), I have self-published book that makes about $10 a year (lol), and some other random occasional side jobs that donít amount to much.

Tax status: Married, filing jointly
Monthly take home pay:  3,744 4,182
                                Me: 3,373
                               DH:371809 (the original was a mistake)

Average monthly expenses:


Housing -        $900   - Renting a  1 bedroom, 1.5 bath apt. Cheapest we could find in the area close to our religious community
                                           and family. Housing in our area is pretty high. Most 1 bedroom apartment rentals are between $950 -
                                          $1300 per month, 2 bedrooms more like $1250 - $1600. To buy a real fixer upper 3 bedroom house is
                                           around $275,000 and a normal one for $400,000.
Grocery -       $214   
Transportation:      
Car Insurance -         129.27   - Thinking this may be a bit high. We have a 2002 Toyota Camry and drive about 5,000 miles a year)
Gas -                  40.98    - I have a big commute, but I love my job. 
Parking/Uber/Taxi-   20.23  -   Since we only have one car, sometimes Uber is necessary, and since we live near a big city paying for
                                                parking is something we do on occasion when we go to a park or the beach, etc.
Car Repairs-            170.47 - Old car! My husband is handy, and has fixed several things himself, but is not confident enough to take
                                              on certain jobs and Iím mess with anything requiring coordination.
Plane/Bus/Train Tickets -  253   - Includes a plane ticket for my SIL who was in a foreign country when my husbandís grandfather
                                                   passed away. Without that expense we avg 61. Thatís mostly plane tickets, we donít travel much, but
                                                   when we do itís far. We go to visit my parents who live several thousand miles away about twice a
                                                   year. We also went once to visit friends in a state too far to bus to.
Religious -      85.44 -  This includes purchases for holidays, memberships religious organizations (to support
                                                them, but we donít include this in charity), and religious texts. Big expenses not monthly, but averages
                                                out to this.
Teaching Supplies -    25.31   Books for my classroom library, some decorations, and art supplies (we do projects fairly regularly and
                                                I'm not so good about remembering to bring in my receipts for reimbursement.Totally facepunch
                                                worthy.)
Handyman supplies - 106.88   I know based on the amount my husband spends on supplies, and the amount he makes after
                                               taxes this business doesnít really make sense, but he has some psychological struggles that are
                                               impediments to holding a regular full time job and since weíre doing okay, I havenít pushed the issue. It
                                               may be time to talk about this again thoughÖ.
Giving:      
Charity  -                       481   
Gifts -                       25.38 -   Mostly for birthdays
Health:      
Insurance -               496.98   -This category is the most :( for me.  We have the cheapest plan available on our stateís marketplace,
                                    so extremely high deductible, covers very little, and doesnít cover infertility at all. The insurance my job offered
                                    last year was insane for a couple (over a thousand a month) and for an individual was slightly more expensive
                                    than what we have now with slightly better terms. We really only have this in case, G-d Forbid, would get
                                  extremely ill. Been looking into healthshare option, but only found one with religious affiliation so far and we
                                   canít join one that would have us following a different religionís laws. 
Doctor Visits -            1   - That was to let the REís office test out that our credit card worked.
Vitamins -          9.88   
Dates -     62.57 -   Includes all the activities we did on our 3 week vacation abroad this year (was our first vacation not to visit
                                        parents in 4 years of marriage. Not planning to do anything similar any time soon). Our usual average is
                                      about is about 25.
Misc:   
Electricity -           75.42   - Water covered by our landlord. We live a hot climate, but keep our air conditioning at 81 on average.
Internet   -          49.95    -   Was 19.95, for our first year, just jumped now that the year ended. The only available competition
                                           charges charges $50 for first year and then $60. We don't have a TV and don't want one.
Other   -               223   - This includes the laptop I had to buy on short notice, when my 5 year old one stopped functioning. Without
                                           the laptop, 138.58. (Hmm, guessing that will probably get me some facepunches too)

Cell Phone    -        49             -Iím on republic wireless, DH metro pcs with my MIL
Total                   2,521.30   

So, if we were staying on this course, that leaves us with about an average of  $1,222.70 $1,660.70savings /month or 33% 39% savings rate. Likely that wonít happen because of the infertility treatment, and if itís successful our expenses would surely go up with a kid, but probably weíll still keep saving some.


Liabilities/Assets:
No debt :D Weíre really good about paying credit cards on time, Thank G-d, and bought our car using cash. My masters (elementary Ed.) and BA (in political sciene) were both sponsored by my parents and my husband dropped out of college before his financial aid grant ran out, so no student loans.

Not much to say in the way of assets, though. Our car is worth ? . We bought it for a little over $4,000, and have since put on two new tires, but the air conditioning broke, and until we figure out how to fix it, in this climate that makes the car worth significantly less. We have about 14k in the bank.

Specific Question(s):
1.   I think weíre doing well, but any suggestions, other than religious related ones, would be welcome. Just if you have something to say about DH, please keep it nice. He is a kind, gentle, wonderful person and I married him knowing that he didnít come from the same kind of financially educated background that I did. His father is the same kind of sporadically employed handyman as he is (they work together periodically) and his mother has not had what one could call a conventional career path either. He is open to discussion and has adopted many of my financial ideas gladly, but the job thing is complicated for him.

2.    Despite our bank account funds being larger now than we really need for emergency savings, I havenít invested anything because weíre strongly considering moving to another country within 5 years. From what Iíve read, it seemed to me like you canít invest using Vanguard or other index funds if you donít have an address in the United States, and the market being as volatile as it is, I donít want to invest short term.  Is this a correct assessment?

3.   I just found out recently that my school does have a retirement plan matching policy. I have to see our financial coordinator for more info, but what are relevant questions to ask when I do go see her? Would our possible plans to move potentially make that not a good idea also?

4. Seems to me like my take home pay is a little to high, based on 15% tax rate and the fact that I have a contract for $45,000 ayear. Should I ask my financial coordinator at school to withhold more? Am I misunderstanding something about how taxes work?

Thanks in advance for your feedback!

Edits due to this:
Wow, thanks so much everyone for all the helpful responses!

First off, just wanted to mention that I somehow missed entering two months of my husband's income in my spreadsheet (I'm to go back and edit my original post afterward, G_d Willing), so while his business is still on the lower end of the spectrum, it's not as unprofitable as I thought. We did talk last night and he was open to hearing some my suggestions for how he might improve the business (more advertising, discounts for people who refer, keeping better records of his hours so he can know for sure how much he's making, since he tends to price by project, etc.).
« Last Edit: October 09, 2018, 03:58:01 PM by memorytoast »

reeshau

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Re: Should we invest? If yes, how?
« Reply #1 on: October 07, 2018, 02:48:23 PM »
This is an unusual case study, but there are some places for discussion and suggestions.  Just to preface these comments, our son was conceived on our 4th round of IVF.  I also just passed month 4 of a 3-5 year assignment outside of the US.

You talk about your cash cushion being large now, but I look at that as one round of IVF.  You are just starting the process of medical assistance, so you may not have to go anywhere near that step, but I think continuing to pile money for that goal is a good step in preparation.  There are very few insurance plans that cover IVF, but on the other hand it is an area of medicine with (relative) price transparency, and where you can negotiate!  Much more like other consumer markets than most US medicine.

Also regarding your child:  you don't mention it as an explicit goal, but obviously having a child will change your life drastically, and you talked around a few points.  What is your timeframe for this?  Eventually, I expect you will want a 2 bedroom apartment, at least.  And with you as the breadwinner, will DH become a SAHP?  Or will you also need to add in daycare?  This will put serious dents in your budget.

Of course, the other major change would be moving overseas.  You mention 5 years:  are you assuming it is after the birth of your child, or are you moving there for other options?  Of course, both medical care and childcare are radically different propositions in many other countries.  Research this in depth before you commit.

Specific to your question #2:  are you US citizens?  And, do you plan on eventually coming back?  If yes to both, I don't see any issue with getting Vanguard started in the US.  Mutual fund investing is *MUCH* cheaper in the US than the rest of the world.  If you are a citizen, the US will tax you anyway wherever you invest.  (and may tax foreign funds even more highly)  And if you don't need the money in the foreign country, most follow territorial taxation, so won't care about your US investments.  (There are exceptions to this:  make sure and research it specifically)

For myself, my official US address is with my in-laws in Texas (so, no state income tax on foreign earnings) which is where we will also return.  We moved our house phone to a VOIP service, and moat of our US accounts don't know we are living abroad.  There is a *lot* to learn, and the specifics vary country-to-country,  but millions do manage it.

memorytoast

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Re: Should we invest? If yes, how?
« Reply #2 on: October 07, 2018, 03:39:28 PM »
This is an unusual case study, but there are some places for discussion and suggestions.  Just to preface these comments, our son was conceived on our 4th round of IVF.  I also just passed month 4 of a 3-5 year assignment outside of the US.

Thanks so much for your response! You answers were thoughtful and gave me food for thought, so I really appreciate it.

You talk about your cash cushion being large now, but I look at that as one round of IVF.  You are just starting the process of medical assistance, so you may not have to go anywhere near that step, but I think continuing to pile money for that goal is a good step in preparation.  There are very few insurance plans that cover IVF, but on the other hand it is an area of medicine with (relative) price transparency, and where you can negotiate!  Much more like other consumer markets than most US medicine.

This is a great point. The financial assistance from the religious organization is need based, so there's actually more help if one's diagnosis requires more expensive procedures, and that's what I'm kind of banking on, if we have to go there, but maybe that's the wrong way of looking at it. 

Also regarding your child:  you don't mention it as an explicit goal, but obviously having a child will change your life drastically, and you talked around a few points.  What is your timeframe for this?  Eventually, I expect you will want a 2 bedroom apartment, at least.  And with you as the breadwinner, will DH become a SAHP?  Or will you also need to add in daycare?  This will put serious dents in your budget.
Another excellent bunch of points! We would probably like to have at least two bedrooms at some point, but we have a pretty decent sized bedroom currently, and I don't think this would be an immediate need. Our landlord is terrific and cool with us staying even with a baby in tow. So probably at least another year or two in this apartment.

The SAHD option might be appealing to DH, but as of now my MIL works only part time some evenings and would be thrilled to be our child's caretaker. I've also thought about the possibilities of:
a) changing careers to something with higher earning potential - I do really like teaching, but I feel like I have a lot of skills that could be used for a variety of different careers and if I'm going to be the main breadwinner, (which it seems like is the case for now), maybe that would be more responsible.
b) The school I work at has significantly subsidized daycare for teachers 


Of course, the other major change would be moving overseas.  You mention 5 years:  are you assuming it is after the birth of your child, or are you moving there for other options?  Of course, both medical care and childcare are radically different propositions in many other countries.  Research this in depth before you commit.

The reason I said five years, is because if we would go we would want to go before our children were school age, so that's assuming that we have a child within the next year. However, we might decide to go without a child too. We both spent time studying abroad there (I was there for about 9 months and DH for a year and a half) and loved it and it was also the destination of our 3 week vacation this summer.

I have done my research on medical care and childcare. The country we're looking into has socialist medicine, where everyone has free basic health insurance, but if one wants better health insurance one can pay a nominal fee per month . One amazing aspect of their system is that it actually covers PIF treatments entirely (including IVF!) and SIF treatments substantially. When I heard that I was tempted to say let's go now, but I realize that's not enough of a reason to move somewhere. Income is way less there for teachers, (I would probably teach English, and given my experience and imperfect fluency in the primary language, I think I could fairly easily find a job.), but handymen make more, on average, (still not sure being a handyman is the right choice for DH, but during my research I used that job since we haven't talked about other possibilities), and food, childcare, and health insurance are much less, so it kind of evens out. Housing can be much less or much more depending on where in the country you choose.

Specific to your question #2:  are you US citizens?  And, do you plan on eventually coming back?  If yes to both, I don't see any issue with getting Vanguard started in the US.  Mutual fund investing is *MUCH* cheaper in the US than the rest of the world.  If you are a citizen, the US will tax you anyway wherever you invest.  (and may tax foreign funds even more highly)  And if you don't need the money in the foreign country, most follow territorial taxation, so won't care about your US investments.  (There are exceptions to this:  make sure and research it specifically)

For myself, my official US address is with my in-laws in Texas (so, no state income tax on foreign earnings) which is where we will also return.  We moved our house phone to a VOIP service, and moat of our US accounts don't know we are living abroad.  There is a *lot* to learn, and the specifics vary country-to-country,  but millions do manage it.

We are US citizens, but if we go it would be with the intention of not coming back. We probably would leave the possibility open for a couple of years in case things don't work out, but we want to go long term. I don't think religiously we would be permitted to make it seem like we are living in the US, when we weren't...but maybe we would if it was only intended to be temporary. Worth investigating.

reeshau

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Re: Should we invest? If yes, how?
« Reply #3 on: October 08, 2018, 03:36:20 AM »
It seems you are approaching this in a thoughtful manner, but you have several big turns coming that have to work themselves out.  Good luck!

We are US citizens, but if we go it would be with the intention of not coming back. We probably would leave the possibility open for a couple of years in case things don't work out, but we want to go long term. I don't think religiously we would be permitted to make it seem like we are living in the US, when we weren't...but maybe we would if it was only intended to be temporary. Worth investigating.

It's not really your choice.  As long as you are US citizens, you are also citizens of a state.  If you do nothing, you remain a citizen of the state you last were resident in.  The only "engineering" you would do is perhaps choose to relocate to another state just before leaving for some advantage, like (no) income taxes.  But it is the US and State governments that insist on global income taxation.  You would have to go to the step to renounce your US citizenship to end it.

As my law professor said:  just because laws have a structure, does not mean they have to make sense.  Physical presence isn't the end of the story with taxation.

Freedomin5

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #4 on: October 08, 2018, 04:03:00 AM »
With regard to teaching in a foreign country, if you hold a US teaching license, you could also consider teaching at an international school. You would be teaching in English, and salary would be a lot higher (likely even higher than what you currently make). In addition, international schools provide free housing and free round trip tickets back to your hike country each year. DH could probably also get a job at the school in a non-teaching position.

Freedomin5

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #5 on: October 08, 2018, 04:10:56 AM »
Quote
2.    Despite our bank account funds being larger now than we really need for emergency savings, I havenít invested anything because weíre strongly considering moving to another country within 5 years. From what Iíve read, it seemed to me like you canít invest using Vanguard or other index funds if you donít have an address in the United States, and the market being as volatile as it is, I donít want to invest short term.  Is this a correct assessment?

Not a US citizen, but I do live abroad as an expat. We invest through non-tax sheltered accounts in our home country (Canada), and we are able to buy Vanguard funds. The brokerage just deducts the tax off of any dividends we make and remits the taxes to the government on our behalf. Itís actually relatively simple and pain free.

@lhamo is a US citizen who spent many years living abroad. She may be able to speak more specifically about how you could invest using a US brokerage while living abroad.

former player

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #6 on: October 08, 2018, 05:17:11 AM »
On housing, my understanding is that the best practice is that new babies should sleep in the same room as their parents for the first six months of life, so that would put off any need for a second bedroom.  The baby can of course share a bedroom with you for much longer if that works for you.


Retirement plan matching policy sounds like a good thing, and you have the spare income at the moment to put into retirement.  Given that you are still only 26, there is a big benefit to putting at least some money into retirement funds at the moment, as it will have up to 40 years to compound before you draw it out - smaller contributions now mean no need for bigger contributions later.

My understanding is that matching policies usually specify that if you put a certain amount of your monthly income into a retirement fund the employer will also make a contribution to the fund.  The things to understand are how that matching works so that you get maximum benefit out of it that you can afford.  So if the employer says "if you put 3% of your monthly income into retirement we will put the same amount in as well" then you should do your best to put at least 3% in.

The other thing to ask about in retirement funds is where the money will be invested and how much will be taken in fees.  You will probably have a choice of different funds in which to invest.  You should look for one which invests across the whole of the stock market (ie an index fund) rather than one which picks and chooses individual stocks, and you should look for the index fund with the lowest fees applicable to the contributions you will be making (fees can be charged in different ways, so make sure you understand how the fees will apply to how much you are putting in and on what schedule).  Given that your employer is religious you may be limited in the investments available if your religion tends in that direction.  Given that you are 26 and not looking for early retirement, you should be looking for a fund which is all stocks, or as close to it as religiously possible, rather than one with a large proportion of bonds (bonds provide income but less growth and less risk, and are good for people close to retirement who need certainty and security: you are looking for long-term growth which will come from stocks).


fiteacher

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #7 on: October 08, 2018, 02:23:08 PM »
Hi MT,

Depending on what your endocrinologist says have you thought at all about moving to a place where IVF is covered. For example, if you move to the state of Massachusetts your insurance coverage would most likely cover a few attempts for IVF (they did for us, unfortunately we had a couple of miscarriages and our insurance ran out, thus we are adopting). If you are a teacher then you could probably hook on with one of the public schools here (best education in the country) and there are places to live that wouldn't be as expensive.

You could do this for a couple of years and then move abroad.

fiteacher

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #8 on: October 08, 2018, 02:27:01 PM »
One more thing MT that you might do for infertility treatments is SHOP around. There are different clinics that offer different packages. You might buy a package for six opportunities and be pregnant (it might be cheaper) or go to different places. Check this article out from the WSJ: https://www.wsj.com/articles/the-fertility-clinic-that-cut-ivf-prices-in-half-1536589667

memorytoast

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #9 on: October 08, 2018, 03:59:02 PM »
Wow, thanks so much everyone for all the helpful responses!

First off, just wanted to mention that I somehow missed entering two months of my husband's income in my spreadsheet (I'm to go back and edit my original post afterward, G_d Willing), so while his business is still on the lower end of the spectrum, it's not as unprofitable as I thought. We did talk last night and he was open to hearing some my suggestions for how he might improve the business (more advertising, discounts for people who refer, keeping better records of his hours so he can know for sure how much he's making, since he tends to price by project, etc.).

@reeshau Well, that's great to know (the citizens of the last state info), because we currently live in a no income tax state (FL). This country is even eligible for dual-citizenship, so that's something to find out more about, i.e., 'Do we pay taxes to both countries if we retain are US citizenship?'

As my law professor said:  just because laws have a structure, does not mean they have to make sense.  Physical presence isn't the end of the story with taxation.

Lol, true dat! There are so many laws that are head-scratchingly illogical!

With regard to teaching in a foreign country, if you hold a US teaching license, you could also consider teaching at an international school. You would be teaching in English, and salary would be a lot higher (likely even higher than what you currently make). In addition, international schools provide free housing and free round trip tickets back to your hike country each year. DH could probably also get a job at the school in a non-teaching position.

Another great area to investigate!

@former player Thanks for pointing me in the right direction of what to ask. I knew some of those things, but not all, so really helpful.

@fiteacher We haven't thought about moving since we specifically moved to FL to be closer to family and in warmer weather. While it kind of stinks that health insurance is so lousy here, I don't think my husband could handle the cold north again, (he grew up here, but we lived in the north for 3 years after we got married). Shopping around has been on our mind. We're actually going to an RE that's further away because we heard that he's not so quick to jump to the most expensive treatments, but a good reminder as we continue on this journey. 

lhamo

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #10 on: October 08, 2018, 06:54:16 PM »
Re:  maintaining US investment accounts while overseas as a US citizen, we did this from 2002-2015ish while living in China.  We used my mom's address as our US mailing address, and did not tell Vanguard or TD Ameritrade that we had moved overseas.  All our credit cards, etc. were registered to the US address.  We used our overseas residence address when filing US taxes, etc.  I didn't do much other than add more money to the Vanguard account during that time, though.  Opening new accounts might be an issue, especially now with lots of places requiring two-factor verification (which often requires you to use a US phone number if you use the phone option).

reeshau

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #11 on: October 09, 2018, 02:59:07 AM »
@reeshau Well, that's great to know (the citizens of the last state info), because we currently live in a no income tax state (FL). This country is even eligible for dual-citizenship, so that's something to find out more about, i.e., 'Do we pay taxes to both countries if we retain are US citizenship?'
You at least need to *file* federal taxes, as long as you are a US citizen.  Whether you actually need to pay anything is another matter.  For your current situation, there is a foreign income exclusion that is currently $108k that would shield an equivalent job for now.  Above that, there is a foreign tax credit, which helps if you live in a jurisdiction that taxes you more heavily than the US.  But in either case, always do file, and keep up on your other required financial filings. (e.g. FBAR for listing foreign accounts)

Opening new accounts might be an issue, especially now with lots of places requiring two-factor verification (which often requires you to use a US phone number if you use the phone option).

We addressed this, as well as maintaining our established relationships, by moving our old landline number to a VOIP provider.  We use iPlum because of a few features we like.  The base rate, with 100 minutes and/or texts per month, is $1.99.  There are a few that are actually cheaper, but most will not transfer a number.  But it's pretty easy to address this now.  Just remember to turn the ringer off at night!
« Last Edit: October 09, 2018, 04:49:05 AM by reeshau »

Ben Kurtz

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #12 on: October 09, 2018, 07:47:09 AM »
To address the concern about keeping a U.S. brokerage account while moving abroad:

This is not a legal point for the accountholder, but a compliance point for the brokerage house. To my knowledge there is no law preventing a U.S. citizen from holding a U.S. brokerage account after moving abroad (whether temporarily or permanently), nor even a law prohibiting U.S. brokerage houses from servicing U.S. clients who live abroad. But I do know that many brokerage houses won't accept U.S. citizen clients with addresses abroad, because while legal it imposes additional compliance burdens on them, which they don't care to take on.

So I don't think there is much legal or ethical discomfort in opening a brokerage account and keeping it registered to a convenient U.S. address after moving abroad. You aren't breaking any laws, and by finding a U.S. address that will work for you, you keep the brokerage company happy and away from any internal compliance problems. I have lived abroad from time to time and kept my accounts registered to a U.S. address, and plenty of other U.S. expats have done the same.

Similarly, regarding the employer retirement account:

Go for it: contribute enough to get as much matching as your employer provides, and put everything into either (1) a low-fee index fund (something that tracks the S&P 500 or the total U.S. market or even the total worldwide market, if available -- usually at least a low-fee S&P 500 tracker is available in most retirement plans) or (2) a low-fee "target date" fund aimed at folks retiring in 2060+ (if that is offered in your plan -- not all plans have one). Don't even bother opening the statements, because the value WILL fluctuate a lot over the years, but you shouldn't really care about the value until you are in your 50s and starting to think in detail about your conventional retirement.

On the international angle: I have not heard of any 401k / 403b / employer plan provider having issues with plan participants who move abroad and give the plan administrator their foreign address. You won't be able to make further contributions once you move and leave that employer (which is of course true whether or not you move abroad), but your money can remain invested just where you left it. This is different than the situation with private after-tax brokerage accounts. But a related point to keep in mind: many plan administrators require that your account value be above a certain level (often set between $5,000 and $20,000) if they are to keep holding your retirement funds after you leave your employer. If your account is less than this limit, they will ask you to roll it over into another retirement savings account (your new employer's 401k-type plan, if possible, or a rollover IRA you open yourself with a brokerage house) and if you fail to do so then after a while they cash you out and mail a check, which creates a tax bill for you. Still, I say: contribute to the retirement plan enough to take full advantage of the employer match, because there are plenty of ways to deal with the administrative side if/when you decide to leave the employer and/or move abroad, while remaining invested in your long-term investment choices.

General comments:

Is there someone (you, a bookkeeper in your community, a retired gentleman who attends your house of worship) who can help your husband set up systems to properly track, plan and price his handyman projects? I have found that many people with strong technical skills often lack the aptitude or patience for bread-and-butter business administration, particularly if they're left to their own devices to figure out the business questions entirely on their own. Many doctors are wonderful at clinical medicine or surgery but have mediocre business sense and need a lot of help on the business side. Many lawyers are great in court but baffled by law firm financial and administrative matters. Same is often true of plumbers, auto mechanics and professional writers. A handyman probably isn't billing his time at a high enough hourly rate to support full-time office staff, but if someone spent an afternoon helping him improve his processes for estimating and costing projects, keeping his books and expenses, collecting on his invoices, etc., I am morally certain he could increase his monthly take-home dramatically, which would be an incredible boost for your family.

cchrissyy

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #13 on: October 09, 2018, 10:38:53 AM »
I think you have 2 linked problems and maybe they can get solved together.

1 - You want a baby but lack a medical plan that would help pay for the interventions you need, as well as the normal pregnancy and delivery and infancy costs. You're paying about $500 a month for really weak coverage.

2 - Your husband - who I understand is lovely and has real skills - makes very little money. $400/month is what, 10-20 hours of work for a handyman? he clearly has a lot of free time.

Therefore I suggest he get a conventional job somewhere with great health insurance. There are some places that offer benefits even for part-timers. I think Starbucks and UPS do but probably on this forum there would be a thread of other employers who are specifically sought after for their excellent health coverage. He should find out what employers those are and match that list to your area. Doing so will save you $500/m of insurance expenses and seriously boost your family income.  I'm not saying he should stop doing the handyman business on the side, or that he should do this forever and ever.  It just sounds like a greta solution for this year, and the next, or however long it serves your family needs.

memorytoast

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Re: Not trying to FIRE, can you help us with our budget anyway?
« Reply #14 on: October 09, 2018, 05:54:27 PM »
@reeshau Well, that's great to know (the citizens of the last state info), because we currently live in a no income tax state (FL). This country is even eligible for dual-citizenship, so that's something to find out more about, i.e., 'Do we pay taxes to both countries if we retain are US citizenship?'
You at least need to *file* federal taxes, as long as you are a US citizen.  Whether you actually need to pay anything is another matter.  For your current situation, there is a foreign income exclusion that is currently $108k that would shield an equivalent job for now.  Above that, there is a foreign tax credit, which helps if you live in a jurisdiction that taxes you more heavily than the US.  But in either case, always do file, and keep up on your other required financial filings. (e.g. FBAR for listing foreign accounts)

Ah-huh, gotchya.
Opening new accounts might be an issue, especially now with lots of places requiring two-factor verification (which often requires you to use a US phone number if you use the phone option).

We addressed this, as well as maintaining our established relationships, by moving our old landline number to a VOIP provider.  We use iPlum because of a few features we like.  The base rate, with 100 minutes and/or texts per month, is $1.99.  There are a few that are actually cheaper, but most will not transfer a number.  But it's pretty easy to address this now.  Just remember to turn the ringer off at night!

Well that's intresting! Probably we wouldn't be interested in opening any new accounts abroad and would try to get things set-up before, but thanks for the mention so we can keep it in mind if actually does get closer.

@Ben Kurtz Thank you so much for your detailed response. Your explanations were both clarifying. I've tried brainstorm a business "mentor" for DH before, but came up blank. I agree with your assessment that being a good handyman does not necessarily make one a natural business man, but since I have no one that can step into that role as of now, I'm just working on helping him adjust bit by bit as best I can. It's a fine balance, but I've found "hey, if you did x, y, and/or z do you think p might be the result?" works okay. That way I can spell out some better business practices without it being outright criticism.

@cchrissyy Mentioned your idea to DH and he definitely seemed open to the possibility! He thought delivering packages might be up his alley, and he would love to slash our insurance bill, so G-d Willing we're going to look into it.