I'm branching this off from
my other thread, at
@waltworks request. Not sure exactly what I'm doing here, but I guess....treat this like a reddit AMA?
General background: two adults (ages 31, 29), two kids (ages 7, 8). We live in Colorado (the Springs, not Denver). I run my own handyman business; I own a single-fam rental, and rent the basement of our current house on airbnb.
I took Walt's admonition to review my spending more accurately, so I did. I reviewed my spending records, and here's what I found (with notes):
*"accurate" means I have actual tracking to back it up, and I'm within a dollar
"good" means I have actual tracking, but it's incomplete, and I'm within 5-10 dollars
"guesstimate" means I have some tracking, but am basing this on past year averages, I'm reasonably close-- not off by more than $15 for sure.
"HIGH" means the actual could be lower, but I erred on the high side.
"LOW" means the actual could be higher, but I think I'm accurate.
mortgage 1,138 accurate | PITI + HELOC
utilities 262 accurate | gas/water/sewer/electric
internet 40 accurate | comcast
phone 36 accurate | 2 lines, MintMobile
trash 22.5 accurate
work expenses 192 accurate | work truck/gas/insurance/maint/tools/supplies
food 240 good | groceries/restaurants total
household misc 100 guesstimate
clothing 15 accurate | mostly shoes/clothes for the kids
toiletries/medicine 15 HIGHguesstimate
↓↓↓ two drivers/two cars ↓↓↓
license/registration 16 accurate
auto insurance 66 accurate
auto maint 45 good
gasoline 50 accurate
life ins 17 accurate
fun stuff/birthdays 20 LOWguesstimate
school supplies 15 HIGHguesstimate
Total $2,289.50 ($1,151.50 without the mortgage)
With regard to FIRE expenses-- since we're not married and finances are separate, I actually only pay half the vehicle expenses, half the school/children's expenses, and half the shared expenses (food/utilities/phone/household/etc.), while I pay the full amount of the mortgage (I own the house) and all work expenses (obv). I'm sure SO has expenses of her own (e.g., going out w/friends), but they don't really change the bottom line,
and this current budget/expense iteration is full of luxury and extra in almost every category.
Whoa, you live on $26k a year *with multiple kids*, with over half that being mortgage? As in, <$1000/mo in *all* other expenses?
Holy shit. That is freaking amazing. I figured you were single. Our family of 5 spends twice what you do a month (outside of the mortgage), and we're pretty darn frugal (basically free ACA healthcare, inexpensive homecooked food/never eat out, take the bus everywhere, get all clothes as hand-me-downs or thrift store, ultra cheap phone plan, no TV, etc).
You should post a case study, you guys are killing it.
-W
Umm...thanks!? Maybe it makes a bit more sense that I'm like "HOLY COW, A HUNDRED THOUSAND DOLLARS!!!?!?!?" with this whole refinance thing, lol!
$26k/yr spending, yes. Two adults, two kids (ages 7 & 8). Mortgage is $1160, so basically half the expenses are mortgage. Income this last year (2019) was $39k, which is way above-average for me-- average over the last 10 yrs has been $27-28k.
I take that back. Actual spending in 2019 was ~$22k. I made $39k net, and for sure spent: $12k on a kitchen remodel, $3.5k on a bathroom reno, and >$1.5k on landscaping (I tracked remodel expenditures a lot more closely than normal spending this year). I didn't end the year much different financially (better, if anything) than I started, so all other spending must have been the difference-- $22k, or ~$1850/month.
*looooooong exhale*
*has existential crisis*
I.....think I need to switch gears toward making FIRE plans instead of OMY plans.
I think you need to track your actual spending. Sounds like you don't really know what it is.
If you are actually spending $22k a year, yes, you are FIRE.
Again, post a case study. I want to see how it's even vaguely possible to live a modern (ie, access to this forum, own a car, etc) lifestyle with a family of 4 in a HCOL area and spend well under $1000 a month doing so.
-W
I've tracked my spending religiously for the previous 9 years, so last year I didn't feel compelled to track quite as closely, based on how consistent we've been historically. I'm 90% certain that my back-of-the-envelope estimate is about as accurate as rounding everything off to the thousands' place.