Author Topic: So... How do I FIRE if I just bought a house?  (Read 950 times)

Bearblastbeats

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So... How do I FIRE if I just bought a house?
« on: November 07, 2018, 09:20:31 AM »
We pulled the trigger and purchased our first home. I went with a FHA loan of 3.5% down on a 257k house and we will be closing and moving in by end of December.

I take home $2100 biweekly and my GF brings home ~$600 biweekly. (depending on hours)

Outside of student loans ($48/m) I have no other debt than this current house.

My GF pays me about $300 every two weeks towards bills and in which I cover the following below:

Mortgage/Taxes/Ins.: $2000
Cell + Ins.: $115
Electric: $55
Gas: $50
Auto Ins.: $75
Groceries: $150
Netflix + Prime: $22
Student Loan: $48
Pet Food/Supplies: $75
Fuel: $200 - $300 (dependent on travel for work)


Where can we save, and where should I allocate extra funds, if any?

PloddingInsight

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Re: So... How do I FIRE if I just bought a house?
« Reply #1 on: November 07, 2018, 09:28:09 AM »
Looks like your expenses are a bit more than 1/2 your income.  Great job!  Save up 10-20 grand for emergency home repairs first of all.  Then read the Bogleheads guide to Investing for what to do with the extra money.

RWD

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Re: So... How do I FIRE if I just bought a house?
« Reply #2 on: November 07, 2018, 09:46:21 AM »
What are your timeline goals for FIRE?

Bearblastbeats

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Re: So... How do I FIRE if I just bought a house?
« Reply #3 on: November 07, 2018, 09:49:27 AM »
What are your timeline goals for FIRE?

ASAP. I turn 32 in Feb and we will have our baby at the end of Feb. I always wanted to FIRE by 40 but doesn't seem to realistic now. Maybe 50?

LifeHappens

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Re: So... How do I FIRE if I just bought a house?
« Reply #4 on: November 07, 2018, 09:56:52 AM »
Do you need both Netflix and Prime? Small savings, but they seem redundant.

Are you reimbursed when you travel for work?

The expenses - are they combined for you and your GF? $150 per month for groceries is really low for two people.

You didn't write a full case study, but I want to point out you are missing many spending categories. You have nothing for house maintenance, car repairs, household supplies, clothing, etc. Also, I saw in a different thread that you and your GF are expecting a child soon so your expenses will change.

Honestly, it looks like your best opportunity to speed up your time to FIRE is through increased income.

Mississippi Mudstache

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Re: So... How do I FIRE if I just bought a house?
« Reply #5 on: November 07, 2018, 09:59:29 AM »
What are your timeline goals for FIRE?

ASAP. I turn 32 in Feb and we will have our baby at the end of Feb. I always wanted to FIRE by 40 but doesn't seem to realistic now. Maybe 50?

This seems appropriate: Early Retirement Math. If you're saving half your income, then yep. You're looking at working until 50. You're not going to retire by 40 without drastically reducing your expenses or increasing your income.

Bearblastbeats

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Re: So... How do I FIRE if I just bought a house?
« Reply #6 on: November 07, 2018, 10:09:22 AM »
Do you need both Netflix and Prime? Small savings, but they seem redundant.

Are you reimbursed when you travel for work?

The expenses - are they combined for you and your GF? $150 per month for groceries is really low for two people.

You didn't write a full case study, but I want to point out you are missing many spending categories. You have nothing for house maintenance, car repairs, household supplies, clothing, etc. Also, I saw in a different thread that you and your GF are expecting a child soon so your expenses will change.

Honestly, it looks like your best opportunity to speed up your time to FIRE is through increased income.

I thought so as well but I just started my new job 2 months ago.

RWD

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Re: So... How do I FIRE if I just bought a house?
« Reply #7 on: November 07, 2018, 10:15:32 AM »
What are your timeline goals for FIRE?

ASAP. I turn 32 in Feb and we will have our baby at the end of Feb. I always wanted to FIRE by 40 but doesn't seem to realistic now. Maybe 50?

And how much do you have invested already? If you have nothing saved (and without knowing the specifics of your mortgage) you appear to be on track for FIRE around age 46. If this is unsatisfactory you'll have to increase your income or decrease your spending. Remember that your mortgage expense (principal and interest portion) does not need to be sustained forever. So you only need to save 25x the remainder of your expenses plus taxes/insurance on the house and an additional amount equal to the remaining mortgage principal.

Assumptions with the above calculation:
7% returns after inflation
5.6% interest rate for 30 years fixed
$577/month for taxes/insurance on the house

FireHiker

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Re: So... How do I FIRE if I just bought a house?
« Reply #8 on: November 07, 2018, 10:33:30 AM »
Who do you use for your cell phone? I see you have $115 down as cell plus ins. Do you mean you have insurance on your cell phone? Is it for just you or is that the total for both of you? Although it isn't the MOST Mustachian option, we switched to T-Mobile this year. It reduced our bill (we have 3 phones on our plan) and includes Netflix so we still have Netflix but it is "free" (well, actually it saves us money since T-Mobile was cheaper than AT&T for us, which we previously had).

You should write up a full case study if you haven't already. Good luck!

Scortius

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Re: So... How do I FIRE if I just bought a house?
« Reply #9 on: November 07, 2018, 12:56:51 PM »
I would also encourage you to add 1% of the value of your home to your annual expenses as maintenance. Roofs, water heaters, and sewer pipes add up over time! As long as you're ready for it you'll be fine.

Bearblastbeats

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Re: So... How do I FIRE if I just bought a house?
« Reply #10 on: November 07, 2018, 01:35:57 PM »
I would also encourage you to add 1% of the value of your home to your annual expenses as maintenance. Roofs, water heaters, and sewer pipes add up over time! As long as you're ready for it you'll be fine.

That makes sense. Thank you.

J Boogie

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Re: So... How do I FIRE if I just bought a house?
« Reply #11 on: November 07, 2018, 02:48:23 PM »
If you spend that much on fuel, there is a lot of potential for savings by replacing your vehicle with something like a chevy volt.

Insurance can be a bit more expensive for EVs. Mercury insurance is the cheapest for EVs from what I've read online.

You seem to be spending the same amount on feeding a person as feeding a pet(s). This is insane. I would recommend paring down your pet collection via attrition as eliminating pets can be bad for morale. Then when the day comes to say goodbye rather than framing it as a financial decision you can say wistfully, there's no replacing Woofer. Woofer was the best, and there's no other Woofer out there. I don't want to insult the memory of Woofer by trying to replace him/her.  I'm also too heartbroken to think about potty training a different pet and I will always be, because Woofer meant that much to me.
« Last Edit: November 07, 2018, 02:53:47 PM by J Boogie »