Author Topic: I could use another face-punch (re: household finances)  (Read 32307 times)

Joet

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I could use another face-punch (re: household finances)
« on: May 28, 2013, 01:50:27 PM »
So may was a month where my wife and I "watched our expenses closely" and I know the month isnt over yet but I'm calling it an epic failure once again. I tracked our spending using data from mint for the last 12 months or so and our 'median' spend is ~$10.5k/mo

Categories:   
Mortgage + Property Tax + Insurance:      $2677 [3.375-30]
Cash and ATM [some of this wasnt spent]  $900
Car Payment                                            $752 [0.9 APR, will pay off with my July bonus]
Vacation                                                  $675 [memorial day hotel, ignoring other incidentals]
incidents]
Groceries                                                $586
Bills and Utilities                                      $446 [directtv, home phone, cell phones, internet, PG&E, water, trash]
Restaurants                                            $443
Home improvement                                  $412 [new backdoor w/dogdoor, part of my remove-dogwalker-expense-perpetual-project]
Dog Walker                                             $342
Gifts                                                      $343 [my mothers birthday, mothers day, and a few others fit in here, note this was her purchasing not me, I normally spend very little on gifts. In a fit of rage she declared that I will do all the spending for my family's gifts now. I said great]
Giants tickets                                          $282 [fractional season tickets]
Gas and Fuel                                           $277 [I had yet another month of 100% bike commuting, but trips to the coast are spendy]
Pet food and supplies                                  $212 [if I told you how many cats inside and outside we are supporting you would probably kill me]
Clothing                                                  $204 [but they were on sale]
Maid                                                       $180 [2x visit/month]
Car ins                                                    $120 [pretty high policy, and we've had recent
Home Supplies                                        $110 [target]
Gardener                                                $100 [4x month, front and back yards]
Dry Cleaning                                           $76
Coffee Shops                                          $65

Stealth categories I put these in to make budgeting more realistic:
Trash                                                    $30 [billed every other month]
Annual vacation to see in-laws                 $400 [even without deluxe class tickets, international flying isnt cheap around xmas]
+ some temporary authorizations from our recent trip   $200-ish

all-in                  $9,800-ish


So I want to sort of congratulate myself for coming in under $10,500. But we're still ~800 over what I hope to spend as an uber compromise [$9,000, all-in, including a realistic accounting for ALL magic 1-time expenditures and vacations and it-was-on-sale and oh-hey I love that bike or oh-hey I just have to go to fiji honey my buddies are going]

So we had a great weekend down at the coast and my brother and his wife came up [we paid for everything, his wife is still in school and probably owes $300k in student loans at this point---not MD unfortunately, psych]

Am I getting there? I was sorta expecting all this stuff to magically fall into place overnight. We agreed to have "...an adult conversation regarding out budget" [read: no screaming allowed, the first person to mention divorce has to leave the room for a timeout]---I wish I was making that part up.

So other than bringing in a 3rd party/marriage counselor, how are we doing? Also I want to point out that my wife makes a little less than I do, and currently hits her 401k max contribution allottment every year [and has consistently, since I forced her to like a decade ago]. She's around $140k/yr and like $80k net or so after 401k and after taxes [CA, ugh]. So she makes a ton.

We've talked about splitting our finances [we never have] and if one party insists on having a certain item the other party does not [eg dogwalker--although as you can perhaps tell in my line-item budget she has agreed to 'look into' my construction skills [rear mini fence, to keep my dog away from the true back-fence and a large angry dog behind us], and an improvement to our rear-gate to make it more secure [latch/reinforcement/etc] as well as replacing the rear door/trim/with a new dog-door etc, although now there are issues with 'ZOMG the cats might run out' (good) and this could just be one of those perpetual tasks that I never quite perfect to her desires and I cant remove the line-item dogwalker from our monthly budget in this lifetime.] We've also discussed removing the home-phone item but recently she's recanted (after agreeing to call the phone company and cancel it---it's in her name). Reason? Her parents call us on that number. Heaven forbid we ask them to change how they contact us [or join the 21st century and call us for free so that we can both save $1-$2k a month combined!]

So this has become one giant rant. I drew up an alternate budget "spending plan" which I hope to propose but it's patterned like this:

Possible budget:

Lets take our housing completely out of the picture:
1821 mortgage
 756 property tax
 180 maid
 100 gardener
 100 home insurance
----
$2957/mo on housing

Next, lets add the US median household income to spend as if our housing was free:

$4208/mo [equivalent to US median household spending]

Now lets add $1,835/mo to it just because we can! Vacations, toys, whatever

$1835/mo   extra spending so we enjoy life. How about we split it $1,250 'her' and $585 'his'
----
$9,000/mo! yay! See how I cleverly backed into that # again :)


So what I'm trying to do is on top of housing [I include here a maid and a gardener, I know, whatever] trying to spend at/around $6,000/mo all-in average.

Something we havent been able to do. Based on this month we went over by approx $1k this month. Not the worst we've ever done by any means. Another way to look at it is we are UNDER by about $500 what we usually end up spending.

Oh man. Well, I await tips and advice if you'd be so generous. It probably sounds like I'm blaming everything on my wife, that isn't my intention. I seem to leave out things like my bike hoard [I bought a $1300 mtbike on craigslist, an $800 ebike there, and a $400 hybrid]. I also head to the coast every chance I get [~30 miles each way to santa cruz] and I've been known to take trips to various south pacific islands with my buddies to surf [but tbh we live like homeless people and will literally camp more often than not, but food/beer adds up heh]

So tonight we'll have a 'budget' discussion which she normally thinks is some kind of an attack on her way of life/personality/upbringing [granted, vastly different, me working class, her entitled], but Im hoping for the best. Will update this after we talk.

Normally she agrees to "stop spending so much", but when she walks into an ann-taylor loft and stuff is half off, shit is getting bought, end of story. I try to talk about the easy ones [home phone, dog walker, direct tv] but each becomes a long drawn out attack she presumes against her lifestyle/decisions and then we move on towards splitting our finances/divorce.
If there's one thing I've noticed in ~15 years of marriage is that 'compromise' means me seeing her way of doing things. I'm trying to position $9k as some sort of magic number where we reach FI sooner [my definition of FI, with drastically reduced spending, not hers obviously]. At $10.5k monthly spending we are still putting away approx 80-90k/yr depending on bonus[es]. She has said on more than one occasion I am absolutely crazy to worry about our spending at this level of savings. Part of me wants to agree. One topic I hope to bring up early tonight is the SWR theory of portfolios. Simply put the more you have, the easier it is to get by. I think she looks at our budget/income as one giant pile of fun money--just look at our crazy 401k balances!

Comments? Criticisms? Face-punches?

smalllife

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Re: I could use another face-punch (re: household finances)
« Reply #1 on: May 28, 2013, 02:22:15 PM »
To put in perspective where this is coming from . . your mortgage is more than my entire take home pay and you are wasting it on trifling luxuries.

You need to have a conversation with your wife about expected standard of living.  You are living high on the hog, even accounting for high housing costs.  Pet walkers, dry cleaning, home and cell phones, cable, season tickets, a maid, a gardener, and $1000/month on food (more than minimum wage just on food costs!), etc. 

If you spend $120,000 per year but are only saving $80-90k, you will have to work for at least 20 years to reach financial independence.  That's absolutely insane with that high of an income.   

Huge facepunch on the consumerist entitlement that accompanies such reckless spending.   Here's an example spending chart for your income:

Mortgage + Property Tax + Insurance:      $2677 [3.375-30]
Cash and ATM [some of this wasnt spent]  $900  Track your cash, account for your spending!
Car Payment                                            $752 [0.9 APR, will pay off with my July bonus]  Paid off, will never waste so much money on a car again.
Vacation                                                  $200  Super generous $2,400/year for vacations.  This is extremely luxurious.
incidents]
Groceries                                                $400  Easily doable for two adults.  Meal plan, cut out the processed crap, and eat leftovers.
Bills and Utilities                                      $300 [directtv, home phone, cell phones, internet, PG&E, water, trash].  Read the post on $10 iphone plans, and watch your utility usage.  I bet you are probably over-paying for a huge cable bill too.
Restaurants                                            $100  Treat yourself once a month so you don't feel deprived.  Read something on hedonic adaptation. 
Home improvement                                  $300 Set aside money for repairs, etc.  Be realistic. 
Dog Walker                                             $342  I'll even let you keep the dog walker. . . until one of you drops to part time.
Gifts                                                      $50  Money doesn't buy love: learn to make gifts, give your time, etc.  Stop the Hallmark holiday train.
Giants tickets                                          $282 [fractional season tickets]  Only to prove a point about your spending, but this is insane.  Buy one game's ticket a season and you'll still get to see them live.
Gas and Fuel                                           $277 [I had yet another month of 100% bike commuting, but trips to the coast are spendy]   Are you hypermiling, what's the mpg?
Pet food and supplies                                  $212 [if I told you how many cats inside and outside we are supporting you would probably kill me]
Clothing                                                  $100 Start buying non-dry cleaning clothing.  I would be willing to bet you don't need to buy clothes for the next decade, but hey, this is a realistic don't crimp the lifestyle too much budget.
Maid                                                       $180 [2x visit/month]  You are adults.  Clean your home.  I don't see a kids line in here so there is nothing you need to do that an hour a week can't handle.
Car ins                                                    $120 [pretty high policy, and we've had recent
Home Supplies                                        $110 [target]  Lumped in with your home repairs above.
Gardener                                                $100 [4x month, front and back yards]  You bought a house: take care of it.
Dry Cleaning                                           $76  Most "Dry Clean Only" is fine on the gentle cycle.  Don't buy anything that needs it.  Do your suits once a season. Included in clothing costs.
Coffee Shops                                          $65  Buy yourself a coffee maker or plan for your snacking needs.

Stealth categories I put these in to make budgeting more realistic:
Trash                                                    $30 [billed every other month]
Annual vacation to see in-laws                 $400 [even without deluxe class tickets, international flying isnt cheap around xmas]

Total = $5458

That's an extra $36k/year saved, and $900k that you can knock off the FI-point in your stache!  And your lifestyle is barely compromised, you just have to put a little effort into changing your habits.



zhelud

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Re: I could use another face-punch (re: household finances)
« Reply #2 on: May 28, 2013, 02:26:51 PM »
What is your savings goal?  Have you shared this goal with your wife, and is she on board? If you don't have a shared goal (X amount of savings, or Y amount of income from investments, or whatever, by year Z) then of course your wife thinks you are just being a big jerk and getting upset about all her purchases for no apparent reason.

(And good grief, you guys are spendy. A maid, gardener, and dog walker? Regular trips to the South Pacific? Are you sure you are in the right forum?)

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #3 on: May 28, 2013, 02:37:17 PM »
yea probably on the wrong forum lol, but you guys are great with the budget-ing advice.

I think the bottom line is we are obviously not on the same page with goals. We thought we were. Maybe 10+ years ago we were. Rising incomes led to rising spending, mostly. Our networth is a bit north of 1.3m or so, of that our retirement portfolios are over $600k together, and in taxable we have another 150k invested. Beyond that, an emergency fund of 6-12 months depending on how you calculate it (~70k). The rest is home equity.
My savings goal is to hit $2m as soon as possible With zero market growth and our current savings level (@ 10.5k/mo spending) we'll hit that in about 8-9 years--I define that as FI for my purposes. Yes I know that is not realistic given our current spending levels. With a little growth in the markets it is probably as little as 5. From there we'd only be working because we feel like it [at age 45]. This is my plan, heh. Her plan involves probably working into her 70s and climbing the corporate ladder as high as possible. Tho lately I see her resolve cracking. But the foundation is still strong. Who knows, another 25 years is a long time.

I appreciate the face punches. I just had a brilliant idea. My wife insists on the maid because she is tired of cleaning up the house. Brilliant idea is I start to do it! woohoo. Thanks guys!

thanks smalllife: but one minor point: we wont be able to visit her parents with that vacation budget sadly! it has to be 400/mo for sure [minimum]. Surely you'd agree visiting the in-law side of your family once per year is important? no? They used to visit us when their own parents were younger, but now they are caregivers for our own parents and cant break away to visit us in the US any longer. Or if they do, they reserve that rare event for their other children.
« Last Edit: May 28, 2013, 02:44:23 PM by Joet »

swick

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Re: I could use another face-punch (re: household finances)
« Reply #4 on: May 28, 2013, 02:43:33 PM »
Sounds like you have to have a serious chat about what FI actually looks like to you both...What are you going to do with your time? Once you have more time, will your wife want to do MORE shopping, traveling, etc? Will you have the money if that's what you want to do?

Most FI calculations assume you will be at a standard or slightly lower cost of living...which is why half the equation is bringing down your annual expenses to a level you can live with but still enjoy the things that are very important to you - if the Maid/dog walker/Ann-Taylor/South Pacific lifestyle is what you want to maintain, it'll be very tough to ever reach FI.

Would your relationship survive if you took away the high incomes?

Will you feel resentful if you give her a $1,250 'her' and $585 'his' spending budget? It doesn't sound like you are an equal partner in the relationship and it doesn't sound like he has any intention of working with you if things get tough or you really want change.

plainjane

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Re: I could use another face-punch (re: household finances)
« Reply #5 on: May 28, 2013, 02:45:22 PM »
Have you asked her what she thinks a reasonable amount is yearly/monthly to spend on whatever the hell she wants?  What if you promise to stop nagging if she stays within that number?  She can spend it on anything, and you won't comment.  (And don't just drop a number on her and expect her to accept it, you're supposed to be equal partners)

And I'd say that in my experience adult conversations rarely start with ground rules that say someone needs to take a timeout.  Would it be possible to do this conversation in a public place so you guys behave yourselves? 

It might help if you acknowledge that you fall down too (how many bikes do you need, why do your vacations not really count) and don't get into "but yours are bigger than mine"...

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #6 on: May 28, 2013, 02:48:21 PM »
I dunno, we met when we were both completely broke and in college. So it passed the "compeltely broke" phase. Would it survive it today? Dunno. In the great recession she was out of work for a bit [~6 months] but found an even more lucrative path seemingly because of that.

I'd be a little resentful but honestly no. At $9k/spend/mo we hit $2m networth in 4-5 yrs assuming very low market/housing growth (1-2% annum).

Spending is a serious problem I dont know how to fix is is why I'm here. Perhaps we just split our finances and thats that. Any little line item on the budget is a huge screaming shouting match and I think thats actually the purpose. So that spending doesnt get fruitfully discussed our planned rather it just happens naturally every time she swipes the credit card "for us"

Good point, I don't know. Perhaps we just split "shared ours" expenses down the middle [we make roughly the same $], and then "her expenses" she can pay for [or not] from her own account.

Perhaps thats really the only way forward. Otherwise yes, I'm a huge nagger. "Hey hun guess what! We spent ~$10k this month after agreeing to spend $9k. So what are we going to spend $1k less on next month??"

But what gives me pause here is that if we split and go our separate ways here financially, unfortunately as life partners we probably wont arrive at the same destination.

EG if I take the monthly expenses that I'm willing to share and cut it in half:
$2677/2 = $1338/mo housing
$120/2 = $60 car ins
$100/2 = $50/gardener
$752/2 = $356/car payment. Lets pretend I agreed to this purchase
$300/2=  $150 [nix directv, nix home phone, PG&E, trash, water]
$0      = $0/Dog walker/Maid
$212/2 = $106 pets/supplies. Lets pretend I agree to having so many cats
$600/2 = $300 Groceries
$500/2 = $250 Restaurants
$282/2 = $141 Giants tickets
$350/2 = $175 gas/fuel
$200/2 = $100 Clothing
$400/2 = $200 trip to in-laws
$600    = $500 elective/other/entertainment spending
--------------
$3826/mo.

Which means she will have spent ~$6200 this month. I guess she takes home more than this [even after maxing the 401k] so no problem, perhaps?

But then she'd be shouldering:
maid, dog walker, directtv, home phone
various shopping categories
various impromptu weekend getaways.

How does that work? say she just suggested we book a place on the coast for july 4th. We'll probably spend ~$800 ish down there (200+ night hotel). I say 'no hun, I dont think its in our budget. Didnt we just get back yesterday from the exact same place? Why not somewhere different?.

Would it then be... well... I say we can go, I have the $, do you want to come or not I'm going? And then... of she goes by herself? Or I come along "for free". As in , what happens when the 2 people dont agree on the spending together? Does one person go by themselves?
« Last Edit: May 28, 2013, 03:03:17 PM by Joet »

smalllife

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Re: I could use another face-punch (re: household finances)
« Reply #7 on: May 28, 2013, 02:52:13 PM »
I left the inlaw-travel in the budget.  It was the personal vacation spending that I downsized :-)

It sounds like you two have drastically different ideas about where you want to go - life styles, finances, etc.  Start talking in generals instead of bringing up line items.  Live by example (aka the bike hoarding).

KingMe

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Re: I could use another face-punch (re: household finances)
« Reply #8 on: May 28, 2013, 03:24:35 PM »
$2 million is nowhere near how much you're going to need if BOTH of you decide not to work 10 years from now. If your spouse doesn't mind working until age 70, then saving $70,000+ per year now is probably good enough, even if you want to stop working much earlier. You'd have plenty of time to walk the dogs and do the groundskeeping. [I'd keep the maid; label it "divorce insurance."]

I agree with the poster who wrote that you need to talk about your goals. If early retirement is not her goal, then I see why she would think that abandoning pricey TV and phone packages isn't worth it.  Use FIREcalc and Excel to run the numbers and see what is possible under different scenarios. If the numbers work for both of your long-term plans, then you don't need to obsess over $1,500 in spending each month. Maybe adding another $20,000 or more to your annual saving level isn't needed to allow you to meet your goals.

That said, you would continue to be a grist for the Antimustachian Wall of Shame and Comedy at your household's level of spending.

matchewed

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Re: I could use another face-punch (re: household finances)
« Reply #9 on: May 28, 2013, 03:29:51 PM »
I also think you're missing the forest from the trees on this one. Where do you want to be with your wife in the next ten years (five/15/20)? Where does she want to be with you in those same periods? Once you can mash those two concepts together then you can work on a plan. One you have a plan you can hold each other accountable to it. For now it sounds like you're holding her accountable to your vision, and that is not fair.

Theadyn

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Re: I could use another face-punch (re: household finances)
« Reply #10 on: May 28, 2013, 04:05:39 PM »
To give you another perspective...     I've worked my butt off reducing expenses and don't really feel the hardship.  So, with the kind of income you guys are pulling and if I had that coming my way, I could in ONE YEARS TIME pay off the mortgage and have enough to be FI.     Then again...   I don't have a lot of the things listed above. 

It really comes down to what is important to both of you guys.  Need less of those things now, you are able to save more money, you won't need that type of income to reach FI and you get there sooner.  Or work forever to pay the dog walker, Ann Taylor, gardener, etc. and maybe one day have enough saved up to continue paying for all of those things. 

Let me ask you, have either of you considered what would happen should one of the incomes disappear.  Trust me, I know, it can happen.   What then?  Would it not be better now to be living on less to weather those times?

Sure is a tough situation, sorry.  Until you two can agree, sounds like the arguments will remain.   :(

(gonna run before I get face punched)

swick

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Re: I could use another face-punch (re: household finances)
« Reply #11 on: May 28, 2013, 04:18:04 PM »
I dunno, we met when we were both completely broke and in college. So it passed the "completely broke" phase.

There is quite a big difference between the "Starting out" completely broke phase and the "I'm used to a certain lifestyle and income and now it is gone" broke phase.

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #12 on: May 28, 2013, 04:34:34 PM »
I dunno, we met when we were both completely broke and in college. So it passed the "completely broke" phase.

There is quite a big difference between the "Starting out" completely broke phase and the "I'm used to a certain lifestyle and income and now it is gone" broke phase.

ok, so what does that mean, practically? point-of-no-return?
I'm not really talking about going back to zero/$1k/month spending, but down to like $9k or so, though, so perhaps not a terribly relevant point?

samustache

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Re: I could use another face-punch (re: household finances)
« Reply #13 on: May 28, 2013, 04:39:53 PM »
We just went through this on a smaller scale in my household. The bottom line is whatever she had to sacrifice, I sacrificed more. She gave up the maid service, I gave up the landscaping service. Now I do all the landscaping AND a good portion of the housecleaning :). If you are giving up more than she is, it will be harder for her to be angry, but also show you mean business.

Is your car a premium-only-gas-guzzler? First thing I'd do is sell it for something cheaper. This lowers a number of line items (insurance/gas/future repairs), with the added bonus of looking sacrificial.


Dee18

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Re: I could use another face-punch (re: household finances)
« Reply #14 on: May 28, 2013, 05:11:11 PM »
What really struck me about your post is how you repeatedly criticized your wife.  Yet your budget includes expenditures of $575 on a hotel with your brother and his wife as your guests, $900 in ATM withdrawals which I suspect were partly for you, $282 on Giants tickets (and I’m being sexist here but I bet you wanted these), $343 for gifts included a gift for your mother’s birthday (ahem, did it occur to you to go ahead and get a gift for your mother before your wife had to do it?), and $100 on the yard you could probably take care of without her objecting, and—as you admit—you bought $2500 worth of bikes…  Sorry, but it seems like you are complaining rather than making the changes you want to see.  Remember that great Gandhi quote:  be the change you want to see in the world.  Try 6 months of not criticizing your wife in person or on this blog and instead just do your best to cut expenses by taking over the tasks you can do.   You might be surprised at the results. 

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #15 on: May 28, 2013, 05:54:14 PM »
OK thank you. I apologize as this was kind of a repeat thread. But after my [failed] attempts at spending less, I am currently nominating myself for this wall of shame/infamy.

I like your suggestions also Dee.

It was suggested I spend a lot of the cash too? Indeed I do. I spent $60 in cash in May [shared team lunches @ work]. $60 out of $900 ATM withdrawls. I know this because I used YNAB any time I spent anything. Turns out, I hardly spent anything all month [as usual]

I would have loved to have just met down by the coast and drove down for a day trip or something. The trip wasn't my idea. My wife LOVES the place, and invited my brother and his wife [about the only couple that regularly travels with us], we've gone with other groups of friends before, too.

Yes I like the giants and baseball but fractional season ticket ownership [woohoo, front row!] was not my idea. She arranged/paid for everything/etc all [much like every other item in our budget]. I guess I'm a giant complainypants.

Last time it was suggested for me to 'lead by example'.

As a for-instance, I've tried to get her to stop taking our cars for carwashes, so when they start looking dirty I'm out there washing them. I literally have to wash them EVERY week though, to stop her from hitting "OK" at the gas-station carwash for a $10-20 carwash. I discovered after looking through our finances that some of our "gas/fuel" bills include carwashes. Facepalm.

Same idea with our dog. He goes in for a grooming/wash/trim/godknowswhat monthly. I started washing him [which she calls cruel, and a huge mess]. In reality, I'm pretty good about it and do it in the tub. I clean up the hair in the trap and throw it out. A little blowdrying and done. She normally would budget a $70 grooming monthly for the dog [internally I call him the $50k dog, based on expenses/projected regarding him---I love him btw]. Anyways I seem to have *somewhat reduced her desires to send him in for monthly grooming/boarding [it takes like 8 hours for some reason for them to finally get to him in the queue on a weekend---I call it his jailtime]. Anyways, thanks for the comments.

I realize I am a huge part of the problem, but I think not in the way the female responders have taken. I literally do not swipe the credit card very often. Maybe $200/mo max. She easily does $5k or so, I'm not making this up. When pressed on 90% of her spending she will say "...but hun, it's for US ". Indeed, these are shared expenses--everything has me involved at least tangentially I suppose other than say the clothes she buys for herself. A classic example is the 'track suit' she bought for me [this is a recurring theme]. I hate jogging. Literally hate it. I'll run 2-3 times a week though, 2-3 miles and 'compete' in the odd 5k. My wife wanted a track suit for the once or twice a year she'll go jogging so she buys me one to match. Cute. Thanks hun. I can't donate it to charity without hurting her feelings. But really, I dont need a sympathy gift because she decided to buy herself something--I really dont.

I think I'm part of the problem in that I haven't sufficiently put my foot down to restrain spending. One example is our lawn maintenance/repair/design/etc. We had a gardener COMPLETELY re-do our front lawn [and back lawn] not once, not twice but THREE times now. It's ridiculous. She literally pays them ~$4k after our grass looks "worn out" to remove, re-sod, replace the lawn because it doesnt look green enough. Forget that that means these same gardeners simply arent doing their job properly. Lets look at that objectively. In the last 6 years I have spent ~$12k to replace my lawn THREE times. I seeded/feeded it once at the proper time [spring] and it came in nicely. But not thick enough for her tastes. In come the gardeners and the check gets written. I finally told her that if I see another gardener replacing my lawn AGAIN I am moving out for good. If he does it secretly and is done by the time I get home same deal. Try me. Fortunately it has been about 2 years since the last time we completely re-sodded the lawn again but I'm still wincing from the checks if you can't tell. The recurring theme is ... whatever comes in, gets spent. Plus just a little bit more. True when we made $40k, true at $150k, and true again at $300k. The only way we're hitting 80-90k savings now at our current spendings rate is that I stash the vast majority of it secretly. Example--post-tax 401k investing. I literally stuff in $50k/yr or so into my 401k. She puts in 17.5k in hers (+ match), we each do $5.5k roths [mutual agreement based on how awesome they are] and then another $5k in ibonds with our tax return. Thats around 90k/yr with my match. It's a decent amount, IMO. If you look at our net income after taxes we're saving right around 1/3 of our income. But I think we can do a lot better, plus as you all keep saying: we'll never truly reach FI if we don't get a hold of our expenses.

You can repeat this scenario ad nauseum regarding everything. Tree trimmers? Here's a check. Pavers for the driveway? here's a check. Tile the kitchen? Here's a check. Granted I'm kind of a hack but I can do lots of things. I replaced the basement stairs, 2 of our doors, a window, the dishwasher, bunch of other stuff. But she ... based either on upbringing or perhaps a critique of my carpentry skills [or probably both], are wholely NOT in the DIY camp. In fact, when our arguments get real good, she'll label my and my entire family 'white trash' since we do stuff ourselves. I was not raised that way at all.

It is fun to spend a weekend on the coast with her, and invite my brother. She calls it her 'spiritual getaway' whatever that means [I read it as she hates her job]

If in 5-9 yrs when we 'hit' 2m that isn't "enough" with part time work/hobby jobs @ 3% SWR or so, well so be it I guess, time to [finally] make the hard choices and figure out how to live on 60-90k/yr. I assume based on conversations with my wife that she is perfectly content to work throughout her 50s/60s, so this might not be a big deal at all. But she may resent me for not working when she 'has too'.
« Last Edit: May 28, 2013, 06:43:42 PM by Joet »

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #16 on: May 28, 2013, 06:42:48 PM »
We just went through this on a smaller scale in my household. The bottom line is whatever she had to sacrifice, I sacrificed more. She gave up the maid service, I gave up the landscaping service. Now I do all the landscaping AND a good portion of the housecleaning :). If you are giving up more than she is, it will be harder for her to be angry, but also show you mean business.

Is your car a premium-only-gas-guzzler? First thing I'd do is sell it for something cheaper. This lowers a number of line items (insurance/gas/future repairs), with the added bonus of looking sacrificial.

I would [but this is a recurring theme], vehicle #1 is the car SHE HAD to have. Some kind of sports car sedan, a bit over $40k. I'm sure you can guess what it is. Then, we HAD to get another new car. An SUV. Because the dog couldnt possibly fit in anything smaller. Plus 'we' need one sporty car and one utility vehicle. [we never offroad, not even a dirt path]. So she actually forced both new vehicle purchases. There isn't one car for me to sacrifice. It would be me either sacrificing her sports sedan, or her SUV. I've pushed her on numerous occasions to ask her 'which car is yours? Which is mine?' and the answer is always the same: neither. She'll alternate driving the cars on every other working commute-day. On the weekend we'll normally drive the SUV with dog as our copilot.
Full disclosure: I have a '93 mustang 5.0 in the garage with about $5k in mods. It is not a practical daily driver and actually is not even street legal [drag car]. Total invested: $10k. Purchased in '99 [14 years ago]. I have toyed with the idea of selling it but I am not aware that it is actually depreciating [this is a somewhat cherry coupe/sedan aka notchback, somewhat rare, and a former CHP cruiser. Really nice interior, other officianados have called it 'purty'], but I'd gladly sell it if a token were required to represent sacrifice. I'm not sure the gesture really holds any water though. Total spending on it in years 2005-2013: $0

StarryC

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Re: I could use another face-punch (re: household finances)
« Reply #17 on: May 28, 2013, 07:54:12 PM »
Maybe money is not the tactic you should take.  How does your wife feel about the environment/ earth and humans around the world?  I don't see any charity on your list, so maybe you guys don't feel that way, but it is an aspect of Mr. Money Mustache that I think is often overlooked.

How much food do you throw away each week/month because it was purchased and spoiled?  With $600/groceries and 2 people + 500 in eating out, my guess is it is a lot.  Every strawberry you throw out is a waste not just of food, but of all the resources it took to produce and transport it.  Maybe she can get on board with asking "what do we have that needs to be eaten" each night instead of "what do I feel like eating" each night.  This mind set helps me avoid waste.

What kind of clothes are being purchased?  I haven't read it yet, but I've heard a lot about this Overdressed, a book about the high cost of cheap fashion.  You will spend less per year on clothes, shoes, and jewelry if you only by ethically produced.  Or, if every time you buy something you feel the guilt of oppressing people and wasting natural resources.  The same is true for decor items, new tile for the kitchen, new cars, and electronics- basically everything you buy increases your burden on the earth and the people of the world. 

Also, maybe spending some time with some less fortunate people would help you both appreciate what you have?  Soup Kitchen, Habitate for Humanity build, make the next trip to Mexico one to build a house for some people in poverty, big brother/big sister a kid, do some sorting or intake at a food bank, or use whatever your professional skills are to help others.  Comparing "up" leads to more spending, comparing down usually leads to gratitude.  If you have time for a beach vacation, you probably have time to do some volunteer work.  I sometimes find I am embarrassed by my wealth when I'm confronted with the poverty of others- How can I waste money on movie tickets and fancy purses, while this person doesn't have running water and that person is worried about feeding their child. 

daverobev

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Re: I could use another face-punch (re: household finances)
« Reply #18 on: May 28, 2013, 08:34:27 PM »
I dunno dude. I feel your pain. First I wanted to say "give her a big hug, tell her you love her, explain how you actually feel". Maybe that's just not the right thing.

I'm going down the split finances route now, actually. Or rather, something like the following:

Pay comes in to entirely separate bank accounts, from which you each have a monthly/biweekly payment set up into a joint account. You'll have to set clear rules for what is joint and what is not. I'd say cars *MUST* be separate.

You are both REALLY wealthy, and you can certainly afford to be where you are. You ARE doing a good job saving. Of course, we only have your side of things.

But it feels like you have a lot of pent up resentment and it is (IMHO; IANAMarriageCounsellor; etc!) doing a lot of damage.

Sell the mustang. But a 2004 Honda Civic or.. Pontiac Vibe or something. Use it as your carry-all. Give the two cars, loans, etc etc to your wife.

But tell her you love her, too. If you still do. If you don't.. well.

lhamo

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Re: I could use another face-punch (re: household finances)
« Reply #19 on: May 28, 2013, 09:10:15 PM »
Given the level of frustration and resentment you seem to be carrying around about this, I think you have one of four choices:

1)  Just let things be and stop worrying about things so much.  You are saving a ton.  Yes, you are also wasting a ton.  But 90k+ in savings means that even with these horrible spending habits you aren't going to be headed for bankruptcy any time soon. 

2)  Split your finances. If you can get her to agree to keep maxing out accounts, that would be best.  Contribute equally (or proportionately, based on % of salary) to a joint account for certain fixed expenses, maybe to include a base amount for groceries (which you should probably take care of -- she can do splurgy stuff out of her own accounts if she wants to).  Everything else is paid for out of your individual accounts.  Have some kind of baseline agreement that as long as retirement savings targets are met, this is a no shame no blame kind of arrangement.  She wants to take the dog to the groomers?  She pays for it.  She wants to resod the lawn?  She pays for it.  You want to buy another bike?  You pay for it.

3)  Get marital counselling.  Seriously, I think this would be a wise investment for you guys.  There are patterns here that are not healthy for either of you personally or in your relationship. 

4)  Divorce.  Hate to suggest it, but you guys seem like your values and priorities are seriously misaligned.  Doesn't sound like either of you are terribly happy in the relationship.  You've been together a long time, but maybe your futures would be brighter if you found people who were more closely aligned in terms of values and long term goals.

Good luck.  Whenever I read stuff like this it makes me SOOOOO glad my DH and I are pretty much on the same page and rowing in the same direction financially speaking.


Dee18

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Re: I could use another face-punch (re: household finances)
« Reply #20 on: May 28, 2013, 09:33:11 PM »
Wow, it does sound like a difficult situation, one where the lines of communication might really be helped with some counseling.  Or if that is not appealing perhaps you could meet with a financial planner together--even a free Fidelity one, so that a neutral person could lay out the facts and possibly lead you into a conversation about when you each do want to retire.  Maybe you want to retire in five years and she doesn't---that could also be okay.  on another note, I recall you posting a great yurt photo.  was that one you stayed at?

icefr

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Re: I could use another face-punch (re: household finances)
« Reply #21 on: May 28, 2013, 09:39:04 PM »
Edited before posting: I ran through your expenses and gave some strong suggestions, but reading through everyone else's comments, I do really agree with them. Good luck talking to your wife. I know this is hard. Try to word things not as money though. My ex-boyfriend and I had different ideas on spending money. I thought going out to eat was grabbing fast food as a treat occasionally, never getting a drink. He thought going out to eat was a fancy restaurant and dropping $100/meal. Non-money wise, I saw fast food as a thing to enable me to get to the gym easier and eating out as a luxury thing. I don't really like soda or alcohol. He would order it just because. He thought I should hire a cleaner. I thought I should satisfice with cleaning. We fought a lot because our life values just didn't line up. It wasn't about the money spent, but about why it was being spent. Some people think that if you're saving a ton, you're doing fine, no matter how much you're spending. Are you in that camp? Or is this level of spending nauseating you? Have you broken down how much of your $4k in monthly fat is created by you and how much is created by your wife? Is it even? Perhaps splitting finances will help bring those things out and help each of you lower your spending, if that's what you want. Good luck.


It's really hard to imagine a median spend of $10.5k/month for me and my spending is high by Mustachian standards (~$3.2k/month). My gross income is quite high, but not quite $10.5k/month high. Though I guess there are two of you.

I'm going through this and looking at how easily I would slap out a ton of fat from your budget. But, most of the spending here isn't money, but lifestyle. You and your wife need to decide what you want your lifestyle to look like. Honestly, I would suggest baby steps. Try to improve one budget category each month and see how things go from there. Another suggestion: separate your income and spending. Bonuses go 100% to your stash, not for spending.

I found room for $3,782 of easy to me MONTHLY savings in your spending. And I'm not super Mustachian. (That includes paying off the car.) That means that about 40% of your budget is pure fat and that's ignoring the fact that there really isn't much you can do about your housing cost. That brings it down to "only" $5,928, but is a pretty good start.

Your mortgage + property tax + insurance at $2677 is about 84% of my total monthly budget, for one person. I understand that you guys live in San Jose and I live in Seattle, but that still seems pretty expensive to me.

Quote
$900 in cash and ATM spending
My recommendation here is to stop using cash for a few months so that you can track things better. You can't fix this if you don't know where it's going. I only let myself not really know where $100 is going at most. I take cash out of an ATM for specific things (e.g. paying softball guy) and about $60 every couple months otherwise.

Savings: $800/month

Quote
$586 on groceries and $443 on restaurants
My groceries budget is $150 and add another $100 for work lunches out and eating out by myself (still working on getting those down myself). Add in max another $100 for social eating out an that's a total of $350/month. I realize that there are two of you and I eat very little food, but your food budget is still 3x mine for 2x the people. What I don't understand here is how you're spending $586 on groceries and then $443 on resturants. Are you including toiletries in your grocery budget? Separate those out - that should make a bit of a difference. But I still don't understand where $586 is going here. You should track that a bit more closely for a bit.

Oh and I found $65 on coffee shops later down. Buy a thing to make coffee at work. It will probably cost you $65 the first month, but will keep costs down later. Or make coffee at home. Even a K-cup thing would save you money here.

My guess is you should be able to cut this down to $350/month on groceries and $100/month on restaurants if you plan things well.
Savings: $644/month

Quote
Bills and Utilities                                      $446 [directtv, home phone, cell phones, internet, PG&E, water, trash]
Could you break this down a bit more? Which ones are flat fees? Which ones are controllable?

How much time do you spend watching TV? Could you downgrade to a lower package? I was perfectly happy with Comcast's limited cable plan for $15/month. Not a bad tradeoff to keep cable.

If you have unlimited cell phones, do you really need a home phone? Or could you cut down on your cell phone packages and keep the home phone? Pick one. Being in a contract is not a good reason. The math can often work out in your favour to break the contract if you save enough money monthly.

Without knowing more specifics, you can probably cut this down to $200/month at most.
Savings: $246/month

Quote
Gifts                                                      $343 [my mothers birthday, mothers day, and a few others fit in here, note this was her purchasing not me, I normally spend very little on gifts. In a fit of rage she declared that I will do all the spending for my family's gifts now. I said great]

My gift to my family is generally time, phone calls, and $50/birthday and Christmas at most. Does your mother really expect $343 worth of presents?

Savings: $343/month

Quote
Gas and Fuel                                           $277 [I had yet another month of 100% bike commuting, but trips to the coast are spendy]

Awesome to hear on the bike commuting. What kind of cars do you drive? It might be cheaper to rent a fuel efficient car for a road trip than to drive yours.

Savings: $227/month

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Clothing                                                  $204 [but they were on sale]

Items of clothing being on sale doesn't mean anything. You need to evaluate whether you need them or not. Try to commit to not spending a penny on new clothing for the rest of 2013. Then allow yourself to spend money when you need to replace something. Stop creating new use cases, wandering into stores for fun, etc.

Savings: $204/month

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Maid                                                       $180 [2x visit/month]

Learn how to clean your house/apartment yourself. Learn how to be satisficed in how clean the place is. Possible first step: get the maid to only come once a month.

Savings: $180/month

Quote
Home Supplies                                        $110 [target]

I understand that this is higher some months than others, but this needs to be understood too. It is so easy to spend extra money than intended at Target.

Savings: $110/month

Quote
Gardener                                                $100 [4x month, front and back yards]

Really? If you don't want to garden, then dig up your garden. Gardening should be a relaxing pastime, not for keeping up with the Joneses.

Savings: $100/month

Quote
Dry Cleaning                                           $76

What clothes do you own that require dry cleaning? Aren't you a software developer?

Savings: $76/month

happy

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Re: I could use another face-punch (re: household finances)
« Reply #22 on: May 29, 2013, 04:02:40 AM »
Your last post on this topic,  I accused you of trolling I think....clearly you're not, since you've hung around and contributed some good posts. So I apologise for that.

What I couldn't get my head around was why a guy smart enough to earn your living and invest to 600k, couldn't read MMM and get it for himself to the extent that you posted that outrageous spending plan and asked for help.

You've done it again! but what becomes clear is , your posts are not actually about the budget.  They're about your relationship and how you interact over money and spending with your wife.  We can go through your budget line by line, but there's so much fat in there you don't really need us to do that.

I think Llamo's post summarises a lot I would want to say.  First of all I think you need to figure out what you really want and how much you want it. I mean how much does FI and retirement mean to you? Do you want FI, do you want to retire early, if so how early? What lifestyle would you want and how much longer would you be willing to work if that involved high expenses?  Because I mean, you could settle for Llamo's no1 suggestion, and take a chill pill.

Or do you want it so much you would split finances and/or risk divorce? Splitting finances apparently works for some folks but it does raise weird questions like your weekend away example.

If you want to continue to pursue some sort of FI plan, then you and your wife are going to need to be on the same page at least more-so than now. From your descriptions , keeping in mind I am a random stranger on the internet, it sounds like you guys will need some help working through this.  If you have hopes and dreams of retiring together, you need to somehow be able to express that to your wife without so much tension getting in the way. And see if she would want that too.

You do need to set the example and do some work eg gardening, household jobs etc to save costs, but if your description is accurate about the car washing, it could be very anxiety provoking if you constantly have to spring into action to keep things clean to avoid your wife calling in the paid cavalry. Thats one of the things that made me think you guys need a counsellor or neutral person to help sort some of this out.

There are loads of possibilities here: eg does your wife buy stuff for you and both of you to express her love? Read the "Five Love Languages"...(not my most fave book) but I think the concept that we express love differently is very valid.  I notice you are DINKS, are the multiple pets and excessive spending some sort of child substitutes? I mean no offence by this proposition and please don't answer a random stranger on the internet asking pointed questions.  I'm just putting out there possible ideas that might have a bearing on all this.

Again I'm just surmising but I think you can argue all you like about getting the budget from 10k to 9k, but this is just the superficial part of the problem and won't be very effective, until you sort out the underlying issues.






plainjane

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Re: I could use another face-punch (re: household finances)
« Reply #23 on: May 29, 2013, 06:04:17 AM »
When pressed on 90% of her spending she will say "...but hun, it's for US ". Indeed, these are shared expenses--everything has me involved at least tangentially

Given the amount of frustration with this relationship evident in your posts, is it possible that she is trying to use money to make things better between you and/or present a facade of everything being great?  Yes, it is self-defeating, but have you shown her other ways?  (Or it's possible she is tired of you being all controlling, and she's acting out this way.) - Come to think of it, I've done _both_ those things with food.

If the relationship was better, I'd suggest that you have a discussion about both agreeing before anyone buys anything which fulfils a shared need, but you guys seem to have so much power struggle going on.  If she isn't up for couple counselling, I'd suggest you going solo.  (Generally I wouldn't suggest it, but you're throwing money at so many other things, this shouldn't be an issue for you.)

zhelud

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Re: I could use another face-punch (re: household finances)
« Reply #24 on: May 29, 2013, 07:07:36 AM »
After reading all this, I think you would be better off skipping all the money-related suggestions and going straight to a marriage counselor. Go alone if she doesn't want to come with you.

limeandpepper

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Re: I could use another face-punch (re: household finances)
« Reply #25 on: May 29, 2013, 07:30:14 AM »
Money issues aside, how is your relationship? Or does the money issue loom so large now that it's consuming it? I'm just wondering if you two could do things like you used to when you were broke college students, it may jog her memory on how you could have so much fun even without money, and remind you both of the good times you had when things were simpler. It sounds like you have a lot of hard work and patience ahead of you to make things right, so this is not going to be a quick fix but it's one possible thing that may help.

cerberusss

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Re: I could use another face-punch (re: household finances)
« Reply #26 on: May 29, 2013, 07:48:22 AM »
Why not separating income (and thus spending) for a while?

In my last relationship, both salaries came in on one account. In my current relationship, we each have a private account where the salary comes in, and we transfer money for groceries, mortgage, internet, etc to a shared account.

aj_yooper

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Re: I could use another face-punch (re: household finances)
« Reply #27 on: May 29, 2013, 08:01:16 AM »
Joet, you and your wife have done very well financially regarding long term assets and great incomes so far.  Llamo summarizes various options on how you could proceed.   Yes, you and your wife spend mightily and you could make easy changes, if you worked as a couple on a mutual FI plan or really, any plan.  Right now, your income allows the Spendy and the Big Savings plans to coexist.  Your own budget is probably not that different from a lot of high income households, but, of course, really stands out here.  Option 2 has definite merit; some of our friends have always done this and they can spend $1,000 on a family dinner  or Mercedes (his) and use coupons at Ihop and Rav (her).  They have a good marriage, but just differ on spending.  Getting to option 2 would require heroic acceptance of each other and diplomacy and maybe some outside coaching help.

Your marital relationship is way complicated.  You seem to have a terrific sense of humor. 

We are only responsible for ourselves.

mgbrin

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Re: I could use another face-punch (re: household finances)
« Reply #28 on: May 29, 2013, 09:03:31 AM »
After reading all this, I think you would be better off skipping all the money-related suggestions and going straight to a marriage counselor. Go alone if she doesn't want to come with you.

I'm with this advice.  I realize we're only getting one side of the story, but it sounds like you are NOWHERE near on the same page.  You're not even in the same book.  Not sure if you're in the same libarary, let alone bookstore.  Your situation is what MMM calls an "emergency" and debating whether you have half a dog-walking service or all a dog-walking service is not even in the ballpark of treating this like an emergency. 

http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

CALL 911

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Re: I could use another face-punch (re: household finances)
« Reply #29 on: May 29, 2013, 09:10:53 AM »
It's been said many times above here, but it's the best answer. Spend some money on counseling. Probably both individual and marriage. You aren't aligned with your goals, you don't communicate, you can't compromise, and (at least here) you dump all of your financial problems on her (while glazing over the bike habit, the South Pacific surfing, and the mustang that hasn't left the garage in 8 years). You have some demons in your head, and she likely does as well. You mentioned divorce or leaving at least 3 times (I stopped counting). Please, talk to someone. You will both benefit.

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #30 on: May 29, 2013, 10:53:10 AM »
thanks all :)

yes, divorce is a possibility. We skipped our "conversation" [fight] last night as I'm sure it would not have been productive.

I guess it's a power play [I make this $$, dont tell me how to spend it] comes up a lot. "We're already saving TOO much" comes up a lot too. [EG my co-worker, the VP of blahblahblah mentioned to me the other day that he JUST started saving in his 401k, etc]

counseling it is. And I'm leaning towards splitting the finances. But that's rather silly as at the end of the days its all 'our money' [at least per CA law], and any additional 'saving' I am able to do is half hers anyways in a settlement. And assuming we dont split, money spent is money spent. *sigh lol

On a sidenote, I'd probably be able to rent a room or something and save like ~9-10k/month if single. heh. Or slightly better than we are doing together--including principal payments on our primary residence. Interesting. Some of that is slightly lower taxes tho

footenote

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Re: I could use another face-punch (re: household finances)
« Reply #31 on: May 29, 2013, 11:04:17 AM »
Highly recommended: "Should You Leave?" (http://www.us.penguingroup.com/nf/Book/BookDisplay/0,,9780140272796,00.html)

My biggest take-away: people of similar maturity tend to marry. And when one partner matures and the other partner does not grow in the same way, they are going to grow increasingly distant as their paths split.

Good luck, Insanity - truly wishing you the best possible outcome, regardless of what it is.


Sweet Betsy

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Re: I could use another face-punch (re: household finances)
« Reply #32 on: May 29, 2013, 11:40:09 AM »
I stumbled upon a movie on Netflix a few months ago called "Mammoth". It tells a story of a highly successful, wealthy couple in New York, their relationships with each other and those around them.  It's a hard watch because of an incident near the end of the movie but I thought it did a perfect job reflecting the amazing amount of waste that can occur in our culture.  For example, the wife goes grocery shopping all the time...their fridge is full of beautiful fruit and vegetables, etc...but they almost always get takeout.  Both the husband and wife seem to spend money like it's their only way to communicate...it doesn't go well.  Anyway, your description of your relationship with your wife and in turn your relationship to money as a couple reminds me very much of this movie. 

Yes, you are both highly successful...you bring in lots of money and are saving some of it.  I have to agree with many of the other posters that getting into an argument about whether or not you should be paying for a dog walker isn't really the issue.  The issue is what you are both trying to cover up by spending so much more than you need to.  I'm glad you are going to try counseling.  I think that addressing the underlying issues will naturally bring about more agreement in your finances. 

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #33 on: May 29, 2013, 12:59:48 PM »
yea the frig is always bursting full of stuff [as are the cabinets], and we always get takeout :)
mind you, she makes the dinners! I just eat it. haha. I figure I don't really have a leg to stand on on that one
 *facepunch accepted

Undecided

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Re: I could use another face-punch (re: household finances)
« Reply #34 on: May 29, 2013, 03:14:05 PM »
Joet, have you calculated how long you postpone FI by accommodating the excess of your current spending over your ideal spending?

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #35 on: May 29, 2013, 03:54:16 PM »
depends how you define FI I suppose [my definition: net worth of $2m]

The difference between spending 10.5k/mo vs 9k/mo only pulls it in like a year or 2 depending on market return/inflation assumptions.

7-8 yrs vs 8-10 or thereabouts. Perhaps the argument is who cares. Indeed :)

matchewed

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Re: I could use another face-punch (re: household finances)
« Reply #36 on: May 29, 2013, 05:20:43 PM »
For the sake good communication it may be best to stick with a more well known definition instead of your personal take. Something like a stash that can replace your annual expenses with a 4% SWR.

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #37 on: May 29, 2013, 05:27:29 PM »
yea I guess thats ~3-3.5m then at current expenses. Of course other 'experts' suggest a 50-80% figure of 'current expenses' being 'expected expenses' in 'retirement'. Health care being the elephant in the room.
50% of expenses at 4% SWR would be 1.58m, aka we'd be there ~next year sometime. If 80%, 2.5m. If we can walk the dog, clean the house, mow the lawn, and pay off the car before retirement [ignore the mortgage, or moving somewhere with lower cost of living] it gets close to 2m or less. Who knows. It's just a made up number that implies a lot of options are on the table, as long as we discuss what that # implies or what it's limitations are, good enough no? Also I'm more comfortable talking about a range of 2.5-4% being the expected ability to safely withdraw. Possibly a bit higher once some form of SS/medicare kicks in.

Undecided

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Re: I could use another face-punch (re: household finances)
« Reply #38 on: May 29, 2013, 05:52:36 PM »
yea I guess thats ~3-3.5m then at current expenses. Of course other 'experts' suggest a 50-80% figure of 'current expenses' being 'expected expenses' in 'retirement'. Health care being the elephant in the room.
50% of expenses at 4% SWR would be 1.58m, aka we'd be there ~next year sometime. If 80%, 2.5m. If we can walk the dog, clean the house, mow the lawn, and pay off the car before retirement [ignore the mortgage, or moving somewhere with lower cost of living] it gets close to 2m or less. Who knows. It's just a made up number that implies a lot of options are on the table, as long as we discuss what that # implies or what it's limitations are, good enough no? Also I'm more comfortable talking about a range of 2.5-4% being the expected ability to safely withdraw. Possibly a bit higher once some form of SS/medicare kicks in.

If I understand correctly, nearly 40% of your current net wealth is in home equity. How are you viewing that as supporting you? Also keep in mind that you'd probably lose a decent chunk of that to transaction costs if you sold your current house to move to a cheaper location. (FWIW, we're the same age and I left the SF area last year to move to a less expensive area, and although we still spend nearly as much as we did [other than housing] (basically the same amount you spend [other than housing]), we now save quite a bit more.)
« Last Edit: May 29, 2013, 08:07:27 PM by Undecided »

Jamesqf

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Re: I could use another face-punch (re: household finances)
« Reply #39 on: May 29, 2013, 06:01:01 PM »
7-8 yrs vs 8-10 or thereabouts. Perhaps the argument is who cares. Indeed :)

Perhaps I'm wrong, but I get the impression that it's less a matter of you not being able to save enough, as it is you being irritated by her seemingly pointless & wasteful spending.  That is, the money is going out, yet you don't see yourself (or you as a couple) getting a return in pleasure or utility that represents a good value for the money.

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #40 on: May 29, 2013, 06:03:29 PM »
yea I guess thats ~3-3.5m then at current expenses. Of course other 'experts' suggest a 50-80% figure of 'current expenses' being 'expected expenses' in 'retirement'. Health care being the elephant in the room.
50% of expenses at 4% SWR would be 1.58m, aka we'd be there ~next year sometime. If 80%, 2.5m. If we can walk the dog, clean the house, mow the lawn, and pay off the car before retirement [ignore the mortgage, or moving somewhere with lower cost of living] it gets close to 2m or less. Who knows. It's just a made up number that implies a lot of options are on the table, as long as we discuss what that # implies or what it's limitations are, good enough no? Also I'm more comfortable talking about a range of 2.5-4% being the expected ability to safely withdraw. Possibly a bit higher once some form of SS/medicare kicks in.

If I understand correctly, nearly 40% of your current net wealth is in home equity. How are you viewing that as supporting you? Also keep in mind that you'd probably lose a decent chunk of that to transaction costs if you sold your current house to move to a cheaper location. (FWIW, we're the same age and I left the SF area last year to move to a less expensive area, and although we still spend nearly as much as we did (basically the same amount you spend), we now save quite a bit more.)

Yea I dunno, San Jose isnt my forever-home by any stretch. Probably the replacement is renting somewhere or *gasp* buying something sub-500k-ish (ideally). I'm already heavily discounting the trulia/zillow/comp prices to include transaction drag*2 and another 100k off. I think it's conservative, but what do I know. As many have pointed out it's just a napkin-drawing at this point, I don't really know what is supposed to magically occur at NW 2.0m, just that at that point I'd no longer feel inclined/required to work.

Joet

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Re: I could use another face-punch (re: household finances)
« Reply #41 on: May 29, 2013, 06:05:35 PM »
7-8 yrs vs 8-10 or thereabouts. Perhaps the argument is who cares. Indeed :)

Perhaps I'm wrong, but I get the impression that it's less a matter of you not being able to save enough, as it is you being irritated by her seemingly pointless & wasteful spending.  That is, the money is going out, yet you don't see yourself (or you as a couple) getting a return in pleasure or utility that represents a good value for the money.

I think I'd agree with this sentiment.

swick

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Re: I could use another face-punch (re: household finances)
« Reply #42 on: May 29, 2013, 06:31:23 PM »
I don't mean to sound harsh but it seems like the money isn't the main issue but a symptom of an unhealthy relationship. I would make that your top priority, especially as you do live in CA.

There might not be an extra difference in the end of a grand or two extra spending - but if it is being spent because one or both of you are unhappy you could spend the next 5 or 10 years stashing while she is spending and THEN you decide to split, your networth drops by 1/2.

As cold as it sounds, if your marriage was strictly a financial investment, feelings and everything else aside, would you be comfortable investing your cash and future in it at this point in time?

expatartist

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Re: I could use another face-punch (re: household finances)
« Reply #43 on: May 29, 2013, 07:16:49 PM »
Joet, splitting finances has really worked for us. It has reduced the power plays that naturally come along with $ and made us each responsible for our spending. Actually it's been good for our relationship overall.

You've mentioned your wife's family living overseas, and her coming from a privileged background. Would you say these factors are part of who she is? And how changeable are they?

Lhamo's suggestions #2 and #3 are both great ideas IMO. Best of luck from yet another stranger on the internet ;)

aj_yooper

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Re: I could use another face-punch (re: household finances)
« Reply #44 on: May 29, 2013, 07:34:37 PM »
Joet,

There has been a lot of OMG "The sky is falling" regarding your family budget struggles.  I really respect your hard work towards FI and your honesty.  Many families deal with far worse struggles and find a way to lead a fulfilling life.

Fix what you can and accept the rest. 

bkru21

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Re: I could use another face-punch (re: household finances)
« Reply #45 on: May 30, 2013, 08:58:15 AM »
I am a little surprised, if not shocked, about the idea about getting a divorce is being so loosely thrown about. In the end, this may cost you more. Call me a traditionalist, but I always believed marriage is sacred and that you have made a commitment to the other person to work with them, to be with them through thick and thin, and "for richer or poorer."

As others have alluded, you are a smart guy, and probably don't need our help on cutting down your budget. Your main problem here is communication. May I suggest a book called "Crucial Conversations?" It's given me a better insight to dealing with tough situations, and how to communicate your thoughts and feelings without offending the other person. Give it a read, I think you would like it.

jrhampt

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Re: I could use another face-punch (re: household finances)
« Reply #46 on: May 30, 2013, 09:58:02 AM »
I might approach this from a different angle; instead of trying to curtail spending directly, make sure even more $$ is inaccessible by doing one or both of the following:

- increase ibond purchases to $10k each ($20k total) since you are currently only buying half of what you could be at $5k per person per year
- pay down the mortgage faster - ordinarily this might not be a great idea, but if you are going to spend it otherwise, would be better to lock it away as home equity instead


kkbmustang

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Re: I could use another face-punch (re: household finances)
« Reply #47 on: May 30, 2013, 10:47:57 AM »
I am a little surprised, if not shocked, about the idea about getting a divorce is being so loosely thrown about. In the end, this may cost you more. Call me a traditionalist, but I always believed marriage is sacred and that you have made a commitment to the other person to work with them, to be with them through thick and thin, and "for richer or poorer."


I agree with this. Work on communication and through these issues, whether through joint counseling or individual if she won't go. If I remember correctly you've spent 15 years married. Spending didn't go up overnight. Neither will a reduction in spending. Give her time to wrap her brain around where you're coming from. In the meantime focus on you. Sell your car. Cut back on your spending. Show her affection in ways that don't require money. Walk the dog. Clean the house. Do the yard. Whatever. She'll notice. And don't rub it in her face.

aj_yooper

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Re: I could use another face-punch (re: household finances)
« Reply #48 on: May 30, 2013, 10:48:43 AM »
I might approach this from a different angle; instead of trying to curtail spending directly, make sure even more $$ is inaccessible by doing one or both of the following:

- increase ibond purchases to $10k each ($20k total) since you are currently only buying half of what you could be at $5k per person per year
- pay down the mortgage faster - ordinarily this might not be a great idea, but if you are going to spend it otherwise, would be better to lock it away as home equity instead

I wouldn't do this to make $ more inaccessible, but to save real interesting money.  Banks aren't in it to  help your FI goals.  I don't like the bonds idea in taxable due to taxes, but I think the mortgage is a place to tinker.  Shorten the term, possibly by refinancing at a better rate.   Save huge amounts of interest immediately by moving up on the amortization schedule.  This might have appeal to your spouse.  It doesn't mean you are paying off the whole mortgage, just doing it quicker and more efficiently with only a small amount of pain.  Then take a look at your interest expense and you will probably find that in the early years of the refinance, you can prepay some when you get cash; you'll save about 1/2 prepaid principal in interest expense.

jrhampt

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Re: I could use another face-punch (re: household finances)
« Reply #49 on: May 30, 2013, 10:56:13 AM »
With ibonds, you can defer federal taxes on the interest and most states don't tax the interest either, so they are not a bad choice for post-tax money.