Author Topic: Case Study: Day late and a dollar short  (Read 14153 times)

skunkfunk

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Case Study: Day late and a dollar short
« on: February 04, 2014, 10:13:01 PM »
Good day, mustachians! I, in September, borrowed money for a house, and a new car, and several other things for which I have only marginal use. About a month later, I started reading this website, and wait, what? - people retire early? Can I actually DO that? Is this legal?

Unfortunately, the damage is already done and I'm afraid I'm in for several face punches, so here's the down and dirty.

Income: I and my wife both work full-time, I as an electrical engineer intern, her as a schoolteacher. We've been married one year. I am two years out of college, and she is in her first year of full-time work. No children yet, though we're working on that.
Total net monthly income: $5,500

Current expenses: Auto insurance - $178 monthly. I have a mark on my record, 3 cars, and one requires full coverage.
Auto payment - $209
Gasoline - ~$300. We get 36 mpg in the car that gets most of the miles, and still spend this much. I live 5 miles from work, and the wife lives 10 miles from work.
Auto Parts- ~$200 (Varies wildly. I DIY on most of this.)
Internet (DSL): $30
Phones: $76. I use Ting, but my wife refuses to use either it or Republic Wireless due to poor Sprint coverage in rural areas. She pays $40 monthly to be on her parents plan. I'm working on it.
Television (Satellite): $59. I am practically addicted to NBA basketball, or else we would ditch it. Not sure what to do about this.
Utilities: $200 monthly. Natural gas and electric.
Student loan: $72. (deferred another 12 months)
Life insurance: $12. This gets us a 5% discount on homeowners insurance, which makes it break about even.
Homebrewing beer: $50. We make a lot of beer.
Fast food & restaurants: $100
Groceries: $400. This varies so much it is difficult to come up with a typical amount. It has been as low as $250, and as high as $450.
Health: $100
Home improvement/maintenance: $500. This house has been an incredible money-pit. Seems like something breaks every day. Hopefully I'm just breaking it in?
Lawn and garden: $56. Did I mention that I also borrowed money to buy a $2000 lawn mower? For a mere .88 acres.
Mortgage: $1445 (includes tax and insurance)
Payment for money owed to my family: $125
Personal Care: $50. This is for whatever it is my wife does to her hair and such.
Clothing: $60
Pets: $150. We've had some wretched luck with cats. I hope to lower this to around $50 a month for dog food and cat litter.
General shopping: $150. This is for cleaning products and whatever doesn't fit into the other categories.
HOA: $25.
Personal: $400. The real kicker. We each take $200 and do what we like with it. For me, this has amounted to about $70 a month of cash in my wallet, with the rest going to either investing or shoring up other things in the budget.
All of this comes up to $4,809, which is roughly consistent with my current target budget. I attempt to save $500 in the vanguard funds and $500 in my 401K each month, though the vanguard saving has been hit-and-miss.

Assets: $6800 in checking account. $17500 in vanguard index funds and REIT. ~$20,000 in a traditional 401K. The house cost $160,000. Knowing what I know now, I doubt I'd get that much for it. Have a new 6-speed car (doh), an early 90's 5-speed pickup I use for work, and an old car I built from a junkyard. Not sure I'd call those assets, really, so adding up the other things comes to $204,300. Without the house which is owned mostly by the bank at this point, $44,300.

Liabilities: Student loans - $5270 @ 0.9%
Car loan - $12,500 @ 2.2%
Loan from family - $17,500 @ 3%
Home loan - $149,000 @ 3.75% (15 years)
Lawn mower - $2000 @ 0%

Total - $186,270 ($37,270 without house)

Specific Question(s): I guess want general advice and thoughts on my costs. I feel like I made major mistakes buying too much home, a new car, the lawn mower, etc. If I could take it all back I would, but I'm not sure where to go from my actual position! I feel like it's too early to sell the house for a loss, or sell my wifes car that she just bought. So maybe I just need a few face-punches. I'm honestly not sure what the correct questions would be. Oh, and how do I change my 401K to a Roth IRA? My employer matches 25% of what I put in up to 12% of my salary, which I do put in 12%, but how do I get that into a Roth?

This is pretty long, and it's pretty dry. If you would like any more information, you're a glutton for punishment, but I will happily provide more detail.

mxt0133

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Re: Case Study: Day late and a dollar short
« Reply #1 on: February 04, 2014, 11:20:58 PM »
First of congratulations on finding the site and joining the forums.  I think if would help if you go through more posts and find out where you think you can do better.  It's easy for someone to makes tons of suggestions that has be frugal for a much longer time on your budget.  But that might be overwhelming all at once. 

The good thing is you found this site at an early age and your mistakes can be corrected.  There are a few ways to approach early retirement, commit to saving more or commit to spending less.  Some people do better at one approach, others the opposite.  If you don't like feeling deprived of things, i.e. "addicted to NBA basketball", then set goals like saving more so you can watch all the NBA basketball you want when you are retired.

Good luck!

marty998

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Re: Case Study: Day late and a dollar short
« Reply #2 on: February 05, 2014, 12:30:47 AM »
Yes...Basketball. You pay $720 a year to watch it. You say you have $400 "personal money" but don't count the TV, the house maintenance, the garden, the phones etc as personal? Maybe if you had to pay for all that out of the $200 you would think differently about it?

I reckon it will be much more fun, cheaper and better for your health if you spent that time actually playing basketball.






ZiziPB

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Re: Case Study: Day late and a dollar short
« Reply #3 on: February 05, 2014, 03:45:09 AM »
Hi and welcome to the forums.  Good for you for finding this place at a young age!  Sounds like you had a wake up call but make sure that your wife is on the same page with you because doing this on your own is hard!

There are a few things that jump out at me in your budget:

- 3 cars, expensive car insurance and $200+ a month for car parts?  Get rid of the third car at the very least.  It sounds like it's just a very expensive hobby.  If you are serious about saving money, this is a no brainer.

- You have a $150 misc category and then $400 in personal spending?  What exactly are you doing with that $550 per month?  You need to track every single dollar you spend for a couple of months so that you can get to the bottom of this and then cut it to a bare minimum.  You already have a personal care line item, restaurant eating line item and a clothing line item.  If this money is being spent on Starbucks, lunches out, etc., cut it out completely.

- $100 fast food and restaurants - you can definitely cut this down

I'm sure you will get more constructive advice here.  Stick with it and you will see a lot of positive changes in your life and your net worth!

warfreak2

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Re: Case Study: Day late and a dollar short
« Reply #4 on: February 05, 2014, 04:24:35 AM »
$200/mo on auto parts: practically a whole car every year!

$500/mo on home repair: $6000 a year, it sounds like you are hiring out most of the work. If you're using your free time fixing cars and then paying people to fix your house, kill two birds with one stone, and use your free time to fix your house. Same for lawn and garden.

Personal care, clothing, fast food/restaurants, those are pretty frivolous expenses when you have multiple loans you could pay down. You must be making a lot of beer, I don't know if you drink 50 litres a month, or give most of it away, but you could look for barter opportunities in your local community - trade some of your homemade beer for things you are currently spending money on, it might come out actually profitable for you.

Five miles isn't too far to cycle! Depending on traffic, it might not even be slower.

Kaminoge

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Re: Case Study: Day late and a dollar short
« Reply #5 on: February 05, 2014, 04:31:21 AM »
First of all you're not a day late... it's great you're sorting this out while you're still young.

1. 3 cars for 2 people both of whom have short commutes? And spending that much on petrol? Some obvious savings here.
2. You've got lots of other stuff that could be cut or severely decreased. Auto parts, beer (unless you're trading it for stuff), tv. The clothing budget seems fairly high to me too.
3. What on earth are you doing to the house that it costs that much to maintain?




unpolloloco

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Re: Case Study: Day late and a dollar short
« Reply #6 on: February 05, 2014, 07:31:45 AM »
Have a solution to the basketball issue: http://www.nba.com/leaguepass/broadband/
$65/year for live streaming.  Way better than $720!

skunkfunk

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Re: Case Study: Day late and a dollar short
« Reply #7 on: February 05, 2014, 09:16:00 AM »
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Have a solution to the basketball issue: http://www.nba.com/leaguepass/broadband/
$65/year for live streaming.  Way better than $720!

Unfortunately, while this does show promise in the future, they black out local games. Perhaps I can try streaming the next few games and see how I like that.

Quote
1. 3 cars for 2 people both of whom have short commutes? And spending that much on petrol? Some obvious savings here.
2. You've got lots of other stuff that could be cut or severely decreased. Auto parts, beer (unless you're trading it for stuff), tv. The clothing budget seems fairly high to me too.
3. What on earth are you doing to the house that it costs that much to maintain?

1. Indeed. 2. Agreed, particularly the auto parts. If I can fix issue 1, less miles will mean less wear and tear on my old junkers. 3. On my current docket, I must replace the living room windows, replace a door, replace the motor in my AC condenser, add structural bracing under some joists in a portion of my home, and adding structural cross members to the rafters due to the roof bowing slightly. And none of that includes all the things I've already fixed. I wish I'd just rented a place.

Quote
Five miles isn't too far to cycle! Depending on traffic, it might not even be slower.
I will try it. I'm pretty intimidated by all the hills, but I'll give it a shot.

Quote
You have a $150 misc category and then $400 in personal spending?  What exactly are you doing with that $550 per month?  You need to track every single dollar you spend for a couple of months so that you can get to the bottom of this and then cut it to a bare minimum.  You already have a personal care line item, restaurant eating line item and a clothing line item.
Quote
You say you have $400 "personal money" but don't count the TV, the house maintenance, the garden, the phones etc as personal? Maybe if you had to pay for all that out of the $200 you would think differently about it?
Excellent idea. I believe I can get my wife's blessing if I start taking items like TV, clothing, and our phones out of our "personal allowance" instead of budgeting for them.

Thank you for the responses, everyone.

ThatsMyOtter

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Re: Case Study: Day late and a dollar short
« Reply #8 on: February 05, 2014, 09:38:06 AM »
It sounds like you and your wife are both pretty young. Unless there are fertility issues you're aware of, I'd suggest holding off on trying for kids until you pay off (or at least down) your non mortgage debts. Take some time to estimate how having a baby will affect your income and expenses. Then show those numbers to your wife and suggest that you try spending as though you do have a baby for a few months to see what it does to your finances. However much you think you'd spend on a baby (child care, additional health care, etc.) can go to paying down your debts faster. Hopefully your wife will be on board with long term changes in how you manage your finances as a couple if you can show her how it will make your family more financially secure in the long run.

darkcait

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Re: Case Study: Day late and a dollar short
« Reply #9 on: February 05, 2014, 11:45:39 AM »
If I were to wake up tomorrow in your position, I would do the following:

1. I would sit down with my spouse and make a budget for the coming month that included everything you will be spending. You can probably trim back some of the categories just by making them more specific as has been suggested above.

2. I would then decide together in which areas you feel you would be willing to sacrifice in order to retire early or reach financial independence at a young age. What would you be willing to give up? Because I think there are a lot of areas where I think you could reduce spending without it bothering either of you too much, I would begin with those. As you see that you are starting to make gains, you may be more willing to give up the cable and she may be more willing to change cell phone providers. It is easier to do those things when you are progressing, rather than at the beginning when it is just a plan.

3. I would reduce your cash reserve in your checking, and liquidate your Vanguard and other taxable accounts to eliminate debt. This is a personal decision, but if you were willing to do that, in one month you could eliminate the lawn-mower loan, the student loan, and the family loan, which would free up $253 that you could put towards the car payment. I personally would do the family loan before the car, because money can make things weird with family members, and you can always sell the car. With other cuts, and paying the $500 you are currently saving towards the car, you could be debt-free except for your house within a year. You would then have around $1000 per month to build your emergency savings back up, and then to invest.

**Again your debt tolerance is a personal decision between you and your wife, but it would dramatically free up your cash-flow in a year's time, and you would not have to worry about any payments ever again (other than your home). You could also sell the car and buy a cheaper one to speed up the process.

4. I would decide which home improvements are an emergency which cannot wait until you are debt free, and continue to budget for those. I would worry about things like replacing windows once the debt situation is cleaned up.

Also, one of the best things we did after getting married was live on only one income. We have just been able to save mine, and it is also a form of saving for an emergency, as one of you could still lose your job and you could afford your lifestyle. Also, it makes it easier if one of you needs to reduce your work hours or stay home when you have children.

Grateful Stache

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Re: Case Study: Day late and a dollar short
« Reply #10 on: February 05, 2014, 11:59:43 AM »
As others have stated, the first step is coming here and exposing your budget to the peanut gallery. For that, I congratulate you.

You've got a lot of good things going for you. With patience and some time to sort it all out, you'll get there.

P.S. What's up with the $2,000 lawn mower?

skunkfunk

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Re: Case Study: Day late and a dollar short
« Reply #11 on: February 05, 2014, 12:43:39 PM »
Quote
P.S. What's up with the $2,000 lawn mower?

Yeah, that. When we bought the house, we determined it would take around 4 hours to mow the lawn with a standard lawn mower. After a brief search on craigslist, we went to the store and bought a fancy zero-turn toro lawn mower and a trimmer. All told, that trip to the store cost $3k, $2k of which we financed, hence the $56 per month in lawn during February.

Merely one of many mistakes that month.

Travis

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Re: Case Study: Day late and a dollar short
« Reply #12 on: February 05, 2014, 01:18:40 PM »
"Vanguard is hit or miss." 

If you're referring to stock gains and losses, it happens and it's part of doing business.  If you're referring to putting money in the account, set it up on automatic and pretend that money isn't yours to spend anymore. 

"Groceries varies so much."

This sounds like you're not making a shopping list or watching prices.  Come up with a menu of what you want to cook, what you'll need to buy, and stick to just that core list of items.  If something doubles in price a particular week, find an alternative.  If you're just grabbing stuff off the shelf without thinking what you actually need to buy, you can easily jack up your bill.

I also agree about getting rid of at least one of the vehicles, preferably two if your commute can handle both of you driving together. You're paying insurance, registration, and upkeep on vehicles you can't possibly be getting enough use out of. If your wife is commuting 20 miles a day round trip in a 36 mpg vehicle, she should only be spending about $40 a month on gas. Where is the other $260 going?  Unless you're driving out of state every single month those other two vehicles are crushing you. That's more than your current car payment!  As far as biking, I started a week ago and with a couple hills it takes me a half hour to ride 5 miles. 

Pay back your family as soon as you can.  They're your highest interest and it's best to keep money out of family discussions.

You have $500/month tied up in very vague "personal" categories.  Itemize these numbers so you know where your money is going and you'll probably see you have no reason to spend that money.

ritchie70

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Re: Case Study: Day late and a dollar short
« Reply #13 on: February 05, 2014, 01:41:46 PM »
There's plenty of facepunching and helpful stuff here already, but one thing I noticed that nobody mentioned is that you list $2000 loan for a mower @ 0% interest.

Nobody gives a long-term loan at 0% except maybe car manufacturers. (Maybe Toro dealers too??) If that's going to go to non-zero, get it paid off before that happens. Usually what I've seen is 12 or 18 months at 0% then it skyrockets to 20% or more.

I finance stuff like that sometimes too if they'll give me 0% but I subtract one payment period, divide the balance by the payment periods until it's non-0%, and send them that much each month. I subtract one payment period because it's easy to run afoul of that date and suddenly have interest to be paid.

Right now I'm paying for tires over 12 months because it's free money.

skunkfunk

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Re: Case Study: Day late and a dollar short
« Reply #14 on: February 05, 2014, 02:36:36 PM »
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Usually with the 0% financing it's "X months no interest" but if you still have a balance at the end of "X" months you are back charged interest for the full time at their ridiculous rate. I use this occasionally too and they basically never make it obvious that you are accruing interest during that time.

Yep, it backcharges at something disgusting like 30% if I don't pay it off in time. I calculated that at $56 a month I'll pay it off just in time. I will double check the fine print and banish that debt if I'm wrong about it.

Quote
I also agree about getting rid of at least one of the vehicles, preferably two if your commute can handle both of you driving together. You're paying insurance, registration, and upkeep on vehicles you can't possibly be getting enough use out of. If your wife is commuting 20 miles a day round trip in a 36 mpg vehicle, she should only be spending about $40 a month on gas. Where is the other $260 going?  Unless you're driving out of state every single month those other two vehicles are crushing you. That's more than your current car payment!  As far as biking, I started a week ago and with a couple hills it takes me a half hour to ride 5 miles. 

Wife's family lives 75 miles away. We go there a few times a month. We put ~2500 miles a month on that car, somehow. I think we're what you would call "car clowns" at this point.

Thanks for all the advice, everyone. Keep it coming, I've got quite a list of changes to make from all of this.

Thegoblinchief

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Re: Case Study: Day late and a dollar short
« Reply #15 on: February 05, 2014, 02:47:50 PM »
Current expenses: Auto insurance - $178 monthly. I have a mark on my record, 3 cars, and one requires full coverage.-->Drop one of the cars. If you must keep it around as a "spare", drop the insurance, activating it only when you need it.

Gasoline - ~$300. We get 36 mpg in the car that gets most of the miles, and still spend this much. I live 5 miles from work, and the wife lives 10 miles from work. -->Where the hell are you driving?? 5 miles is definitely bikable for you. If the wife is game, 10 miles is as well, but I wouldn't push on it.

Television (Satellite): $59. I am practically addicted to NBA basketball, or else we would ditch it. Not sure what to do about this. -->Consider unaddicting yourself ;) Sports is a major timesink, IMO.

Fast food & restaurants: $100 --> Cut this out entirely, or drop to $50 to do a 1/month "date night".

Groceries: $400. This varies so much it is difficult to come up with a typical amount. It has been as low as $250, and as high as $450. -->$300 is incredibly generous for two people. If you're really motivated, get it to $200 and STICK to it.

Health: $100 --> Medical out of pocket? Unclear what this is.

Home improvement/maintenance: $500. This house has been an incredible money-pit. Seems like something breaks every day. Hopefully I'm just breaking it in? -->$6,000 a year? That's...a lot. Based on some of the details you offer later, fix any structural issues ASAP, but why'd you buy the house with those in the first place? Do the other things have to be replaced now?

Lawn and garden: $56. Did I mention that I also borrowed money to buy a $2000 lawn mower? For a mere .88 acres. -->Sell this, pay off the loan, and get some damn exercise.

Payment for money owed to my family: $125 --> Pay them before you do anything.

Personal Care: $50. This is for whatever it is my wife does to her hair and such. -->Too high. My wife gets a $30 haircut once a year and she looks gorgeous.

General shopping: $150. This is for cleaning products and whatever doesn't fit into the other categories. --> Way too high.
HOA: $25.
Personal: $400. --> There's some good tips already in the thread, but that is a ton of money to just "blow" each month. You really need to have a sit down and adjust this.

With the exception of the lawn mower and third car, none of your debt is super egregious. I would focus on reducing spending to increase savings rate and put all of that into 401(k)/403(b) for your wife if she's public teacher, then Roth.

soccerluvof4

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Re: Case Study: Day late and a dollar short
« Reply #16 on: February 06, 2014, 05:09:20 AM »
My suggestion is really simple. Stop buying for awhile. ANYTHING. Start cutting things out by monitoring your expenses the excess fat. Like others said on here your young enough to change your patterns and you have a lot of good going for you but you got stop buying what seems spontaneously. But there is plenty of fat to be trimmed without really feeling any pain. NBA addict? really?? Cant stand to watch it anymore , to many over paid baby's. The 80's and early 90's were the hay-days! lol... Good Luck and keep us updated.

greenmimama

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Re: Case Study: Day late and a dollar short
« Reply #17 on: February 06, 2014, 06:25:49 AM »
To give you a rough idea, we spend the same In our monthly budget, but we are a family of 5 and our house payment is $1800/mo and we are nowhere near where we want to be, we still have a lot a fat to trim

unpolloloco

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Re: Case Study: Day late and a dollar short
« Reply #18 on: February 06, 2014, 07:14:53 AM »
Quote
Have a solution to the basketball issue: http://www.nba.com/leaguepass/broadband/
$65/year for live streaming.  Way better than $720!

Unfortunately, while this does show promise in the future, they black out local games. Perhaps I can try streaming the next few games and see how I like that.

What about setting it up at a different location?  Friend/family across the country?

rogera

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Re: Case Study: Day late and a dollar short
« Reply #19 on: February 06, 2014, 10:12:56 AM »
I've been in this situation where it is overwhelming and I just have a few things to add for easy ways to start:

1) Yes, get rid of car #3...fast, easy, and you can throw the cash at the family debt

2) Look into child care costs now (if you will need child care eventually). I was surprised to learn how much our budget went toward this and doctor bills insurance won't cover. We pay about $600 a month (depending on days in the month) for care and easily another $75 on baby medical bills on average a month. This is easily our second largest expense after the mortgage.

You've got some savings, but it is worth it to make another savings account now to put future child expenses in once you've cut your budget and paid off the family debt and mower. Sometimes child care places require a one month's deposit, just like an apartment. You can also take out a portion of these expenses pre tax from your paycheck at many places and then be refunded for paying them.

3) It really, really helped me to avoid bad habits that cost money that I don't think about (for example, the $4 coffee place right next to my daycare that has a drive thru). I purposefully go a different route or get a $1 coffee at McDonald's if I want to "splurge" and these types of decisions have REALLY made a difference for me.

MsSindy

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Re: Case Study: Day late and a dollar short
« Reply #20 on: February 06, 2014, 10:50:06 AM »
Here's what you have going for you:
 - have good career paths
 - young
 - found MMM
 - have a DIY spirit
 - have some $$

Here's what's working against you:
 - have almost $40k in non-mortgage debt!!
 - buy impulsively (lawn care items)
 - don't know EXACTLY where your money goes
 - have a house that is a bit of a fixer-upper

The good news is that these things are all workable!  You've received good, solid advice, so I'm not going to repeat things.  However, you really need to re-think having children right now, you can't afford it!  You guys need some time to get control of your finances so you start a family on the right track.  You need time to build some frugality muscles - prove to yourselves that you can exercise control in purchases, then work on having children.  Children will present you with oodles of opportunities to be non-MMM, and you need to have some practice in making good, financially-prudent decisions.  Forget FI, for now, but rather talk to your wife about the need to build a strong, financially safe future for your family - which means GET OUT OF DEBT.  Honestly, try to negotiate even a 6 month waiting period to allow you to make some progress; it'll be a tough sell, but it will set you for success.

Also, you mention that you are an electrical engineer INTERN??   Is this not a full-time, regular position?  Tell us more about that.

prima

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Re: Case Study: Day late and a dollar short
« Reply #21 on: February 06, 2014, 11:28:50 AM »
Itís great that you recognize that you need help but you came to the wrong place. This site is more about frugal living, pinching every penny to saving for the retirement. Not everyone finds enjoyment in that. You seem to enjoy watching basketball, isn't that worth every penny to you? Your debt also doesn't look that bad, if you donít acquire more. A few more years down the road and you will be making at least 20 % more than now. My advice Ė enjoy life now (not when you are old and sick), keep your new car, it could be the last new car you ever bought and take your wife out more often before you have children, you might not have this much freedom ever again. And if you want to learn how to budget better and save for fun goals Ė check out this website:  http://www.youneedabudget.com/method . Good luck!

Wanderer

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Re: Case Study: Day late and a dollar short
« Reply #22 on: February 06, 2014, 11:37:11 AM »
No time for more, but dog food and cat litter?  :?  What is the cat eating?  Cats need cat food, they are obligate carnivores and require dietary taurine, while dogs are omnivores and can manage on less taurine.  Hope this isn't a reason for your bad luck with cats...

skunkfunk

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Re: Case Study: Day late and a dollar short
« Reply #23 on: February 06, 2014, 11:55:44 AM »
Also, you mention that you are an electrical engineer INTERN??   Is this not a full-time, regular position?  Tell us more about that.

It's a full time, regular position. In my state, I'm not allowed to be called just an "engineer" until I've been out of college for 5 years working under a professional engineer who oversees any engineering work I do. After that, I take a test and get a stamp.

In practice, it just means I can't stamp a drawing for construction - my boss stamps my drawings. I'm a "designer" for a few more years before I can take that test and be an "engineer." Typical for all states.

Itís great that you recognize that you need help but you came to the wrong place. This site is more about frugal living, pinching every penny to saving for the retirement. Not everyone finds enjoyment in that. You seem to enjoy watching basketball, isn't that worth every penny to you? Your debt also doesn't look that bad, if you donít acquire more. A few more years down the road and you will be making at least 20 % more than now. My advice Ė enjoy life now (not when you are old and sick), keep your new car, it could be the last new car you ever bought and take your wife out more often before you have children, you might not have this much freedom ever again. And if you want to learn how to budget better and save for fun goals Ė check out this website:  http://www.youneedabudget.com/method . Good luck!

I don't want to be working full-time. If I can get my PE (by passing that test), I may be able to retire early and only take the jobs that I find interesting while I work from home (though any job will necessarily involve driving to meetings and construction sites.) That's the goal. The question is whether that happens in my 30's, 40's, or 50's. If it means bumming off my parents TV for basketball games, that might be what it takes. So I think I'm in the right place.

Speaking of which, I'm considering leaving my pickup at work and bicycling here! Unfortunately, there are a bunch of hilly roads and scary drivers around here. Has anyone tried one of those electrically-assisted bicycles? They cost a lot of money - too much money?

Hope this isn't a reason for your bad luck with cats...

Nope. My cats somehow contracted feline leukemia virus. So far, I've had one cat fall off a tree and die, and another ran off for a month and almost starved to death before returning with some wounds from a fight. So I replaced them with two new cats. Those two cats (indoor this time) somehow got feline leukemia virus. I put one of them down last weekend, a 5 month old kitten. That alone was almost $100, but I didn't have the heart to do it myself. The lone remaining cat is hanging in there for the moment. I hope I have better luck with children.

And on the home repairs - yet another thing broke today. The pipes froze up this morning, and I'm pretty sure it was the pipes out in the well-house. I installed an electrical outlet out there and plugged in some heat. With any luck, I didn't ruin any plumbing.

Wanderer

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Re: Case Study: Day late and a dollar short
« Reply #24 on: February 06, 2014, 12:50:13 PM »
I don't think anyone here begrudges you $100 for euthanasia of a suffering pet.  Frugality doesn't require being inhumane. Euthanasia's not a DIY thing, you don't want to f*** it up. I think people here would say if you choose to have pets, provide proper vet care.  That doesn't necessarily mean shelling out for chemo and radiation treatment if a pet gets cancer (though some would), but you also don't treat them as disposably as livestock (which should be treated better than we do anyway, but that's another topic).

Sorry for your bad luck!  Being indoor only is safer for cats, though I worry about mine getting bored sometimes.  Unfortunately maybe one of your kittens got FeLV from its mother before you got them.  I hope your other cat pulls through.  Some cats do recover.  However, if it becomes a carrier (which your vet may be able to test for) any other cat you get could be at risk for infection.

Cinder

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Re: Case Study: Day late and a dollar short
« Reply #25 on: February 06, 2014, 01:02:54 PM »

Speaking of which, I'm considering leaving my pickup at work and bicycling here! Unfortunately, there are a bunch of hilly roads and scary drivers around here. Has anyone tried one of those electrically-assisted bicycles? They cost a lot of money - too much money?


I've seen a few people comment on the threads about them.  One person loves theirs, another got one, had nothing but issues with it, and the extra added weight of the battery/motor meant not much net gain over just using a regular bike.  Your ride isn't that far, it would be best to just build up the strength.  The first two weeks will really suck, and eventually you'll get used to it and it will be like nothing!

mamagoose

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Re: Case Study: Day late and a dollar short
« Reply #26 on: February 06, 2014, 01:03:55 PM »
Sell that lawnmower on Craigslist and use the cash to get some nice drought-tolerant xeriscaping on your 0.88 acres, then never worry about landscaping again. Yardwork is one of the first things that gets "outsourced" by new parents (if yall are going down that road one day), or in my case gets neglected and we get the side-eye from the neighbors.

skunkfunk

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Re: Case Study: Day late and a dollar short
« Reply #27 on: February 06, 2014, 01:23:42 PM »
Sorry for your bad luck!  Being indoor only is safer for cats, though I worry about mine getting bored sometimes.  Unfortunately maybe one of your kittens got FeLV from its mother before you got them.  I hope your other cat pulls through.  Some cats do recover.  However, if it becomes a carrier (which your vet may be able to test for) any other cat you get could be at risk for infection.

My wife grew up on a farm, so she did learn from her dad how to put down an animal that needs it. We just couldn't do it that way, though. The remaining cat definitely has FeLV. We were at one point about 90% sure we needed to put it down, but it miraculously pulled through at the last minute. We'll see if it fought it off and is now merely a carrier, but my gut feeling is it's only a matter of time before it hits again. In any case, we will not be getting any other cats until this one is gone.

I've seen a few people comment on the threads about them.  One person loves theirs, another got one, had nothing but issues with it, and the extra added weight of the battery/motor meant not much net gain over just using a regular bike.  Your ride isn't that far, it would be best to just build up the strength.  The first two weeks will really suck, and eventually you'll get used to it and it will be like nothing!

I'll try it. Not just yet - snow hasn't melted and I'm not about to try it for the first time in this weather - but soon.

Sell that lawnmower on Craigslist and use the cash to get some nice drought-tolerant xeriscaping on your 0.88 acres, then never worry about landscaping again. Yardwork is one of the first things that gets "outsourced" by new parents (if yall are going down that road one day), or in my case gets neglected and we get the side-eye from the neighbors.

Ok, google search shows that some of that stuff looks amazing. It would take quite a bit of dirt work to get rid of all of our grass, though. Our yard isn't at all flat, so I don't think any rocks would stay put.

Mori

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Re: Case Study: Day late and a dollar short
« Reply #28 on: February 07, 2014, 02:52:35 PM »
As far as biking and hills, I'd say do a few test runs on a day you don't have to be there at any particular time. For me, my practice runs are on the weekends. The hills on my route are challenging starting out, but once I hit a certain amount of time on my bike I'm good to go. I definitely learned why I have so many gears on my bike.

Best part about a test run? If you get too tired you can just turn around. :) Give yourself a marker point and get to there and back, and then expand on every trip. Start slowly and build up your endurance.

The snow, however, I have no words for. It's messing up my biking right now, too.

thepokercab

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Re: Case Study: Day late and a dollar short
« Reply #29 on: February 07, 2014, 03:05:40 PM »
"Vanguard is hit or miss." 
If you're referring to stock gains and losses, it happens and it's part of doing business.  If you're referring to putting money in the account, set it up on automatic and pretend that money isn't yours to spend anymore. 

Definitely agree with this-  set up those automatic payments into Vanguard.  I've been doing it for about a year and now in my mind its another expense, like Rent or utilities.  When i look at my checking account at the end of the month, I feel super poor, but cheer up when I remember that a third of my "expenses" went to Vanguard. 

MrsPete

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Re: Case Study: Day late and a dollar short
« Reply #30 on: February 07, 2014, 03:22:19 PM »
You're not a day late or a dollar short -- yet. 
But if you keep living this way, you will be there soon. 

Much of what I'll say may've already been suggested:

- You have borrowed for the house.  Do some math and determine whether it'd be smart for you to stay in it a while or sell it.  Could you take in a roommate to help decrease the monthly costs?  You're smart enough to understand the concept of compounded interest, so pay something extra on the house each and every month.

- You have more cars than drivers, and you're spending almost 20% of your income on transportation.  You don't live that far from work -- how are you using so much gas?  Unfortunately, this is pretty typical, but you're not aiming to be typical.  At the very least, get rid of one car (the most expensive one).  You're talking about kids; keep the car that'd be the best family vehicle.

- Your wife should pay close attention to her job.  I'm a teacher too, and it's a job that's going to change significantly in the next decade.  When I signed on, the deal was low pay - secure work - secure benefits, including a pension.  At this point, I suspect only one of those things is going to remain true, and that's low pay.  I would advise her to have a "back up plan" and not to count on

- As for your job, you say you'd like to work part time, from home, only taking the jobs that interest you. Dude, that's not going to happen. At least not for a long time.  Yes, engineers CAN get that kind of sweet gig, but those jobs go to the guys (or girls) who've been on the job for a long time, who've proven their worth, who have experience behind them.  LOTS of people are PEs, and they still aren't working as you describe.  You may be one of those guys in the future, but right now you have to focus on building yourself as a traditional worker -- you're still an intern.  That's the way the game is played.  If it were easy, don't you think a whole lot of guys at your office would have jumped on that band wagon?

- Is basketball the only reason you're paying for cable?  If so, could you watch a buddy's house?  A six-pack of beer for every game is cheaper than cable all the time.

- Fast food and restaurants are low hanging fruit.  They should be cut from the budget first.

- My grocery bill also varies wildly.  One month I might buy half a cow, which then saves me money for the next 9 months.  In the fall, when canned goods are cheap, I stock up, but then I don't buy many for the rest of the winter.  Secure a copy of the book The TightWad Gazette (first of three editions, or the complete edition) and read the author's suggestion for creating a price book for groceries.  It'll take you some time, but it'll help you find rock-bottom grocery prices.  At the same time, seek out a variety of non-grocery store places to shop for food; the grocery store is convenient, but it is also the most expensive place to buy food.  For example, I shop at several ethnic food stores (but only 3-4 times a year each, and I stock up when I go), an expensive health food store that sells spices super-cheap, the internet, and the farmers' market.

- You've sunk an incredible amount of money on a mower.  I suspect you could've paid a lawn service to do the work for you for this price.  Try to sell it to a lawn service. Seriously. A guy  just bought our several-years-old crappy mower that's been sitting in the rain and doesn't work mower.  Why?  Because he can fix it (whereas we cannot), and it'll allow him to put his teenager to work by his side so together they can do more yards.  Failing that, consider opening a small lawn service yourself.  Do not keep this thing just for your own once-a-week mow.  You cannot afford that. 

- You have an awful lot of categories that add up to "discretionary spending" -- restaurants, personal, health, general shopping.  Slash these significantly.  You cannot afford them.

- Find a way to bring in more cash.  You love basketball.  Can you ref high school games?  Work concessions at a local venue?  Brainstorm what else you can do. 

- Delay the kids.  Your finances aren't ready, and although people love to say, "If you wait 'til you can afford them, you'll never have them", that's emotional drivel.  You need to be in a solid, secure place financially before you have a child.  I suggest getting out of debt to the student loan people and family (and staying out), and put aside a good nest egg.  You have money coming in, and there's no reason you can't manage this.  Then, in anticipation of your wife being on maternity leave for a while, live on JUST your salary for a while and bank hers. 
« Last Edit: February 07, 2014, 03:28:08 PM by MrsPete »

bk1

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Re: Case Study: Day late and a dollar short
« Reply #31 on: February 08, 2014, 07:00:22 PM »
In my opinion, delay having kids until having your wife stay home to raise the kids fits in with your financial plan. There is no point in having kids just to send them off to someone else to raise and see them more than you or your wife does each day.

Faith2014

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Re: Case Study: Day late and a dollar short
« Reply #32 on: February 08, 2014, 07:36:58 PM »
Just a couple of thoughts:

Is your wife 100% committed too?  And to the long term?  I would suggest focusing on "Fast food & restaurants:" - perhaps not cutting it out entirely the 1st month, but instead cutting it 50% and looking at the expenses in a month or two?  It really isn't that difficult to cut out, but taking it in 2 steps might ease you into it.

"General shopping: $150. This is for cleaning products and whatever doesn't fit into the other categories. "

My suggestion is to hit the blogs/books and find old fashioned basic supplies to clean your house.  I guess we call them green nowadays, but they're cheap and healthy, so whatever works.  Using vinegar, baking soda and 2-3 other ingredients, you can clean nearly anything in your house.

I would also suggest looking at the Stay At Home Christian mommy blogs.  Those ladies can squeeze a nickel til it hurts.  You will find great ways to be economical in the kitchen, and how to shop better, etc.  This should help both the general shopping and grocery categories.  (I'm sure that there are other SAHM blogs that aren't Christian, but they tend to not whine or complain on their blogs and are super positive.)

Fireman

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Re: Case Study: Day late and a dollar short
« Reply #33 on: February 08, 2014, 08:51:58 PM »
Itís great that you recognize that you need help but you came to the wrong place.
No, this is the correct place.  You realize you're in a financial predicament and you have reached out to this community for help.  The articles and forums are a fantastic learning environment!

This site is more about frugal living, pinching every penny to saving for the retirement.
This site is about figuring out how to differentiate between what you want and need, learning strategies to reduce expenditures and increase income, and making your money work for you so that you can be financially independent and retire early.

Not everyone finds enjoyment in that.
I think most here do and with a little time, i'll bet you will start to embrace this lifestyle as well!

You seem to enjoy watching basketball, isn't that worth every penny to you?
This community isn't about browbeating you for spending money on anything other than a roof over your head and beans for dinner.  As above, it's about learning to decide what's important and slashing the rest.

Your debt also doesn't look that bad, if you donít acquire more.
No, your hair is on fire and I think you agree.

A few more years down the road and you will be making at least 20 % more than now.
And right now, you can make choices that will allow that 20% to go towards savings, investments, and your future children's college fund.  By seeking help now and righting the ship, you and your family will be much better off financially.

My advice Ė enjoy life now (not when you are old and sick)
Spending money ≠ happiness and age ≠ infirmity.  Enjoy life now and when you are older.  By not having to work as many years, your health should last longer, too.

keep your new car, it could be the last new car you ever bought
Get rid of the new car (or at least one of the cars) and don't buy another new car.

and take your wife out more often before you have children, you might not have this much freedom ever again
Stay home, cook for each other, and rent a movie.  Sharing time with each other doesn't require going out to eat and having children doesn't mean you can't spend time together.

And if you want to learn how to budget better and save for fun goals Ė check out this website:  http://www.youneedabudget.com/method.
A budget is a great idea and helps you see exactly where your money goes.  YNAB is a good jumping point but don't limit yourself to it.  There are plenty of sites, programs, and systems to track how much you spend.  The biggest thing is setting a budget and sticking to it!

Good luck!
Agreed!

Welcome to the site and this community!  The only other thing i'll add is don't let the first time you jump back on the bike be a day you're headed to work.  As someone who was an avid biker growing up and through college, well, it's not as easy to get back in the saddle!  That aside, I hope you find as much help and happiness here as I have!  Good luck to you and the Mrs. and on growing the family, whenever that may be!

skunkfunk

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Re: Case Study: Day late and a dollar short
« Reply #34 on: February 09, 2014, 10:01:15 AM »
Is your wife 100% committed too?  And to the long term? 

No. She's already complaining that we don't spend enough of our money for things she needs for her job - she wants more work-appropriate clothes and she wants to buy things for the classroom, and I can't get her to shop secondhand. She seems to want to accumulate money towards FI, but she doesn't understand that it will not just happen on its own when we get to talking about the details.

MsSindy

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Re: Case Study: Day late and a dollar short
« Reply #35 on: February 09, 2014, 11:49:13 AM »
Is your wife 100% committed too?  And to the long term? 

No. She's already complaining that we don't spend enough of our money for things she needs for her job - she wants more work-appropriate clothes and she wants to buy things for the classroom, and I can't get her to shop secondhand. She seems to want to accumulate money towards FI, but she doesn't understand that it will not just happen on its own when we get to talking about the details.

This is probably going to be your biggest challenge then.  Start to re-frame the discussions with her.  Stop talking about early retirement and FI - if she's not on board, then you're fighting a losing battle right now, wasting your breathe, and causing unnecessary friction.  Start talking about financial security and how you want to provide a stable foundation and emergency fund for the family...and how you want her to be able to stay home with the children (or work part-time) - things along those lines.  Find out what is going to resonate with her, so that you guys can get on the same page.  If she's still in consumer mode, having children is just going to make that 10 times worse.  Time for a good, honest conversation of how you guys get yourself in a secure position.

Self-employed-swami

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Re: Case Study: Day late and a dollar short
« Reply #36 on: February 09, 2014, 11:58:16 AM »
Sell the lawn tractor!

Albert

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Re: Case Study: Day late and a dollar short
« Reply #37 on: February 09, 2014, 11:59:10 AM »
You'll probably need to compromise with your wife on some things otherwise you risk finding out how expensive divorce ca be. Just my two cents :)

Faith2014

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Re: Case Study: Day late and a dollar short
« Reply #38 on: February 09, 2014, 01:44:20 PM »
Uh oh.  I've read about serious problems arising when one person leads the charge to change the financial situation.  It turns into a power struggle and can lead to divorce. 

I think re-framing the discussion as MsSindy suggested is a great start.  Once that settles in, then start asking her opinion on how things should change.  If you don't get buy-in, this will fail.

WRT/clothing - does she like to shop, or is it really a case of needing appropriate clothing?  She's just 1 year out of school and I think she's probably correct in her assessment.  Now, I hate to shop but do spend the money I need to in order to look the part for work. 

While you do have a lot of expenses, I think you will need to compromise - maybe on the time frame when you start getting serious about debt reduction.  Perhaps she can develop a budget and a timeline for creating her professional wardrobe.  You really run the risk of creating serious resistance if you don't give her room to do what is required for her work without your 'permission'. I'm not suggesting that you'd argue about it, I'm just thinking about how I would react if my SO said I was 'complaining' about not being able to buy work clothes.  (Of course, I can have a quick trigger - with any luck - your wife is a more gentle soul than I.) You'd be sleeping with your lawn tractor!  The financial stress, new job, new marital status, etc is very stressful for the both of you.

It might be a good idea to look for discussion on how to get buy in from a reluctant spouse.  Not sure if there are fruitful discussions here, but I would have to think that you could find something related to Dave Ramsey.

Good luck!

Cinder

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Re: Case Study: Day late and a dollar short
« Reply #39 on: February 10, 2014, 06:55:18 AM »
Is your wife 100% committed too?  And to the long term? 

No. She's already complaining that we don't spend enough of our money for things she needs for her job - she wants more work-appropriate clothes and she wants to buy things for the classroom, and I can't get her to shop secondhand. She seems to want to accumulate money towards FI, but she doesn't understand that it will not just happen on its own when we get to talking about the details.

My wife has the same problem.  She doesn't have her own classroom yet, is still just an aid.  But she always wants to buy this book that would be great for the classroom, or those things which would work great in the classroom, etc. 

I think she is trying to do premature optimization.  If she doesn't have a classroom yet, how does she know what that future classroom needs?  It isn't that bad since we get most of these things at heavy discounts / garage sales, but it still takes up increasing amounts of storage space.

I had commented earlier in a 'continuing the discussion' post about women's clothing, since she constantly felt the need for more professional clothing, there were some good responses there.  E.G.
Regarding #2, this has been discussed on the forum before, but don't underestimate the possibility that this is a very real and pressing concern. Professional women are judged very harshly based on their appearance in certain fields, and the impression you make on the higher-ups can obviously affect your chances of rising. Visibly worn-out clothing will not help a woman (or really anyone) who wants to advance professionally. Depending on the culture of her workplace, keeping her snowboots in a pile in the corner might not look so classy either.

Can either of you sew? Are you willing to learn? Being able to do your own alterations is really valuable. Other than that, I think most non-standard-sized people hire tailors. It's a frustrating situation.


ritchie70

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Re: Case Study: Day late and a dollar short
« Reply #40 on: February 10, 2014, 08:15:51 AM »
In my opinion, delay having kids until having your wife stay home to raise the kids fits in with your financial plan. There is no point in having kids just to send them off to someone else to raise and see them more than you or your wife does each day.

I'm going to disagree. Delay kids for a few years, but not too long if you truly want them. The biologically easiest time to have children is now. It's going to stay easy for a while then it's likely to get progressively harder. There are a lot of people in their thirties and forties dropping tons of money into fighting fertility problems. That isn't very mustachian at all.

I'm 45, my wife 43, and we have a two year old. We put it off for a while waiting for various life events that are irrelevant here, then were trying for well over a year and finally got lucky, but I was starting to accept that we probably weren't having children when it happened.

It's rough being 45 and having a toddler you can't hand her back to her parents because you're the parents. Man are there days I wish i was twenty-something again - and I'm a pretty young 45. I love her more than anything but I'm really not looking forward to a high school aged daughter when I'm 60.

MrsPete

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Re: Case Study: Day late and a dollar short
« Reply #41 on: February 10, 2014, 12:10:43 PM »
Is your wife 100% committed too?  And to the long term? 

No. She's already complaining that we don't spend enough of our money for things she needs for her job - she wants more work-appropriate clothes and she wants to buy things for the classroom, and I can't get her to shop secondhand. She seems to want to accumulate money towards FI, but she doesn't understand that it will not just happen on its own when we get to talking about the details.
This is the biggest problem on your plate -- bigger than the mower, bigger than the car.  She's a smart person, so sit down and look at how the numbers work out.  And since she wants work-appropriate clothes, etc., work out a budget that gives her SOME of what she wants, yet ALSO gives you a good deposit into the savings account each month.  And determine between you when you're going to -- in the future -- sit down and consider your progress (in our house, we do a thorough look at our numbers every New Years and on our anniversary, which falls in the summer -- we used to do more often, when we were younger and less set in our ways). 

When she sees numbers starting to accumulate, she may come over to your side.  When I married my husband, he understood the point of saving money, but he failed to make the connection between little daily choices and the bottom line.  However, I set an example, pointed things out to him, and today he loves second-hand, watches the sales at Harris Teeter, and loves to eat out with a coupon.  An intelligent spouse is trainable!



mamagoose

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Re: Case Study: Day late and a dollar short
« Reply #42 on: February 11, 2014, 05:10:55 AM »
In my opinion, delay having kids until having your wife stay home to raise the kids fits in with your financial plan. There is no point in having kids just to send them off to someone else to raise and see them more than you or your wife does each day.

I'm going to disagree. Delay kids for a few years, but not too long if you truly want them. The biologically easiest time to have children is now. It's going to stay easy for a while then it's likely to get progressively harder. There are a lot of people in their thirties and forties dropping tons of money into fighting fertility problems. That isn't very mustachian at all.

I'm 45, my wife 43, and we have a two year old. We put it off for a while waiting for various life events that are irrelevant here, then were trying for well over a year and finally got lucky, but I was starting to accept that we probably weren't having children when it happened.

It's rough being 45 and having a toddler you can't hand her back to her parents because you're the parents. Man are there days I wish i was twenty-something again - and I'm a pretty young 45. I love her more than anything but I'm really not looking forward to a high school aged daughter when I'm 60.

I'm in the middle here - you want to be secure enough financially to where you feel "ready" to have the kid, but not so old that it's difficult to conceive. And by secure I don't mean having checked off all the stuff in your bucket list (European vacations, etc), I just mean you understand your finances and what it'll be like with a third person living in your house. My husband & I are both mechanical engineers and we plan plan plan, since we moved in together we planned our household budget off the lower of our two incomes because of the recession and job security, and that was the BEST decision we have made. We waited until we were debt free (aka my student loans paid off) to get engaged, then got a mortgage and the rough idea was to pay it off before the baby was born, ended up paying it off like 6 weeks after she was born, but you get the idea. I am now one of those "work from home part-time engineers" and it's great being able to raise my daughter, I always felt it didn't make sense to have kids so I could pay someone else to raise them. We waited until the stars aligned to have our baby (debt free, both got our PE licenses), worked really really hard to get those stars aligned at a relatively young age (she was born between our 29th birthdays), and now that she's here we both wish those stars could have aligned sooner. Part of that hard work was biological too, it's not all financial - making a baby takes some prep work, we exercised and ate healthy, I had to cut out a lot of stress to the point where I felt comfortable harboring a human being in my body for 10 months... and we got super lucky, ended up getting pregnant the very first time we tried. I don't know if we'd have been so lucky if we'd waited 1, 2, 5 more years.

skunkfunk

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Re: Case Study: Day late and a dollar short
« Reply #43 on: February 12, 2014, 08:47:24 AM »
Well, I can tell you all where my money went this month. I have spent total $1108 on: door and frame for the garage that was damaged by settling, added structural support under the joists, and replacing a window that got obliterated by a ricochet. I probably still have ~$250 worth of parts and tools that I'll need to get up in the attic and repair the rafters, too. It's warming up, so I'll need to replace the motor in my condenser, as it was whining quite loudly last time it ran; I doubt it has much life left.

I should have stayed in my old apartment.
« Last Edit: February 12, 2014, 09:31:34 AM by skunkfunk »

Fireman

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Re: Case Study: Day late and a dollar short
« Reply #44 on: February 12, 2014, 09:21:00 AM »
I should have stayed in my old apartment.

This.  Sure, there are times when I miss having a garage like space to do tinkery type things, but at the end of the day, it's nice knowing that I have no yardwork, snow removal, appliance repair, or maintenance to concern myself with. 

Plus, I have several friends with houses and since I don't have to work on my own house, I don't mind lending them a hand!