Current TimelineCurrent Monthly Income: $6000Current Surplus: $1746Total Debts: $326,000Total Amount Needed To Retire (25x Current Yearly Spending): $1,276,200With your current surplus of apx
$20,952 per year, invested each year, it will take you
25-26 years to reach your goal of
1.27 million and be debt free... Making you 57 years old at the time of retirement.
http://www.bankrate.com/calculators/retirement/roi-calculator.aspxRoom For Improvement: Mortgage: $1706.04Sounds like you live in a HCOL area, but even then, a 1.7k mortgage means lots of bedrooms. If you have an extra bedroom, or a room you are currently using as an office/play room/yoga studio/whatever,
consider getting a roommate instead. In HCOL area Denver, where I am, an empty bedroom can get you
$500/mo, and you can still charge for utilities or internet. See:
http://affordanything.com/2014/09/02/how-i-earned-an-extra-40800-in-two-years/Potential Savings: $500/mo x Number Of Empty Bedrooms.
Cell phone: $90.00Make the investment to switch DW and MIL to Republic Wireless, or another similar carrier. With RW...
$10/mo plan x two people, apx
$25/mo (with tax) - Savings:
$65/mo, or $780/yr$25/mo plan x two people, apx
$60/mo (with tax) - Savings:
$30/mo, or $360/yrInternet: $40.00 How many people are using your internet at once? Here, we get 7mbps from Century Link, and regularly have two people watching movies on netflix in different parts of the house + 2 people on cell phones using wifi + 1 laptop computer browsing the web + 1 desktop computer playing MMO games. 7mbps can support all of this activity. If there are cheaper options, even if it means less bandwidth, you should take them...
Potential Savings: $10/mo? More?
Electricity: $105.00Natural Gas: $205.00Since you mentioned that these switch with the seasons, that gives me the impression that your biggest pulls are heating in the winter (gas) and cooling in the summer (AC).
Total Energy: $310.00I think you easily could cut this back 33% by changing the thermostat, making a solid effort to better insulate windows and doors, replace bad windows and weatherstripping around doors, and changing any light bulbs to LEDs and line drying your clothing... See:
http://www.mrmoneymustache.com/2011/05/10/ill-show-you-my-electricity-bill-if-you-show-me-yours/Potential Savings: $100/mo... or more!
Groceries: $650.00 See this recent thread:
http://forum.mrmoneymustache.com/ask-a-mustachian/do-you-know-your-grocery-total-before-you-get-to-the-till/msg514787/#msg514787I would safely say this should be no more than $150/mo per adult being fed, if you're not eating out at all, even including toiletries. Right now it's around
216.66 per adult person...Try to buy staples whenever possible... And watch out for buying special things for the tot, like prepackaged foods etc. For example, if you like prepackaged applesauce, then buy some small 1 cup containers, buy applesauce in bulk, and make your own/reuse the containers. If nonperishable items are on sale, buy them in bulk and store the surplus!
Potential savings: $200/moEating out: $195.00Dinner With Family: $120.00Meal With Coworkers: $75.00I'm of the opinion here that the dinner out with family is what should be eliminated. You can get the same benefits of dinner with the family at home, by cooking a hearty meal for a fraction of the cost, and experience creating something together on top of that. The Meal With Coworkers that your wife enjoys, however, has benefits (like positioning, socialization and career advancement) that aren't so achievable by other means (like cooking at home).
Potential Savings: $120/mo, or $1440/yrGas: 210.00Your Wife's Commute: Infinitely ExpensiveAccording to the IRS, it's about
$0.51/mi to drive around, including maintenance, gas, fees, etc. I have an older car with moderate gas mileage and high insurance cost, and it actually costs me about $0.57/mi.. While MMM's Ultimate Cheap Driving Estimate is something like $0.17/mi...
So,
$0.51/mi over
60 miles a day comes out to
$30.60/day. If there are
251 working days in a year, your wife's commute is upwards of
$7680.60 per year. Isn't that more than a month of your combined income? By this math, her taking a non-profit position much closer to home (eliminate commute) for a pay reduction of 10k/yr, is actually just a difference of 3k/yr.
If invested, this alone becomes:
$120,705 after 10 years
$475,936 after 25 years
http://www.bankrate.com/calculators/retirement/roi-calculator.aspxYour 6mi/day commute, on the other hand, costs about
$3.06/day, or
$768.06/yr, using the same math. I'm assuming the driving you're doing for the company is reimbursed? I hope so...
The Cost Of Time: How much is your wife paid, per hour? And exactly how long is her commute, in time?
If your wife is paid
$25/hr, and makes a
2 hour commute every day, she's losing
$50/day of her own time. If she does this for
251 working days in 2015, she's losing
$12,550 per year. Of course, this isn't out of pocket cost, and instead of just perceived monetary cost of the loss of time...
http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/Clothing: $100.00 Can anyone sew? Try:
Making everything from scratch... OR...
Buying clothes that are too large, take them in, and then take them out as she grows.
Secret Of Life: Babies don't care what they're wearing, and in my experience, prefer to be naked anyways.
When the kiddo needs a new shirt, what does the conversation sound like?
"The kid needs new shirts. This very cheap $5 plain shirt will do!" or "Look at this one! It's
pink, with little buttons and sequins and a
unicorn! It's
$35, but it's just going to go perfectly with these
pink $20 shorts with flowers on the pockets!"
In other words, be careful not to be emotionally attached to your baby's wardrobe... Big useless money sink there.
http://forum.mrmoneymustache.com/ask-a-mustachian/what-is-your-monthly-clothing-cost-what-does-it-buy/msg505932/#msg505932Going to chime in on the baby. CRAIGSLIST MAN! Mom's are giving away garbage bags FULL of clothes. We got one full for $25. A few shirts got donated due to stains, but everything else was worn once or twice. Fantastic deals. That's $1200 a year that your'e dropping on your baby. I don't spend that much on myself!
+1 Yes, eyePod.. Yes.
Potential Savings: $90+/moHair cuts: $20.00 RE: Commuting Cost and Value of Time from above...
The haircut is not high per se, but you would also have to factor in the amount of money it is costing her to drive to her friend's place. Is it about more than just the haircut and is a friendship issue? I.e. she values the time she has with her? Otherwise, find a place closer.
Entertainment: $100.00Ah... Your daugher is 2. Legoland is pretty cool, and I totally want to go there (because I love Legos!), but
your daughter is 2. She doesn't know the difference between Legoland and a bathtub full of Duplos, to be quite frank. She also doesn't know the difference between the Aquarium and the fish store, or the Zoo and the pet store - and the pet store even lets you hold or pet the animals, wow!
It costs about
$15 to go to the movies where I live, not including snacks or 3D/IMAX movies. Let's assume you see a movie once a month...
Potential Savings: $85/mo Total Potential Savings: $1050/mo, assuming you rent out a bedroom, and not including any changes that you might make to commuting/gas costs, or (driving to get a) haircut costs...
New FIRE TimelineCurrent Monthly Income: $6000New Monthly Surplus: $2796New Monthly Expenses: $3204Total Debts: $326,000Total Amount Needed To Retire Debt Free (25x New Yearly Spending): $961,200/color]With this new surplus of apx
$33,552 per year, invested each year, it will take you
~17 years to reach your goal of
.96 million and be debt free...
http://www.bankrate.com/calculators/retirement/roi-calculator.aspxSince you're currently 31, this means you would be working until you're 48-50... What is your age of retirement goal, anyways?
Further solutions include:Downsizing the place that you live to cost less (bigger surplus)
Downsizing your driving costs by working and socializing locally (bigger surplus)
Getting better jobs and earning more income
Investing wisely!
Whew. That was really long (apologies to everyone's scroll wheel for the length!), but hopefully it provides some perspective and support. Remember that the quick and dirty math dictates that saving 75% of your income typically means retiring in 7-10 years.
Good luck!
EDIT: Realized that I didn't account for investing when calculating # of years to retirement goal. Oops sorry! Fixed now with a loose estimate. :)