Author Topic: Case study: PLEASE help me figure out how to retire in 15 years  (Read 16197 times)

EconDiva

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Case study: PLEASE help me figure out how to retire in 15 years
« on: February 25, 2015, 10:35:04 AM »
Income:

Gross MONTHLY salary: 5384.60 (Gross annual salary is 70K, going up to 72K next month, and I get a 7% cash profit sharing bonus at end of year)

MONTHLY expenses:

Medical: 124.20   
Dental: 11.96   
Vision: 7.48   
Life insurance: 15.20   
AD insurance: 9.80
Fed insurance: 325.04   
Fed income tax: 653.44   
FICA-medicare: 76.02   
State income tax: 240.50   
Group term life: 1.68   
Rent: 1010     
Internet (mandatory for work purposes): 50
Utility: Gas 60
Utility: Electric: 80
Cell: 50
Train (mandatory): 185.25   
Food (including restaurants): 400
Student loans (mandatory): 300   
Travel:  300
Gifts: 100
Lady stuff (hair, nails, brows): 100
Uber rides/cta transit rides: 150
Going out (play/concert/museum/movie/bar/dance class/etc.): 100
Gym: 50
Clothes: 102.03
401K loan (will be paid off June2015): 682     
TOTAL: 5384.60

Monthly Savings:
401k (5%): 269.23
ROTH IRA: 100
E fund: 100   

Assets:

30K in 401K/ROTH IRA

Liabilities:

10K in private student loan @4%
401K loan (~4K left and will be paid off June 2015)

Specific Question(s):

I'm feeling overwhelmed.  I've been on MMM's site for a while but not making the progress I want.  According to MMM's shockingly simple math, I need a savings rate of 55% in order to get to the goal of retiring in 15 years (I'd like to do it sooner but not thinking that's realistic).  I need to make some big changes apparently. 

My specific questions are:
How do I change the above categories to get to my 55% savings goal?  In other words, ***what do the amounts in each category need to change/decrease to?*** How much can I include in a separate/new savings category for a house/car purchase?  I would really really like to buy a home and a car in 5 years.  My plan is to move back to the south (maybe Atlanta) to be closer to my mother/all my friends.  I'm figuring I'd be looking at houses in the 100Kish range.
« Last Edit: February 25, 2015, 12:47:57 PM by EconDiva »

jasminegeekface

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #1 on: February 25, 2015, 10:51:24 AM »
What is your current spending in all these categories? That would make it a little easier to flesh out a plan than starting from scratch, even if it's only approximate for some of the expenses.

boognish

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #2 on: February 25, 2015, 10:55:54 AM »
Rather than asking for the maximum amount for each category, why not strive for the minimum? Start with bare necessities and examine the value of additional expenses.

EconDiva

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #3 on: February 25, 2015, 10:58:08 AM »
Rather than asking for the maximum amount for each category, why not strive for the minimum? Start with bare necessities and examine the value of additional expenses.

Ok; then please feel free to provide minimum amounts.

EconDiva

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #4 on: February 25, 2015, 11:00:00 AM »
What is your current spending in all these categories? That would make it a little easier to flesh out a plan than starting from scratch, even if it's only approximate for some of the expenses.

Current spending:
 
Rent: 1010     
Internet (mandatory for work purposes): 50
Utility: Gas 60
Utility: Electric 80
Cell: 50
Train (mandatory): 185.25   
Food (including restaurants): 400
Student loans (mandatory): 300   
Discretionary (travel, gifts, going out, etc.): 200     

ioseftavi

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #5 on: February 25, 2015, 11:04:09 AM »
Rather than asking for the maximum amount for each category, why not strive for the minimum? Start with bare necessities and examine the value of additional expenses.

Ok; then please feel free to provide minimum amounts.

Hi Econdiva- looking forward to providing feedback. 

This is going to sound much meaner than I intend (I promise I am not trying to be mean here), but would you mind reading the "how to write a case study" topic and following it to the letter?  I started trying to help you but am having trouble following your categories with any degree of confidence. 

If you do it exactly as its presented here - with formatting, logical order, and complete transparency around what's what - it makes it much easier for everyone to quickly zero in on easy fixes and potential problems.  Be sure to edit your original post - don't add new ones at the bottom with info people will need.

jasminegeekface

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #6 on: February 25, 2015, 11:08:00 AM »
Okay, at first glance:

Rent: 1010      Any chance you could downsize or move to a cheaper area to bring this down? I don't know where you live or whether you're living alone, so depending on those factors there might be some wiggle room here.
Internet (mandatory for work purposes): 50
Utility: Gas 60
Utility: Electric 80
Cell: 50
Train (mandatory): 185.25   
Food (including restaurants): 400   Again, don't know if you live alone, but if you do and this is all for your own food, then this number looks very high. How frequently do you eat out? This number could probably be chopped down by half easily if you cut down on eating out.
Student loans (mandatory): 300   
Discretionary (travel, gifts, going out, etc.): 200    Personally I would throw out a discretionary category in your budget altogether and instead split it up into more specific things, i.e. have a designated travel budget and gift budget, with smaller amounts. Also, what are you counting as "going out," since you already included restaurants in your food budget?

Gimesalot

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #7 on: February 25, 2015, 11:14:06 AM »
Looking at your deductions:

Why are there two life insurance deductions?
What is AD insurance?  Do you really need this?

Looking at expenses:

$1010 for rent seems really high.  I would consider moving or roommates
$60 for gas seems high.  We use only our stove on gas and it is $15 a month.  If you have gas heat, this would change.
$80 electric seems high for one person.
$50 cell can be reduced using ting, republic, or a million other choices
$400 for food might be really high if it is just you. 
$300 for student loans - are these fixed interest? 

Glenstache

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #8 on: February 25, 2015, 11:15:33 AM »
Not an exact answer to your question, but here are some thoughts:

You seem to have a decent salary.
1) I would not consider your 401(k) contributions an expense.
2) You are currently paying $1010 (rent) plus $185 (train) to live where you do. Can you reduce your rent and commute costs? This is probably the lowest hanging fruit in your budget. You could probably trim a bit out of food/discretionary as well. But, a 15% reduction in housing/commute would have a greater impact than a dramatic reduction in "other" spending. Also, see if you can arrange to have commute costs and or internet subsidized or paid in pre-tax dollars. There are incentive programs for some forms of public transportation (I used to be able to get up to $100 in credit for bus fare, for example). If the internet is required by work, then see if you can consider it a work expense and pay in pre-tax dollars (or tax credit, same thing).
3) Your plan to get a $100k mortgage in ATL will probably result in a mortgage payment under $1000, but with higher maintenance costs. Before you buy, do the math on if it is cheaper to rent or own. If you do buy, consider buying a duplex to live in one side and rent the other. There are a number of posts on the forum discussing the math on these issues.
4) Get a side hustle.

EconDiva

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #9 on: February 25, 2015, 11:22:03 AM »
Rather than asking for the maximum amount for each category, why not strive for the minimum? Start with bare necessities and examine the value of additional expenses.

Ok; then please feel free to provide minimum amounts.

Hi Econdiva- looking forward to providing feedback. 

This is going to sound much meaner than I intend (I promise I am not trying to be mean here), but would you mind reading the "how to write a case study" topic and following it to the letter?  I started trying to help you but am having trouble following your categories with any degree of confidence. 

If you do it exactly as its presented here - with formatting, logical order, and complete transparency around what's what - it makes it much easier for everyone to quickly zero in on easy fixes and potential problems.  Be sure to edit your original post - don't add new ones at the bottom with info people will need.

No prob!  I totally understand you're not being mean and should have read the sticky on posting a case study as I've been here long enough to know better :P

I revised my original post; also changed it to include monthly numbers instead of biweekly.
« Last Edit: February 25, 2015, 11:42:32 AM by EconDiva »

EconDiva

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #10 on: February 25, 2015, 11:26:10 AM »
Okay, at first glance:

Rent: 1010      Any chance you could downsize or move to a cheaper area to bring this down? I don't know where you live or whether you're living alone, so depending on those factors there might be some wiggle room here.
Internet (mandatory for work purposes): 50
Utility: Gas 60
Utility: Electric 80
Cell: 50
Train (mandatory): 185.25   
Food (including restaurants): 400   Again, don't know if you live alone, but if you do and this is all for your own food, then this number looks very high. How frequently do you eat out? This number could probably be chopped down by half easily if you cut down on eating out.
Student loans (mandatory): 300   
Discretionary (travel, gifts, going out, etc.): 200    Personally I would throw out a discretionary category in your budget altogether and instead split it up into more specific things, i.e. have a designated travel budget and gift budget, with smaller amounts. Also, what are you counting as "going out," since you already included restaurants in your food budget?

Rent-yes, I could move.  But the question is how much do I need to bring it down to?  That will determine where I move or if I could even continue to live in Chicago anymore.  I currently live alone on the North side of Chicago and commute an hour and half one way daily during the week to Lake Bluff, Illinois.

Food-I'm not eating out at all right now.  I spend $100 weekly on groceries. 

Discretionary-I could break it down.  It would consist of mostly travel.  Going out would be things like a movie, dancing class, drinks somewhere, etc.

EconDiva

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Re: PLEASE help me figure out how to retire in 15 years
« Reply #11 on: February 25, 2015, 11:28:32 AM »
Looking at your deductions:

Why are there two life insurance deductions?
What is AD insurance?  Do you really need this?

Looking at expenses:

$1010 for rent seems really high.  I would consider moving or roommates-I am considering this.  But I'm trying to figure out what amount I need to get this down to in order to meet my 55% savings goal.  The amount will determine where I live, how many roommates, etc.
$60 for gas seems high.  We use only our stove on gas and it is $15 a month.  If you have gas heat, this would change. -I have gas heat.
$80 electric seems high for one person.
$50 cell can be reduced using ting, republic, or a million other choices -Reduced by/to how much?
$400 for food might be really high if it is just you.  -It is just me
$300 for student loans - are these fixed interest? -Yes, its fixed.

Red Beard

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #12 on: February 25, 2015, 11:34:54 AM »
I might be a bit dense, but are the expenses you list occurring twice a month (i.e $100 dollars for internet, $2020 for rent, etc.)?
« Last Edit: February 25, 2015, 11:37:20 AM by Red Beard »

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #13 on: February 25, 2015, 11:42:02 AM »
I might be a bit dense, but are the expenses you list occurring twice a month (i.e $100 dollars for internet, $2020 for rent, etc.)?

You're not dense; I really should have listed monthly expenses; I've modified my original post (again).  Hopefully this makes it easier for everyone.

There are 2 months out of the year where my monthly salary is more because we get paid three times which is why I had originally just posted my biweekly salary and deductions.

thd7t

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #14 on: February 25, 2015, 12:03:56 PM »
MMM's numbers are based on after tax numbers.  It looks like your take home is around $3800/month after all deductions.  Your costs are around $2600.  To be at 55% savings rate, you need to spend $1710/month.  This puts your current savings rate at about 31% (although it looks like only $270 go into your 401k).  On the upside, you're already about a year and a half into your 15 year plan, if you include your current 401k and Roth.

ioseftavi

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #15 on: February 25, 2015, 12:05:07 PM »
Income:

Gross MONTHLY salary: 5384.60 (Gross annual salary is 70K, going up to 72K next month, and I get a 7% cash profit sharing bonus at end of year)

MONTHLY expenses:

Medical: / Dental: / Vision: / Life insurance: / AD insurance: / Fed insurance: / Fed income tax: / FICA-medicare: / State income tax: / Group term life:
These are all simple and pretty much non-negotiable or minimally adjustable, with the exception of taxes, which we can tweak later with your 401(k).

Rent: $1,010     
This sounds 100% fine, relative to your income, but your commute and commuting costs are awful.  I would seriously consider moving closer to work, or finding a job closer to your current place.  Spending 3 hours per day commuting, at a cost of $185/month, is not good.

Internet (mandatory for work purposes): 50 / Utility: Gas 60 / Utility: Electric: 80 / Cell: 50
All seem fine with the exception of cell.  If you wanna go bare-bones, swap to an MVNO.  Not a glaring problem, though.

Train (mandatory): 185.25   
See my comment about your rent.

Food (including restaurants): 400
Seems fine.

Student loans (mandatory): 300   
Seems fine, and I wouldn't pay more than the minimum @ a 4% interest rate. 

Discretionary (travel, gifts, going out, etc.): 200     
Seems fine again....

TOTAL: 3800.57
NOT FINE!  Here's our problem.  You've listed $3,800 worth of expenses, almost all of which seem reasonable.  However, your gross income is $1,600 higher than this, monthly.  That's almost $20,000 per year we haven't earmarked. 

Where is that money going?  We've got serious unidentified leaks here.  This gap has to be identified and plugged.  If travel is costing you $4k per year, that's fine, but we need a monthly "Travel" line item with an expense of $333.  You need to do this for all your "lumpy" (not-every month) expenses.

Monthly Savings:
401k (5%): 269.23   
Totally not ok!  This is good for an average American, but super low for an MMM reader!  I would challenge you to double this TOMORROW, to 10%.  Then let 2 pay periods go by, and if you're not starving and destitute, increase it again to 15%.

My guess would be that you have spending that you are either not accounting for, or spending that is higher than the totals you've listed.  If it's not important enough to account for, drop it from your spending, and give those dollars a home in some kinda automated savings!

yandz

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #16 on: February 25, 2015, 12:15:41 PM »
Ok since yoy say you are not eating out currently, 100/wk on just groceries for one person is really high.  For two of us, we spend ~$75 a week and this includes household stuff (tp, soap, etc).  Sometimes it is less, sometimes more with a pantry stock up, but we average right around here.  And we definitely aren't the lowest on the boards, but we are comfortable with our savings rate + we love food, so we are totally fine with it and can accommodate our splurges on some more gourmet items.

For practical guidance on reducing - I haven't used them, but just read about thefresh20.com - they have a solo plan.  Might be worth subscribing for a month ($10) just to get a feel for if it helps you.  If you used their solo meal plans (good dinner that serves two and pack leftovers for lunch), you end up at about $120/mo.  Buy some oats or eggs for breakfast and you should easily be able to hit $150/mo even with some items added.  You can end the subscription once you get the hang of meal planning. Or don't - paying the subscription will save you money over your current budget.

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #17 on: February 25, 2015, 12:25:14 PM »
Ok since yoy say you are not eating out currently, 100/wk on just groceries for one person is really high.  For two of us, we spend ~$75 a week and this includes household stuff (tp, soap, etc).  Sometimes it is less, sometimes more with a pantry stock up, but we average right around here.  And we definitely aren't the lowest on the boards, but we are comfortable with our savings rate + we love food, so we are totally fine with it and can accommodate our splurges on some more gourmet items.

For practical guidance on reducing - I haven't used them, but just read about thefresh20.com - they have a solo plan.  Might be worth subscribing for a month ($10) just to get a feel for if it helps you.  If you used their solo meal plans (good dinner that serves two and pack leftovers for lunch), you end up at about $120/mo.  Buy some oats or eggs for breakfast and you should easily be able to hit $150/mo even with some items added.  You can end the subscription once you get the hang of meal planning. Or don't - paying the subscription will save you money over your current budget.

Thank you for the tip!

I can't remember the last time I paid 150 month for groceries...I really don't.  My God, am I that horrible at spending wisely?  Anyways, I will definitely look into this.  Going from 400/month to 150/month would mean spending $38/week at the grocery store.  I honestly don't know how to get 21 meals out of $38.  It sounds like a daunting task but I obviously am eating like a king (a king that will never retire). 

Just to give an example of yesterday's meals, I had:
Breakfast:
home made breakfast wrap (1 egg, green pepper, onion, tomato, spinach, cheddar cheese on a whole what tortilla)
Morning snack:
Turkey jerkey from Trader Joe's
Lunch:
2 pieces baked chicken with brussel sprouts (these were bought from the pre-cooked hot meal section of the grocery store I frequent)
Dinner:
2 tacos (ground turkey, onion, shredded lettuce, tomato, cheese, sour cream) with a side of half an avocado
Evening snack:
1 serving Trader Joe's honey roasted almonds with a couple of slices of green apple

Anyways, the food category is one I haven't tackled in forever.  I obviously need to be eating less, eating smaller meals, and using ingredients that can stretch out meals.  Thanks again for the recommendation.

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #18 on: February 25, 2015, 12:30:13 PM »
Income:

Gross MONTHLY salary: 5384.60 (Gross annual salary is 70K, going up to 72K next month, and I get a 7% cash profit sharing bonus at end of year)

MONTHLY expenses:

Medical: / Dental: / Vision: / Life insurance: / AD insurance: / Fed insurance: / Fed income tax: / FICA-medicare: / State income tax: / Group term life:
These are all simple and pretty much non-negotiable or minimally adjustable, with the exception of taxes, which we can tweak later with your 401(k).

Rent: $1,010     
This sounds 100% fine, relative to your income, but your commute and commuting costs are awful.  I would seriously consider moving closer to work, or finding a job closer to your current place.  Spending 3 hours per day commuting, at a cost of $185/month, is not good.

Internet (mandatory for work purposes): 50 / Utility: Gas 60 / Utility: Electric: 80 / Cell: 50
All seem fine with the exception of cell.  If you wanna go bare-bones, swap to an MVNO.  Not a glaring problem, though.

Train (mandatory): 185.25   
See my comment about your rent.

Food (including restaurants): 400
Seems fine.

Student loans (mandatory): 300   
Seems fine, and I wouldn't pay more than the minimum @ a 4% interest rate. 

Discretionary (travel, gifts, going out, etc.): 200     
Seems fine again....

TOTAL: 3800.57
NOT FINE!  Here's our problem.  You've listed $3,800 worth of expenses, almost all of which seem reasonable.  However, your gross income is $1,600 higher than this, monthly.  That's almost $20,000 per year we haven't earmarked. 

Where is that money going?  We've got serious unidentified leaks here.  This gap has to be identified and plugged.  If travel is costing you $4k per year, that's fine, but we need a monthly "Travel" line item with an expense of $333.  You need to do this for all your "lumpy" (not-every month) expenses.

Monthly Savings:
401k (5%): 269.23   
Totally not ok!  This is good for an average American, but super low for an MMM reader!  I would challenge you to double this TOMORROW, to 10%.  Then let 2 pay periods go by, and if you're not starving and destitute, increase it again to 15%.

My guess would be that you have spending that you are either not accounting for, or spending that is higher than the totals you've listed.  If it's not important enough to account for, drop it from your spending, and give those dollars a home in some kinda automated savings!

Excellent catch as I totally did not list my 401k loan in here.  I revised my original post to include this expense of 628/month.  This will be paid off this June.  You can facepunch me for it but I promise I've learned my lesson!!

In regards to the rent, I hear you.  Do others agree I should try to move?  Issue is I live near Chicago and my job is nowhere near the city.  As a single person I can't see myself living in Lake Bluff, Illinois.  I could consider a less expensive place in Chicago; but what amount am I shooting for here?  I think my biggest problem is I haven't put real numbers on what my budget categories 'have' to be...I've listed 'what they are'...but I think in order for me to get on a clear path to FI I need to know exactly what to reduce everything down to.

I'm revising the budget again one more time to try to account for the remainder of the money that's not accounted for.  I can only provide estimates right now.

ETA: So I went back in and provided estimates for additional 'leakage categories'.  I really don't know for sure how much I'm spending in those categories (travel, lady stuff, going out, etc.) but I estimated them for now.

Looking at it makes me think to myself "YIKES"!!

But the thing is...I 'know' I need to cut out everything....start doing my own hair, cut out the gym, travel less and cheaper, buy less gifts, etc.  However, to be completely honestly, I think my biggest issue is not knowing what number I need to be saving to be at a 55% savings rate.  If I knew that I could backwards into where to cut, what to cut first, etc.
« Last Edit: February 25, 2015, 12:48:50 PM by EconDiva »

mandy_2002

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #19 on: February 25, 2015, 12:37:26 PM »
I understand the desire to live closer to the city, but how often do you actually go out in the city?  You go to work 5 days a week, 48-50 times per year.  If you go out in the city 2-3 times a week, that is already a 50% reduction in commuting costs, and most likely a good cut in rent.  I live 20 miles from San Francisco, and will be moving 5 miles further from the city in the next month, but saving a ton of money.  For me, it's worth it to be funded to retire in 2 years. 

ioseftavi

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #20 on: February 25, 2015, 12:41:43 PM »
Excellent catch as I totally did not list my 401k loan in here.  I revised my original post to include this expense of 628/month.  This will be paid off this June.  You can facepunch me for it but I promise I've learned my lesson!!

I really try not to do facepunches, but it's good you've learned not to do 401(k) loans! 

...I could consider a less expensive place in Chicago; but what amount am I shooting for here?  I think my biggest problem is I haven't put real numbers on what my budget categories 'have' to be...I've listed 'what they are'...but I think in order for me to get on a clear path to FI I need to know exactly what to reduce everything down to...

DISAGREE TO INFINITY, particularly with your last sentence!  Remember, the perfect is the enemy of the good

If you sit around and try to nail down your spending per month to the penny, you will sit around for weeks, months, or years feeling like your budget isn't precise enough - "where will I cut another $50 from?!?!"  It doesn't matter where you cut from.  Simply give yourself less money to spend, and you will automatically start spending LESS.  It doesn't have to be a precise amount less, and it doesn't have to come from a certain category you put a label on.

Don't worry about where you're spending too much right now; you have a ton of fat to cut.  Double your 401(k) contributions RIGHT NOW, and I promise you: you will suddenly find that you get along just fine with $270 less per month.  You might spend less on groceries.  You might go out to eat less.  You might find that you do dance lessons on a night of the week when classes are free or cheap.  You will find a way to do it.

Seriously.

Double the 401(k) contribution.

Do it.

Do it. 

DO IT!

[Also, yes, long-term you should find a cheaper/closer to work place to live.  You'll save time, money, or both.]
« Last Edit: February 25, 2015, 12:45:36 PM by ioseftavi »

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #21 on: February 25, 2015, 12:44:22 PM »
I understand the desire to live closer to the city, but how often do you actually go out in the city?  You go to work 5 days a week, 48-50 times per year.  If you go out in the city 2-3 times a week, that is already a 50% reduction in commuting costs, and most likely a good cut in rent.  I live 20 miles from San Francisco, and will be moving 5 miles further from the city in the next month, but saving a ton of money.  For me, it's worth it to be funded to retire in 2 years.

I go into the city once a week, on the weekends.  In the summer, twice a week. 

I'm sorry, but I don't get your statement about the 50% reduction in commuting costs.  I pay for a monthly Metra card, that card only gets me to work and back.  If I go into the city I use a CTA card, which is pay per use.  Otherwise when going into the city I use Uber, as I don't have a car and usually have to take Uber to bring groceries home.

If I move to the city my job is in I would need to find a subtenant and buy a car, as there is virtually no public transit in the city my job is located in.

jasminegeekface

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #22 on: February 25, 2015, 12:47:28 PM »
Ok since yoy say you are not eating out currently, 100/wk on just groceries for one person is really high.  For two of us, we spend ~$75 a week and this includes household stuff (tp, soap, etc).  Sometimes it is less, sometimes more with a pantry stock up, but we average right around here.  And we definitely aren't the lowest on the boards, but we are comfortable with our savings rate + we love food, so we are totally fine with it and can accommodate our splurges on some more gourmet items.

For practical guidance on reducing - I haven't used them, but just read about thefresh20.com - they have a solo plan.  Might be worth subscribing for a month ($10) just to get a feel for if it helps you.  If you used their solo meal plans (good dinner that serves two and pack leftovers for lunch), you end up at about $120/mo.  Buy some oats or eggs for breakfast and you should easily be able to hit $150/mo even with some items added.  You can end the subscription once you get the hang of meal planning. Or don't - paying the subscription will save you money over your current budget.

Thank you for the tip!

I can't remember the last time I paid 150 month for groceries...I really don't.  My God, am I that horrible at spending wisely?  Anyways, I will definitely look into this.  Going from 400/month to 150/month would mean spending $38/week at the grocery store.  I honestly don't know how to get 21 meals out of $38.  It sounds like a daunting task but I obviously am eating like a king (a king that will never retire). 

Just to give an example of yesterday's meals, I had:
Breakfast:
home made breakfast wrap (1 egg, green pepper, onion, tomato, spinach, cheddar cheese on a whole what tortilla)
Morning snack:
Turkey jerkey from Trader Joe's
Lunch:
2 pieces baked chicken with brussel sprouts (these were bought from the pre-cooked hot meal section of the grocery store I frequent)
Dinner:
2 tacos (ground turkey, onion, shredded lettuce, tomato, cheese, sour cream) with a side of half an avocado
Evening snack:
1 serving Trader Joe's honey roasted almonds with a couple of slices of green apple

Anyways, the food category is one I haven't tackled in forever.  I obviously need to be eating less, eating smaller meals, and using ingredients that can stretch out meals.  Thanks again for the recommendation.

A couple of things that jump out at me here:

1. Lunch, morning snack, and dinner are all meat-based. I realize this is just an example of one day, but if you regularly include some kind of meat in all your meals, that is probably adding up. Maybe try to cut down to just a meat-based dinner and find alternatives like beans or veggies or something for lunch and snacks.

2. Pre-cooked hot meal for lunch; if a pre-cooked meal is even a semi-regular occurrence, that's probably adding a lot to your costs. The same food cooked at home usually costs significantly less.

3. Not exactly related to that example, but where do you buy grocery items other than the ones listed as coming from Trader Joe's? If it's honestly a struggle to create a week's worth of meals from $40-50, then the pricing there might be part of the problem.

Also, if you haven't done this already, if you have receipts lying around from recent grocery runs, take a good look at them and figure out where your money is going. When I did this I found a lot of impulsive snack/prepared food/etc expenses that I didn't notice day to day because it felt like it was only once in a while.

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #23 on: February 25, 2015, 12:48:45 PM »
What's with all the insurance?  Life insurance and group term life?  You are single with no dependents, right?  And what is Fed insurance?

As to other expenses, rent and food jump out at me as high.  You need to move (as close to your job as possible) and spend less on food.  Try shopping at stores other than Trader Joe :-)  I have been working on my food spending the last few months and have finally learned to shop almost entirely at Aldi.  I aim for $50 per week and have been pretty successful recently.

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #24 on: February 25, 2015, 12:52:57 PM »
Excellent catch as I totally did not list my 401k loan in here.  I revised my original post to include this expense of 628/month.  This will be paid off this June.  You can facepunch me for it but I promise I've learned my lesson!!

I really try not to do facepunches, but it's good you've learned not to do 401(k) loans! 

...I could consider a less expensive place in Chicago; but what amount am I shooting for here?  I think my biggest problem is I haven't put real numbers on what my budget categories 'have' to be...I've listed 'what they are'...but I think in order for me to get on a clear path to FI I need to know exactly what to reduce everything down to...

DISAGREE TO INFINITY, particularly with your last sentence!  Remember, the perfect is the enemy of the good

If you sit around and try to nail down your spending per month to the penny, you will sit around for weeks, months, or years feeling like your budget isn't precise enough - "where will I cut another $50 from?!?!"  It doesn't matter where you cut from.  Simply give yourself less money to spend, and you will automatically start spending LESS.  It doesn't have to be a precise amount less, and it doesn't have to come from a certain category you put a label on.

Don't worry about where you're spending too much right now; you have a ton of fat to cut.  Double your 401(k) contributions RIGHT NOW, and I promise you: you will suddenly find that you get along just fine with $270 less per month.  You might spend less on groceries.  You might go out to eat less.  You might find that you do dance lessons on a night of the week when classes are free or cheap.  You will find a way to do it.

Seriously.

Double the 401(k) contribution.

Do it.

Do it. 

DO IT!

[Also, yes, long-term you should find a cheaper/closer to work place to live.  You'll save time, money, or both.]

I actually had already changed the 401k contribution this morning.  I upped it from 5 to 7.  My plan was to up it from 7 to 10 next month.  Sound ok?

In regards to your comments, I guess I get that you're saying to just start somewhere (anywhere) in regards to cutting back...is that the point?  If so, I get it.  I was at 0% savings 2 years ago, so I understand.  But as you can see if I really want to get to FI in 15 years I need to do something drastic...or else it's never going to happen.  Right?

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #25 on: February 25, 2015, 01:00:24 PM »
What's with all the insurance?  Life insurance and group term life?  You are single with no dependents, right?  And what is Fed insurance?

As to other expenses, rent and food jump out at me as high.  You need to move (as close to your job as possible) and spend less on food.  Try shopping at stores other than Trader Joe :-)  I have been working on my food spending the last few months and have finally learned to shop almost entirely at Aldi.  I aim for $50 per week and have been pretty successful recently.

Correct, I am single with no dependents.  Fed insurance=FICA tax

If I move close to my job I will have to buy a car.  Does that still make it a good plan you think?  I live in the Chicago area and my job is farrrr from the city.  Think suburban, mostly families, everything closes early, little/no public transit/etc.

There is an Aldi close to me...I think I need to check out meal planning sites and go from there...typically I go to the local grocery chain (Jewel Osco) and either Trader Joe's or Whole Foods every week.  And yes, I have been buying pre-cooked meals from the hot bar every time I grocery shop :/

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #26 on: February 25, 2015, 01:04:06 PM »
Hi:

I'm going to zero in on your food bill because cooking is my favorite mustachian thing.

First consider your sourcing.  A lot of people here love Aldi's.  We don't have them in my state but we do have Grocery Outlet which is excellent.  Got lucky there yesterday and arrived just as they were marking things down.  Came home with 20 lb. of assorted cheese (keeps for months in the fridge) for less than $40.00.  Every trip is not like that but I love it when it is.  Other good sources include ethnic grocery stores and small fruit markets

1.  Congratulations on making your own breakfast wrap.  Are you making these in bulk and freezing them or are you making them one at a time an frequently throwing out leftover bits of fresh vegetable that get mushy.  If the former, bravo; if the latter, you have something to work on

2.  Turkey jerky from Trader Joe's.  Does it have to be protein?  If so consider a boiled egg or a small piece of cheese bought on sale and cut yourself.  Even a slice of homemade meatloaf would probably be cheaper per gram of protein.  If not, the sky is the limit on stuff you make yourself.  If it needs to be something you keep in a desk drawer take a look around the above grocery stores and find something cheap that keeps well.  I keep the Hub's desk drawer full of Odwalla Bars from Grocery Outlet.  I think I calculated the cost of the last bunch at 18 cents/bar.

3.  Baked chicken and brussels sprouts from the grocery store deli.  I assume you were craving something hot.  If you don't have a place to warm food that you bring from home it's time to think about a good thermos.  If you do have a place to warm up food at work, you know what to do.

4.  Tacos.  Sounds pretty good, just watch for wasted vegies

5.  Almonds and apple slices.  Almonds from anywhere are fairly pricey.  Are you getting enough pleasure from them to slow down your retirement for?  If so continue, if not consider making popcorn.  Apple slices, what happened to the rest of the apple?

 
« Last Edit: February 25, 2015, 01:06:31 PM by 2ndTimer »

ioseftavi

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #27 on: February 25, 2015, 01:06:41 PM »
I actually had already changed the 401k contribution this morning.  I upped it from 5 to 7.  My plan was to up it from 7 to 10 next month.  Sound ok?

I would do 10% right away.  I was given this same dare by a colleague when I was in my 20s.  He told me that "If you're sobbing two weeks from now about how you can't afford lunch, I will buy your damn lunch for a week.  Double it and lemme know if you're starving, but something tells me you'll stop going to starbucks so damned much."

The act of doubling my 401(k) contributions at that point - I was in my 20s - was huge.  I realized that I truly was an exploding volcano of wastefulness, and I realized that there is always something I can cut.

Seriously.  Blow your own mind.  Double it and watch as you somehow find a way. 

In regards to your comments, I guess I get that you're saying to just start somewhere (anywhere) in regards to cutting back...is that the point? 

That is part of the point.  But remember that frugality is a muscleI wrote a post about this on our journal, if you want to read more about this.  Basically, you can't go and expect to be at a 55% savings rate overnight, anymore than you'd expect to walk onto a track and run a 6 minute mile.  It's going to take you YEARS to get to that point, and that's ok.  The important thing is: start going to the fiscal gym. 

Start upping your savings, and your brain and lifestyle will figure out how to adjust.  Don't wait until you've written down - to the penny - how you're going to get to 55% savings before you do anything.  Get out of your comfort zone by upping your savings from 5% to 10%.  Once your brain and lifestyle are comfortable at that spending level, you do it again.  You do this over and over, and one day you'll find that you're at 30 or 40%.  THAT'S how you get to 55%.

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #28 on: February 25, 2015, 01:08:56 PM »
MMM's numbers are based on after tax numbers.  It looks like your take home is around $3800/month after all deductions.  Your costs are around $2600.  To be at 55% savings rate, you need to spend $1710/month.  This puts your current savings rate at about 31% (although it looks like only $270 go into your 401k).  On the upside, you're already about a year and a half into your 15 year plan, if you include your current 401k and Roth.

Thanks for the post.  Based on what you've written here, I've come to the following conclusion:

Based on my original post, I need to be saving 2,090/monthly to have a 55% savings rate.  Currently I'm saving 469.23/monthly (ROTH, 401k, E fund).  That means I need to be saving an additional ~1,620/monthly. 

So, I need to find 1,620 to cut from various categories in my original budget posted.

ZiziPB

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #29 on: February 25, 2015, 01:12:28 PM »

Travel:  300
Gifts: 100
Lady stuff (hair, nails, brows): 100
Uber rides/cta transit rides: 150
Going out (play/concert/museum/movie/bar/dance class/etc.): 100
Gym: 50
Clothes: 102.03

All of these are totally discretionary.  If you are serious about saving then you need to cut these completely or reduce significantly.

As to rent: right now you are spending $1010 for rent, plus $140 for utilities, plus $185 for commuting plus $150 for commuting for fun.  So about $1500 per month.  Have you looked into the total costs or rent, utilities and commuting if you were to move close to work?  Do the calculations and figure out the possible savings.  And then decide if it is worth it for you or not.

As to food, you need to stop shopping at Whole Foods and similar establishments and stop spending (wasting!) money on prepared foods.  You need to start meal planning, cooking (in batches on the weekends, if you don't have time during the week) and shopping at Aldi, your local oriental grocery store, etc.  I think you can easily cut your $400 to $200.

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #30 on: February 25, 2015, 01:15:23 PM »
I actually had already changed the 401k contribution this morning.  I upped it from 5 to 7.  My plan was to up it from 7 to 10 next month.  Sound ok?

I would do 10% right away.  I was given this same dare by a colleague when I was in my 20s.  He told me that "If you're sobbing two weeks from now about how you can't afford lunch, I will buy your damn lunch for a week.  Double it and lemme know if you're starving, but something tells me you'll stop going to starbucks so damned much."

The act of doubling my 401(k) contributions at that point - I was in my 20s - was huge.  I realized that I truly was an exploding volcano of wastefulness, and I realized that there is always something I can cut.

Seriously.  Blow your own mind.  Double it and watch as you somehow find a way. 

In regards to your comments, I guess I get that you're saying to just start somewhere (anywhere) in regards to cutting back...is that the point? 

That is part of the point.  But remember that frugality is a muscleI wrote a post about this on our journal, if you want to read more about this.  Basically, you can't go and expect to be at a 55% savings rate overnight, anymore than you'd expect to walk onto a track and run a 6 minute mile.  It's going to take you YEARS to get to that point, and that's ok.  The important thing is: start going to the fiscal gym. 

Start upping your savings, and your brain and lifestyle will figure out how to adjust.  Don't wait until you've written down - to the penny - how you're going to get to 55% savings before you do anything.  Get out of your comfort zone by upping your savings from 5% to 10%.  Once your brain and lifestyle are comfortable at that spending level, you do it again.  You do this over and over, and one day you'll find that you're at 30 or 40%.  THAT'S how you get to 55%.

It's at 10% now!

If you want to buy me lunch next week, I accept payment via Paypal lol.  To be completely honest, that money would have likely gone to a new outfit (I'm planning two trips this year, one of which is in the spring, and I actually have a list of items to purchase like a bathing suit, sandals, a dress to go out in, etc etc).  Can you tell I'm obviously NOT flexing any type of frugality muscle right now? :(

But I get what you're saying.  Maybe that's why I feel overwhelmed? 
« Last Edit: February 25, 2015, 01:19:54 PM by EconDiva »

ZiziPB

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #31 on: February 25, 2015, 01:16:41 PM »

I would do 10% right away.  I was given this same dare by a colleague when I was in my 20s.  He told me that "If you're sobbing two weeks from now about how you can't afford lunch, I will buy your damn lunch for a week.  Double it and lemme know if you're starving, but something tells me you'll stop going to starbucks so damned much."

The act of doubling my 401(k) contributions at that point - I was in my 20s - was huge.  I realized that I truly was an exploding volcano of wastefulness, and I realized that there is always something I can cut.

Seriously.  Blow your own mind.  Double it and watch as you somehow find a way. 

In regards to your comments, I guess I get that you're saying to just start somewhere (anywhere) in regards to cutting back...is that the point? 

That is part of the point.  But remember that frugality is a muscleI wrote a post about this on our journal, if you want to read more about this.  Basically, you can't go and expect to be at a 55% savings rate overnight, anymore than you'd expect to walk onto a track and run a 6 minute mile.  It's going to take you YEARS to get to that point, and that's ok.  The important thing is: start going to the fiscal gym. 

Start upping your savings, and your brain and lifestyle will figure out how to adjust.  Don't wait until you've written down - to the penny - how you're going to get to 55% savings before you do anything.  Get out of your comfort zone by upping your savings from 5% to 10%.  Once your brain and lifestyle are comfortable at that spending level, you do it again.  You do this over and over, and one day you'll find that you're at 30 or 40%.  THAT'S how you get to 55%.

+1
Go to 10% NOW!  And we all promise that you probably won't even feel the difference ;-)

kiwigirls

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #32 on: February 25, 2015, 01:21:59 PM »
What's with all the insurance?  Life insurance and group term life?  You are single with no dependents, right?  And what is Fed insurance?

As to other expenses, rent and food jump out at me as high.  You need to move (as close to your job as possible) and spend less on food.  Try shopping at stores other than Trader Joe :-)  I have been working on my food spending the last few months and have finally learned to shop almost entirely at Aldi.  I aim for $50 per week and have been pretty successful recently.

Correct, I am single with no dependents.  Fed insurance=FICA tax

If I move close to my job I will have to buy a car.  Does that still make it a good plan you think?  I live in the Chicago area and my job is farrrr from the city.  Think suburban, mostly families, everything closes early, little/no public transit/etc.

There is an Aldi close to me...I think I need to check out meal planning sites and go from there...typically I go to the local grocery chain (Jewel Osco) and either Trader Joe's or Whole Foods every week.  And yes, I have been buying pre-cooked meals from the hot bar every time I grocery shop :/

Would you consider moving nearer to work and buying a bike?   When I started biking to work (approx. 20min each way) I was initially worried that my hair would be ruined and I would need a shower when I arrived at work etc etc but I found that I would bike leisurely to work in the morning so as not to sweat & I would be fine to go straight into the office.  I did used to change into work clothes & put my makeup on at work.  If I wanted a harder workout I would do it on the way home when it didn't matter..  This was really easy to implement for me - much easier than I initially thought.

ioseftavi

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #33 on: February 25, 2015, 01:22:45 PM »
It's at 10% now!

If you want to buy me lunch next week, I accept payment via Paypal lol.

No, I get what you're saying.  Maybe that's why I feel overwhelmed?

HELLS YEAH!  Congratulations!  And yes - it's easy to feel overwhelmed sometimes.  The important thing is, just START.  You can worry about optimizing even better after you've already done all the "easy" stuff, which will probably take you a year.

My suggested next step: DON'T DO A DAMNED THING FOR 4 WEEKS.  Just like upping the weight at the gym, you need to give your brain and lifestyle a chance to acclimate to this new savings rate. 

Keep examining other suggested changes people are making here, and try to figure out which one you might want to try next.  Some things suggested will feel too crazy - that's cool.  Just backburner those ones for now.  Some suggestions will sound PERFECT, and those are the ones that you want to consider adopting next.

Congrats again on 10%, and good luck!

ZiziPB

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #34 on: February 25, 2015, 01:27:56 PM »
Quote
To be completely honest, that money would have likely gone to a new outfit (I'm planning two trips this year, one of which is in the spring, and I actually have a list of items to purchase like a bathing suit, sandals, a dress to go out in, etc etc).  Can you tell I'm obviously NOT flexing any type of frugality muscle right now? :(

You sound like a person who would do best with "pay yourself first" system.  It seems to me that if the money is not in your account, you won't spend it.  Sounds like you already took the first step of bumping your 401k contributions to 10%.  Great!!!  Can you automate any other debt payments or savings?  How about your student loan?  Can you set up a system where a set amount each month goes there without you having to think about it?  Set it up now, even if it is $50 or $100 and as soon as your 401k loan is paid off, direct the amount you were paying to your 401k loan to your student loans in a similar fashion.  That will allow you to pay off your student loan in a year!  And then take that amount (which should be around $1000 per month) and max your 401k!

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #35 on: February 25, 2015, 01:31:28 PM »
What's with all the insurance?  Life insurance and group term life?  You are single with no dependents, right?  And what is Fed insurance?

As to other expenses, rent and food jump out at me as high.  You need to move (as close to your job as possible) and spend less on food.  Try shopping at stores other than Trader Joe :-)  I have been working on my food spending the last few months and have finally learned to shop almost entirely at Aldi.  I aim for $50 per week and have been pretty successful recently.

Correct, I am single with no dependents.  Fed insurance=FICA tax

If I move close to my job I will have to buy a car.  Does that still make it a good plan you think?  I live in the Chicago area and my job is farrrr from the city.  Think suburban, mostly families, everything closes early, little/no public transit/etc.

There is an Aldi close to me...I think I need to check out meal planning sites and go from there...typically I go to the local grocery chain (Jewel Osco) and either Trader Joe's or Whole Foods every week.  And yes, I have been buying pre-cooked meals from the hot bar every time I grocery shop :/

Would you consider moving nearer to work and buying a bike?   When I started biking to work (approx. 20min each way) I was initially worried that my hair would be ruined and I would need a shower when I arrived at work etc etc but I found that I would bike leisurely to work in the morning so as not to sweat & I would be fine to go straight into the office.  I did used to change into work clothes & put my makeup on at work.  If I wanted a harder workout I would do it on the way home when it didn't matter..  This was really easy to implement for me - much easier than I initially thought.

I don't think I would bike to work.  The winters in Lake Bluff are brutal.  I can't imagine biking home in the dark in 5 degrees weather and snow.  I'm open to cutting things but not sure I could swing doing this.  Other issue is my office park is not pedestrian/bike friendly.  I've never seen someone walking or biking into work.  My company is a very large company and has an "office park" that consists of lots of buildings/gates/etc.  In other words, I only see vehicles (cars and the company shuttles) enter/exit my office location.  There are actually signs posted all over the 'park', and near the entrance stating 'no pedestrians'.... :/

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #36 on: February 25, 2015, 01:33:50 PM »

I would do 10% right away.  I was given this same dare by a colleague when I was in my 20s.  He told me that "If you're sobbing two weeks from now about how you can't afford lunch, I will buy your damn lunch for a week.  Double it and lemme know if you're starving, but something tells me you'll stop going to starbucks so damned much."

The act of doubling my 401(k) contributions at that point - I was in my 20s - was huge.  I realized that I truly was an exploding volcano of wastefulness, and I realized that there is always something I can cut.

Seriously.  Blow your own mind.  Double it and watch as you somehow find a way. 

In regards to your comments, I guess I get that you're saying to just start somewhere (anywhere) in regards to cutting back...is that the point? 

That is part of the point.  But remember that frugality is a muscleI wrote a post about this on our journal, if you want to read more about this.  Basically, you can't go and expect to be at a 55% savings rate overnight, anymore than you'd expect to walk onto a track and run a 6 minute mile.  It's going to take you YEARS to get to that point, and that's ok.  The important thing is: start going to the fiscal gym. 

Start upping your savings, and your brain and lifestyle will figure out how to adjust.  Don't wait until you've written down - to the penny - how you're going to get to 55% savings before you do anything.  Get out of your comfort zone by upping your savings from 5% to 10%.  Once your brain and lifestyle are comfortable at that spending level, you do it again.  You do this over and over, and one day you'll find that you're at 30 or 40%.  THAT'S how you get to 55%.

+1
Go to 10% NOW!  And we all promise that you probably won't even feel the difference ;-)

I did...it's at 10% now.  I started thinking, why not increase my ROTH from 100 to 200 too today?  It would probably just be money I'd spend on clothes or going out or Uber rides anyways.....but I don't want to go overboard.  When I do too much at once, it never works out.

Last year, I was putting something like 20% into 401K and ROTH altogether.  I had like two emergencies come up that wiped out my measly $1500 EF fund and lowered my 401k/ROTH contributions, hence the reason they are so low today.  When I get 'knocked down' I don't take time to re-evaluate and 'bounce back' quickly like I should.....
« Last Edit: February 25, 2015, 01:35:42 PM by EconDiva »

dandarc

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #37 on: February 25, 2015, 01:37:52 PM »
Well done on bumping 401K to 10%!  When your 401K loan pays off, make sure and bump your 401K contribution by that amount - you already know you don't need this money for day to day expenses, and it will save you money being a contribution rather than a loan repayment (go traditional, not Roth if you have the choice).

Directing your savings to traditional accounts (looks to my eye like you're in the 25% bracket, higher with state tax), will save on taxes this year.

ioseftavi

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #38 on: February 25, 2015, 01:38:59 PM »
I started thinking, why not increase my ROTH from 100 to 200 too today?  It would probably just be money I'd spend on clothes or going out or Uber rides anyways.....but I don't want to go overboard.  When I do too much at once, it never works out.

Last year, I was putting something like 20% into 401K and ROTH altogether.  I had like two emergencies come up that wiped out my measly $1500 EF fund and lowered my 401k/ROTH contributions, hence the reason they are so low today.  When I get 'knocked down' I don't take time to re-evaluate and 'bounce back' quickly like I should.....

You're doing awesome.  My rule of thumb is 2 pay periods, at a minimum, once I've made a change.  That's a month - if I can keep doing something for a month, and it feels easy, I'll go ahead and consider it "permanent", and start considering further changes. 

Don't overdo it in your quest to hit 15 years.  Start by focusing on what you can control: your habits.  Learn to modify your habits (logically, consistently, permanently), and you will hit any F/I goal you set for yourself.  But it all starts with the ability to change your own habits.

Unique User

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #39 on: February 25, 2015, 01:43:26 PM »
It's at 10% now!

If you want to buy me lunch next week, I accept payment via Paypal lol.  To be completely honest, that money would have likely gone to a new outfit (I'm planning two trips this year, one of which is in the spring, and I actually have a list of items to purchase like a bathing suit, sandals, a dress to go out in, etc etc).  Can you tell I'm obviously NOT flexing any type of frugality muscle right now? :(

But I get what you're saying.  Maybe that's why I feel overwhelmed?

Good job on moving it to 10% so fast.  All the other comments are good comments, but the one thing you can do is look at each thing before you buy it or each bill before you pay it and think about whether you can get it lower.  Do I need to buy precooked chicken and brussel sprouts or can I cook it for dinner and then bring leftovers for lunch the next day?  Can I get my internet for less than 50%.  Getting a pedi is awesome, but can I cut them to every other month?   Also, if the bump to 10% is easy, bump it again, but a small amount.  Each time you adjust and say that was easy, bump it up a bit more. 

The other advice I don't think I saw was the minute that 401k loan is paid off, adjust your contribution to increase by that amount that you had been paying.  Pain-free way to increase your percentage. 

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #40 on: February 25, 2015, 01:48:29 PM »
Well done on bumping 401K to 10%!  When your 401K loan pays off, make sure and bump your 401K contribution by that amount - you already know you don't need this money for day to day expenses, and it will save you money being a contribution rather than a loan repayment (go traditional, not Roth if you have the choice).

Directing your savings to traditional accounts (looks to my eye like you're in the 25% bracket, higher with state tax), will save on taxes this year.

In regards to that stupid 401k loan, once that's paid off in June my plan was to split that money between my EF and ROTH with 500 going to ROTH and 182 going to my EF.  I hadn't planned on changing the 401k contribution.  Sound like a good plan?  My idea was that the ROTH is serving as my backup EF for now since my current EF is so low. 

DecD

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #41 on: February 25, 2015, 01:52:45 PM »

Travel:  300
Gifts: 100
Lady stuff (hair, nails, brows): 100
Uber rides/cta transit rides: 150
Going out (play/concert/museum/movie/bar/dance class/etc.): 100
Gym: 50
Clothes: 102.03

All of these are totally discretionary.  If you are serious about saving then you need to cut these completely or reduce significantly.

As to rent: right now you are spending $1010 for rent, plus $140 for utilities, plus $185 for commuting plus $150 for commuting for fun.  So about $1500 per month.  Have you looked into the total costs or rent, utilities and commuting if you were to move close to work?  Do the calculations and figure out the possible savings.  And then decide if it is worth it for you or not.

As to food, you need to stop shopping at Whole Foods and similar establishments and stop spending (wasting!) money on prepared foods.  You need to start meal planning, cooking (in batches on the weekends, if you don't have time during the week) and shopping at Aldi, your local oriental grocery store, etc.  I think you can easily cut your $400 to $200.

I'd start looking here.  You've listed here $900 per month of discretionary spending.  You could find some big savings here.  Do you really need to get your nails done?  Your eyebrows?  Grab a nice pair of tweezers and a bottle of nailpolish instead.   

Take a look in your closet and see what you've got- how long can you make your current wardrobe last?  What if you just...didn't buy any clothes for the next 6 months?  Is there really anything you need- any clothing item out there that's more important than retirement in 15 years...or can you make what you've already got last?  I bet, if you've been spending $1200/year on clothes, you've got quite a wardrobe already.  I bought a suit last week- that was worth spending some money on as I didn't have one and I needed it for a work meeting.  But other than that, I haven't bought a stitch of clothing since May when I jumped on the MMM bandwagon myself.  And you know what?  I am still rockin' my current clothes just fine.  I have plenty.

Is there a cheaper way to get where you're going than Uber?  Is there a way to consolidate trips?  Would a grocery delivery service be cheaper than Ubering it to the store?  Come spring, can you bike to the store instead?

I've done a ton of international travel in my life, but recently I've been focused on domestic travel.  There are so many amazing places nearby that I haven't explored.  Could you cut down your travel budget by selecting local places to visit? Or could you smartly manage frequent flyer miles/credit cards to pay for some of your travel that way?

Entertainment: can you have friends over more often instead of going out?  Could you find awesome local free festivals and events instead of pricey ones?  Especially come spring, i bet Chicago is full of fun free stuff to do.

Good luck! :)

MsSindy

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #42 on: February 25, 2015, 01:53:33 PM »
I think what you need to determine is how bad do you want it (FIRE), and what are you willing to give up/change today to get it.  Really think about WHY you want to FIRE in 15 years....and is 17 or 20 years okay?  What does the rest of your life-plans look like?  Will there be a significant other? kids? pets? aging parents? Think about your goals and let them be your motivator.

Being single and moving to what I assume are "the burbs" may not be great for your social life, but see above for your goals/motivation.  Before moving, investigate things on Meetup.com to see what social things there are to do.  What do you like to do?  If being in the city means that you're going out drinking/eating to socialize, then maybe finding different social outlets will actually save you money (i.e. go hiking, it's free!).  But, if you tend to do a lot of free things in the city (museums), then it may not impact as much.  Regardless, before you shut down any decisions on moving, try thinking about things differently and from different perspectives.  Instead of saying, "I couldn never...", say, "well, what if I did .....instead". Or, what if you only did it for 2 or 3 years so you could save a big chunk - it doesn't have to be permanent.  Give this some more problem-solving thought, but I'd tackle some of the other easy stuff first.

Also, you keep asking what is the minimum you should be shooting for.  Instead, go do some research and see what prices are actually going for.  Go look at some places and see if you could see yourself happy there....or feel you could put up with it to meet your goals (i.e. rent a room instead of an apt for awhile) (see goals above!).

As for the practical side of things, a couple categories stuck out for me: the lady stuff at $1,200 per year!  That's not going to get you to an early retirement.  At the very least do your own nails and brows (there's some great organic stuff sold at ULTA for brows - easy peasy after 1 or 2 tries and for about $10 will last you forever!)  Consider a simplier hairstyle that doesn't need as much maintenance.

If AD Insur means accidental death or dismemberment, I'd take the $120/year and invest it instead...unless you're working around machinery and have a high risk of loping off an arm!
As others have stated, food is high.  One easy way is to just start substituting 1 or 2 meals with low cost versions.  For example, sub your current breakfast for oatmeal w/frozen berries or 1 egg and toast - simple & cheap.  Also, consider switching away from Trader Joes - they're more expensive and have a lot of tempting specialty items.  Hot bar items are usually around $8 - 9 per lb!!  You don't have to go from $400 to $150 overnight - make some gentle changes and you'll barely feel it.

Also, ~$5k on travel could be reduced if your goal is to get to FIRE in 15 years - try doing a big trip every other year and the rest local stuff or low-key.  And come on.... you don't own a bathing suit already??  and a cute dress already??  and if you're spending $2400/year on clothes, I bet you have some really cute sandals, too.

Gym: $50/mon - how often do you go (come on, really)?  I'm guessing not too much if you're also spending money on eating out and going out, dancing lessons, etc.  Again, re-examine your ultimate goal and see if it's worth delaying FIRE.  You could join a free running/biking club instead - you'd get to socialize and exercise for free!  Offer to walk dogs and make some money on the side!

Clothes: ~$2400 per year - what??  I work in a professional environment in the NorthEast, so I completely understand the need to have seasonal, professional clothes - but you really need to concentrate here - examine your closet and try a clothing fast for a couple of months.  Unless you're fresh out of college and still building a wardrobe, this is insane (for anyone wanting to FIRE in 15 years, anyway...that is your goal, right??)  Decide on the 2 - 3 items you really NEED per season and only buy those - and you only get 2 seasons: Spring/Summer and Fall/Winter. So, 4 - 6 new ITEMS per year....buy classic quality pieces, and if you're meeting your goals splurge on some inexpensive trendy pieces to keep your wardrobe fresh and vibrant.

In the short term, focus on paying off your debt and start to build a small emergency fund and investments.  Experiment and challenge yourself with each descretionary expense on "how low can I go" - you'll find where that sweet spot is where you say, "yep, this is what I'm willing to do to be FIRE in 15".  And if you find yourself making excuses or not making any progress month after month, then maybe you don't really want it that bad...but I suspect you do!

dandarc

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #43 on: February 25, 2015, 01:57:24 PM »
Well done on bumping 401K to 10%!  When your 401K loan pays off, make sure and bump your 401K contribution by that amount - you already know you don't need this money for day to day expenses, and it will save you money being a contribution rather than a loan repayment (go traditional, not Roth if you have the choice).

Directing your savings to traditional accounts (looks to my eye like you're in the 25% bracket, higher with state tax), will save on taxes this year.

In regards to that stupid 401k loan, once that's paid off in June my plan was to split that money between my EF and ROTH with 500 going to ROTH and 182 going to my EF.  I hadn't planned on changing the 401k contribution.  Sound like a good plan?  My idea was that the ROTH is serving as my backup EF for now since my current EF is so low.
Sounds fine, but if I were going that route, I'd get the EF up to whatever the goal number is ASAP - are you going for the Dave Ramsey 3-6 months expenses?

Just to try and put the tax advantages of the traditional 401K into concrete numbers - if you up the 401K by $682 / month, you'll reduce your tax burden by at least $170 per month (you're in the 25% bracket).  What that means is 401K gets $682 per month added, and you've also got another $170 to put into your IRA or EF.

Chrissy

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #44 on: February 25, 2015, 02:14:04 PM »
Howdy, fellow Chicagoan!  $1010 isn't bad for North Chicago.  I'm paying $1035, and I'm off the same Metra line as you.  There are killer rent deals to be had in Rogers Park, and the neighborhood is improving quickly.  Seems to me you'd want to be off one of the Evanston stops or Wilmette, though your rent might actually go UP.

See if you can find a place without gas. 

What's going on with your electricity?  Mine is $35-$40/mo.  Put everything on surge protectors and turn it all off when you leave.  Your internet, tv, phone and toothbrush chargers are sucking $40/mo away from you when you're not home.

Ubering to get groceries home is damn 'spensive!  I have a delivery pass to Peapod which runs me $69 for 6 mo ($11.50/mo).  Check it out.

See if you can move closer to work and NOT get a car.  Is there an area within 2 mi of work with a gym and grocery?  If so, move there, and come in to Chicago on the weekends on the Metra.  You're kinda living this way already, sounds like, except you spend 3 hours commuting everyday!  (Is this right?  Or do you sometimes work from home?)  I would totally trade 15 hrs/wk of commuting to work for 6 hrs/wk of commuting to fun.

Phone.  I switched from AT&T ($67 w/ employer discount) to Airvoice ($30/mo).  Brought a free phone from my sister.  Got to keep my number.  No problem.

Baron235

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #45 on: February 25, 2015, 02:44:21 PM »
Lots of talk on cutting expense, which is important. However, can you get a raise?  New job that lowers your commute?  Why not move to the South sooner? 

If you really want to do something drastic here are your three choices:

1.  Move to a cheaper location like the south.
2. Get Paid more. (new Job or current Job)
3.  Lower your rent. (kind of like the 1st one I mentioned)

These will make the biggest impact on your plans.  The changes that many have mentioned on here will add up to a significant change, so don't ignore them. But if you can change one of things I mention you hit your FI number much quicker. 

James

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #46 on: February 25, 2015, 02:53:52 PM »
I think you are coming at it from the wrong way. Instead of asking where to cut, I would decide what you have to spend, and decide how to spend that. You save 55%, you have some mandatory expenses, and then what is left? That is what you have to spend, now pick the priorities for that spending from the rest of those categories. But there isn't any more money to spend than that, so it's going to seem very tight at first. It will seem like you can't do it, yet people do it every day. Once you figure out how to live on that amount, it will slowly just become the new you. You might miss things for a while, and some things you might really miss for a long time, but you will reach your goal and you can find ways to enjoy life at the new spending level. But I think that is the way to make it work, not by deciding where to cut, but deciding where to spend.

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #47 on: February 25, 2015, 03:02:04 PM »
Howdy, fellow Chicagoan!  $1010 isn't bad for North Chicago.  I'm paying $1035, and I'm off the same Metra line as you.  There are killer rent deals to be had in Rogers Park, and the neighborhood is improving quickly.  Seems to me you'd want to be off one of the Evanston stops or Wilmette, though your rent might actually go UP.

See if you can find a place without gas. 

What's going on with your electricity?  Mine is $35-$40/mo.  Put everything on surge protectors and turn it all off when you leave.  Your internet, tv, phone and toothbrush chargers are sucking $40/mo away from you when you're not home.

Ubering to get groceries home is damn 'spensive!  I have a delivery pass to Peapod which runs me $69 for 6 mo ($11.50/mo).  Check it out.

See if you can move closer to work and NOT get a car.  Is there an area within 2 mi of work with a gym and grocery?  If so, move there, and come in to Chicago on the weekends on the Metra.  You're kinda living this way already, sounds like, except you spend 3 hours commuting everyday!  (Is this right?  Or do you sometimes work from home?)  I would totally trade 15 hrs/wk of commuting to work for 6 hrs/wk of commuting to fun.

Phone.  I switched from AT&T ($67 w/ employer discount) to Airvoice ($30/mo).  Brought a free phone from my sister.  Got to keep my number.  No problem.

Hi!

Yep, that's actually where I reside: Rogers Park.  2 block walk to Metra and 5 block walk to the El.  I was in a studio for $900 near Loyola but was having to walk to the El, then get off and walk to the Metra, then get off and take the work shuttle, so....yeah, you get the point.  Sad to say my current commute is actually an improvement on what it used to be.  With that said I've moved on average about every 1.5 years for like the past 12 years and I'm about 6 months into my current 2 year lease so moving would be difficult although not impossible.  Just kinda tired of it :)  I now have a newly remodeled 2 bedroom/1 ba with hardwoods, jetted tub, etc.....I think it is a steal honestly.  Prices in Lake Bluff to be near my job (many have probably already guessed the company) is not really less expensive.  I did look at Evanston before I found my current spot, just didn't find anything there in time. 

So I'm supposed to get a work from home day this year which would mean 4 days commuting instead of 5, but I'm not sure how soon that'll actually happen. 

I'm definitely looking into Peapod!!

seattlecyclone

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #48 on: February 25, 2015, 03:05:32 PM »
Your commute is killing you. Beyond the expense of the train pass, the time it eats out of your day causes you to spend more money in other areas of your life.

You take an Uber to get groceries. Why? A single person can easily carry a week's worth of groceries on public transit. This facepunch-worthy expense kinda/sorta starts to make sense when you consider that you've already spent three hours on a train that day and simply don't have time to take transit to the grocery store.

Similarly, you often buy hot foods at the store. These hot foods are more expensive than cooking your own food. You know this, but you buy them anyway. Why? Well, after spending a full day at work and 90 minutes getting home, you simply don't have enough time to cook dinner and go to the store. So on days where you go to the store, you not only pay someone to drive you there, but you pay someone to cook dinner for you as well.

Look through the rest of your spending and try to add up how much more money you spend because your commute makes it so that you don't have enough time to do something yourself.

I understand and share your preference for urban living. But this preference simply doesn't work well with a job in the far-out suburbs. Are there any jobs in your field within the city? I strongly urge you to apply for some.

EconDiva

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Re: Case study: PLEASE help me figure out how to retire in 15 years
« Reply #49 on: February 25, 2015, 03:07:42 PM »
Lots of talk on cutting expense, which is important. However, can you get a raise?  New job that lowers your commute?  Why not move to the South sooner? 

If you really want to do something drastic here are your three choices:

1.  Move to a cheaper location like the south.
2. Get Paid more. (new Job or current Job)
3.  Lower your rent. (kind of like the 1st one I mentioned)

These will make the biggest impact on your plans.  The changes that many have mentioned on here will add up to a significant change, so don't ignore them. But if you can change one of things I mention you hit your FI number much quicker.

Just 3 years ago I was making 45K...I moved here to try to get a better paying position and increase my salary.  So far it's worked and I've been trying to land a job at the type of company I work at for a while now.  I think I need to at the very least stay a few more years just in order to gain enough additional experience to increase my value/marketability.  In Atlanta the job market for my industry is a little different and the pay is usually lower.  So I 'could' move back south sooner than 5 years, but not anytime soon like within the next year or 2. 

I'm working on the duties I take on at work and putting myself in management's eye for a promotion; do consider I've only been here one year though so all in due time.  Maybe next year a promotion would be realistic but I'm still too new right now.  I just got a 2.7% merit increase starting next month so at least that was something for now....

Just to give a little background on myself, I moved to Chicago from the south with the intention of gaining enough experience in my field to be of more value when I move back to the south.  It's taking longer than I had wished (I've been in Chicago 3 years now) but it's happening.  Now the big question will be...will I actually be able to move back to the south and command the same salary there come time I'm ready to move back in several years?  Just a thought that crosses my mind a lot and will impact decisions I make in the short term. 
« Last Edit: February 25, 2015, 03:11:54 PM by EconDiva »