The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: EconDiva 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.
-
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.
-
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.
-
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.
-
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
-
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 (http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/) - 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.
-
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?
-
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?
-
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.
-
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 (http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/) - 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.
-
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.
-
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.
-
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.)?
-
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.
-
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.
-
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!
-
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.
-
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.
-
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.
-
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.
-
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 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.
-
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.
-
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.
-
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?
-
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 :/
-
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?
-
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 muscle. I wrote a post about this on our journal (http://forum.mrmoneymustache.com/journals/stealth-saving-(lentils5eva-ioseftavi)/msg134085/#msg134085), 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%.
-
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.
-
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 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 muscle. I wrote a post about this on our journal (http://forum.mrmoneymustache.com/journals/stealth-saving-(lentils5eva-ioseftavi)/msg134085/#msg134085), 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?
-
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 muscle. I wrote a post about this on our journal (http://forum.mrmoneymustache.com/journals/stealth-saving-(lentils5eva-ioseftavi)/msg134085/#msg134085), 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 ;-)
-
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.
-
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!
-
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!
-
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'.... :/
-
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 muscle. I wrote a post about this on our journal (http://forum.mrmoneymustache.com/journals/stealth-saving-(lentils5eva-ioseftavi)/msg134085/#msg134085), 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.....
-
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.
-
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.
-
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.
-
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.
-
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! :)
-
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!
-
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.
-
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.
-
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.
-
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.
-
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!!
-
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.
-
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.
-
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.
This is a great idea.
Chrissy also had a ton of good advice especially since she lives in the area, I hope you take that to heart!
Other than that the things that hugely jumped out to me were the buying prepared foods and the $100/month on hair/nails/brows (oh and the Ubering but the Peapod idea sounds like it might alleviate that). OMG just no. I am a crazy spendy mcspenderpants (seriously I am barely mustachian) and I can't even imagine spending that much on that stuff!!
For the prepared foods, I don't have great advice on how to break the habit (although if you get your groceries delivered I guess that removes the temptation), but for the lady stuff... do you have a super high-maintenance haircut that needs to be touched up often? Could you think about trying a different hairstyle? I totally understand the appeal of a nice hair place, mine is $60+tip (facepunch I know) but my hair is such that I can get away with 2x a year. I absolutely love gel manicures and pedicures but they are a total volcano of wastefulness... I might splurge on one pedicure per year as a way to pamper myself before a race, and maybe ask for a gift certificate from my bf or parents as a birthday present so I get one other one. Brows, I also understand wanting a pro touchup once in a while but learn to deal with it yourself in between... 1-2 waxes a year isn't gonna break the bank but if you do it frequently they really add up!!
Oh yeah and that's a fuck ton of money to spend on travel if you are really trying to make this budget work. What kind of travel are you doing?
-
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.
+1
Think about making gradual cuts to get you to your goal. Start with something easy and painless. It will serve as motivation when the cuts get to things that you think are necessities.
For example, I was spending $800/month on groceries and $400/month on bars/restaurants (for two people). I started by cutting out ordering pizza by keeping a few frozen pizzas in our freezer. Is it healthy? No. Did we stop spending $25 on a pizza delivery? Yes. Did it put me at my goal? Nope. The next month I focused on cutting back on packaged food, bulk cooking from scratch. The month after that I focused on avoiding food waste. Now we spend $250/month on groceries (includes toiletries, paper products, personal care products). We're trying to spend under $100/month for restaurants.
Good luck!
-
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.
This is a great idea.
Chrissy also had a ton of good advice especially since she lives in the area, I hope you take that to heart!
Other than that the things that hugely jumped out to me were the buying prepared foods and the $100/month on hair/nails/brows (oh and the Ubering but the Peapod idea sounds like it might alleviate that). OMG just no. I am a crazy spendy mcspenderpants (seriously I am barely mustachian) and I can't even imagine spending that much on that stuff!!
For the prepared foods, I don't have great advice on how to break the habit (although if you get your groceries delivered I guess that removes the temptation), but for the lady stuff... do you have a super high-maintenance haircut that needs to be touched up often? Could you think about trying a different hairstyle? I totally understand the appeal of a nice hair place, mine is $60+tip (facepunch I know) but my hair is such that I can get away with 2x a year. I absolutely love gel manicures and pedicures but they are a total volcano of wastefulness... I might splurge on one pedicure per year as a way to pamper myself before a race, and maybe ask for a gift certificate from my bf or parents as a birthday present so I get one other one. Brows, I also understand wanting a pro touchup once in a while but learn to deal with it yourself in between... 1-2 waxes a year isn't gonna break the bank but if you do it frequently they really add up!!
Oh yeah and that's a fuck ton of money to spend on travel if you are really trying to make this budget work. What kind of travel are you doing?
I only get my hair cut once a year. But I'm an African American female that wears my hair natural so getting it straightened costs $70 without a tip. I haven't paid less than $60 to get my hair pressed anywhere since going natural 14 years ago and trust me I've been to lots of salons. The process would take me 4 hours at home. And it only lasts 2 weeks or so...if I work out lot like right now it's even less. Anyways, to alleviate the cost 'most' of the time my isn't straightened from the salon; it's usually pulled all the way back in a natural bun and that's it. I'm averaging the hair, nails, brows thing out over the course of a year and this is my best guess on how much those things add up to. There are months I don't get my hair pressed or nails done at all. Then there are months where I may go on a trip and have to present at work and end up getting all of these things done twice that month. So it may be a little overstated but not by a whole lot.
So....in regards to the travel, I don't usually do what I consider to be a whole lot. Last year I traveled to SC and VA back to back (twice) for two funerals and I went to Miami in both October and December.
This year, I plan to go to St. Martin for 4 days in June, Puerto Rico or Mexico 5 days in September, and for 2 more trips...probably a weekend in Miami or Atlanta, and home to SC (or wherever my mom would like to go) in December. This will be the most I've ever traveled in one year. However, I have traveled internationally recently for my job and accumulated miles so I will get to use them for probably 2 of the trips....
-
I'm an African American female with natural hair as well. Check out https://www.youtube.com/user/GreenBeautyChannel for hair care tips that are actually helpful. I hear you on wanting to look professional by getting your hair pressed. What kind of people do you work with? Liberal? Conservative? What do other women of color do with their hair? My workplace is pretty liberal and are aware that they could be accused of discrimination if they express a problem with natural hair. I see afros, braids, etc getting more popular in the workplace. I have a short afro myself. And I don't change my hair for trips around the country when I am interacting with clients.
Can you get a roommate for your swanky 2 bedroom?
For working out I bought this and put it in my home: http://www.amazon.com/Phoenix-98516-Easy-Up-Manual-Treadmill/dp/B000NPXWMU
I've decided not to do personal travel (except weddings and funerals) until FIRE because I want to retire that badly. I make similar income to you.
Moving up north to make more money isn't helpful if you are spending it all.
-
Your attitude about spending is confusing me. You say you want to know how much to cut every spending category to be FI in 15 years. Well, why do you want to be FI? What do you value? I think you will be more successful with cutting spending if you start by re-framing your goals and needs. The beauty with spending consciously is you realize that you don't need to spend a lot to be happy. And it's a gradual process - you start by eliminating some wasteful habit, then you realize life is still good and you don't feel any worse, then you feel more comfortable applying that to other areas, questioning, not doing something just because others do, and not caring.
Congrats on upping your 401k to 10%!! My suggestion: start tracking all your expenses. Sign up on mint.com (or personal capital) and go through every evening, or once or twice a week, and move all of your expenses into a spreadsheet, breaking spending out by categories. This will be eye-opening and you'll see how much you actually spend on everything.
Rent: 1010
You said above that you have a 2 bedroom!! That's totally crazy for 1 person, why not get a roommate?
Internet (mandatory for work purposes): 50
Can you get this lower? What about using http://www.chicagocheapinternet.com/ to find a cheaper option, then calling your provider to cancel and switch, and getting a lower rate from them as they do what they need to to keep you as a customer?
Utility: Gas 60
Utility: Electric: 80
What can you do about your utilities? Can you call your provider and have them do an energy audit? My husband and I pay about $20 for electricity. Do you make sure to turn off lights in rooms you're not using? To you keep appliances unplugged? Can you talk to your neighbors and see how your bills compare? Can you put up insulation for your windows?
Cell: 50
Switch to an MVNO (look it up on wikipedia - I have a Verizon MVNO called Page Plus Cellular, my phone (iphone 4s) costs $33 every month, and there's no contract. You can do even better depending on your needs. How much data do you need since you have wifi at home and work? Why not try disabling data on your phone to curtail random facebooking etc and see how much data you don't need?
Train (mandatory): 185.25
Food (including restaurants): 400
You can do so much better. If you're not a confident cook, talk to your friends who like cooking and ask for some of their easy or in-a-time-crunch recipes. Are you happy to eat the same thing for dinner multiple times if it's food you like? Try bulk-cooking so you have several meals (like http://www.budgetbytes.com/2013/05/italian-wonderpot/), and keep snacks handy for times you're hangry (granola bars, hard-boiled eggs, veggies + hummus, etc).
Student loans (mandatory): 300
Travel: 300
Are you doing the bare-minimum work like getting credit cards with bonuses? Check out Barclay Arrival Plus and Chase Sapphire Preferred- they have promotions like spending 3k in 4 months and getting 50K points. If you spend that anyway, it's an easy way to save tons of money on flights.
Gifts: 100
Who are you buying for? That's a lot of money - are you doing this because you love to, or because it's a habit you never questioned? Talk to friends/family you gift for, see if they might not prefer something experiential (that can be inexpensive) like getting gourmet coffee then going for a walk, or coming over to your place for some wine and conversation.
Lady stuff (hair, nails, brows): 100
Hmm. Plugging your own eyebrows is really easy (and I actually have come to really enjoy it). Buy some nice tweezers and a magnifying mirror, and you're good basically forever.
Uber rides/cta transit rides: 150
Going out (play/concert/museum/movie/bar/dance class/etc.): 100
I'm sure the default among your friends might be going out for dinner or for drinks, so be proactive about the inexpensive things you can do - people will probably be amenable to a change in plans as long as it doesn't require effort of them. There are lots of things in Chicago - http://www.timeout.com/chicago/kids/activities/free-museum-days. Also, consider hosting your friends at your apt - a box of wine and some baked potatoes and garlic sour cream sauce (or cheese and crackers) are all you need if you've got the awesome people. This will be a lot cheaper than going out, especially if other friends take turns hosting.
Gym: 50
Do you actually go? Check out some groupons for short-term memberships, or where you pay $X for Y visits. Figure out what kind of exercise you can do at home - I personally do crunches and have a pair of 8lb dumbbells. I'm sadly really inactive in the winter when it's cold, but come fall/spring/summer, I'm all about running outside, which is totally free and doesn't require any gym membership.
Clothes: 102.03
I too love clothes and looking good. But you need to cut this out - eating well and exercising and being fit is what will make you look good, not clothes. Spend an evening going through your closet (fun music and glass of wine go well with this), go through all your clothes and figure out what you don't wear/don't like/feels uncomfortable, and donate all that. With the rest of the clothes, try on different outfits and combinations, and remember how many awesome things you have to wear. Unsubscribe from all the store emails - they'll just make you want to shop. And stop using shopping as a recreational activity - stay out of stores and you'll shop less. Some of this will depend on your personality - I am totally fine not shopping, but of course whenever I do go into a store I have all sorts of desires to buy cute dresses, etc, again. So I pretty much don't shop, buy necessities from Amazon, and when I look at stuff for fun (like a new hiking backpack), I put it on my wishlist and don't buy. The key is if I really want something or need something, I get it, I don't deny myself. I just spend consciously and generally that means when I'm thoughtful I buy less.
Good luck!
-
I'm going to try to tackle the Chicago-specific stuff. You can discard this when and if you decide to move away from Chicago, but you're really spending a pretty penny for your chosen arrangement up here.
Rent in Chicago shouldn't be over $700/mo for one person. It CAN be, sure, but if you can't find a decent living space for less, you're not looking hard enough. I've lived within an hour (Hyde Park, Logan Square) CTA/Metra ride from the Loop for a few years, and an apt with a roommate or two usually costs $500-$600. For a while there I was paying $425, and it was a nice place along the Blue Line (3 roommates + me, but with a huge kitchen which I adored). I biked to work in the loop every day because it was so close.
Why do you pay so much for the Metra AND CTA AND Uber??? You live WAYYYY too far away from your work if you are paying for a $185 metra pass, plus still finding yourself needing the CTA and Uber that much. You should live close enough where your monthly pass for work is around $100, and extra transit on top of that should not really be more than $50/mo. And then get a bike so you don't have to take transit so much.
Food in Chicago can be expensive (I spend $250/mo, but I'm a hippie who likes organic stuff. Trader Joe's helps with some items but it is not the cheapest for everything. I buy a lot online and a lot of cheap staples at asian grocery stores), but $400 is too much, wow. Lower that immediately to $300, and then see if you can tidy up any more in the future.
Start buying thrift-store clothing. There are lots of great thrift stores in Chicago, but online is great too. (liketwice.com/tFIOz is a great site for quality used clothing.)
-
I do agree with others who are asking you to consider finding a lower cost place to live closer to work. I can personally tell you: For the first time in my life, I live walking distance to work, and it is AMAZING. Not having a commute significantly improved my quality of life!
As a woman, I also challenge you to consider your expense on beauty stuff. Lots of beauty can be DIY! I took the plunge into cutting my own hair over a year ago, and I'll never go back! (And my hair is actually kind of cute - I get compliments). I've done blunt bangs, layers, whatever. The key is to buy good scissors, and watch a lot of Youtube videos first. And also remember that if you mess up, you'll just have to go pay for a professional to cut your hair, which is where you'd be if you didn't cut your own hair anyways! I will admit that my hair is long (below my shoulders). I think it would be harder to do a nice-looking short haircut on oneself.
-
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.
+1
Think about making gradual cuts to get you to your goal. Start with something easy and painless. It will serve as motivation when the cuts get to things that you think are necessities.
For example, I was spending $800/month on groceries and $400/month on bars/restaurants (for two people). I started by cutting out ordering pizza by keeping a few frozen pizzas in our freezer. Is it healthy? No. Did we stop spending $25 on a pizza delivery? Yes. Did it put me at my goal? Nope. The next month I focused on cutting back on packaged food, bulk cooking from scratch. The month after that I focused on avoiding food waste. Now we spend $250/month on groceries (includes toiletries, paper products, personal care products). We're trying to spend under $100/month for restaurants.
Good luck!
Wow, that's a big change...How long did it take you to get to spending the $250/month on groceries?
Congrats on making such huge strides...I am taking everything in that everyone has written and do understand this will be a gradual process. I know that habits aren't broken easily and will take time and constant adjusting. Just dreaming of the day I reach my goal...sigh...
-
I just wanted to say thank you to everyone for all of their input/comments/suggestions/encouragement thus far. I am going to frequently be re-reading everything everyone has posted and continues to post in this thread for a long time to come. I really do appreciate all of the help.
It's obvious that I need to gradually cut my discretionary categories wayyyyyy way down. I will start using Mint to help with tracking the spending in these buckets (I've had Mint for a long time just haven't bothered using it in years :/).
I must say that the hardest choice many have suggested is the moving part (moving closer to my job). As mentioned earlier I'm 6 months into a 2 year lease and have moved on average every 1.5 years for over a decade now so I guess the thought of moving again is a little overwhelming. I've also changed jobs that frequently. Not saying I'm not considering it, I just am not sure about where to start even thinking about it. I moved to Chicago to be close to the city and all it has to offer so the thought of moving to Lake Bluff, Illinois is scary because I'm 99% sure I won't like it. And if I don't stay at my current job 1, 2, 3 years or however long down the line it won't be pretty having to orchestrate another job and housing move back into the city of Chicago where all of the jobs are.
I just don't know if moving closer to my job is the answer...? It seems my other option if I stay in Chicago is get a roommate or two. My current place has 1 bathroom which means I'd be sharing it with someone. Or, I still move out but stay in the Chicago area and rent a room. Or lastly...a roommate in a 2Br/2Ba. I'm trying to wrap my head around what are my best options here in terms of decreasing my spend on housing. The only other option I could think of is renting my room on airbnb...if I could pull in $200 or so monthly doing that I'd 'think' it may be worth staying put...at least until my lease is up.
Thoughts? It seems most people are pushing that I move closer to work. I do dream of how much better I'd feel having a under-15-minute commute. An hour and a half in this weather and snow right now had me dreaming of moving back to the south this morning!
-
I started by cutting out ordering pizza by keeping a few frozen pizzas in our freezer. Is it healthy? No. Did we stop spending $25 on a pizza delivery? Yes. Did it put me at my goal? Nope. The next month I focused on cutting back on packaged food, bulk cooking from scratch. The month after that I focused on avoiding food waste. Now we spend $250/month on groceries (includes toiletries, paper products, personal care products). We're trying to spend under $100/month for restaurants.
Good luck!
Wow, that's a big change...How long did it take you to get to spending the $250/month on groceries?
Congrats on making such huge strides...I am taking everything in that everyone has written and do understand this will be a gradual process. I know that habits aren't broken easily and will take time and constant adjusting. Just dreaming of the day I reach my goal...sigh...
4alpacas example (working on her food budget) is extremely true-to-life, in my experience. You'll notice she didn't start by writing out what she was going to spend on food, to the penny. She didn't immediately jump from $800 to $250. And she didn't get to a certain point and say "OK, I'm done, that's it." She's still working on it.
That's what it's all about - pick a category. Figure out a way to spend less. Once you've made it your "new normal", re-examine it. If further change doesn't scare you or feel impossible, see if there's another way to reduce costs, and tackle that next.
-
I'm an African American female with natural hair as well. Check out https://www.youtube.com/user/GreenBeautyChannel for hair care tips that are actually helpful. I hear you on wanting to look professional by getting your hair pressed. What kind of people do you work with? Liberal? Conservative? What do other women of color do with their hair? My workplace is pretty liberal and are aware that they could be accused of discrimination if they express a problem with natural hair. I see afros, braids, etc getting more popular in the workplace. I have a short afro myself. And I don't change my hair for trips around the country when I am interacting with clients.
Can you get a roommate for your swanky 2 bedroom?
For working out I bought this and put it in my home: http://www.amazon.com/Phoenix-98516-Easy-Up-Manual-Treadmill/dp/B000NPXWMU
I've decided not to do personal travel (except weddings and funerals) until FIRE because I want to retire that badly. I make similar income to you.
Moving up north to make more money isn't helpful if you are spending it all.
Nice to meet another 'natural Mustachian' :)
Thanks for the youtube link! I will definitely check it out. To answer your question, to be completely honest I do think I'm in more of a liberal environment. I have seen natural styles, short fros, braids and locs at my job. Now, there aren't a ton of black females where I work by any means at all, but out of the ones I've seen around only 2 I've noticed with regularly straightened hair-one of which is wearing a lacefront. Anyways, you know how we can be when it comes to hair and I pretty much have a 'do you' sentiment about it. When I first went natural I wore braids and my then my own hair in twists for...years. Nowadays its a bun or straightened...guess I'm kinda boring lol. Those 2 things are pretty damn quick and easy to either do (bun) or have done (press).
In regards to the roommate suggestion, please see my post directly above this one...I'm tossing it around but haven't decided the best option for tackling the housing cost yet. That's crazy the link you posted because I was just looking at one of those manual treadmills! Do you like it? The main reason I didn't buy it is because I wasn't sure where to put it...if I turn my empty 2nd bedroom into a guest room I wouldn't want it in there, and there's no room in my bedroom or anywhere else really. My place is nice on the inside but it's small...not really a 'true 2 bedroom' in my person opinion. In other words, the 2nd bedroom could only comfortably fit a twin bed if you wanted to be able to walk around the perimeter of the bed without being squished up against a wall.
Just curious, how much time do you have until FIRE? Do you miss traveling? I have to admit that this is the first time in my life where I've made enough money to go on a trip or 2 a year, and I love traveling so I guess I've been in the mode of thinking "I deserve" when its obviously a luxury and maybe I need to cut that out completely too? I was kindof surprised more people didn't zero in on that and simply say 'no traveling' for now...
When you said "Moving up north to make more money isn't helpful if you are spending it all." I really needed to hear that and it really resonated with me last night. Before I moved here I had a friend who told me my move didn't make sense because I wasn't getting paid enough to move. In other words, she was arguing that moving from Atlanta to Chicago to go from 45k to 55k was unwise because of the higher COL in Chicago. Honestly, I am paying 1010 rent here when I was paying 700 rent there so there's truth to it. My mid term goal, as mentioned in an earlier post is to move back to the South but only once I've gotten enough experience here to demand a similar salary there...I wanted to move back to Atlanta or another southern city where the cost of living is lower once I feel confident I can demand at least 80K moving back. I think I've let my costs rise moving here and that's not good...even though Atlanta is less expensive on the COL scale I feel I can still live at about the same cost I was paying in Atlanta when I left there about 3 years ago. It will require adjustments, but I believe it can be done........
-
You know...from following this thread, my impression is that you love where you live and as a city dweller myself, I have a hard time encouraging you to move the 'burbs. I love that my area is walkable and close to everything I need - work, groceries, fun, etc. I would encouraging you to find a new job in Chicago proper - close to where you live or where you want to live. Moving house seems "easier" because you have more direct control over it. But frankly, changing jobs sounds like an option to me. You mentioned you have been advancing in your career and gaining skills to get into the role you want. Without knowing exactly what you do, I will just say that people tend to stay in jobs "too long" during phases of rapid career growth. When you are acquiring marketable skills at a fast rate, you don't need to stay in that position for 4-5 years. 1-2 years (so long as you are on resume building projects and managing your work as such) is often enough to land you a new job. throughout my 20s, I have changed jobs every 1.5-2 years - each time a strategic move and step up. In that time I more than doubled my salary (44k out of college; 96k now + ~17% bonus and equity in a fast growing company. ETA: "now" is me at 29/yrs old). For me this meant working my butt off but also working 5 jobs in 9 years. I never would have progressed as I have if I had stayed longer at each company. Now I am in a career phase that will likely mean staying longer in my current role. I am blabbering now, but I will just say - don't discount a job change and look closer to where you want to live.
-
Your attitude about spending is confusing me. You say you want to know how much to cut every spending category to be FI in 15 years. Well, why do you want to be FI? What do you value? I think you will be more successful with cutting spending if you start by re-framing your goals and needs. The beauty with spending consciously is you realize that you don't need to spend a lot to be happy. And it's a gradual process - you start by eliminating some wasteful habit, then you realize life is still good and you don't feel any worse, then you feel more comfortable applying that to other areas, questioning, not doing something just because others do, and not caring.
Great questions...and even better suggestions! Thank you very much; I will be continuing to look back on everything you've noted in every category of your original posting.
In regards to your question, why do I want to be FI, here are the reasons:
-I don't like working a job much at all. I want to be free from the obligation to report to a job every day. I want to choose if/when to work and for long, and I don't like the feeling of 'needing' a job to support myself...it feels 'unstable' so to speak.
-I want more time to myself. I'm a dreamer. A creative thinker. A photographer. I'm basically an introverted (INFP) artist at heart working in a fast paced corporate type environment and I don't want to be doing that when I'm 60. For one, I won't be able to maintain this speed of work until that age. For another, I am sure to be seen as less valuable the older I get once I hit 50ish or so. I want to be able to have time to do things I enjoy which are mostly leisurely things. And I don't want to be too old with little time left to enjoy those things.
-I had a few family members pass last year and I'm realizing every day that we are not promised tomorrow. I moved away from all of my friends and family and the only thing I have 'going' for me so to speak right now...is my job. My mother will be 57 this year and if I can FI earlier than planned, maybe I'll have more time to spend with her in her old age, like I wish I would have had to spend with my grandfather who passed last year. Again, it comes down to giving myself time back. Wanting to have more time with my mom is part of the reason I've justified traveling more...either for her to see me, me to see her, or for us to take a trip together 1-2 times a year. That's pretty costly. Now, my mom is in the process of foreclosure down in the south and not doing too well financially for herself (she's been out of work for 3 years) so that's an entirely different story altogether.
-I don't want to end up like some people I've seen. I don't want a mortgage at 65. I don't want to only have 100K in the bank at 59. I want to feel more secure than that.
-
Sticking out your lease would make some sense if you can find a roommate for the 2nd bedroom. You'd still be paying too much in train costs, IMO, but the amount you spend on rent is the bigger issue. Roommates are easiest found through networks (any alumni from a high school or college in the area? Any friends-of-coworkers looking for a place to stay?) but craigslist can also work out. I've personally never found bathrooms to be an issue (I've dealt with 4 people to 1 bathroom before, but I prefer a more relaxed 2 to 1 ratio), but I'm usually out of the house for most of the day (as well as my roommates, who have been similar full-time professionals or students), so the biggest concern is usually shower scheduling. (Sorry if this is too individual to be helpful, though. I try to remember that just because I am OK with something, it doesn't mean other people are. I don't mean to be dismissive of your needs, just remember that having a private bathroom is costing you $500/month!)
Another option is subletting your apartment out for the remainder of the lease (most leases allow some form of sublet, but you should check). Then you can move somewhere closer to work. (Or, as Yandz said, try to find a job in the city proper! But Lake Bluff is really far away to be living in Chicago itself.)
I know moving isn't fun, but it can be really worth it. I personally downsized enough such that all of my stuff (if I pack it efficiently) fits in a Ford Transit Connect I rent from Zipcar (It's actually a really big car). It then costs about $40 to move within Chicago (plus finding a willing friend to help me move the boxes). Even if you need double that for two trips, that's little compared to the $300-500/month you could be saving finding a new place.
-
You know...from following this thread, my impression is that you love where you live and as a city dweller myself, I have a hard time encouraging you to move the 'burbs. I love that my area is walkable and close to everything I need - work, groceries, fun, etc. I would encouraging you to find a new job in Chicago proper - close to where you live or where you want to live. Moving house seems "easier" because you have more direct control over it. But frankly, changing jobs sounds like an option to me. You mentioned you have been advancing in your career and gaining skills to get into the role you want. Without knowing exactly what you do, I will just say that people tend to stay in jobs "too long" during phases of rapid career growth. When you are acquiring marketable skills at a fast rate, you don't need to stay in that position for 4-5 years. 1-2 years (so long as you are on resume building projects and managing your work as such) is often enough to land you a new job. throughout my 20s, I have changed jobs every 1.5-2 years - each time a strategic move and step up. In that time I more than doubled my salary (44k out of college; 96k now + ~17% bonus and equity in a fast growing company. ETA: "now" is me at 29/yrs old). For me this meant working my butt off but also working 5 jobs in 9 years. I never would have progressed as I have if I had stayed longer at each company. Now I am in a career phase that will likely mean staying longer in my current role. I am blabbering now, but I will just say - don't discount a job change and look closer to where you want to live.
Not blabbering at all...this is very important information. Just curious to know what industry you're in if you don't mind sharing?
The thing is, I'd been looking to work at this type of company for...I don't know...5-6 years. Now that I'm here I'm hesitant to only give it 1-2 years because I like my team, the salary, and the learning environment. You are reminding me not to become too complacent, and I appreciate that. I think my best way to approach this is to 'look and see what's out there'. I admit I'm not that open to looking right now because I 'worked so hard to finally make it here'. But it doesn't hurt to see if I can do better. For me, my current job 'is better'...it's the 'best its ever been for me so far'...so the pay/environment/etc. has balanced out the horrific commute. It's one of those places that, in my industry, in this city, is kinda where everyone wants to be. The kinda place when you leave people say...why would you leave X company? The fact I'm supposed to get a work from home day soon is kindof like a 'dangling carrot' in that I'm just drooling to get it as soon as possible for some sort of relief from this commute situation.
As you can see, the issue is I like the job itself enough to not want to leave and the city itself enough to not want to move.... :/
-
Lake Bluff has an apt now on Craigslist that has a gym in it in the 925 monthly range. I'd hang out in my spare time commuting on Craigslist and see if I could get a lower rent/cut the commute/lose the train fees apt. And then I'd go into Chicago on the occasional weekend to socialize/enjoy the big city enviro. I moved lots of times when I was younger and renting...always to save $$s.
On the job front, if you want to make bigger money so you can move back closer to family in the future, when was the last time you had a convo w/your manager or the HR dept about what it would take for you to move up? Doing any continuing education?
-
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?
I am going to try Aldi's...there is one off of the train line not too far away from me. I did read an article this morning about some horse meat scare they had 2 years ago though??? Apparently horse meat was found in meat they were claiming was 100% beef....anyways, I digress :/ My neighborhood is one of the most diverse ones in Chicago...there are also tons of ethnic grocers so I will check those out and also look into if any local 'markets' will be opening up once warmer weather hits.
Wraps-I've only been making them 2 at a time. I can do better with this and start making them in bulk and freezing. I'm usually good with the vegetables; I try to use all of them up before they go bad. I have a habit of not buying too many when I do grocery shop.
Turkey jerkey-it doesn't have to be protein but I find protein filling and I'm trying to go low carb right now. Thanks for the suggestions...I keep Lara Bars in my desk but have also done Odwalla ones too :)
Baked chicken/brussel sprouts-These come from a place called Food Ease that mostly consists of a buffet line of 'healthy foods', along with a few produce items and pre-packaged 'healthy snacks'. Its my weakness. I wasn't craving something hot that day so to speak, I was just being plain lazy. I'd been going there and buying pre-cooked meals for lunch/dinner (facepunch time, I know!).
Apples/almonds-Fruits are the worse for me. I end up never eating all that I buy. I need to watch this closer. If I buy a whole apple, I never eat the whole thing. I end up buying sliced apples in a bag, which are more expensive. But at least I usually eat all of those. Almonds...another luxury. I can quit those. But one bag usually lasts me three months (I keep it in my drawer at work and snack when I'm hungry to keep from buying something in the office).....
-
You know...from following this thread, my impression is that you love where you live and as a city dweller myself, I have a hard time encouraging you to move the 'burbs. I love that my area is walkable and close to everything I need - work, groceries, fun, etc. I would encouraging you to find a new job in Chicago proper - close to where you live or where you want to live. Moving house seems "easier" because you have more direct control over it. But frankly, changing jobs sounds like an option to me. You mentioned you have been advancing in your career and gaining skills to get into the role you want. Without knowing exactly what you do, I will just say that people tend to stay in jobs "too long" during phases of rapid career growth. When you are acquiring marketable skills at a fast rate, you don't need to stay in that position for 4-5 years. 1-2 years (so long as you are on resume building projects and managing your work as such) is often enough to land you a new job. throughout my 20s, I have changed jobs every 1.5-2 years - each time a strategic move and step up. In that time I more than doubled my salary (44k out of college; 96k now + ~17% bonus and equity in a fast growing company. ETA: "now" is me at 29/yrs old). For me this meant working my butt off but also working 5 jobs in 9 years. I never would have progressed as I have if I had stayed longer at each company. Now I am in a career phase that will likely mean staying longer in my current role. I am blabbering now, but I will just say - don't discount a job change and look closer to where you want to live.
Not blabbering at all...this is very important information. Just curious to know what industry you're in if you don't mind sharing?
The thing is, I'd been looking to work at this type of company for...I don't know...5-6 years. Now that I'm here I'm hesitant to only give it 1-2 years because I like my team, the salary, and the learning environment. You are reminding me not to become too complacent, and I appreciate that. I think my best way to approach this is to 'look and see what's out there'. I admit I'm not that open to looking right now because I 'worked so hard to finally make it here'. But it doesn't hurt to see if I can do better. For me, my current place 'is better'...it's the 'best its ever been for me so far'...so the pay/environment/etc. has balanced out the horrific commute. The fact I'm supposed to get a work from home day soon is kindof like a 'dangling carrot' in that I'm just drooling to get it as soon as possible for some sort of relief from this commute situation.
As you can see, the issue is I like the job itself enough to not want to leave and the city itself enough to not want to move.... :/
The details of my situation is a little different, but I also have a job I love with a horrible commute. I know this flies in the face of everything mustachian, but I'm not going to change it. I have a very specific skillset. I have my dream job. I'm highly paid. My situation isn't optimal, but I'm okay with it.
Set your personal goals and go for it. Don't worry about whether or not it's mustachian. If city living and a job in the suburbs is what you want, then find a way to make it work while hitting your financial goals.
Yeah, this is good advice. I have worked at some miserable places and being somewhere you love is so worth it (whatever "it" is). I just remembered you saying you need to stay a couple years to get marketable skills and if THAT were the only reason, I would say hunt. Getting the skills is important; waiting some arbitrary period of time is not. But it sounds like you truly love it. That is a different thing. To answer your question, I am a product manager for a medical device company. I need to hang out "at this level" now for a bit before going for a director type position. I hope to be FIRE before that happens ;)
-
You know...from following this thread, my impression is that you love where you live and as a city dweller myself, I have a hard time encouraging you to move the 'burbs. I love that my area is walkable and close to everything I need - work, groceries, fun, etc. I would encouraging you to find a new job in Chicago proper - close to where you live or where you want to live. Moving house seems "easier" because you have more direct control over it. But frankly, changing jobs sounds like an option to me. You mentioned you have been advancing in your career and gaining skills to get into the role you want. Without knowing exactly what you do, I will just say that people tend to stay in jobs "too long" during phases of rapid career growth. When you are acquiring marketable skills at a fast rate, you don't need to stay in that position for 4-5 years. 1-2 years (so long as you are on resume building projects and managing your work as such) is often enough to land you a new job. throughout my 20s, I have changed jobs every 1.5-2 years - each time a strategic move and step up. In that time I more than doubled my salary (44k out of college; 96k now + ~17% bonus and equity in a fast growing company. ETA: "now" is me at 29/yrs old). For me this meant working my butt off but also working 5 jobs in 9 years. I never would have progressed as I have if I had stayed longer at each company. Now I am in a career phase that will likely mean staying longer in my current role. I am blabbering now, but I will just say - don't discount a job change and look closer to where you want to live.
Not blabbering at all...this is very important information. Just curious to know what industry you're in if you don't mind sharing?
The thing is, I'd been looking to work at this type of company for...I don't know...5-6 years. Now that I'm here I'm hesitant to only give it 1-2 years because I like my team, the salary, and the learning environment. You are reminding me not to become too complacent, and I appreciate that. I think my best way to approach this is to 'look and see what's out there'. I admit I'm not that open to looking right now because I 'worked so hard to finally make it here'. But it doesn't hurt to see if I can do better. For me, my current place 'is better'...it's the 'best its ever been for me so far'...so the pay/environment/etc. has balanced out the horrific commute. The fact I'm supposed to get a work from home day soon is kindof like a 'dangling carrot' in that I'm just drooling to get it as soon as possible for some sort of relief from this commute situation.
As you can see, the issue is I like the job itself enough to not want to leave and the city itself enough to not want to move.... :/
The details of my situation is a little different, but I also have a job I love with a horrible commute. I know this flies in the face of everything mustachian, but I'm not going to change it. I have a very specific skillset. I have my dream job. I'm highly paid. My situation isn't optimal, but I'm okay with it.
Set your personal goals and go for it. Don't worry about whether or not it's mustachian. If city living and a job in the suburbs is what you want, then find a way to make it work while hitting your financial goals.
Yeah, this is good advice. I have worked at some miserable places and being somewhere you love is so worth it (whatever "it" is). I just remembered you saying you need to stay a couple years to get marketable skills and if THAT were the only reason, I would say hunt. Getting the skills is important; waiting some arbitrary period of time is not. But it sounds like you truly love it. That is a different thing. To answer your question, I am a product manager for a medical device company. I need to hang out "at this level" now for a bit before going for a director type position. I hope to be FIRE before that happens ;)
I do have to clarify...I don't like working all that much, so I don't 'love' my job by any means :) I don't expect to ever love any job actually...just not in my personality. But instead, I 'like it enough' in that it fits the goals I wanted to reach for salary and the needed learning experiences *for now*.
Nice job you have there :) I was looking at those types of positions at one point...pay seems great. Rather, I come from a clinical research coordinator role (in the hospital setting) and am now doing clinical trials research for a biopharma company. My role is just a step below a Clinical Trial Project Manager.
-
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?
I am going to try Aldi's...there is one off of the train line not too far away from me. I did read an article this morning about some horse meat scare they had 2 years ago though??? Apparently horse meat was found in meat they were claiming was 100% beef....anyways, I digress :/ My neighborhood is one of the most diverse ones in Chicago...there are also tons of ethnic grocers so I will check those out and also look into if any local 'markets' will be opening up once warmer weather hits.
Wraps-I've only been making them 2 at a time. I can do better with this and start making them in bulk and freezing. I'm usually good with the vegetables; I try to use all of them up before they go bad. I have a habit of not buying too many when I do grocery shop.
Bulk cooking is the best! I try to make at least one recipe a weekend, and I freeze individual portions. It makes packing lunch easy, and I get the variety I crave.
Turkey jerkey-it doesn't have to be protein but I find protein filling and I'm trying to go low carb right now. Thanks for the suggestions...I keep Lara Bars in my desk but have also done Odwalla ones too :)
I'm a HUGE fan of hard boiled eggs as a snack. I'm wasteful and just eat the whites, but I eat about 2/day. I make a dozen at a time.
Baked chicken/brussel sprouts-These come from a place called Food Ease that mostly consists of a buffet line of 'healthy foods', along with a few produce items and pre-packaged 'healthy snacks'. Its my weakness. I wasn't craving something hot that day so to speak, I was just being plain lazy. I'd been going there and buying pre-cooked meals for lunch/dinner (facepunch time, I know!).
Avoiding take-out was difficult for me too. The bulk cooking made it so much easier to eat at home. My trigger was being tired. When I realized it was faster to just eat something already prepared at home (rather than going someplace to pick up something), I really cut back on eating out.
Apples/almonds-Fruits are the worse for me. I end up never eating all that I buy. I need to watch this closer. If I buy a whole apple, I never eat the whole thing. I end up buying sliced apples in a bag, which are more expensive. But at least I usually eat all of those. Almonds...another luxury. I can quit those. But one bag usually lasts me three months (I keep it in my drawer at work and snack when I'm hungry to keep from buying something in the office).....
Why not cut up the apples yourself when you buy them? I went through a similar struggle. Apple slices are so convenient. I keep a knife at work, so I can slice it up while I'm eating it.
-
Well...if you feel like coming further north, Minneapolis metro area is the mecca of med device so there is lots of opportunity. But that requires both moving AND changing jobs ;)
ETA: it is actually a super great place to live if you don't think about the winter. http://www.theatlantic.com/magazine/archive/2015/03/the-miracle-of-minneapolis/384975/
-
I'm sorry to hear about the foreclosure. My dad's house foreclosed in 2014. It was a good thing for him (IMO) because he can finally start getting his finances together.
I like the treadmill. It took me a month to learn to use it. It's about 3 times as hard as a regular treadmill. You have to move yourself forward, make the belt turn, and keep your balance at the same time. I keep it against the wall in my living room and people don't even notice it when they walk in.
If it is OK with your landlord I think you should get a roommate. You can put in your craigslist ad that you are looking for someone who will participate in cleaning. That helped me weed some people out when I was looking for a roommate.
On travel I say do the trips this year to get it out of your system, then stop. I love travel too and I did some slow travel for a few months five years ago. Feeling like you should go on trips because you have more money is what we call "lifestyle inflation" around here. It's tough to give up what society says we should have because we deserve it. But frugality is a muscle that you have to keep building. Try reading "the millionaire next door." It's about how people think they are wealthy because they spend lots of money. But people who are truly wealthy get there by not spending on status symbols.
My FIRE date could be as soon as 8 years from now, depending on a lot of factors.
Remember that you are doing fine for a "normal" person, but we want to see you get to the next level.
-
I know you've gotten a lot of great advice and it's hard to put yourself out there for all the MMM world to see. Good job.
The one thing I wanted to pipe up on was tracking your money. It really sounds like the monthly expenses you've listed are a bit of a guess, and that you perhaps don't really have a handle on it? I could be wrong! But with so much leakage between declared expenses and income, I think you really need to track and look much closer to where every dollar is going.
I get the high grocery spending and the prepared foods thing. I'm busy and if a grocery store isn't between work and home, I'm just not going. The only exception for me is Costco, I go monthly or so, but it's not far for me, just not on the way to work. So I shop at TJs and WF, although I try to limit it, I have a list, and I had to give up sesame honey cashews because they were just too expensive - and carby, dammit. One thing that could work for you there is weekend cooking with meal planning. Make a couple great meals on the weekend and freeze them in individual portions. In a few weeks time, you could really have some good meals, with variety, sitting right in your freezer waiting for you to thaw for breakfast or dinner, or pop in your bag for lunch.
Good luck.
-
Have you read MMM article about commuting(http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/ (http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/))?
I know it isn't what you want to hear, but that is definitely the biggest way to cut your spending. As long as you didn't get an expensive car, it would almost assuredly save you a lot of money. And it would be guaranteed to save you a lot of time, which definitely translates to money (either through savings or working a side job).
Maybe reading the article will give you a fresh perspective on the commute.
-
Not sure if this has been suggested yet as I haven't read all the comments.
Buy a few nail polishes in the colours you love and do your own nails.
Shave your legs rather than posing for someone to wax them. (And lady parts)
Dye your own hair instead of paying for it. Especially if you're brunette!!!! I gather that it's harder to dye your own hair blonde.
Pluck your own eyebrows.
If you grow your hair long than you should only need to get a cut once a year unless it grows ridiculously fast.
Cut back on clothes and shoe shopping. Set small challenges for yourself for a start, see if you can go for a month without buying any new pieces, put together a new combination of clothes. purge old items that you don't wear you could still them online and use the money to buy fabric dye to breathe life into your favourite blazer that's faded.
-
Great job on bumping the 401k!
I've noticed that all of your trips are to warm places. Heck, I live in the South, and I'm still thinking about tropical vacations when Dec hits. Completely understandable.
Given all you have written, it seems like you should work on getting a roommate for now but also seriously look for jobs back in Atlanta. Think about it this way: you've got 18 months left on your current lease to find something in GA, and you can break the lease if you find something great!
You won't feel the need to spend so much on travel once you are back there. Your housing costs will be lower, your commuting time will be much less, and you'll be back with friends and family. You CAN command what you are earning (or even more!) in Atlanta I think. You are extremely articulate and bright. Many employers pay a huge range for the same position, and they tend to pay what people ask for upon hire. So, since you seem to be doubting that you can be paid what you are making now when you move back south, try to pick up a book at the library called Ask For It: How Women Can Use Negotiation to Get What They Really Want. This book changed my life, and you have plenty of time to read on the train :-) Then make a long list of what you want at your current job and from a future job and make it happen! Good luck!
-
Your attitude about spending is confusing me. You say you want to know how much to cut every spending category to be FI in 15 years. Well, why do you want to be FI? What do you value? I think you will be more successful with cutting spending if you start by re-framing your goals and needs. The beauty with spending consciously is you realize that you don't need to spend a lot to be happy. And it's a gradual process - you start by eliminating some wasteful habit, then you realize life is still good and you don't feel any worse, then you feel more comfortable applying that to other areas, questioning, not doing something just because others do, and not caring.
Great questions...and even better suggestions! Thank you very much; I will be continuing to look back on everything you've noted in every category of your original posting.
In regards to your question, why do I want to be FI, here are the reasons:
-I don't like working a job much at all. I want to be free from the obligation to report to a job every day. I want to choose if/when to work and for long, and I don't like the feeling of 'needing' a job to support myself...it feels 'unstable' so to speak.
-I want more time to myself. I'm a dreamer. A creative thinker. A photographer. I'm basically an introverted (INFP) artist at heart working in a fast paced corporate type environment and I don't want to be doing that when I'm 60. For one, I won't be able to maintain this speed of work until that age. For another, I am sure to be seen as less valuable the older I get once I hit 50ish or so. I want to be able to have time to do things I enjoy which are mostly leisurely things. And I don't want to be too old with little time left to enjoy those things.
-I had a few family members pass last year and I'm realizing every day that we are not promised tomorrow. I moved away from all of my friends and family and the only thing I have 'going' for me so to speak right now...is my job. My mother will be 57 this year and if I can FI earlier than planned, maybe I'll have more time to spend with her in her old age, like I wish I would have had to spend with my grandfather who passed last year. Again, it comes down to giving myself time back. Wanting to have more time with my mom is part of the reason I've justified traveling more...either for her to see me, me to see her, or for us to take a trip together 1-2 times a year. That's pretty costly. Now, my mom is in the process of foreclosure down in the south and not doing too well financially for herself (she's been out of work for 3 years) so that's an entirely different story altogether.
-I don't want to end up like some people I've seen. I don't want a mortgage at 65. I don't want to only have 100K in the bank at 59. I want to feel more secure than that.
It sounds to me like you're starting to question the basic reasons you went to Chicago in the first place. If so, maybe start thinking seriously about going back South? Keep negotiating different positions until you have a salary you like, and then see if they'll pay a relocation bonus. Best of luck to you.
-
Not sure if this has been suggested yet as I haven't read all the comments.
Buy a few nail polishes in the colours you love and do your own nails.
Shave your legs rather than posing for someone to wax them. (And lady parts)
Dye your own hair instead of paying for it. Especially if you're brunette!!!! I gather that it's harder to dye your own hair blonde.
Pluck your own eyebrows.
If you grow your hair long than you should only need to get a cut once a year unless it grows ridiculously fast.
Cut back on clothes and shoe shopping. Set small challenges for yourself for a start, see if you can go for a month without buying any new pieces, put together a new combination of clothes. purge old items that you don't wear you could still them online and use the money to buy fabric dye to breathe life into your favourite blazer that's faded.
I have a small polish collection so I'm good to go there and will just reconsider getting them done next time I'm feeling an itch for a mani/pedi.
I only wax if I'm going on a beach trip somewhere...otherwise I do Veet creams and such. Brows are much harder...I do pluck them in between threadings and usually get them threaded every other month for about $12. My hair is past my shoulders so I do wear it pulled back in a bun most of the time which means I 'could' go many months without a salon visit if I chose not to get it straightened.
Clothes/shoes-my biggest problem right now. Thanks for the tips...this is the best area for me to focus on at the moment by having some type of 'no spending' challenge for myself....
-
Lake Bluff has an apt now on Craigslist that has a gym in it in the 925 monthly range. I'd hang out in my spare time commuting on Craigslist and see if I could get a lower rent/cut the commute/lose the train fees apt. And then I'd go into Chicago on the occasional weekend to socialize/enjoy the big city enviro. I moved lots of times when I was younger and renting...always to save $$s.
On the job front, if you want to make bigger money so you can move back closer to family in the future, when was the last time you had a convo w/your manager or the HR dept about what it would take for you to move up? Doing any continuing education?
I've only been at my current job for 1 year. But I just had my first review and it went well, so if all continues to go well I 'may' be looking at a promotion the very end of the year/beginning of next year.
-
Well...if you feel like coming further north, Minneapolis metro area is the mecca of med device so there is lots of opportunity. But that requires both moving AND changing jobs ;)
ETA: it is actually a super great place to live if you don't think about the winter. http://www.theatlantic.com/magazine/archive/2015/03/the-miracle-of-minneapolis/384975/
I've heard great things about Minneapolis. If I end up needing to move again in the near future for job purposes I would consider it.
-
Great job on bumping the 401k!
I've noticed that all of your trips are to warm places. Heck, I live in the South, and I'm still thinking about tropical vacations when Dec hits. Completely understandable.
Given all you have written, it seems like you should work on getting a roommate for now but also seriously look for jobs back in Atlanta. Think about it this way: you've got 18 months left on your current lease to find something in GA, and you can break the lease if you find something great!
You won't feel the need to spend so much on travel once you are back there. Your housing costs will be lower, your commuting time will be much less, and you'll be back with friends and family. You CAN command what you are earning (or even more!) in Atlanta I think. You are extremely articulate and bright. Many employers pay a huge range for the same position, and they tend to pay what people ask for upon hire. So, since you seem to be doubting that you can be paid what you are making now when you move back south, try to pick up a book at the library called Ask For It: How Women Can Use Negotiation to Get What They Really Want. This book changed my life, and you have plenty of time to read on the train :-) Then make a long list of what you want at your current job and from a future job and make it happen! Good luck!
Thanks for the encouragement. I do believe that since moving to Chicago I feel compelled to travel more to 'get away', especially when it is cold. But also because sometimes the travel includes seeing people I've moved away from. Until this thread I hadn't considered moving back any sooner. I'd just been so focused on the fact I 'finally got this good job' that I'm fearful to 'rock the boat' and try moving to another job...yet again.
My concern about finding another position where I can command the same salary is moreso centered around the industry I work in. I work for a Pharma company and that industry is not as big in Atlanta, hence the pool of positions I could apply for are much much lower. Re-reading back through this thread, though, I must admit I'm thinking about this now. I thought I would try to get a remote position with my current employer (so I could move back to Atl) but that could take yearssss to finagle. If I could (1) figure out a quicker way to get this type of position with my current employer, or (b) find one with another employer then I could move back relatively soon....
-
Great job on bumping the 401k!
I've noticed that all of your trips are to warm places. Heck, I live in the South, and I'm still thinking about tropical vacations when Dec hits. Completely understandable.
Given all you have written, it seems like you should work on getting a roommate for now but also seriously look for jobs back in Atlanta. Think about it this way: you've got 18 months left on your current lease to find something in GA, and you can break the lease if you find something great!
You won't feel the need to spend so much on travel once you are back there. Your housing costs will be lower, your commuting time will be much less, and you'll be back with friends and family. You CAN command what you are earning (or even more!) in Atlanta I think. You are extremely articulate and bright. Many employers pay a huge range for the same position, and they tend to pay what people ask for upon hire. So, since you seem to be doubting that you can be paid what you are making now when you move back south, try to pick up a book at the library called Ask For It: How Women Can Use Negotiation to Get What They Really Want. This book changed my life, and you have plenty of time to read on the train :-) Then make a long list of what you want at your current job and from a future job and make it happen! Good luck!
Thanks for the encouragement. I do believe that since moving to Chicago I feel compelled to travel more to 'get away', especially when it is cold. But also because sometimes the travel includes seeing people I've moved away from. Until this thread I hadn't considered moving back any sooner. I'd just been so focused on the fact I 'finally got this good job' that I'm fearful to 'rock the boat' and try moving to another job...yet again.
My concern about finding another position where I can command the same salary is moreso centered around the industry I work in. I work for a Pharma company and that industry is not as big in Atlanta, hence the pool of positions I could apply for are much much lower. Re-reading back through this thread, though, I must admit I'm thinking about this now. I thought I would try to get a remote position with my current employer (so I could move back to Atl) but that could take yearssss to finagle. If I could (1) figure out a quicker way to get this type of position with my current employer, or (b) find one with another employer then I could move back relatively soon....
No reason not to pursue both of those options. See which coalesces first.
-
Your attitude about spending is confusing me. You say you want to know how much to cut every spending category to be FI in 15 years. Well, why do you want to be FI? What do you value? I think you will be more successful with cutting spending if you start by re-framing your goals and needs. The beauty with spending consciously is you realize that you don't need to spend a lot to be happy. And it's a gradual process - you start by eliminating some wasteful habit, then you realize life is still good and you don't feel any worse, then you feel more comfortable applying that to other areas, questioning, not doing something just because others do, and not caring.
Great questions...and even better suggestions! Thank you very much; I will be continuing to look back on everything you've noted in every category of your original posting.
In regards to your question, why do I want to be FI, here are the reasons:
-I don't like working a job much at all. I want to be free from the obligation to report to a job every day. I want to choose if/when to work and for long, and I don't like the feeling of 'needing' a job to support myself...it feels 'unstable' so to speak.
-I want more time to myself. I'm a dreamer. A creative thinker. A photographer. I'm basically an introverted (INFP) artist at heart working in a fast paced corporate type environment and I don't want to be doing that when I'm 60. For one, I won't be able to maintain this speed of work until that age. For another, I am sure to be seen as less valuable the older I get once I hit 50ish or so. I want to be able to have time to do things I enjoy which are mostly leisurely things. And I don't want to be too old with little time left to enjoy those things.
-I had a few family members pass last year and I'm realizing every day that we are not promised tomorrow. I moved away from all of my friends and family and the only thing I have 'going' for me so to speak right now...is my job. My mother will be 57 this year and if I can FI earlier than planned, maybe I'll have more time to spend with her in her old age, like I wish I would have had to spend with my grandfather who passed last year. Again, it comes down to giving myself time back. Wanting to have more time with my mom is part of the reason I've justified traveling more...either for her to see me, me to see her, or for us to take a trip together 1-2 times a year. That's pretty costly. Now, my mom is in the process of foreclosure down in the south and not doing too well financially for herself (she's been out of work for 3 years) so that's an entirely different story altogether.
-I don't want to end up like some people I've seen. I don't want a mortgage at 65. I don't want to only have 100K in the bank at 59. I want to feel more secure than that.
It sounds to me like you're starting to question the basic reasons you went to Chicago in the first place. If so, maybe start thinking seriously about going back South? Keep negotiating different positions until you have a salary you like, and then see if they'll pay a relocation bonus. Best of luck to you.
Sigh....I think its moreso I'm beginning to question to myself "Do I really need to stay another 3, 4, 5 years to again enough additional experience and marketability to be able to move back down to the south at a comparable salary to what I make now?"
Maybe I can move back in 2 years....or 1...depending upon how I position myself...?
-
Your attitude about spending is confusing me. You say you want to know how much to cut every spending category to be FI in 15 years. Well, why do you want to be FI? What do you value? I think you will be more successful with cutting spending if you start by re-framing your goals and needs. The beauty with spending consciously is you realize that you don't need to spend a lot to be happy. And it's a gradual process - you start by eliminating some wasteful habit, then you realize life is still good and you don't feel any worse, then you feel more comfortable applying that to other areas, questioning, not doing something just because others do, and not caring.
Great questions...and even better suggestions! Thank you very much; I will be continuing to look back on everything you've noted in every category of your original posting.
In regards to your question, why do I want to be FI, here are the reasons:
-I don't like working a job much at all. I want to be free from the obligation to report to a job every day. I want to choose if/when to work and for long, and I don't like the feeling of 'needing' a job to support myself...it feels 'unstable' so to speak.
-I want more time to myself. I'm a dreamer. A creative thinker. A photographer. I'm basically an introverted (INFP) artist at heart working in a fast paced corporate type environment and I don't want to be doing that when I'm 60. For one, I won't be able to maintain this speed of work until that age. For another, I am sure to be seen as less valuable the older I get once I hit 50ish or so. I want to be able to have time to do things I enjoy which are mostly leisurely things. And I don't want to be too old with little time left to enjoy those things.
-I had a few family members pass last year and I'm realizing every day that we are not promised tomorrow. I moved away from all of my friends and family and the only thing I have 'going' for me so to speak right now...is my job. My mother will be 57 this year and if I can FI earlier than planned, maybe I'll have more time to spend with her in her old age, like I wish I would have had to spend with my grandfather who passed last year. Again, it comes down to giving myself time back. Wanting to have more time with my mom is part of the reason I've justified traveling more...either for her to see me, me to see her, or for us to take a trip together 1-2 times a year. That's pretty costly. Now, my mom is in the process of foreclosure down in the south and not doing too well financially for herself (she's been out of work for 3 years) so that's an entirely different story altogether.
-I don't want to end up like some people I've seen. I don't want a mortgage at 65. I don't want to only have 100K in the bank at 59. I want to feel more secure than that.
It sounds to me like you're starting to question the basic reasons you went to Chicago in the first place. If so, maybe start thinking seriously about going back South? Keep negotiating different positions until you have a salary you like, and then see if they'll pay a relocation bonus. Best of luck to you.
Sigh....I think its moreso I'm beginning to question to myself "Do I really need to stay another 3, 4, 5 years to again enough additional experience and marketability to be able to move back down to the south at a comparable salary to what I make now?"
Maybe I can move back in 2 years....or 1...depending upon how I position myself...?
Why not send a couple resumes out right now? See who bites and for how much? If you don't like the offers, just don't take them and wait a while. Really no potential for loss here, except for costs associated with traveling for interviews as necessary.