Hi, all
This is an 8 month update, checking in more for keeping myself honest but would love some outside input on our spending. Our goal over the last 8 months has been to build up our cash reserves so we can buy a house. No luck so far but we have been looking for a few months. We continue to contribute the max amount to retirement savings although I haven't done IRA contributions yet. (on my to do list for today)
Things I've identified to improve.
1)we can do better on food spending. We have improved from before but this is still a little bit high
2) Our pet spending seems kind of high, I think we can improve that by 40 dollars
3) Our child is expensive, not sure if we can improve that
Hi All, Would love some input from everyone. My wife and I are both busy professionals. I work about 60 hours a week and she works about 40 hours a week. My job is not flexible all at, hers is. We both enjoy our jobs but don't think we can keep up this pace forever so we have started to get serious about our goals for FI so we can take our foot off the gas pedal. A couple of quick things to help put our numbers in perspective.
1) We have more income than time. We are occasionally choosing time over money so that our path to FI is enjoyable along the way
2) we live in an incredibly expensive part of California. Unfortunately it comes with the jobs and family
3) We have one child, one dog and another child planned in 1 year
Okay now for the numbers
I have updated numbers, everything that is in bold is new
Net income:
Me 33: Just finished all my medical training. Income last year 65k. This year 290k 300k for a net monthly income of ~14k
wife 34: Has one year left of medical training. Income last year 68k. Income next year ~70k 94k. In 2 years should earn ~140k. Net montly income of 3.5k
Combined monthly net income: ~ 17.5k 21k
Quick note, september was our 5 year anniversary so entertainment is a bit higher than normal
Current monthly expenses:
Gas: 120 (I mostly ride my bike) 139.54
Car insurance: 125 125
car maintenance: 50 50
internet : 48 68, only way I can get this lower is to sign a contract but we will be moving soon so I'm stuck at 68
phones: 100 75 tried going with republic wireless but barely works at work.
television: 8 0 No cable, netflix only
utilities: 200, Gas, eletric, water, garbage 251.16
Rent: 2000 (we are paying WAY below market rates) 2000
student loan: 419 (in a year will be ~ 850) 419, wife was able to defer her's interest free for another two years
Life and disability insurance: ~204 188.46
restaurants: varies wildly. ~200 (this generally is date nights) 216
groceries: 700 (i know we need to do WAY better on this) 471.75+161.89 buying premade food
health: 200 183.26
Cleaning ladies: 130 130
renters insurance: 25
personal care: 50 275 bizarrely high this month, average is close to 75
clothing: ~70 80
pet: 100 80
Day care: 1400 cheapest in the area by a decent margin. 1400
Child's college fund: 600 600
Misc 400 (vacations, entertainment, travel) 400
Total monthly expenses: 7021 (i shudder at that number) 7338.36
Stuff i absolutely can't change: Rent, Day care, phone, internet, student loan payment. ~4k
which leaves about 3k for some help.
Assets
Cash: 73.3K 165.8k
Retirement accounts: 139k 162k
Lending club: 21k 23.9
Other investment accounts: 210K 224.5
Cars: 2001 toyota corolla 2006 toyota prius both with ~90k miles
Total assets: ~443k 576.2
Liabilities
me: 98k student loan debt @ 1.99% (I will continue to pay minimum payments on this) about the same
wife: 100k student loan debt @ 0% until she finishes training and then will be 2.98%. Reasonable chance she gets some loan forgiveness for doing research in under researched areas. about the same
total liabilities 198k 195
Net worth is about 240k 381
We currently save about 60% of our take home pay.
Ok now our goals/issues:
1) Buy a starter home. Estimated cost ~800k to 1.2 million. Now before i get destroyed for calling that a starter home just look at houses in the palo alto, mountain view, redwood city area in california. For us to buy something (3 bedrooms, 1200 square feet) in an area where we won't have to send our child to private school (30-40k a year here) I figure we will have to spend about a million. Crazy and offensive, yes. The alternative is to continue renting. Our current place is 800 square feet. For us to rent the exact same thing we have right now we would have to spend about 3k a month. To upgrade to a 3 bedroom we would spend 3.5k at a minimum. More likely 4-4.5k.
2) FI in 7 years or when I hit 40.
Currently we max our retirements which means
22k contributed by work, 17.5k by me to 401k, 11k in IRAs. so about
50.5k/year in tax advantaged accounts
save/invest ~10k a month, lets round down to 9k so
108k/year
So we are saving about 163k a year.
Here is how I see it. If we buy a home I figure that is 200k in downpayment. Our mortage costs + insurance + home improvement would probably go from 2k currently to about 6k so we would save 5k a month instead of 9k which would lower our yearly saving to 60k for a total of
110k a year with our current incomes. I except our net incomes will go from ~17.5k a month to about 22-25k a month over the next 2 years.
Anyways, my wife and I have very modest needs despite some of those numbers. We just happen to live in an incredibly expensive area and can't really move because of jobs and family. Now I'm feeling like I am rambling. I would love some suggestions.
Thanks,
Z