Author Topic: Reader case study- What can we do in order for me to quit my job, start a fam...  (Read 3245 times)

enduring homesteader

  • 5 O'Clock Shadow
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  • Posts: 3
  • Age: 38
  • Location: Montana
    • Enduring Homesteaders
Reader case study- What can we do in order for me to quit my job, start a family, renovate the house and eventually have a self-sufficient, financially independent homestead?

Here is our situation:

                Both my husband and I were in the Navy (Nuclear propulsion), which is where we met. I got out end of 2011, and he was a year or so later. He found a job in MT as a software developer and we made the move. We put the house I bought in 2006 up for rent and moved. We ended up renting a place for a year and then bought a house in MT. (We couldn’t take paying our landlords mortgage for him anymore) We found a place 20 miles out of town, ~5 acres, and a 1300 sq. ft. mobile home/ stick built monstrosity of a fixer upper. But it had land (I wanted livestock), a hand full of neighbors which each had bigger houses with at least 20- 40 acres land in between, and it cost a fraction of other equivalent options. (Not to mention the view) I work as a legal secretary (no college degree) for a state agency and getting paid at 2006 rates (I hate it). My husband and I are 34/33 respectively, and I would like to start having kids. (Not the livestock variety, we had 2 of those this year). My goal is to be able to quit my 8-5 job, start a family, still be able to renovate the house and eventually have a self-sufficient homestead. Eventually producing all our own food and produce, and selling any surplus. Having both of us work full time jobs makes it very difficult to achieve much of anything on the home front. If only we could figure out how to live and save off my husband’s income and still be on the path to become financially independent. We need help/ advice on where we can put our money to achieve these goals. We have a huge chunk of cash just sitting in the bank doing nothing for us. The husband does not know what to do with it and is highly concerned with losing it if invested and/ or needing it for an emergency.  Any advice would be greatly appreciated.


Our numbers:

Husband’s earnings(per paycheck) 25.80/ hour @ 80 hrs.= 2063.77 which would be about 54k/ year
401k @ 5%= 103.19
Health Flex- 20
Life/STD/LTD- 12.50
Purch vacation- 39.69 (gets an extra paid week off per year)

Fed withholding- 207.24
Medicare- 29.76
Soc Security- 127.23
MT withholding- 101

Accruals/ other-
HP ER Contrib- 20.84
For a take home total of 1444 every 2 weeks or about 37.5k per year

My earnings-(per paycheck)
Hourly rate of 12.03/ hr. which is about 25k per year
State share credit- 443.50
Regular pay- 962.68

Fed withholding- 43.25
Fed Med/EE- 12.17
Fed OASDI/EE- 52.04
MT withholding- 30

Before tax deductions-
Pretax medical- 535
Pretax dental- 30.50
Pretax basic life- .95
Pretax AD&D- .38
New PERS retirement- 76.05 (7.9%)

Employer paid benefits-
New PERS Retirement- 80.58 (8.2%)

After tax Deductions-
MT State Admin staff- 19.52
For a take home of 606.32 every 2 weeks, which is about 15.8k / year

Both combined- we have a monthly income of 4100.64

Rental income-

Rent is set for ~1200, property management takes 10%, then any maintenance done comes out of it as well. We get about ~ $1075

For a monthly income of 5175.64

Savings- ~37k

Other assets-

2004 Chevy Silverado- paid for and in good shape- permanent registration this year- value ~5k
2004 Saturn Vue- gift- excellent shape- permanent registration this year. Value ~2k
Honda rebel motorcycle- ~$1000- permanent registration. Used for commuting during good weather.
5 dairy goats (1 in milk, and currently supply’s all our milk needs), 28 heavy breed ducks( 10 of which are of laying age) we get 4-10 eggs a day and can sell a dozen for $6(I only have 1 customer so far, sell about 1 dozen every week or so), surplus ducks will be meat. 1 breeding pair of geese (guard birds, lawn mowers, surplus will be meat). 3 dogs (large rodent exterminators, guard dogs). 1 barn cat (small rodent exterminator).

Retirement/ Investing-

Vanguard- Roth IRA (mine) - VEMAX @ 23.7k. Inactive- nothing added
TSP- G fund @ 13.1k- inactive- nothing added
Vanguard- Roth IRA (husbands) - VTIVX @ 49.2k- 100 added per month
Husband’s 401K(work) - He thinks ~45K is in there.


We have 2 mortgages

WA house mortgage- I bought the house brand new in 2006, 30 conventional Fixed with PMI @6.5% for $235k. The payment was ~1600, but split 3 ways since I had roommates. We refinance before moving to MT to get the payment down.

So it is currently a 30 convention fixed W/ PMI @ 4.5% Original loan was 198.4k currently it is 188.5k (We tried to sell it last year, but it turned out that we would have had to pay someone 20k just to get rid of it) PMI payment is 85. Total 1340 Principal and interest is 1005. Escrow is 334. Property tax is ~2k

MT mortgage is a 30 convention @ 3.25% no PMI Original amount was 255k. Current principal- 242.5k. Payment of 1253.57, 455 in principal, interest 658, 140 escrow. With an additional 100 a month towards principal.

Bills/ monthly expenses-
we have no credit card debt.
Car Payment-
2013 Subaru Impreza- financed. Has a loan total ~23k @ 3.25% with 20.8k left. monthly payment of $333.17
Electric bill-88
Phones -133
Entertainment -20 (movies, maybe 1-3 times per year)
Pet/ animal food-150
Home improvement-Most of our extra money goes into home renovation or the bank account for future home improvement
Firewood- ~$100 a cord- use 2-4 cords per winter for heating- 33/ month
Propane- $500 to fill tank- may use 1/2 a tank a year- 21/ month
Monthly expenses run about 4441.74

We have a savings of about 733.90 per month. If I were to stop working it would cut gas, restaurants, groceries, pet food, and possibly phones costs. Giving us a few hundred extra in savings. However, if I were to stop working, we would be losing a few hundred a month, even with savings from me not working. My husband would like to put more into the retirement funds too…

What can we do, so that I can stop working and still have enough to renovate the house and save for retirement?

I am not too concerned with kids costing a ton… I am very frugal and practical. Think primitive tribes raising their kids, strapped to mommas back kind of thing. Plus parents and grandparents falling over themselves to help should make up for anything else. (They are dying for great/grandchildren) Plus, I would plan to work till I have said children.

Some specific questions-

Should something be done with the TSP? Nothing is added to it and it just sits there. Should it be rolled into a Vanguard account, something that we could pull from for early retirement?

We have a lot of savings- we would like to keep about 10k for a big solar room/ green house/ aquaponics project. But we don’t know what to do with the rest/ how to make it work the best for us. We could pay off the car loan but would it be better used towards paying down one of the mortgages, or invested somewhere else?

« Last Edit: July 15, 2015, 04:38:23 PM by enduring homesteader »


  • Handlebar Stache
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OK, so the goal is monthly expenses of $2,888 or less. Plus some wiggle room.

Right now you have monthly expenses of $4,474. So we need to cut $1600 out of the budget. Start with the obvious, phones. $133 is alot of money. My wife and I paid $22 last month using republic, but even if you need better reception due to the remote location, I think $50 between the two of you should be more than enough.  You currently have three cars and a motorcycle for two people, one who wants to quit working. Probably time to sell. Obvious candidate is the Vue. That seems like the most useless of the vehicles. We can cut gas in half if you are not working anymore. If we really get creative, I looked up the value of a 2009 Subaru Impreza(est 100K miles). Using base options and some guessing, value was $7300. You still owe $23K on it, so its probably a lost cause at this point. So we keep the Impreza.  Are we sure this is a 2009? That payment means like 6 more years before its paid off, and its $13K underwater? We can cut eating out down to $50.

Phones - $50
Electric bill-88
Insurance - 180
Impreza loan - $333.17
Entertainment -20 (movies, maybe 1-3 times per year)
Restaurants- 50
Pet/ animal food-150
Firewood- 33/ month
Propane-  21/ month
Mortgage - 1253

Total ~ $2693.17

This leaves about $100/month for upgrades, plus the three or so extra paychecks each year.

That fits your goal, the only thing standing in your way is the second mortgage, which is costing you about $300 a month plus any repairs. You have $39K in savings(the 37 listed plus $2K from selling the Vue). Sell the second house, you lose $20K, still have $19K in the bank. Seems like a good deal. If you are really paranoid, at $700/month, you have roughly two years of work to pay off the extra $20K and still have the same savings rate.

Or, you use the extra money to pay off the Impreza rather than the house, saving a roughly similar amount of money. Or you go extra crazy and do both, and then saving about $500 a month, you rebuild your emergency fund. You could have it back up to $10 in less than two years, even on one income with only minor sacrifices.


  • Stubble
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It looks like your rental isn't cash flow positive (-$265/mo), so you're working to keep that thing.  Selling now or soon may reduce your capital gains tax (if you lived in the house 3 of the last 5 years).  If you have depreciated the house, you'll have depreciation recapture.  You mention you're ~$20k underwater on that property.  I'm not sure where it is and what the market is like there.  If you're waiting on it to appreciate to not be underwater realize you're paying about $3200/yr to wait.  It hurts to take that haircut, but it probably helps simplify your life overall (reduces anxiety of what happens if a tree falls on it?  What if we have a vacancy?  Etc.).

The other comments by AZDude make sense too.  I'm not sure about the Subaru... seems a bit of a lost cause or something doesn't add up (rolled negative equity of past vehicles?).

enduring homesteader

  • 5 O'Clock Shadow
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  • Posts: 3
  • Age: 38
  • Location: Montana
    • Enduring Homesteaders
Well we tried to sell the WA house last year, the realtor said we would not be able to sell it for more than 20k less than what we owe because the do a comparison of houses sold in the area.. I bought it 2006 for 235k, last year it was up on market for 170k, which was 20k less than principal on our loan. We had no one intersted or offers. The area is kind of weird though, there are either muilti-million dollar homes or manufactured homes. My house is in between, so difficult to compare. The area is heavy on retired/ vacation homes or trailer trash. But it is a pretty high demand rental area. We would be willing to get rid of it but no one wants to buy it. Even at a loss for us.

As for the Subaru, I did make a mistake. It is a 2013, valued at 17k ish. I must have mis-typed. I don't think my husband would part with it. It is his commuter car, we can't carpool due to different hours. He totaled his previously paid off one over the winter, and he really wanted awd, due to road conditions we have to endure, so not many options out here. the insurance company gave us a check for 15k. Instead of putting it towards the new car, we just financed the purchase thinking we could put the 15k towards something else.  We only have had it since February.

I rode the motorcycle during the summers, beause the truck gets 13 miles per gallon and is not a good commuter. Then I was given the saturn, so that is my commuter. I would sell the motorcycle but it is only 1k.


  • Handlebar Stache
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OK, that makes more sense. Then just pay off the Impreza and the Vue, and you can stay at home(see my post above).


  • Walrus Stache
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I don't have much to add, except go nuke!  That's how I met my spouse, back in the day before women could be nukes on ships.

With your training, is there any option for getting a higher paying job?  That's quite a lot of training that you got.  That may help in the short term to pay off the cars faster.

But the guy above did a really good job.  At your age, I wouldn't wait too long.  I started trying to get pg at 33 and had my first at 35 (took 1.5 years).  For #2 tried for well over 1.5 years and then gave up.  (Then he came along - surprise! - at 42.)

enduring homesteader

  • 5 O'Clock Shadow
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  • Posts: 3
  • Age: 38
  • Location: Montana
    • Enduring Homesteaders
Thanks for the budget help, it is good to know we can manage with only my husband working, if we pay off the car and cut some costs.
I have been looking for higher paying options, but there really isn't much. Most jobs around here are customer service, construction/ manual labor jobs. Average pay is around 9-10 per hour. There are a few IT jobs around, but i dont have a computer science degree or computer programming experience, and what i have seen listed are not entry level stuff. I don't see much hope of getting a higher paying job in this area. I don't think civilians really understand what sort of qualifications nukes have.
We may get a bump in pay to 95% of market value in the near future, which would make a big difference. I can stick it out for a bit longer, plus our benefits are pretty decent. 

However, since I am going to be working for at the least another year, how would that change things.

If we pay off the car, we will have 1400 of savings every month, with 17k in our savings account. I would like to do something with this other than having it just sitting around doing nothing.

If we don't pay off the car we will have 1100 of savings every month, and 37k in the bank.

Is there something we can do to make this money work for us.