Case Study: Ready for Facepunches...

[Jules13]

Okay, I've been trying to get this organized as I not only reading other people's case studies, but love the great advice that everyone gives (even if it's a facepunch). 

I apologize in advance as this is really long.  I've tried to whittle it down, but perhaps I'm just long-winded.

My husband and I are 41 and 42. Gross income 107k.  Here are the stats.  I am a SAHM and though I'm not willing to go back to work and give up the sanity that having one parent at home provides for us, I would love to have something flexible from home with some extra income (working on that, looking into Leapforce as a start). 

My husband is Australian, so we would love to visit once a year, though that hasn’t been possible lately for other family reasons, not financial. 

Grocery budget is a big budget area for us.  I try, in vain it seems, to get this line item lower.  We eat a lot of fresh/healthy food.  It’s expensive.  We juice, which is expensive.  We eat organic and try to eat local and non-GMO.  It's expensive.  I’m not willing to compromise on quality, but always looking for ways to lower budget and still eat well.  With two, growing boys…it’s only going to get worse!  I’ve joined Costco to see if that will help any.  But, the eating out expense (and we maybe average once/week) on top of this makes the “food” category crazy to me. 

This spending is all based on last year from my Yodlee account.  Some is not tracked very well and that is a goal to do better.

Net Income - $6,217

Expenses - Fixed
$985 mortgage (2.5%, with about 14 years left (135,609 - was paying extra, but since stopped)
$296 Property taxes (I pay these myself once per year)
$104 - Gas heating (average)
$132 – Electric – air con/stove/water  heater (average) both gas and electric are high…old house (1930) without much insulation?  Not sure.
$45 – Water (this is an average as it’s more in summer than in winter)
$56 - Auto Insurance – 2 cars
$115 –home insurance
$10 - Home Security
$24 - Cable
$8 - Phone – landline -
$30 - Cell phone – use PTEL - this is mine, work pays for hubby’s
$56 - Internet
$137 - Life insurance – for both of us – hmmm, this seems high
Total $1998

Expenses - Variable
$444 - House upkeep/maintenance/gardening – includes building a shed $600, rotting wood replacement in order to paint house $1788, drywall repairs $455 (things needed to be done) But, still spending way too much!  We are no longer going to Lowes/Home Depot unless something is broken.  My husband has sworn off touching anything to ensure nothing gets broken…haha.  I have sworn off buying plants this year.  I have some seeds leftover and will plant those. 
$180 – Petrol – I think this is actually higher, not sure.  Need to track better.  (the majority of my driving is to visit my parents once or twice a week to visit and help care for my ailing mother – 30 miles each trip)
$60 – auto maintenance
$30 – Hobbies – art/crafts for me and kids
$738 – Groceries + csa = 8847.33/yr (this is most likely overinflated with beer added in, some toiletries and vitamins from Whole Foods and possibly even some petrol costs – need to track this better!)
$51 – alcohol/beer  - drinking less now, so will go down
$30 – Charitable giving (most comes out pre-tax of my husband’s paycheck, but this is extra)
$100 - Personal Care/haircuts/makeup/clothes/shoes
$156 – TARGET – I obviously need to avoid this store.  This also includes toilet paper, cleaning, some toiletries, etc – yes, I know… #Facepunch
$100 – House décor/furniture - includes used piano $500, local art $191, and spent $282 at IKEA (thank goodness there is not one where we live!).  Without those items, would be $21.50/month
$118 – Medical/Dental/Vision –  usually more like $75/month - husband had an outpatient surgical procedure done last year –includes out of pocket copays, meds, contact lenses, dentistry and I also lump anything labeled “Walgreens” which probably includes toiletries that shouldn’t be in this category)
$90 – gifts (birthdays + Christmas)
$240 - Travel – this is what we spent last year.  It would be a lot more if we went overseas to Oz.
$50 - family activities/memberships (zoo, science museum, botanical gardens, pool)
$180 – preschool fees (will end after May)
$28 - School/education expenses
$230 - Entertainment (going out, dates, Netflix, Iphone games, roller skating, etc) & Restaurant dining
Total = $2825

Automatic Savings/month
Pretax:
401k –1446.64 [904.15 pretax contribution + 542.49 match (100% on first 6%)]  Note: have always contributed up to the match of 6%, but bumped up to 10% starting last payperiod.

Savings out of net income
$916 – Roth IRA (2 plans, split)
$300 – college savings 529 plans (2 plans, $150 each)

Total Savings:
$237, 855 in 401k/rollover IRA/Roth IRA   
$46,704 – cash/travel savings/22k emergency fund – some is earmarked for specific things like painting the outside of our house once it warms up
$3987 – stocks (we might use this for painting our house instead of out of our cash)

Other assets/savings that I don’t include in Retirement calculations:
$250k - home equity – I won’t include this until we decide we will sell at some point, which is not on the cards at the moment.  We were fortunate and bought low in a neighborhood going through re-gentrification that has exploded and still going gangbusters. 
$8530 - 529 (2 plans, one for each kid)

Liabilities:
Home – 15 year, 2.5%, currently owe $135,609 (about 14 more years on current schedule)

Fixed $1998 + Variable $2825 = $4823 Expenses
After Net Savings = 916+300 =  $1216 Savings
Total Expenses + Savings = $6039 (rest is just going into general savings)

Financial Goals:
•   Complete Living Will & Revocable Trust – I have started this…just need to finish it (it’s on the TOP of my list)
•   Me – earn money by working, part-time, from home – right now I’m concentrating on being the family CFO and saving money, which is good start, looking into Leapforce.
•   house paid off in 10 years (by the time oldest son is 18)
•   be able to travel overseas with kids regularly (yearly or every 2 years)
•   be FI (not necessarily RE) by age 55 for my husband (so, in 13 years), so he can either retire or go part-time or contract employee (he’s in IT) or whatever.  FI to us means a 4% withdrawal of $50k, which would mean a retirement nest egg of $1.25 M, right?  How realistic are our goals?  I know we could live off less than $50k, but we do love to travel and I want to feel truly secure, so I’m padding it. 
•   Increase 529 savings for each child (my parents paid for my undergraduate education and having my children start out with as little education debt as possible is very important to us)
•   Track all categories better – specifically what is spent on “home” and “grocery” items.
•   Create a price book for grocery shopping

Thanks for getting to the end!  Looking forward to hearing what you have to say.  Cheers.

[Emg03063]

Looks like you've got a good handle on things and where you need to improve.  I would say it sounds like your utilities could probably be reduced by adding insulation.  It's a pretty simple DIY project to up insulate the attic?  How big is your house, and when was it built?  Where do you get the $50k/yr FI spend # from?  Have you accounted for the fact that your mortgage will be going away?

[ch12]

I think that your goals to earn a bit of cash (I've thought about LeapForce myself) are great. There will be people who are capable and patient enough to address your case study point by point, but I'm just going for the big one: groceries.

Grocery budget is a big budget area for us.  I try, in vain it seems, to get this line item lower.  We eat a lot of fresh/healthy food.  It’s expensive.  We juice, which is expensive.  We eat organic and try to eat local and non-GMO.  It's expensive.  I’m not willing to compromise on quality, but always looking for ways to lower budget and still eat well.  With two, growing boys…it’s only going to get worse!  I’ve joined Costco to see if that will help any.  But, the eating out expense (and we maybe average once/week) on top of this makes the “food” category crazy to me. 

Expenses - Variable
$738 – Groceries + csa = 8847.33/yr (this is most likely overinflated with beer added in, some toiletries and vitamins from Whole Foods and possibly even some petrol costs – need to track this better!)

There's a reason why people in the personal finance/FI community call Whole Foods Whole Paycheck. Your groceries are frankly absurd. I feel guilty spending $300/month for two people, and you've got restaurant spending ($230 meshed in with other stuff) to boot!

It's important to feed your family healthy food. It's a good value to have. However, you need to grow more fresh produce yourself if you're going to insist on juicing it. I used to be raw vegan, and believe me, the produce was expensive for the first month. After I got used to it, the prices dropped - in large part because my parents supplied me with apples, cherries, blackberries, etc. from our own yard (in a city 51 miles away from my college, no less).

Keep paying for your CSA (I value local food as well), but try to eat seasonal, local fresh produce, which is always cheaper than out of season food. What metro area do you live in? For example, Colorado has the cheapest fresh produce out of any state, while other states (ugh, NY) have more expensive fresh produce.

[soccerluvof4]

I think you seem articulate and are doing pretty well. I dont see either alot of wasteful spending. I feed a very active large Family of 6 on exactly what you pay for 4 and we eat very well. That is one area that you can for sure improve on. I would shoot for 600$ a month and go from there. Our grocery bill includes all personal Hygiene products as well , detergents basically anything I need to buy from the store. Even salt for the water softener. We use Sams club for bulk and Aldis for most of our shopping. Do you live in a bad area you need a security system? although cost is low most people don't need them. Personal Hair Care products should be also in Grocery's amount. Also depending on the value of your life insurance (which to can be a waste of money) it seems awful high as well. So a few things you can check into.

Good Luck!! probably a light slap but I wouldn't say face punches. The extra income becomes more of a decision by you on if you want to get to FI faster and I would invest 100% what then you make.

[Melody]

I think your expenses look reasonable. Yes you could tweak it, but there is nothing that really screams "unreasonable"! I also feel FI looks closer than you think it is:
1) send your kids to study in Australia. Here it's easier for them to pay own way (cheaper university fees, higher minimum wages and income support/housing assistance for low income full time students). If you insist on paying it's still cheaper to pay our fees (about $24k will buy an Australian citizen a business degree or science degree from a prestigious university, humanities cost less, law/med more - an equivalent university in the US would cost that amount per year!) and will be easier for them to cover their non tuition expenses (rent, books, transport etc) due to income support and higher wages.  Of course in a semi-socialised system a less prestigious university costs the same... so it's brutal competition and 20+ hours a week of homework for all of the last two years at high school to get into the top schools. Having gone to both US and Australian universities, I felt the Australian university environment was more beneficial - it was a place you went to learn because you were desperate to learn (because working full time would have left you comfortable financially and with more free time on your hands, compared to studying and working which is what most Australian students do) whereas in the US University was a place you went to party and drink beer out of red cups... and sometimes go to class ;-) Parents bankrolling kids through university doesn't always lead to good outcomes as I saw in the US. I feel, ideally, the kid gets enough support that if they work hard and live frugally, they will graduate without debt. Too much parental support seemed almost as detrimental to a kids grades as too little (i.e. the kids who came to party got just a bad grades as the kids with full time jobs).
2) at some point your mortgage payments will stop. I spend $32k a year, $10K of this is rent, a further $5K+ is international travel. I live well, go out lots etc (in Australia where stuff like groceries and beer are notoriously expensive). So $50k for a couple with 2 kids aged 18 or older (one would assume, even if they are living at home working, would be paying their own transport costs, phone bills, entertainment etc... costing you only a small amount of utilities and food) seems quite generous. I reckon you could still have fun and travel on $40k. Travel is cheaper when you don't work - you can travel away from holiday season, mid week etc. If you're three connecting flights are so brutal you need to sleep for a day to recover, no worries, it's not like your vacation time is running out etc...

[Jules13]

Thanks for the replies and advice!

Yes...the grocery budget.  I think my biggest thing is being disciplined enough to track where all this is going and figuring out what in the hell makes it so high.  I live in Nashville.  Healthy food is a premium in the south where junk food and bad diets reign.  I actually shop most at Trader Joe's.  The only stuff I buy at Whole Foods is because it's cheaper at WF than anywhere else.  It's true...sometimes WF is actually the cheapest option.  Not often, but sometimes.  It's right next to my Trader Joe's, so not out of the way.

I do plan to try growing more food this season.  Until last year we had 3 giant trees (2 sugar maples and 1 hackberry) covering the majority of yard in shade for most of the day.  Last year the hackberry had to come down so we have more sunshine coming into the front yard.  Going to try growing more up there.

As for the security system...when we first moved into our neighborhood it was definitely more considered the "bad side of town", but we got in just in time of the re-gentrification boom of it and are now surrounded by hipsters willing to shell out boatloads just to be in the 'hood.  I still feel safer though with the system. 

I came up with the 50k by adding up my current expenses minus the mortgage and then just padding it a little for my own sense of security and for travel.  It's just a number I feel comfortable to shoot for at this point.

I have definitely thought about university education for my boys in Australia.  I made sure I could use 529 Plan money to do that.  I worked for nearly 2 years at the University of Queensland in Brisbane as an undergraduate/graduate adviser, so I'm pretty familiar with how it works over there.  I loved the analogy about Universities there vs here.  Cracked me up.  "whereas in the US University was a place you went to party and drink beer out of red cups... and sometimes go to class"  Haha.  Definitely some truth to that.  I've wondered if Australian students are more serious because they've had to think about it longer, since they are forced to decide a path in high school and choose coursework accordingly.  I'm not sure I agree with that part of it either though.  It's a hard one.  Knowing both systems helped me in my job tremendously though. 

With the need to insulate the house...it's a 2500 sq ft (therabouts), 2-story 1930 tudor.  There is actually insulation in the attic.  It's the WALLS that are the problem.  Mostly plaster walls, so that is both good for insulation and bad for needing to put more insulation in.  I have contacted someone to come and help identify problem areas and give me a quote. 

I think I covered all the queries.  Thanks again for the insight. 
Cheers.

[MayDay]

I am in a very similar situation- sahm, slightly lower income, a few years younger, two kids.  I have a journal in the journal sedition called MayDay's journal if you want to see our exact budget. 

I am really working on food right now, as well as trying to be more concours about electric.  Our electric has been about 100 a month which I think is outrageous since we have no electric appliances oer than the fridge.  It is hard with the kids (always leaving lights on, turning printer or computer on but not back off, etc) but I have been working on talking to them about not wasting, bad for the planet, etc.  I am anxiously awaiting our march bill to see if it has made any difference.

We share similar food values to you.  One thing that helps us is being vegetarian- I know that doesn't apply to everyone- and being in a fairly rural area.  Last week a friend picked up a load of organic free range local eggs for 2.25 a dozen.  We couldn't get anywhere close to that when we lived in the city! 

Here is my general list of ways I save on food costs:
-vegetarian
-huge veggie garden, try to concentrate on a combo of expensive things to buy (asparagus, berries) and things that are idiot proof to grow.
-help out at local farms sometimes and get to bring home any extra, freeze or can it. This depends on childcare- are your kids old enough to leave at home for a few hours? Ask your CSA if they need help at the drop-off or farmers market.
-costco- their organic frozen veggies are the main veggies we eat all winter other than salad stuff which we get fresh at costco.  Also get all cheese, butter, frozen wild blueberries (happy to buy these non-organic as they are one of the best for migrant worker salaries) brown rice, quinoa.  Their organic carrots (whole carrots, huge bag) are super cheap and in the winter they are in the kids lunches every day and part of dinner, cooked, a few days a week.
- a local green/local store sells mostly small quantities of dry goods, but if you ask they will sell you a 25lb bag for 10% over wholesale.  We get whole wheat flour, dry beans etc from them. Another option along those lines is UNFI,  they are a huge supplier of organic/natural foods and most cities have buying clubs that buy wholesale and get a delivery once a month.
-I try to buy only the cheapest fruit in huge winter since it all tastes bad anyway- usually bananas. 
-I try to keep our convenience food spending very minimal.  I figure since I stay at home and no longer have babies that require intensive care, I have no excuse not to make most snacks from scratch.  I do usually buy one bag of snacks a month, from costco as they are far cheaper. 

Last month I got our grocery spending under 500$ for the first time in basically ever, lol, and I. Hope to repeat it this month.  I had been around 600-800 most months.  So it can be done, especially if your spouse is on board (I don't give the kids a choice, they eat what is served and better thank their lucky stars they live in my house and not a refugee camp where they eat rice, rice, rice for three meals a day.  I am mean like that).

[mom2_3Hs]

Do you have an Aldis in Nashville?  They're the discount arm of Trader Joes.  They have some organics (not all, but some) and the produce is crazy cheaper.  Comparing conventional prices, they're about 1/2 the cost of the Kroger in Knoxville (3 lb bag of apples is 2.99 at Aldis, 5.49 at Kroger; a bag of three peppers is $1.99-2.49 at Aldi, $1.66 EACH at Kroger, etc.)

[mollyjade]

I'm going to second seeing if you can work at your CSA or another local farm in exchange for food or discounted food. It sounds like your kids are old enough to come with you, even if they're not old enough to be really useful yet.

For toiletries and vitamins that you're getting at Whole Foods, look to see if they're cheaper at Vitacost (online).

[Thegoblinchief]

It's the variable stuff like the house repairs, eating out, and misc categories that are eating up a huge portion of the budget. Have a dedicated savings bucket for house stuff and STICK to it unless it's an emergency/safety issue. Drywall repairs aren't one.

Groceries can be hard. I dispute the health benefits of juicing myself. To me it wastes a lot of the vegetable/fruit. If you really must do it, smoothies give you all the fiber that juicing wastes. With a decent food processor (I did smoothies for a long time with a $40 Hamilton Beach) you can pulverize stuff really well. You don't need the fancy pants Vitamixes or even the (slightly) gimmicky Ninja thingies.

My memory is really good, so I don't bother with the price book, but it certainly helps a lot of folks. What will help is being a "flexitarian" especially during the winter. Assemble your shopping list based on staples you actually need. Everything else (produce, meat if you eat it) is purchased based on price. Assemble your meals from there. I tend to cook meals that are super flexible from an ingredient perspective (soup, curries, stir frys, veggie burrito/taco/wrap, pizza with weird toppings).

In other words, meal planning is just the baby/beginner step. Depending on the recipe, you can easily find yourself spending MORE until you know which ingredients will always be expensive or what can be substituted with cheaper options for little loss in flavor or nutrition.

[Jules13]

Thanks again.

Kids are 5 and 8, so can't leave them at home.  But, interesting about working for a farm in exchange for food.  Will definitely look into that.  I'm not doing the same CSA this year as I found it ridiculous how quickly some of the things, like kale wilted and started going bad.  Faster than the regular grocery store.  There are tons of others, but I'm going to try to grow some of that stuff anyway. 

I was vegetarian for a while, but no longer.  We probably eat meat half-time and use it more as a seasoning than an main part of the meal.  My boys are carnivores though...they love it. 

We do have aldi and I go there for vegetables/fruit/other things that I don't buy organic.  Definitely much cheaper than anywhere else on some things, but not all.  Mine has started to get a few organic things in too.  And chocolate.  They have good German chocolate. :)

I actually haven't gone to Whole Foods (we do get vitamins from Vitacost) in a while.  I go more in summer to get items for juicing, but now that I've joined Costco, I'm hoping I can find those items there (if I can't grow them myself).  I am not going to argue the benefits of juicing.  Either you area  juicer or you aren't.  We are.  We love it.  We also make smoothies though and I definitely see the benefits of both.

Mayday, I will definitely have a look at your expenses journal.  I have to say that my boys eat a ton.  You wouldn't know it by looking at them.  They are always asking for food.  If I make a batch of muffins or the like, I am lucky if there is any left by the time my husband comes home.  When I buy snacks from the store, I try to buy something they "like" but don't "love" so it will last more than a day.  Seriously afraid of teenage years and something think I need to start a fund just for that.  :)

Thegoblinchief...you are totally right about the house eating up our budget.  The drywall was a total want as I wanted to paint my boy's room (it's been a baby color for the past 8 years) and the walls had this weirdo texture on it that made it impossible to paint a darker color.  Getting that smoothed out was a total want but had been on the list for years so I did it. 

I do realize that I give in to wants too frequently to ever be truly mustacian,  but I do love reading the helpful advice on areas I can work on.  I go in spurts.  Summer is a really hard time for me in terms of cooking, for example.  I just want to go sit on a deck somewhere in the sun and have food brought to me.  haha.  But, will try to do more grilling at home as a compromise. :)

And, will be having a "clothing swap" soon, once it's warmer and friends start bringing out their spring/summer clothes. :)

[MayDay]

My kids are 4 and 6, so similarly I can't leave them alone.  Although you are getting close with your oldest!

Anyway, the most regular farm job I did was to do the CSA drop-off weekly for a farm.  I drove the farm truck (small pick-up) to the location, sat with the veggies for 3 hours, took whatever I wanted of the leftovers (umm, all of them!) then drove the truck back.  The hours were 4-7 so I had to get a sitter for one hour until my H got home, but I was paid 8$ and hour, had fun chatting with other hippies at the drop site, and got tons of free veggies!  I can need our two to products for the entire year from that. 

I also sub for the farm at farmers markets, but that is a ton of work.  CSA drop is much easier.  I know a local bread baker doesn't go to markets, he hires people to go to market for him.  Then whatever bread is left at the end of market, you get to barter for veggies, or keep.  I am going to look into that for this summer as he is close to my house so the drive wouldn't be bad.  You do have to be careful to look at that's mileage for farm jobs, though.  I wanted to work at the veggie farm of the aforementioned CSA this spring while the kids are in school, but when I calculated the mileage, and considered the 8$ an hour wage, it wasn't worth it. 

[Jules13]

So, in order to reach our goal of 1.25 M in 13 or so years.....is that possible with how we are going now or do we need to drastically reduce spending/increase savings? 

Thoughts?  And the plan is to have the mortgage paid off in 9.5 years at the max.  My oldest is 8 will be 18 when he starts his senior year of high school.  I want to bank all that mortgage money starting that Sept. 

[Melody]

Will you start working part time once your youngest is at school?
With your work experience in the educational sector it sounds like there would be part time work that you could do at the local university? At my uni a lot of the advisors were part time. Or how about being a library assistant - got a few friends who do it, seems like 9-3 are common working hours for them and it's a pleasant job.
I'm assuming your 1.25M retirement figure does not include your house or university savings account assets, so you've currently got just under $300k.
Quick and dirty calculation shows a real return of 8% would mean you need to save $1470 a month to reach an inflation adjusted 1.25m. Based on current savings rates it probably won't happen, although I have found money to grow faster than I thought it would - as once you start building up cash more investment opportunities become available. Also I think your income will grow over time (even if, like my mother you never ever return to full time work!) as you start working again and then gradually take on increased responsibilities. If you save all of your income (even a modest part time income) I think you guys will reach your goals easily.

[ch12]

Groceries can be hard. I dispute the health benefits of juicing myself. To me it wastes a lot of the vegetable/fruit. If you really must do it, smoothies give you all the fiber that juicing wastes. With a decent food processor (I did smoothies for a long time with a $40 Hamilton Beach) you can pulverize stuff really well. You don't need the fancy pants Vitamixes or even the (slightly) gimmicky Ninja thingies.

My memory is really good, so I don't bother with the price book, but it certainly helps a lot of folks. What will help is being a "flexitarian" especially during the winter. Assemble your shopping list based on staples you actually need. Everything else (produce, meat if you eat it) is purchased based on price. Assemble your meals from there. I tend to cook meals that are super flexible from an ingredient perspective (soup, curries, stir frys, veggie burrito/taco/wrap, pizza with weird toppings).

In other words, meal planning is just the baby/beginner step. Depending on the recipe, you can easily find yourself spending MORE until you know which ingredients will always be expensive or what can be substituted with cheaper options for little loss in flavor or nutrition.

Yeah, I don't juice - I did a lot of smoothies at one point, so +1 on GoblinChief's advice.

http://www.mrmoneymustache.com/2012/03/29/killing-your-1000-grocery-bill/
http://www.mrmoneymustache.com/2011/08/23/grocery-shopping-with-your-middle-finger/

I'm not a huge fan of carrying a jar of olive oil and eating straight spoonfuls of it, but it's worth doing Mr. Money Mustache's per-calorie analysis when you are feeding a voracious family. :)

[MKinVA]

For those that mentioned Vitacost...I do better at Puritan's Pride (Puritan.com).

[ViragoStache]

I've read through the responses so I hope I'm not repeating anything.  I think your financial goals are great, you definitely need that will and revocable trust, especially with little kids (I have 8 and 3.5 yr old boys).  I hope you can visit Aussie more (love that place! wish the tickets were cheaper!).

I would focus less on saving for college and make sure the retirement accounts are fully funded first.  Save in a Roth IRA and if you want to you can pull that out for college, if not, retirement!

I didn't see anything about the cable!  Please get rid of that.  You have Netflix I think I saw so why cable?  If you want to watch a sports game, head out to a bar :)  I got rid of it and not only did I get rid of the headache, but that monthly cost... ack.

For you internet, not sure what provider you have but see if they have any specials and call up and ask them for that promo rate.  I have TWC and although I hate them, I got a 20$ per month cheaper rate just from a call.

I see the house decor costs from last year (a piano is great, get those kids and you playing) but what are you spending 21$ a month on?  Personal care, I think you know to cut down on those.  Hair cuts at home, no new clothes or shoes (well, kids grow, but try Goodwill or the like) and makeup?  You're beautiful w/o it.  Try a week/month without and see how much more time you have too!!

As you track better (and that is one of my goals too, using mint.com right now) I'm sure you'll see all the holes.  Start saving the extra and see what you can do!  Good luck and keep us updated!!

[Jules13]

Thanks again for advice!  Love it!

Will you start working part time once your youngest is at school?

I would like to work from home, but don't want to be required to be anyway.  I like the flexibility to volunteer at my kids' school and also not to have to worry if one of them gets sick.  Plus, right now, my mother is very ill (has been for the last two years) and we visit her every Tuesday afternoon and I take turns with my sister spending all day taking care of her on Thursdays.  Things come up and my Dad needs help, so again, right now I need and want that flexibility.  I am looking into options of things I can do from home though.  I would love working in a library actually, but right now I value the flexibility more.

Quick and dirty calculation shows a real return of 8% would mean you need to save $1470 a month to reach an inflation adjusted 1.25m.

Do you mean on top of the $2360 that we already save in 401k and Roth IRAs?  Sorry, I'm confused by your wording possibly. 

ch12 - thanks for those links...will be checking those out! 

MKinVa - thanks for the tip on Puritan's Pride.  Will check that out. 

Also looking for a good source for quality raw nuts and chia seeds...anyone?

I hope you can visit Aussie more (love that place! wish the tickets were cheaper!)

Me too!  We actually have enough miles (from points on our American Airlines credit card) for FOUR tickets right now.  It's just a hard time for us to go and we can't get away right now.  Though, my husband might go in Sept for my SIL's wedding.  I'm SO bummed that the boys and I can't go, but I can't take them out of school for 3 weeks and I'm not wasting those tickets for anything less!  (another plus for homeschooling....I can go to Oz when it's convenient for us and not just in our summer/their winter!)

I didn't see anything about the cable!  Please get rid of that.  You have Netflix I think I saw so why cable?  If you want to watch a sports game, head out to a bar :)  I got rid of it and not only did I get rid of the headache, but that monthly cost... ack.

Yes, we have been discussing this...dragging out feet.  We actually get a lot more expensive package for the price of basic cable because they screwed up.  It's been that way for years.  Seriously the only thing we use it for is for my husband to watch ice hockey.  And when I turn it on I watch HGTV, but most of the time we watch Netflix anyway. 

For you internet, not sure what provider you have but see if they have any specials and call up and ask them for that promo rate.  I have TWC and although I hate them, I got a 20$ per month cheaper rate just from a call.

We have AT&T DSL.  The only other option is Comcast (evil).  AT&T is lots better.  My husband is in IT, so he knows what he wants.  He works from home some as well.  Nashville is slated to get Google Fiber network, so I'm sure we will go with that if we do.

The house....I know, I know.  I am guessing that the $21 a month (this is an average from what was spent last year) is for paint.  I like to paint things.  Furniture that I get from yard sales or craigslist.  And rooms. 

Boys clothes.  Have you ever tried to find boy's clothes at the thrift store?  Let me tell you...it is not easy.  Boys wear there clothes out.  Girls have rows upon rows at the thrift store.  The boy's section is lucky to get 1/2 a row.  My oldest is tall so it's hard to find hand me downs either.  I really don't buy them much though, mostly my parents do.  Only once they've put holes in all the knees of their pants (happens often), I patch them, then another holes comes, so if I can't patch them again, I either turn them into shorts or ditch them.  My youngest gets hand me downs from brother and a cousin.  Shoes I usually buy new though I am not above buying 2nd hand if I see a good pair.  Again, boys are hard on stuff, so slim pickins'.

And, I don't wear makeup often, but what I do wear, is not the cheap stuff.  I do have some pricey hair stuff too as my hair is naturally curly and well...let's just say, it's a pain in the arse.  And I only get my hair cut a few times a year, so it's not a big expense either.  No way I'm cutting it myself. :)

I started cleaning my face with oil over a year ago, so no more pricey face stuff either.  Yay!

I WISH my credit union used Mint.  I love mint.  When we left Bank of America (hate them), we had to switch.  I am using Yodlee now.  It's okay.  But, I like Mint better. 

[Melody]

oooh sorry I didn't see the pre tax savings! In that case you are going to reach your goal sooner than you think, even with a lower growth rate you will hit your goal quite quickly.
I just used this savings calculator (doesn't take inflation/taxes into account, but as you are looking for whatever 1.25million is worth in the future, it's all good (i.e. you would bump both your growth rate and your goal up by inflation).
https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/savings-goals-calculator
Personally I think 8% (after inflation/taxes) is a very high assumed growth rate but it is commonly used in personal finance books etc. Now you have the link you can play with the growth rate. Also I don't know how your taxes work, but here I'd have to factor taxes into it as well, although using property/shares you can delay paying by not selling, so theoretically you only need to factor them in at the point of sale.

[Jules13]

Thanks Melody!  Feeling pretty good! :)  Going to play around with the calculator on that link.

[Mori]

We have AT&T DSL.  The only other option is Comcast (evil).  AT&T is lots better.  My husband is in IT, so he knows what he wants.  He works from home some as well.  Nashville is slated to get Google Fiber network, so I'm sure we will go with that if we do.

What I normally do for my internet provider is call the competitor in the area, get a price quote, and then call my provider to see if they can match the price. Might be worth a shot (I normally end up starting in the cancellation department because it's easiest, and I usually end up getting transferred there anyway).

[ViragoStache]

Yes, we have been discussing this...dragging out feet.  We actually get a lot more expensive package for the price of basic cable because they screwed up.  It's been that way for years.  Seriously the only thing we use it for is for my husband to watch ice hockey.  And when I turn it on I watch HGTV, but most of the time we watch Netflix anyway. 

We have AT&T DSL.  The only other option is Comcast (evil).  AT&T is lots better.  My husband is in IT, so he knows what he wants.  He works from home some as well.  Nashville is slated to get Google Fiber network, so I'm sure we will go with that if we do.

Oh, I think we were going to give up cable since my 8 yr old was born.  But once we did (before reading MMM) oh... the $$$savings.  DO IT NOW.    Oh, Comcast wants to buy TWC and I can't wait for that Devil Baby.  I'm IT too and W@H so I need the speed and need VOIP for work so I can't go to a basic plan (though in FI we might) but I'm saying on the plan you have, see if you can get the same for cheaper (after you get rid of cable). 

The house....I know, I know.  I am guessing that the $21 a month (this is an average from what was spent last year) is for paint.  I like to paint things.  Furniture that I get from yard sales or craigslist.  And rooms. 

Just question yourself before doing it.  Living FI doesn't mean you can't do anything fun (and a little painting is better than 'retail therapy') - just ask "is this the best use for this money right now" and if it is, okay.

Boys clothes.  Have you ever tried to find boy's clothes at the thrift store?  Let me tell you...it is not easy.  Boys wear there clothes out.  Girls have rows upon rows at the thrift store.  The boy's section is lucky to get 1/2 a row.  My oldest is tall so it's hard to find hand me downs either.  I really don't buy them much though, mostly my parents do.  Only once they've put holes in all the knees of their pants (happens often), I patch them, then another holes comes, so if I can't patch them again, I either turn them into shorts or ditch them.  My youngest gets hand me downs from brother and a cousin.  Shoes I usually buy new though I am not above buying 2nd hand if I see a good pair.  Again, boys are hard on stuff, so slim pickins'.

I have two boys and it has been nice when we can get the hand-me-downs but yes, as they get older it's hard to find stuff that's not all beat to hell (mostly the pants like you noted).  The shoes at thrift are hit or miss (although I just picked up 2 pair of size 11s for my  3 yr old in good condition for $6 total, and returned the $9 shoes from WalMart).  I have been passing my clothes on too so I hope I get good clothes karma.  If family is looking for gifts for them, ask for clothes.  My folks are the only reason my boys have "new" clothes :)  Great job patching, most would just throw them out.  I'm throwing patches on my boys AND my hubby's clothes!

And, I don't wear makeup often, but what I do wear, is not the cheap stuff.  I do have some pricey hair stuff too as my hair is naturally curly and well...let's just say, it's a pain in the arse.  And I only get my hair cut a few times a year, so it's not a big expense either.  No way I'm cutting it myself. :)

And I have straight hair and what a pain :)  I wouldn't try to cut my hair  at home (same on only getting it cut once or twice a year - I'm due), but I was thinking the boys (using the grooming tool MMM has mentioned).  I actually asked for a WAHL for xmas and got it and I do my oldest boy (poor kid) right now.  I'll get better :)  My hubby has long hair and I trim his, I don't know if he's gone to a professional for hair cuts since I've met him.  (I probably don't wear makeup because I'm lazy - and don't know how to use it, so why mess with it.)

I WISH my credit union used Mint.  I love mint.  When we left Bank
 of America (hate them), we had to switch.  I am using Yodlee now.  It's okay.  But, I like Mint better.

Our CU doesn't use Mint and it's a pain, I hear ya.  Most of my spend is on a CC but the mortgage and other payments are at the CU and I don't want to have to add them in.  I don't really want to change everything right now, but would love to have it all tracked.
I don't know Yodlee - does it include the CU and that's why you use it?

[kkbmustang]

First of all, welcome! Whether you want yo do a Mustachian 180 or a slow maneuver, we've got your back.

I'd suggest starting with the areas that cause zero pain but get results. Like shopping around insurance providers, better internet rates, utility rates and usage. Once we discovered MMM we started actually paying attention to HOW we used our electricity and adjusted accordingly for immediate results. (Increase ac temp, lower heating temp, turn off lights, unplug kitchen appliances, etc.)

Now, the food. A lot of things are cheaper on amazon, free shipping with Prime, and get you out of the stores that cause you to unravel. For me, I try to avoid Whole Foods. (Danger, Danger Will Robinsom!) We go direct to the farmers at our local farmers market. Way less expensive and fresher. We get grass fed beef, pork, free range chicken, eggs and honey direct from the farmers. We go to the same produce dealer who now knows us and gives us great prices. We literally fill the trunk of the Prius full. We do make juices with our Breville and everything else in the Vitamix.

We have reduced eating out to maybe once per week or 10 days. I pack my husband and kids lunches every day. Except when I'm having an exceptionally bad pain day and then they're on their own and eat at school or leftovers.

There are SO MANY WAYS to reduce your spending. Oh, and you should see if you can find an online yard sale page on Facebook for your neighborhood. I'm in one and it is MAGIC. I've bought, sold, and gotten referrals from that group. Gently used clothes, furniture, etc. great way to reduce expenditures on those types of things.

Good luck and have fun!

[chasesfish]

Jules,

I think you're doing pretty well.  You're currently saving $1400/mo and have already identified your main areas of opportunity. 

Do you have access to a Costco?  Your Food/Target budget seems really high and there's clearly opportunity here.  Test Amazon pricing on everything non-perishable as well.  This is a battle you're going to have to fight $5 and $10 at a time.

The only other major thing I see is your income opportunity, there are lots of great posts on the forums about how to pickup a few hundred dollars on the side without hurting the lifestyle you and your family enjoy as a SAHM.

Good luck!

[Jules13]

Just seeing some later responses and have been making a few changes. 

Our CU doesn't use Mint and it's a pain, I hear ya.  Most of my spend is on a CC but the mortgage and other payments are at the CU and I don't want to have to add them in.  I don't really want to change everything right now, but would love to have it all tracked.  I don't know Yodlee - does it include the CU and that's why you use it?

I use Yodlee because I can use it with my CU since Mint doesn't support it.  It's very similar to Mint, just  hard to get used to something different.

That being said, I just started using YNAB a few weeks ago and I LOVE LOVE LOVE it!!!  Highly recommend giving it a go.  There is a free trial for 30 days.  It has helped me to see and understand better than any other program I've use, how I spend my money.  I don't know why...maybe because it forces me to think of it first, as opposed to just tracking it. 

I've planted my seeds for beets, spinach, lettuce and kale and will start my seeds (indoors) for tomatoes and capsicum this week.  I'll also be planting pole beans, green onions, ginger and my raspberry bushes have started coming out so hoping for a decent crop this year.  We'll see.  The birds got most of my blueberries last year. 

Do you have access to a Costco?  Your Food/Target budget seems really high and there's clearly opportunity here.  Test Amazon pricing on everything non-perishable as well.  This is a battle you're going to have to fight $5 and $10 at a time.

Yes, we joined Costco a few months ago and I'm still navigating my way through the deals there.  I've found a few and just recently thought of a way to still buy the huge bags of nuts without having my boys eat them all in one go.  I'm going to ration them out buy weeks into jars so that they will last a whole month rather than them eating them all in one week. 

The only other major thing I see is your income opportunity, there are lots of great posts on the forums about how to pickup a few hundred dollars on the side without hurting the lifestyle you and your family enjoy as a SAHM.

Will definitely be looking into this more in the coming weeks.  My youngest is starting kindergarten in August, so will have lots more opportunity to pursue this then.  I don't want to start anything full time since I like being available to volunteer with teachers and visit with my parents in the afternoons and I also might start home schooling my oldest in a year or two. 

I have also decided to up our 401k contribution to max it out and scale back on the Roth IRA contribution.  Wondering if I should also direct that Roth contribution to my rollover IRA to further reduce taxable income.  I will be (finally) doing my taxes this week so will see what impact that would make.  I've not contributed to it since I left work nearly 9 years ago.

Thanks for continued advice!

[hyacinth]

I've been trying to work on our grocery budget too...it runs 700-1000/mo (holidays are always higher). We've kept it around 700 the past 3 months. Baby steps :-) If I'm more vigilant with the price book and meal planning I think I can get much lower. We're a family of 6 including 2 teenagers (they eat way more than I do!) and 2 grade schoolers. Three of us are gluten intolerant, one of us is dairy intolerant. I used to garden but haven't made time for it the past few years. For me, the garden always ended up costing more than buying produce at the store/farm market and it stressed me out looking at all the weeds! I would buy expensive seeds, special tools, raised beds, etc. I would enjoy getting back into it if I can do it without being overwhelmed (weeding) or overspending! 

Do you have a smartphone? I've found it handy to make a price book in my "notes" app. I have an alphabetical list of items, mostly filled in based on my receipt after I get home from a grocery trip. I used to try and keep track of prices in a physical small notebook but never succeeded with that method. Having it on my phone has been awesome! So easy to pull it out and price compare.

Another thing that's been helping me is emeals. They have all sorts of plans available (clean-eating, vegetarian, gluten free, etc) and supposedly you can set up a plan based on store preference (walmart, aldi, etc). I didn't see that option for the low-carb plan but I don't have trouble finding most of the week's items at Aldi. I'm on the low-carb plan because they tend to be naturally gluten free recipes--meat/fish and vegetables. I just add in breads/potatoes on my own, if desired. I'll probably try out the gluten free option at some point (I think you can change your plan once per month) but gf pastas and specialty flours can get pricey and I was worried they would include alot of that. I enjoy cooking but suck at meal planning so emeals has been awesome for me so far! I just pick 5 or so of the meals each week to make. I usually don't bother with the recipes that I know won't go over well with the family, but most of the recipes (even the ones that I felt were out of our comfort zone) have been surprisingly good. I found a coupon code online and emeals ended up costing me $49.30 for 12 months.

[Allen]

No face punches from me, you are doing everything at least as well as I am.

[stash4cash]

Hyacinth, how are you adjusting the shopping list after  you remove the 1-2 meals that you know people won't like? Just eyeballing it? or do you have some other clever method? :)

[Jules13]

Hyacinth, thanks for the idea of the price book on the phone.  Great idea.

Personally, I think $700 with 4 kids, two of which are teenagers, is pretty dang good!  I am so fearful of the teenage years.  We've planted blueberry and raspberry bushes and are going to plant two pear trees this year in the hopes that they will produce well (in addition to our other veggies we hope to get good at growing) will keep our boys from putting us in the poor house when they are teens.  The 8-year old can out eat me already and that's saying a lot! 

I'm pretty good at meal planning, but I'm still perplexed how our grocery bill gets to where it does.  I'm tracking it all this month so I can see where it all goes.  I don't make expensive meals, so my only guess is fruit.  We eat a ton of fruit.  And, I do buy organic quite often. 

We've done better at planting our veggie garden this Spring.  I've got beets, spinach and kale coming up and lettuce planted.  As well as seeds started indoors for capsicum, tomatoes and cucumbers.  Pole/green beans will sow directly into the earth soon when it warms up a bit.  This is the best I've done so far.  Fingers crossed. 

I also changed our 401k allocations to max that out for the first time and reduced the Roth IRA contributions a bit (in order to do more with 401k).  We had to pay in taxes this year, so I'm hoping that will help that.  We'll see.  We had been maxing out roth contributions but thinking I needed to reduce taxable income first so changed strategies.