Author Topic: Help me increase my badassity?  (Read 6074 times)

wifeytini623

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Help me increase my badassity?
« on: May 10, 2013, 11:10:55 AM »
Hey guys, I'm new to the forum :) I discovered MMM through the Washington Post article and I instantly fell in love. :)

I've never posted before, so please let me know if I'm breaking some kind of rule or etiquette. I would love if you guys could analyze my living situation and tell me where I can improve. I would LOVE suggestions, thoughts, constructive criticism, anything. I aspire to be a Mustachian but I would love some help in the right direction!!

Deep breath. Here goes:

My husband and I have been married for 3 years this May. We have two adorable little children (girl 22 months and boy 10 weeks) and we're very happy and frugal by nature.

Right now I stay at home with the children. My husband works as some kind of system analyst in the city and he commutes to work. We make about $41k after taxes, about $2200/month. When I had one child, I would work on freelance projects online through oDesk to earn some extra income that we would sock into our house fund/savings account. I find now that I have two children, though, I don't have NEARLY enough time to do this as I used to!

Right now we have $13,500 in a house fund and $1K in an emergency fund. Our son was born with a neural tube defect that required a long NICU stay and a leave of absence from work, so our emergency fund has been depleted. Thankfully, hubby is back at work and we're getting regular paychecks again. Unfortunately, we have $30K in student loans that I acquired in college when I was quite a bit less "mustachian" :(. To put a positive spin on this, though, I graduated with $62K worth of debt (yikes...so embarassing) but we've been working like dogs to obliterate our debt as much as we possibly can. Up until recently, we put most of our paycheck and tax returns into paying back our loans. When we found out we were expecting our second child, and then found out shortly thereafter that he had Spina Bifida, we started paying the minimums on our loans and socked all the extra away in our saving account (we knew that, having special needs as he did, he would be in the NICU for quite some time and we would be hit with a big bill and lots of expenses. We were right!).

For the past two years we've lived with my parents rent-free so that we can save/pay off as much as humanly possible. Our monthly expenses are food ($125/week), cell phones ($50/month pay as you go plans), student loans ($309/month minimum payment) gas (about $50/week), transportation to and from the city ($175), parking ($20) and netflix ($8). Since Henry was born, we've had some copays and medical expenses that have been about $50-$60/month so far. Ocassionally we eat out or splurge at Half Price Books, but we really do try to save as much as we can and keep costs low. Our biggest expense is obviously transportation to and from work, but I'm reluctant to have my husband look for a different job because our insurance is so stellar, and our son has special needs. We have an HMO with no deductible and I can't imagine what a NICU stay would have cost us on a different insurance plan. Anyway.

We put away at least $500 per paycheck in the house fund, and now we're slowly trying to build our emergency fund back up from (almost) nothing. I cloth diaper the kiddos, use cloth wipes, shop at Aldi, cook from scratch, make our own laundry soap, shop garage sales, etc. We're homebodies and frugal by nature so we don't have a lot of expensive hobbies or anything like that.

I'm sure I'm forgetting something but that's basically it. We don't have a lot of expenses, but it still feels like we are barely making ends meet between saving for a house and trying to evict Sallie Mae. We want to up our retirement (currently we put 10% in a 401K and have about 20K in there last time I checked) and be able to afford to move out of my parents' house eventually.

Thoughts?


(ETA: we drive a used, paid-for 2003 Toyota Matrix. Hub takes it to the train station in the morning and then commutes to the office, so we really only use it to/from work and about once a month to visit his parents an hour away. We pay car insurance every six months in one lump-sum payment to save $$. We have a low payment (like $3-400 for six months, I want to say?) but that may change after this recent fender bender I've gotten into over the weekend :-/. D'oh.)
« Last Edit: May 10, 2013, 11:12:51 AM by wifeytini623 »

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 16551
  • Age: 39
  • Location: Toronto, Ontario, Canada
Re: Help me increase my badassity?
« Reply #1 on: May 10, 2013, 11:24:09 AM »
What's the rate on your debt vs the rate of return on your savings?  Does it make sense to put money away for buying a house while you're still in debt?

500$ a month is a lot to spend on groceries.

How far away is your husband's train station?  Is biking to the station an option?  Have you tried biking to the nearest grocery store, or using a bike to run errands?

earlyFI

  • 5 O'Clock Shadow
  • *
  • Posts: 88
Re: Help me increase my badassity?
« Reply #2 on: May 10, 2013, 11:39:32 AM »
Welcome to MMM,

It is awesome that both you and your husband are happy and frugal by nature. I like the low phone bill, living w/ parents to off set costs. Congrats for paying down your debt!

The thing that would help you the most would be to Increase income...

Can your husband move up in the job he has now, or can he transfer to another division for more pay? Is he at the top of his pay range for the job? can you move to a city where he would make more?

You can do things on the side to make money, but with 2 kids your time may be limited (especially if one has special needs).

I know this can be a major change or feel like it is impossible to change, but it would have a big impact over time.

wifeytini623

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Help me increase my badassity?
« Reply #3 on: May 10, 2013, 11:53:12 AM »
What's the rate on your debt vs the rate of return on your savings?  Does it make sense to put money away for buying a house while you're still in debt?

500$ a month is a lot to spend on groceries.

How far away is your husband's train station?  Is biking to the station an option?  Have you tried biking to the nearest grocery store, or using a bike to run errands?


Thanks for the reply!!

The return on our savings is negligible - maybe half a percent. Our loans average a 5 or 6% interest rate, so mathematically it would not make sense to save. BUT -- with two children, one who has special medical needs, I just don't feel comfortable having NOTHING socked away, know what I mean? If we had to move out at a moments notice, at least with savings we could put a small down payment on a condo or something. Our income couldn't cover the cost of a 2br apartment, if we had to move out.

$500 covers groceries, but also toiletries and household items as well. Is that still a lot? How much should it be?

Distance to the train is about 7 miles. I'm not sure biking would be an option for him though. It's a 20 minute drive, so I'm sure biking would take at least 30-40 mins...right? Or no? He leaves the house at 530 am to get to work at 7. I can't imagine him waking up even earlier and staying later than he already does...

wifeytini623

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Help me increase my badassity?
« Reply #4 on: May 10, 2013, 11:56:52 AM »
Welcome to MMM,

It is awesome that both you and your husband are happy and frugal by nature. I like the low phone bill, living w/ parents to off set costs. Congrats for paying down your debt!

The thing that would help you the most would be to Increase income...

Can your husband move up in the job he has now, or can he transfer to another division for more pay? Is he at the top of his pay range for the job? can you move to a city where he would make more?

You can do things on the side to make money, but with 2 kids your time may be limited (especially if one has special needs).

I know this can be a major change or feel like it is impossible to change, but it would have a big impact over time.

Hey there!! I agree, I feel like the only thing to do is increase income. Hopefully he'll get a promotion now that his company is restructuring? Any advice on how to increase his chances??

Rebecca Stapler

  • Pencil Stache
  • ****
  • Posts: 907
    • Stapler Confessions
Re: Help me increase my badassity?
« Reply #5 on: May 10, 2013, 12:21:56 PM »
I don't think $500 is too much to spend on groceries and household supplies for a family of 4, but that might be because I live in a HCOLA and coupon a ton in order to keep it at $600 just for food.

What is the current balance on your student loans?

wifeytini623

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Help me increase my badassity?
« Reply #6 on: May 10, 2013, 12:47:55 PM »
I don't think $500 is too much to spend on groceries and household supplies for a family of 4, but that might be because I live in a HCOLA and coupon a ton in order to keep it at $600 just for food.

What is the current balance on your student loans?

I coupon too, for some things. We live just outside of chicago, so moderate COL, i think. Loan balance is $30-$32k

secondcor521

  • Magnum Stache
  • ******
  • Posts: 3112
  • Age: 51
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Help me increase my badassity?
« Reply #7 on: May 10, 2013, 09:48:42 PM »
I think you're doing a lot of things right, actually.

I agree with the other poster that said you really need to work on the income side of the equation.  I think there's always opportunity for stepping up to a higher paying job...basically ask your husband to figure out how he can be more valuable to his company (or to another company -- I saw what you wrote about the insurance aspect, but he can always look elsewhere and if he gets a job offer he can ask for details on the health insurance aspect of things.  You may end up with *better* insurance...you never know until you look).  At his work, who makes $50-$60-$75K?  What skills and experience and education do they have?  How can your husband get those and then move into one of those roles?

As a manager, if someone working for me came and said what do I need to do to increase my salary by $XK per year or Y% per year, I would be happy to sit down and work out something with them, and if they did their part I would work to do mine.

wifeytini623

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Help me increase my badassity?
« Reply #8 on: May 12, 2013, 07:33:26 AM »
That is a fantastic piece of advice :) thank you!!!

They are restructuring his company so hopefully he can apply for a higher-paying position. I think a great way to show initiative would be to talk to his team leader about what he can do to improve his standing in the company etc. Although that might be too forward?

secondcor521

  • Magnum Stache
  • ******
  • Posts: 3112
  • Age: 51
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Help me increase my badassity?
« Reply #9 on: May 12, 2013, 10:32:57 AM »
That is a fantastic piece of advice :) thank you!!!

They are restructuring his company so hopefully he can apply for a higher-paying position. I think a great way to show initiative would be to talk to his team leader about what he can do to improve his standing in the company etc. Although that might be too forward?

Absolutely not.  The key is to approach it with the right attitude.

Bad approach:  "I need more money because of blah, blah, blah.  Why won't you give me a raise?  I really need it, boss!"

Good approach:  "I'm very interested in helping to make this business a success, boss.  What are some specific things I can do in the next three to six months to provide more value to you?"

If your husband understands that he can create a win-win scenario by becoming more valuable to his company first and then getting paid for it a quick second, then you're on the right track.  If he's providing $100K worth of value to the company and getting paid $80K of that value in compensation, then everyone's happy, right?

BPA

  • Handlebar Stache
  • *****
  • Posts: 1202
Re: Help me increase my badassity?
« Reply #10 on: May 12, 2013, 11:26:21 AM »
Welcome and I think you are doing a lot of things right.  I understand the worry about changing jobs when you have good benefits and a child with special needs.  I would already be FI if I weren't raising a child with special needs, but I really need the benefits and security of the job (so I work part-time with the option to go back full-time instead).

I do want to point out that Half Price books are far more expensive than the No Cost books at the library.  I had a book addiction once upon a time that I have curbed.

Have you read the Tightwad Gazette or Miserly Moms or Frugal Living for Dummies?  If not, I suggest getting those out of the library to see if you can find some even greater ways to save money.

Good luck!

FiveSigmas

  • Pencil Stache
  • ****
  • Posts: 528
Re: Help me increase my badassity?
« Reply #11 on: May 12, 2013, 07:47:23 PM »
Absolutely not.  The key is to approach it with the right attitude.

Bad approach:  "I need more money because of blah, blah, blah.  Why won't you give me a raise?  I really need it, boss!"

Good approach:  "I'm very interested in helping to make this business a success, boss.  What are some specific things I can do in the next three to six months to provide more value to you?"

Yeah, I don't think there's anything wrong with being proactive with one's career. I haven't read too much of Ramit Sethi's stuff ("I Will Teach You to be Rich"), but I heard him talk on NPR the other day, and despite his rather off-putting blog/book title, what he said sounded like genuinely good advice:

http://www.marketplace.org/shows/marketplace-money/marketplace-money-friday-april-5-2013

Fast forward to about the 19:05 mark.

The short version:
1. Ask your boss what you can do in the next 6-12 months to bring more value to the company.
2. Start doing those things.
3. Make regular status updates and make sure you and your boss are on the same page regarding your progress.
4. Come the next review cycle, remind your boss of your achievements (Note: you may need to do this before the official performance review, as by that time, decisions regarding pay raises may already have been made).

shelfins

  • 5 O'Clock Shadow
  • *
  • Posts: 47
Re: Help me increase my badassity?
« Reply #12 on: May 14, 2013, 01:39:15 AM »
Welcome to MMM!

On the expenses side:
I'd say you guys are already doing a pretty darn good job being frugal. If you want to optimize further, you could probably bring down your cell phone plans by doing any at-home calls via skype and only using the cell phones for emergencies (potential savings: ~$40/month), hack your grocery bills using some of MMM's techniques (see "Grocery Shopping With Your Middle Finger" and "Killing your $1000 Grocery Bill") (potential savings: ~$135/month), and, at least until you get out of your debt emergency, cut out the Netflix and the Half Price Book trips (potential savings ~$10/month). If your car insurance isn't already liability-only, I'd switch it to that. Also, you say that you spend $50/week in gas. I'm guessing that's a typo and you meant $50/month, but if not, you're definitely driving way more than you think you are, and you need to cut it out!

The only major issue is your husband's transportation. Obviously, the best long-term solution is to find him a job closer to where you live, if possible, which both saves a couple hundred dollars a month, and saves him from what sound like some pretty grueling commutes. I understand the importance of a generous health care package in your situation, but once he gets a job offer, he can get a full run-down of the company's benefits package. If it's got a worse health care plan, he can turn down the job and keep looking. In the short-term, you don't mention how far you live from the city, but is it possible that he'd be better off driving instead of taking the train? Also, many companies offer benefits to employees taking public transit, either by paying for monthly passes, or by letting them buy the passes with pre-tax dollars. Is there any chance his company would consider either?

On the income side:
Since you're already doing pretty well on the spending side of the equation, I'd echo everyone else in the forum and say that where you guys can really see the biggest benefits is by increasing your income. The other posters already offered up some great advice on how your husband can try to get a raise. I'd also put getting your husband a new job closer to home on the income side as well, since the best way to get a big pay raise is by moving to a new job. Plus, once your husband has an extra 2.5-3 hours in his day from the shortened commute, it'll be easy to log a extra hour or two at the office, which will put him in a great position to boost his income even more.

Second, you don't mention what you were doing before you guys started your family, but does it make sense financially for you to go back to work until you're out of your debt emergency? I imagine it's very difficult (and possibly very expensive? I really don't know...) to find a daycare provider for a special needs child, but judging from your student loan debt, I'm guessing you must have a Bachelor's, so you probably have some real earning potential and would still end up coming out ahead. I can completely understand why you might be reluctant to do this, but consider the possible advantages--it could potentially dramatically speed up the process of getting rid of those loans, getting your family into a house of their own, and building up a solid emergency fund and a retirement fund for you and your husband. If it's something you're willing to consider, I'd look at daycare options, crunch the numbers, and see whether it makes sense for your family.

wifeytini623

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Help me increase my badassity?
« Reply #13 on: May 14, 2013, 02:05:58 PM »
Welcome to MMM!

On the expenses side:
I'd say you guys are already doing a pretty darn good job being frugal. If you want to optimize further, you could probably bring down your cell phone plans by doing any at-home calls via skype and only using the cell phones for emergencies (potential savings: ~$40/month), hack your grocery bills using some of MMM's techniques (see "Grocery Shopping With Your Middle Finger" and "Killing your $1000 Grocery Bill") (potential savings: ~$135/month), and, at least until you get out of your debt emergency, cut out the Netflix and the Half Price Book trips (potential savings ~$10/month). If your car insurance isn't already liability-only, I'd switch it to that. Also, you say that you spend $50/week in gas. I'm guessing that's a typo and you meant $50/month, but if not, you're definitely driving way more than you think you are, and you need to cut it out!

The only major issue is your husband's transportation. Obviously, the best long-term solution is to find him a job closer to where you live, if possible, which both saves a couple hundred dollars a month, and saves him from what sound like some pretty grueling commutes. I understand the importance of a generous health care package in your situation, but once he gets a job offer, he can get a full run-down of the company's benefits package. If it's got a worse health care plan, he can turn down the job and keep looking. In the short-term, you don't mention how far you live from the city, but is it possible that he'd be better off driving instead of taking the train? Also, many companies offer benefits to employees taking public transit, either by paying for monthly passes, or by letting them buy the passes with pre-tax dollars. Is there any chance his company would consider either?

On the income side:
Since you're already doing pretty well on the spending side of the equation, I'd echo everyone else in the forum and say that where you guys can really see the biggest benefits is by increasing your income. The other posters already offered up some great advice on how your husband can try to get a raise. I'd also put getting your husband a new job closer to home on the income side as well, since the best way to get a big pay raise is by moving to a new job. Plus, once your husband has an extra 2.5-3 hours in his day from the shortened commute, it'll be easy to log a extra hour or two at the office, which will put him in a great position to boost his income even more.

Second, you don't mention what you were doing before you guys started your family, but does it make sense financially for you to go back to work until you're out of your debt emergency? I imagine it's very difficult (and possibly very expensive? I really don't know...) to find a daycare provider for a special needs child, but judging from your student loan debt, I'm guessing you must have a Bachelor's, so you probably have some real earning potential and would still end up coming out ahead. I can completely understand why you might be reluctant to do this, but consider the possible advantages--it could potentially dramatically speed up the process of getting rid of those loans, getting your family into a house of their own, and building up a solid emergency fund and a retirement fund for you and your husband. If it's something you're willing to consider, I'd look at daycare options, crunch the numbers, and see whether it makes sense for your family.

Wow, what fanstastic advice! Thank you SO much for the analysis! I'm actually new to MMM so I haven't even read the "hack your grocery bill" articles. Definitely going to do that when the baby is down for a nap. :)

Speaking of baby, our son Henry's specialists are all <1hr away from home. And with his frequent checkups and spina bifida clinics, that means we DO spend $50/week roughly in gas. (Sometimes it's $50 every other week, it really depends on what's going on at the time.) So yeah, not a typo :-/ but we figure it's worth living one hour away from his hospital since we are paying $0 for rent...right?

I'm definitely going to talk to the husband about me potentially going back to work. Honestly, I really don't know how cost-effective that would be. Even if biking to work is possible, you're right in that we'd have to pay for daycare, and I'm not sure how feasible that would be with Henry, since he has special needs and may eventually require catheterization/enemas/etc. I'm not sure how many daycare providers would take him. Plus he has so many doctor appointments. I think a good compromise would be to get a part time gig, but that would necessitate him coming home rom work earlier.

snshijuptr

  • Stubble
  • **
  • Posts: 147
  • Age: 34
  • Location: Southern California
Re: Help me increase my badassity?
« Reply #14 on: May 14, 2013, 06:19:24 PM »
You need to contact your state's disability board for your son. In California, you get basically everything for free (college, interventions, etc). Contact national family support organizations for help navigating the system. Talk to your doctors about local, state, and national support. A quick search pulled up the Spina Bifida Association. There are resources out there to help you.