Author Topic: How do you plan for FI when so much is up in the air?  (Read 6875 times)

Elle1989

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How do you plan for FI when so much is up in the air?
« on: September 01, 2014, 05:19:49 PM »
Hi all! First time poster, first time lurker of forum (though I've been reading MMM for several months now). I have a dilemma. I want to reach FI. I have a long way to go on that, but that's what I want. However, I'm having a hard time picturing it because everything seems so up in the air.

Married, no kids. Student loan debt total of just under $43,000 (most at 6.55%), credit card debt total of just over $6,000 (0% -- for emergency trip overseas and balance transfer to get out from under a car to sell it), current medical debt of $2,000 (0%, paying $300-$500 a month). Income approx. $90,000/year gross. Investments (mostly retirement) just under $8,000. Currently contributing up to the match on 401(k)s. Non-debt and non-medical expenses approx. $2,500/month (they were higher, but I recently put a budget on our food spending which was a bit redonk the last few months).

So that's a general idea of our finances. Here's the issue: I read case studies and regular MMM pieces and notice that everything seems to be so stable and figured out -- "your income is this and your expenses are this and they always will be so do this". What about when things are up in the air? How does one plan for FI when they aren't sure what the next year (or even six months) will bring? Here's where I'm at:

1) I love my job, but just over a year ago I was in a completely different profession (the one I went to school for) and never in a million years did I think I'd be here now. DH is headed back to school next year to finish his degree (while cutting work back to PT) as his hours and pay are completely erratic (car salesman) and while he's on the fast track to management, the hours are even worse there. I know true work-life balance is a bit of a fallacy, but his schedule is ridiculous and he often stays late just to talk to customers who are never going to buy anyways. Sorry for the whining. *punches self in face*

2) I was diagnosed with an autoimmune disease a few months ago. While it isn't necessarily life threatening, it requires a decent chunk of money each month for check-ups, immunizations, meds, supplements (doctor recommended after doing blood tests), and more expensive food (I have intolerances to dairy, legumes and gluten, so I've been eating Paleo). I have no idea if these expenses will go up or down, as it's a completely new situation to me.

3) My family is across the country (we moved), his family is across the globe. We've had two emergency trips (one across the country, one overseas) for sudden deaths since moving a year ago.

4) DH is from a cheap COL country. We could go back there for him to finish schooling affordably, as I work remotely. Of course, that presents its own issues (language barrier for me, first world to third world living -- not a princess, but it is an adjustment), but it's always an option. Seriously, credit hours are like $6 each. Not exaggerating. Besides schooling being affordable, we ran the numbers and could live like kings while putting $3,500 towards debt each month on my salary plus a part time salary for him there. But a degree in the U.S. is more universally respected. So that's something to think about as well.

5) We may want kids and a house at some point (currently 25 & 28) and we've talked about adoption for the former (which is really fucking expensive btw). Of course, that's not set in stone either because that would make things too easy ;)

So the point of this rambly mess is this: when you don't know what your life will look like in a year, how can you plan for FI in 10? And are MMM readers really this stable, or is anyone else dealing with future financial uncertainty? Bonus: did anyone start running the numbers while in debt, or did y'all pay it off before putting your FI dreams on paper?

MsRichLife

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Re: How do you plan for FI when so much is up in the air?
« Reply #1 on: September 01, 2014, 05:29:14 PM »
Honestly I don't think you need to plan out the next 10-20 years in order to get to FIRE. Know that it's the goal you are striving for and then just make the best decisions you can based on your current circumstances. Then when circumstances change, make new decisions based on your new situation. As long as the decision you make takes you in the right direction, don't worry too much about the distant future.

As an example. You know that you have a lot of debt at the moment. Make it your number 1 focus to get rid of it ASAP. When it's gone, work on the next thing.

Sorry if I'm making it sound simplistic, but this is all I've done through the years. Identify one or two things I can work on right now, set myself some short-medium term goals, work hard to achieve those goals, then set some new ones.

Good Luck!

ShortInSeattle

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Re: How do you plan for FI when so much is up in the air?
« Reply #2 on: September 01, 2014, 07:29:01 PM »
Honestly I don't think you need to plan out the next 10-20 years in order to get to FIRE. Know that it's the goal you are striving for and then just make the best decisions you can based on your current circumstances. Then when circumstances change, make new decisions based on your new situation. As long as the decision you make takes you in the right direction, don't worry too much about the distant future.

As an example. You know that you have a lot of debt at the moment. Make it your number 1 focus to get rid of it ASAP. When it's gone, work on the next thing.

Sorry if I'm making it sound simplistic, but this is all I've done through the years. Identify one or two things I can work on right now, set myself some short-medium term goals, work hard to achieve those goals, then set some new ones.

Good Luck!

Beautifully stated. Anytime someone talks about "years until FIRE" they are making a projection based on assumptions. Do the best you can today, and revise your plans as life evolves.

It only seems tidy in retrospect.

Ricky

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Re: How do you plan for FI when so much is up in the air?
« Reply #3 on: September 01, 2014, 08:00:30 PM »
You can't plan for every contingency and thus should avoid analysis paralysis. Have goals and figure out resonance ways to meet them. The rest will fall in place. You're much more capable than any calculator out there, promise.

Metta

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Re: How do you plan for FI when so much is up in the air?
« Reply #4 on: September 01, 2014, 08:09:56 PM »
My husband has a philosophy that seems to work. He says that any money put away is making things better, even if it is just a royalty check for $5. You don't actually know when you will have enough because all of our lives are hanging by a thread over a pit of catastrophe. All you can do is improve your financial stability at the moment and trust that things will work out. No one's life is stable, certainly not ours and I count us as among the lucky ones (no death, no divorce, one serious medical condition that is under control).

And for what it is worth, we are earlier in the FIRE realm than my husband's most optimistic hopes. But we did manage to get out of debt and that meant a lot to us. It was a far greater source of calmness than being FIRE. As MsRichLife says, work on the first goal. Don't get caught up in projections. They are all fantasy anyway.

wwweb

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Re: How do you plan for FI when so much is up in the air?
« Reply #5 on: September 01, 2014, 08:11:58 PM »
I have short -term plans (what I will do) and long-term goals (what I want).  So long as my plans are aligned with my goals, I don't worry too much about the mid-term.

Middlesbrough

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Re: How do you plan for FI when so much is up in the air?
« Reply #6 on: September 01, 2014, 08:45:01 PM »
Don't let step 20 cripple step 2. I am young and far from retirement (I have no date and no real plan for it as I am so far away). The best thing I do is track expenses with software that shows what I have spent before so I have a small grasp on the future. Do what you can now, pay down your debt step by step, and don't get worried about what is too far into the future for you to predict. Prepare for the worst, but expect the best. One day you will get there and laugh at your old perceived problems.

Dicey

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Re: How do you plan for FI when so much is up in the air?
« Reply #7 on: September 01, 2014, 11:41:34 PM »
It took me way longer to get FIRE than I ever imagined. I had the same problem that concerns you. My advice: Just start reducing your costs, paying off debt, saving, and investing. Get started and the rest will follow. Someday you may or may not have more accurate predictions, but if you follow the steps, it won't matter.

Personal bias alert: Depending on the country, it wouldn't take much for me to jump on that opportunity. Think about it.

Elle1989

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Re: How do you plan for FI when so much is up in the air?
« Reply #8 on: September 02, 2014, 12:48:17 AM »
Thanks everyone for the input! You're all right of course, I should just focus on one step at a time and not the end game just yet. Wiping out my debt is my main priority -- which will be faster if we choose to go overseas -- and constantly working on lowering/maintaining my expenses (I can do some serious damage with food shopping without a budget). I'm also working on upping my income through a combination of side hustling and getting a raise in the next couple of months.

DH and I discussed the overseas option more tonight and it's definitely something we're considering. The move wouldn't be for a year, giving us plenty of time to decide and prepare. FinallyAwake and Diane are right, why not take the opportunity? He's from Jordan, btw, which is a great (very progressive for the ME) country. When I went there earlier this year, the experience was mostly great (aside from the reason we were there, which was a death in the family). Plus it's super affordable and most of his family still lives there. The one thing I don't understand is whether or not I can invest in my U.S. retirement accounts while living overseas if I still work for a U.S. company. Hmm, must research that ...

Thegoblinchief

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Re: How do you plan for FI when so much is up in the air?
« Reply #9 on: September 02, 2014, 10:42:33 AM »
Spend less than you earn. What you save, save and invest in the most tax efficient manner possible.

Avoid designing your lifestyle with huge structural expenses (large house, car loans, stupid consumer debt because you weren't patient enough to earn the money before buying).

Everything else is details.

Living in another country can be a great experience. It's something I hope to do at some point.

Timmmy

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Re: How do you plan for FI when so much is up in the air?
« Reply #10 on: September 02, 2014, 11:04:16 AM »
I think this has already been covered but remember it's just a plan. 

Run your numbers and calculations on what you know today.  When your situation changes, run your numbers again.  Plan with the info you have.

Gone Fishing

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Re: How do you plan for FI when so much is up in the air?
« Reply #11 on: September 02, 2014, 11:16:13 AM »
We've reworked our plan numerous times.  Sometimes for the better, sometimes not.  My current plan hardly resembles the first plan other than they both involve quitting the rat race.  What matters is that you have one, and have a goal.  With nothing to work towards you are just wandering the desert!

Weyfarere

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Re: How do you plan for FI when so much is up in the air?
« Reply #12 on: September 02, 2014, 05:17:56 PM »
Is the school in Jordan accredited by some organization that's recognized in the US? If not, then a degree from there might be worthless to many US employers.

arebelspy

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Re: How do you plan for FI when so much is up in the air?
« Reply #13 on: September 07, 2014, 08:41:41 PM »
All the stuff in the air is - more or less - irrelevant.

Spend on what is important.  Save as much as you can.  You'll see your net worth grow over time.

As you actually get close to FI, things will resolve themselves.  But if stuff is so up in the air like that, you probably aren't anywhere close to FI.

Just save, and don't worry about FI.  You'll get there.
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isbjshaffer

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Re: How do you plan for FI when so much is up in the air?
« Reply #14 on: September 08, 2014, 10:36:40 AM »
I agree with avoiding "analysis paralysis" If you never start, you'll never retire. It's better to be "off" a couple of years and end up retiring at 48 than to do nothing and never be able to retire.

pachnik

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Re: How do you plan for FI when so much is up in the air?
« Reply #15 on: September 08, 2014, 10:43:26 AM »
All the stuff in the air is - more or less - irrelevant.

Spend on what is important.  Save as much as you can.  You'll see your net worth grow over time.

As you actually get close to FI, things will resolve themselves.  But if stuff is so up in the air like that, you probably aren't anywhere close to FI.

Just save, and don't worry about FI.  You'll get there.

Exactly.  +1  Yes, having savings, knowing what your expenses are, etc. are good ideas no matter what.  Having financial knowledge and smarts isn't ever going to be a negative thing.  You can't lose by following the way of the mustache.  :) 

I was let go from my job very recently.  But I have no debt.  I know what my expenses are because I have been tracking them for half a year and will continue to do so.  I have money saved.  So even in this not so great circumstance, doing the things that will get me to FI are a wise thing to do. 

mozar

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Re: How do you plan for FI when so much is up in the air?
« Reply #16 on: September 08, 2014, 06:41:56 PM »
Is there an exchange program your spouse could do with a US university? Or maybe start here and do a "year abroad" in Jordan and get credits for it?

2ndTimer

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Re: How do you plan for FI when so much is up in the air?
« Reply #17 on: September 09, 2014, 09:59:48 AM »
Don't worry about the forest.  Just pick a financial tree and start working on it.  You will be amazed at the number of new ideas that begin popping into your head as the result of one small change.

Regarding Jordan.  Living in another culture is great is amazing.  We did something similar and it had all sorts of profound, life changing effects.  Also learning new language does great things for your brain.  I found a whole new personality. 

trailrated

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Re: How do you plan for FI when so much is up in the air?
« Reply #18 on: September 09, 2014, 10:34:54 AM »
I would keep the match with the 401k and work on getting rid of all the debt. That will give you some time to "plan" out the rest. And no matter what you decide to do after that,y ou can do it more efficiently without the debt albatross around your neck. Best of luck! Enjoy life!