Author Topic: Minnesota Odd Couple, aspiring Mustachian from Minnesota married a Chicago girl  (Read 7475 times)

pete5306

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Income: Me $76K ex industrial engineer now in corporate, wife special education teacher $50K


                      Me          Wife?            Notes unsure of Wife's spending..
Mortgage                      $1,458    0   Int rate of 3.875
Food and Dining      $800    300   Too much going out
Car                        $160    400   Wife is paying off car
Shopping                     $160    400   
Utilities                     $250    0   Comcast has me stuck, trying to get to the Internet only
ATM                        $120    0   Misc, try to stay under
Stu Loan                  $1,600    0   Goal to payoff asap, weighted avg interest of 5.85%
Phone                  $50    50   
home improv             $200    100   
Travel                $300           100   Like to travel, do one international trip every two years
Sum                     $5,098    $1,350    
Income              $4350           $2916   
After    Spending               ($748)          $1,566    

*Also, how do you post tables?

Expected ER expenses: Hopefully none

Assets:

Assets
Savings(between us both)   $10K
House   $235K est.
Car-Me   $7K
Car-Wife   $16K
Pension Me   $12K
401K me   $22K
Teacher Retirement   $6K
Total   $308K


Liabilities:



Liabilities   Interest
Student Loan   $10K   5.85%
House   $202K   3.88%
Credit Cards   N/A   
Wife Car   $14K   0%
Total   $226K   

Specific Question(s):

As stated in the title me and my wife are somewhat of an odd couple in terms of finances right now.  I have kept track of all my spending on Mint.com since I graduated from school in 2009, while my wife cannot really answer what her expenses are.  She really likes going out to fancy dinners, which I don’t mind too much, but it is very expensive.  My goal from posting this is to get some advice not only on how to invest/save/payoff debt, but also more info on trying to convert my wife to the MMM culture.  We have yet to really combine our finances and every time I try and broach the finance subject I think she gets uncomfortable.  Finances in her family were always handled by her dad and I think she doesn't want to even think about them.  Also I should note that I am 28 and my wife is 30. 

So we just had our one year anniversary and I have been reading this blog for around the same amount of time.  Over the past year I have tried to cut expenses as much as possible.   Below are some notes:
-Started biking to work 4/5 of the week during summer/spring/fall  2/5 in winter.  About 13 miles one way by car, a little over 11 by bike.
-Sold my 2011 Ford Fusion AWD and bought a Pontiac Vibe 5 speed (cash).  Which surprisingly is much more fun in the winter. 
-I always liked cooking at home, but started really focusing on making high impact meals that yield a lot of leftovers for lunch.
-Started making steel cut oats in the crock pot.  2 cups for about $1.50 feeds me breakfast all week.
-Me and my buddy have a little side home brewing that subsidizes the booze some
-Trying to payoff the student loans by Feb 2015.

Other notes:
-Wife bought a brand new Nissan Altima in 2012.  Nice car, gets good gas mileage and she got a good deal on it.  Her commute during the school year is 10 miles round trip. 
-Got a dog for her Christmas gift in 2013.  Has been pretty cheap so far and we just got rid of the dog walker now that the dog is over 1 year old.
-Costco Members

So in general I think we are doing pretty good but would like some help on getting the honey around. 

Short Term Goals (what should I prioritize):
-Pay off student loans asap
-Either max out 401K/Begin Investing/Pay down Mortgage
-Pay off Wife’s car
-Get wife saving/tracking spending(is this the best way, what can I do?)

Long Term Goals
-Start making money on the side in some IT field..
-Get ready to have kids in a couple of years
-Retire by at least 50

Thanks in advance for your help!

-Minnesota Jon

Bateaux

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I'm confused about your house mortage.  Do you have 235k equity in the house and still owe 202k on the mortage?  If so thats a lot of house.  The way you are adding up your assets is a little wierd.  Your wifes car isnt an asset at that value if you owe 14k.  It's 0% interest so it's not killing you at least.  Pay off the student loans.  You had no business buying a new car in 2012 with outstanding student loans or buying a house worth over 500k.  I'm guessing the house is worth 235k and you owe 202k. 

pete5306

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Buying the Fusion was stupid, was pre-MMM and my dad convinced me I earned it…  Now I try to give him spending advice.. 

pete5306

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Also I bought the house in 2012 for $222K.  Based on sales around me I conservatively estimate it is worth about $235K right now.  I owe about $202K on it. 

4alpacas

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Also I bought the house in 2012 for $222K.  Based on sales around me I conservatively estimate it is worth about $235K right now.  I owe about $202K on it.
Do you have PMI? 
What is your food breakdown?  Going out vs. groceries?

I have no advice about getting your wife on the same page.  My DH isn't into it at all (refuses to even read the blog).  I've worked on cutting back on items that he doesn't care about or he sees as improvement. 

For example, our grocery budget went from $800/month to $150-$250 (includes toiletries, paper, etc.) by cooking at home, stretching expensive ingredients like meat, using less paper products, using cheaper cleaning products, and reducing food waste.  My DH is happier with the lower budget because he has premade meals in the freezer whenever he wants. 

I would try to lead by example rather than forcing your wife into something. 

Bateaux

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Pete5306 first thing is don't worry.  You've got this.   You are young and have the income to FIRE successful when you choose.  You don't really have a lot of assets yet.  Attack that debt and justify every dolar spent for now.  Freedom is coming.  Stick around with us and don't get frustrated.

GizmoTX

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How are you & your wife splitting the bills?

pete5306

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Thanks for the responses.

First, I am paying most the bills, we do a maneuver with Comcast where we switch every year to maximize the deal.  I feel like we are doing pretty good on the utilities though.  Average $63 gas, $72 electric, and $43 water/sewage/trash.  Just need to get that Comcast down from $122 to the $40 internet only plan...

Second, I am paying PMI which is $117/month.  I have about $25K left to go to get rid of it.  I want to knock out the Student loans first, but I wonder how much of a priority I should put on this?

Thirdly our food budget.  Overall I estimate we spend about $1100 together.  Probably together about $400 on groceries, $200 bars, $500 dining out?  I am unsure of what my wife spends, she usually does a couple of Trader Joe's runs a month.  My breakdown for sure from Mint.com is $300 groceries, $200 bars and liquor stores, $300 restaurants.  This is where I am really trying to cut down, mainly eliminating bar nights and restaurants. 

-Jon

Cromacster

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Welcome to the Forums!  What part of MN are you in?  I'm in the St Paul-ish area.

For starters I would suggest getting together with your wife and start discussing what money is being spent on, at least on things that you use communally.  Start with being aware of where the money is going, then you can work on her being on the same page.

Results may vary but this is how my wife and work things out.  We don't have fully combined finances, but we do have joint accounts for bills, travel, house maintenance etc.  We have set amounts that we have to contribute each month.  As well as set amounts for investments, 401k's, roth, etc etc.  As long as we both hit our numbers that we agreed upon we can spend on money however we please without the other needing to know.

Calvawt

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Lots of room in that food budget will let you pay off the student loan in no time.

Have you asked your wife to use mint?  Mine was hesitant, but now she uses it freely and categorizes like a pro.


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4alpacas

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Thanks for the responses.

First, I am paying most the bills, we do a maneuver with Comcast where we switch every year to maximize the deal.  I feel like we are doing pretty good on the utilities though.  Average $63 gas, $72 electric, and $43 water/sewage/trash.  Just need to get that Comcast down from $122 to the $40 internet only plan...

Second, I am paying PMI which is $117/month.  I have about $25K left to go to get rid of it.  I want to knock out the Student loans first, but I wonder how much of a priority I should put on this?
If I was in your position, I try to pay down the mortgage to PMI-free territory ASAP.  You're spending $1400 annually on PMI, which doesn't even include the mortgage interest.  Pay it down. 

Quote
Thirdly our food budget.  Overall I estimate we spend about $1100 together.  Probably together about $400 on groceries, $200 bars, $500 dining out?  I am unsure of what my wife spends, she usually does a couple of Trader Joe's runs a month.  My breakdown for sure from Mint.com is $300 groceries, $200 bars and liquor stores, $300 restaurants.  This is where I am really trying to cut down, mainly eliminating bar nights and restaurants. 

WOW!  I would focus on slowly cutting back since your wife isn't completely on board. 

I would recommend having meals prepared to heat up at any time.  This helped us cut back on eating out due to laziness. 

We also started eating dinner at home before we meet up with friends.  We have a few drinks, which is much less than a few drinks plus several dinners and desserts. 

pete5306

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Welcome to the Forums!  What part of MN are you in?  I'm in the St Paul-ish area.

For starters I would suggest getting together with your wife and start discussing what money is being spent on, at least on things that you use communally.  Start with being aware of where the money is going, then you can work on her being on the same page.

Results may vary but this is how my wife and work things out.  We don't have fully combined finances, but we do have joint accounts for bills, travel, house maintenance etc.  We have set amounts that we have to contribute each month.  As well as set amounts for investments, 401k's, roth, etc etc.  As long as we both hit our numbers that we agreed upon we can spend on money however we please without the other needing to know.

I am over in the St Louis Park area.  Right off the cedar lake bike trail which I roll to work on, love the area!  You ride that new green line yet?

Lots of room in that food budget will let you pay off the student loan in no time.

Have you asked your wife to use mint?  Mine was hesitant, but now she uses it freely and categorizes like a pro.


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Tried to, I showed her how cool it is.  She doesn't want to put all her info on there.  As I said I have been using it since 2009, it is probably the best thing ever in my opinion.

The tricky thing is getting the budget set up for her.  I don't really care/need to see her spending on Mint, just want to make sure she is sticking to some sort of budget.  I like the way it was stated on "hitting the numbers" then doing whatever we want with the rest of it (hopefully stash).

The tricky thing on the restaurants is we we really only go out to eat like 2-3 times a month.  Not really a lazy thing...  Just those 2-3 times we hit the nice restaurants which we both like, and it adds up quickly. 

4alpacas

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You're spending $300/month on 2-3 meals.  That's insane!  You have a hair on fire debt emergency. 

pete5306

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You're spending $300/month on 2-3 meals.  That's insane!  You have a hair on fire debt emergency. 

Word!  The problem is the wife thinks we already are pretty low there.  I am caught between a rock, a hard place, and a wife! 

Ybserp

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Danger. Danger. Danger.

OP wants to get his wife on the same page financially but has chosen to cut dining out "which she loves" as his first step. Someone please stop this man before he convinces his bride that Mustachian := Cheap.

The message of frugality is about getting full value from your money not removing the parts of life you love most.


pete5306

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Thanks for the words of encouragement.  The dinners out a couple times a month are really enjoyable for the both of us.  Understanding the cost and the value is important and I think it is something we both do know. 

Trying to convert to Mustachian will be tricky.  My approach so far has been similar to when I was an industrial engineer and working to convert surly machinist to the lean (Toyota) methodology.  They always hated any time I said lean, probably the same way with my wife when I say budget.  So I found the best method was to not really state the buzzwords but have them perform the activities their way then the lean way and show the results.  The tricky thing is that a big pile of machined parts is a lot easier to show progress on then a somewhat invisible 401K!

Thegoblinchief

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Learn to cook fancy food at home or decide that making it only once a month makes it more special. Can't really help there, as I hate restaurants.

Perhaps make the special nights out for milestones in her/your savings? Like, student loans gone! Another 5K in the 401(k)! Etc.

Your food and shopping bill is INSANE, no matter how you dice it. I feed 5 very active people and all personal care items for $600, and that's actually higher than it should be.

Weedy Acres

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You don't convince someone by starting with the tactics (of tracking spending so you can start cutting it).  You start by having conversations about long-term goals.  Once those are in alignment, you jointly figure out how to achieve them.

pete5306

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Small update on a couple of items:

Auto:
This has been a lot lower, I average less than a tank a month in my Vibe and insurance is about $50 a month.  So I am under a hundred for this.

Biking:
Averaging 3/5 days commuting even in this already polar vortex winter we got in Minnesota.  I tell you what I am perfectly fine biking 11 miles in subzero (F)  temps everywhere except the tips of my hands.  Anyone use the bar mitts? 

Food budget:
Cutting back on going out to restaurants.  We did cook at home a lot before, but now are creating more of a habit of staying in and cooking at home.  My food/booze/restaurant/costco budget is down to $700.  I know it is still high, keeping an eye on it to see what we can cut.

Cable:
Cut that sucker, down to internet only.  Really enjoy no cable, probably the best thing ever. 

Student Loan:
Will be paying off in February 2015 for sure.  With some of the savings lately I am bumping the monthly payment towards this to $1900. 

Home Improvement:
This has been almost $0 last couple of months, any issues I have been recycling junk around the house.

SO mustachian conversion/indoctrination:
Her sister is pretty successful and uses Mint.com, trying to leverage that.  I think she is saving more and was onboard with the cable cut as well as staying in.  I will keep pushing in the positive direction. 

Upcoming goals:
Pay of student loans
Sign up for PMP exam
Have a fulfilling but inexpensive Thanksgiving/Christmas
Continue working on positive habits

Boom!

hexdexorex

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There is room to cut in your cell phone.

Internet you might be able to split with the neighbor?

I wouldn't worry about your wife tracking every single thing on mint like you do. For most people that can get really annoying. I would just work on cutting some stuff slowly. Maybe instead of ordering drinks when you go to a fancy restaurant you can bring a thermos with some wine in it :) The hardest for me is not going to lunch with coworkers sometimes because its a great time to socialize. But I have replaced that with going to the gym with other coworkers...

Girlfriend and I are at 250 a month. We eat out once a week (twice if friends invite us out) (often splitting a dish because restaurants often serve way to much) And spending the rest (150-200) on groceries is pretty easy. We don't eat meat....or snacks...or most processed food.

Easy cuts like this...and having decent jobs get us to a 80% savings rate.

surfhb

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Someone here suggested doing a PowerPoint presentation with your monthly budget and presented to their SO.    Maybe if she saw the visual breakdown of expenses and how cutting needless debt and spending could bring you to a day will you both will NOT have to work will help?

Tell her to imagine a time when she doesn't have to work.   You guys will be able to do whatever it is you enjoy.....all day...everyday :)

pete5306

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 Maybe instead of ordering drinks when you go to a fancy restaurant you can bring a thermos with some wine in it :) T

Would they charge a corking fee? :)

rmendpara

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There's nothing wrong with buying nice things and having good experiences with your wife. The whole point of financial independence is to be able to spend time (and money) on what's really important to you.

126k is gross income? So roughly 88k (30% total taxes) net income?
Looks like your total spending (including mortgage, debt, etc) is ~77k (6,448 x 12), so saving ~11k? You're at a 14% savings rate. Not horrible, but that's not getting you to financial freedom any time soon...

Others already provided good savings advice on some items, so I'll just add that you should step back and look at your overall goal. Perhaps set a target of 20% savings/investments (as % of gross income) by next June? Then make sure wife can agree to that, and start moving in that direction.

Since it seems you two are spenders, the best way is to take the money out before it feels available (e.g. maximize 401k, IRA contributions and also set up auto drafts into a brokerage account and autoinvest into some ETFs). It's easy to spend money when there's cash available.

Given you're at a solid income level, and studying for PMP, I assume you expect to be in management in the next 5 years and probably also expect some pay raises. One way to help the spending is to freeze the spending in absolute terms. Say, you want to keep spending at 70k/yr (current levels), and not increase as your pay increases.

So to summarize, a few ideas:

- Set goals jointly with your wife that feel reasonable
- Set up auto-investments to prevent temptation to overspend
- freeze spending at current levels, and don't let your lifestyle inflate with your income

... watch your assets grow! :)