I could really use some help from fellow Mustachians. I can’t for the life of me make my spending numbers look like MM's. If you are open to providing advice, here are the details:
I commenced a bottoms-up analysis after selecting a lower cost of living city for us to move to. I chose Bellingham, WA (no state income tax) in case my spouse wants to continue working even though I don’t. I went through every line and looked up the local cost quotes for each item. Here is what I come up with.
*Assumes purchasing a house and two used cars
Bellingham, WA:
First line is Monthly
Second line is Annual
Property tax
333
4,000
House insurance (if applicable)
58
700
Utilities (water, sewer, electric, gas)
301
3,612
Internet
50
599
Food
780
9,360
Car
0
0
Car Insurance
200
2,400
Gas
110
1,320
Transportation
70
840
Clothing
280
3,360
Health Insurance Premiums
605
7,260
Addtl Health Costs (Deductibles)
333
4,000
Other Entertainment
400
4,800
Miscellaneous/CatchAll
417
5,000
Base Total
5,908
47,251
Car Maintenance
83
1,000
Home Maintenance
210
2,520
Non-Handy Person Luxuries Total
293
3,520
Vacation
417
5,000
Eating Out
460
5,520
Optional: Child Enrichment Programming (Summer camps, music lessons, etc.)
800
9,600
Optional Luxuries Total
1,677
20,120
Grand Total
7,878 per month
70,891 per year
My base budget ends up 74% higher than MM. My budget inclusive of the compromises on child-raising with my spouse and the fact that we both suck at car and home physical stuff (we’re just not good at it, I’d rather earn money elsewhere to cover this) leaves me with a budget that is well more than double MM's.
Here are my questions:
Base Budget
· Focusing on the base budget, most of this stuff is essential. I can’t argue with my spouse’s concern that as a family of four we’ll have doctor visits and such and the occasional problem that will require us to put money towards our deductible. We can’t just budget bare bones on health care costs and get surprised later. Any thoughts on this? Did you guys set aside extra 'savings' in your 'stash for medical expenses?
· Is there anywhere else besides the miscellaneous category where we may not be thinking of things properly? We put the miscellaneous in there as a security blanket for things we haven’t thought about. I’m still young and I’ve never run a budget for a family before. I’m pretty sure there are things I won’t think of happening and we don’t want to be caught short-handed on cash.
Luxuries
· Child enrichment stuff seems so EXPENSIVE. I have no other comparison to how other children have grown up. Have your kids faced any of this so far and what have you done when your kid wanted to join the soccer team or pick up an instrument or go to summer camp for his first sleepaway experience?
· MM advocates driving and doing lower cost vacation activities – I completely get that. I’m not sure how to get around the cost of visiting family, though. Our family is all across the US and the cost to visit one or twice per year for four family members is easily 1.5-2k each time round trip.
I’d like to apply a 3.5% rule. That means based on the above and an assumed fed tax rate, I’d need $2.5 million plus the cost of the house. And if there were anything else I hadn’t thought to figure in, I’d be completely screwed.
Any thoughts for a fellow Mustachian who’s feeling helpless? Or gentle nudges about things I've let slip into my budget that don't need to be there? At this rate I’ll need to slave away in my job for many more years to come.