Author Topic: Need help, poor spending habits and needing to make life changes  (Read 20598 times)

stuck2012

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Dear Mr. Money Mustache or Members that may be able to help us,

I came across the Mr. Money Mustache website today doing a google search on 'average household grocery expenses' in an effort to finally start a family budget. I have always been a believer in achieving financial independence, early retirement, and being able to provide a good financial and educational foundation for our children. However, I know our hard-earned money is being wasted, I have spent too much time at work for too many years (60-70 Hours+/Wk for 20 years), and our health and happiness is sufferring. It is challenging for my wife and I to agree on a common financial or life goal, and how budget and stick to it. I not only concerned with how we spend our earnings going forward, but also protecting our current assets to ensure they are not squandered in the future.


I am 40 years old and my wife is 9 years younger and we have two small children under age 5. We are a single income family currently and I have been very fortunate to
make a very good income over the past 10 years with an average of over 200K/year with the last two years exceeding 400K/year and our net worth is ~850K.  However, I own a small business and it is difficult for me to estimate what my salary and bonuses will be year to year.  My wife is taking college courses to complete a degree program and trying to decide what to to for a career so we eventually have a second income and more stability.  I am also looking to complete an advanced degree at some point in the next 5 years and also thinking of a change in career to something more predictable/stable and with regular work hours and vacation time I can actually take and enjoy.

We currently live in a older and very energy-inefficient home with a primary mortgage balance of 250K @ 4.5% interest and little if any equity if we were to sell today
eventhough we have invested near 100K into the house over the past 7 years.  We also have a weekend/vacation home (1100/SqFt) worth about 250-300K which we do not have a mortgage on, it is off-grid, solar-powered, and highly efficient.  This second home is very important to us as its a place for us to get away with our family and spend quality time without distractions and spend a lot of time outdoors and getting back to the basics.  It is also or 'Plan B' in case things go very bad for us financially, we have a place to live free and clear of any debt and very low overhead and re-occurring cost.


We would like a new house and can qualify for a mortgage w/o selling our existing home, but we feel it's too much of a risk carrying the overhead of another home for a
year or more waiting for it to sell at a loss.  Is it worth the risk to get out from under the operating costs of our existing in-efficient home and get into a more manageable and nicer home?  We were looking at more expensive homes in nicer neighborhoods, but I am concerned (regardless of low interest rates) about a long mortage term, higher monthly payment, and 8-9K/year property tax that comes with it.  We are also looking at building a smaller efficient home but the costs would still be quite high to do where we currently live.

As far as retirement and savings, we have ~20K emergency/backup savings, ~40K savings set aside for a new home, ~325K in retirement, ~10K for each child in UGMA savings accounts.

Now here's the expenditures (estimates, but you'll get the picture),

Not so bad (easy to budget, no so avoidable):
- $1400/Month Mortgage and Insurance
- $9K in Real Estate Property Tax (5K Primary Residence, 4K Vacation Home)
- ~$150/Month for auto insurance
- $430/Month for auto payment
- $50/Month for auto property tax
- $150-200/Month pet care and food (dog and two cats)
~ $500/Month for pre-school for two kids
~ $200/Month for speech therapy for kid
~ $1000/Year Water/Sewer/Garbage Pickup Charges
~ $1000/Year Auto Maintenance/Repairs
~ $2000/Year Community College Courses
~ $2000-3000/Year for Vacation

Scary (no budget, no discipline):
- $900/Month in Fuel for Cars/SUVs/Trucks
- $350-$425/Month in Heating Oil and Natural Gas for Primary Home
- $225/Month Cable (TV and Internet, no Phone)
- $250/Month Cell Phone Bill
- ~$250/Month Electric Bill
- $500/Month Medical Insurance (Not a good plan, high deductible, no maternity coverage)
- ~$200/Month average additional monthly medical co-pays and bills
- ~$3000-5000/Year average home repairs/maintenance
- $500+/Year for pool maintenance (open/close, chemicals)
- $2500+ over past two years for a persian cat, pure-bred dog, and rabbits that we ended up giving away.
- $6000/Year paying off credit cards that were opened to buy who knows what, nothing significant to show for expenditures (more eating out, online purchases, etc)
~ $7500/Year on birthday parties, baby showers, christmas gifts (conservative estimate)
- $2200/Month on groceries and hour household items, eating out, entertainment, baby sitters, clothes for kids,weekly house cleaning (at least $1500/Month on groceries and eating out alone - not exactly sure how all this $is being spent)
- $XXX/Month - unaccounted for


Where do we begin?  Where do we start with budgeting, whats reasonable for various budget categories (i.e eating out, groceries, household items), where do we go for help with managing this?  What decisions do we need to make in an effort to reach financial independence quicker, and early retirement for me? Should I change careers now to get better stability, quality of life, medical coverage/benefits (at a likely lower salary) or just try to squirrel away my earnings since I on average make more money with my existing job than I would elsewhere? What should my wife do as far as getting a career and earnings to contribute to a financial plan? Should I just cash out a large chunk of my retirement account and buy a new house and only have a small mortgage remaining? Or, Should we just pack up and move to our vacation home (the town has good schools for our children and I can work from anywhere with a Internet connection) or is that too soon or drastic (Plus my wife doesn't want to move there as there's no where to shop close and doesn't want to move away from family w/o real good reason).

Please help!!!


Paul der Krake

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Re: Need help, poor spending habits and needing to make life changes
« Reply #1 on: January 01, 2013, 03:55:49 PM »
In a nutshell: cut the unnecessary expenses. You have done a pretty good job of identifying them yourself: shopping around for better prices or getting rid of them altogether should be easy. :)

$900 in fuel? Unless you own half of Texas and drive to 100 miles every morning to check your mailbox, that's just unnacceptable. Fuel efficient cars, less driving. Sell the superfluous vehicles.

For groceries, the conscensus on this forum seems to be around $400-600 for a family of four on groceries.

Welcome to the forums!

Edit: I realized that my post can seem harsher than I intended. What I'm trying to say is, you've already done the hard work! At your income level, it becomes easier to trim the fat and you are now ready to reap the fruits of your labor for the past 20 years. Your money should work for you, not the other way round.
« Last Edit: January 01, 2013, 04:03:18 PM by Paul der Krake »

Another Reader

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Re: Need help, poor spending habits and needing to make life changes
« Reply #2 on: January 01, 2013, 04:25:17 PM »
You have a lot of income and a lot of inflated lifestyle to go with it.  For the amount of money you have made, you don't have much to show for it.  Before I did anything, I would have a long talk with the spouse about setting goals.  What do we want to do individually?  What do we want for the kids?  What sacrifices are we willing to make to achieve this?

In your shoes, I would look at a smaller, newer, more energy efficient house in a good neighborhood close to work, schools, and other amenities.  The large, inefficient house is a drag on your progress.  Can it be rented out for a lot more than it costs to own?  If not, consider dumping it to free you up.

Going back to school between 40 and 45 makes little sense, unless you can identify a specific job that will appear at the end.  Same thing for your wife - although she is younger, will completing a degree really make her highly employable?  I see a general sense of desperation here, not real motivation to move towards a specific goal that would increase your overall satisfaction.

The excuse of "having a fallback" for the vacation home really does not cut it for me.  I doubt it will generate much rent, given its location, but at least it's free and clear.  In your shoes, I would consider selling it and applying the net proceeds to the new primary house.  That would give you time to get your current house ready for sale and sold. 

The recurring expenses are scary.  Again, I would sit down with the spouse and come up with a budget you can both agree on and stick to.  Until you two can account for every dollar coming in and going out and you make conscious decisions about allocating those dollars, you will not be in control of your money.  Read through some of the threads here on how much folks are spending.  Conscious spending is your key to success.

Once you are in control of your finances, you will likely have an easier time making decisions together about what you should do about future education and work.  Cutting your spending and selling houses may take so much pressure off, you may both make different decisions about your income-earning futures.  This site is aimed at folks that want to become financially independent and retire early.  Once you can breathe, you may decide this flavor of Koolaid is for you as well.

Come back and tell us what you accomplish.

Self-employed-swami

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Re: Need help, poor spending habits and needing to make life changes
« Reply #3 on: January 01, 2013, 04:33:12 PM »
I would start tracking expenses using Mint.com so you can see were all that other money is going.

happy

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Re: Need help, poor spending habits and needing to make life changes
« Reply #4 on: January 01, 2013, 05:49:20 PM »
I agree with all that has been said.

The key is to track and cut those expenses. Get your wife on board and start tracking and cutting together. 

I gather earning 400k is taking some sort of toll on you, given your comments about  seeking more regular work hours/vacations. However if I were in your shoes and you are able to, I would: keep earning 400k, plan cuts and get your wife to action these since I gather she is SAHM.  If you are not sure what/how to do this read the MM blog and the forum.  Everything on your"scary list" is up for a major overhaul.

Aim big....could you get your annual expenses to 70k or even 100k (MMM does <30k,)? Your mortgage should then be gone in less than 2 years.

Whilst doing this you can then start pondering questions like moving to a more efficient house, job changes for you and your wife, and general life design. Until you see what is possible and what you really want I wouldn't personally  make big changes to  your location of living/ job. Again whilst you are making changes start experimenting with having fun for free. Learning to stop loving spending for the sake of it needs to be part of the process.

marty998

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Re: Need help, poor spending habits and needing to make life changes
« Reply #5 on: January 02, 2013, 12:17:16 AM »
Yes if the wife wants to maintain the lifestyle you may have a few more issues.

$850k net worth is still $850k and is a great starting point. The suggestions above are reasonable and should definitely be looked into.

- $900/Month in Fuel for Cars/SUVs/Trucks
No sane person needs a truck. Although if you use your truck for business can you claim as a deduction?

- $350-$425/Month in Heating Oil and Natural Gas for Primary Home
Are you living in an igloo?

- $225/Month Cable (TV and Internet, no Phone)
With the hours you work how do you have time for internet and cable?

- $250/Month Cell Phone Bill
Shop around for a deal. Don't be suckered into "plans"

- ~$250/Month Electric Bill reasonable enough for a family I think

- $500/Month Medical Insurance (Not a good plan, high deductible, no maternity coverage)
again shop around

- ~$200/Month average additional monthly medical co-pays and bills
invest in your own health, but again this amount seems pretty reasonable these days
 
- ~$3000-5000/Year average home repairs/maintenance
time to move house

- $500+/Year for pool maintenance (open/close, chemicals)
I won't begrudge you a pool.

- $2500+ over past two years for a persian cat, pure-bred dog, and rabbits that we ended up giving away.
Have you learned your lesson?

- $6000/Year paying off credit cards that were opened to buy who knows what, nothing significant to show for expenditures (more eating out, online purchases, etc)
Can't do anything about the past. Just start tracking it now

~ $7500/Year on birthday parties, baby showers, christmas gifts (conservative estimate)
Yep that's about my total budget....for 15 years.

- $2200/Month on groceries and hour household items, eating out, entertainment, baby sitters, clothes for kids,weekly house cleaning (at least $1500/Month on groceries and eating out alone - not exactly sure how all this $is being spent)
break it down further and cut as necessary

- $XXX/Month - unaccounted for
cancel the xxx cable channel. Porn is expensive

Self-employed-swami

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Re: Need help, poor spending habits and needing to make life changes
« Reply #6 on: January 02, 2013, 12:31:30 AM »
- $XXX/Month - unaccounted for
cancel the xxx cable channel. Porn is expensive

Ha!

stuck2012

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Re: Need help, poor spending habits and needing to make life changes
« Reply #7 on: January 04, 2013, 12:33:13 PM »
Thank you all for your input, its very helpful to see others perspectives. Its taken a couple years already to finally get my wife on board with financial goals/management and we have redone our budget and setup a MINT account to track and I shuffled around how electronic payments are made and automatic savings and retirement withdrawals.  Now I think its monitoring/control of the budget this year rather than arguing on whether or not we should be telling each other what to and not spend money on.

Regarding some of the expenses,

Most of the gas is for a truck and SUV (both V-8s), and I think my wife is doing quite a bit more driving than we should.  Most of this is cost is expensed pre-tax which is good, but still wasteful.  We will have to look at a more economical family vehicle.

We will be reducing our cable TV plan, but of course the cable provider makes it very confusing and difficult to do this online, I think we can cut $100/mnth here

We have no house phone and just use our cell phones for personal/work, these are expensed mostly and needed for work.  We may look into a Walmart plan or somethign to save some $

We only pay $30/mnth as part of our cable bill for Internet, I work from home mostly and use it 10-12 hours/day

Our credit cards have high interest rates, so we're just going to pay them off and hopefully new ones don't get opened again

Yes, I think we do live in an Igloo.  I saved a 2K/year in oil already be re-insulating the attic, but this is a very old house, not zoned properly, and 2x4 walls in most editions, it is very difficult to have consistent and adequate heat so its extra frustrating given the amount of fuel oil and natural gas we're spending money on. I have a wood stove, but the layout of the house doesn't allow for it to heat the house, especially with the single zone furnace setup so its not too helpful.

We will be listing our house hopefully this spring, but I expect we will have a hard time selling in this market and be taking a significant loss b/c of decreased value and trying to unload it quickly.  I am not sure how much loss we can take, I may have to make some calculations on long-term cost-savings versus immediate loss of equity and possibly needing to write a large check to our bank if we sell for less than we owe.

Eventhough we have a budget now, meal planning and grocery shopping will be a big adjustment for us to get our costs down.  Other shopping/birthdays/holidays costs are going to be a tough adjustment as well, especially since we have some graduations/birthdays/weddings/parties going on this year ---its going to take some strong negotiation with the wife to keep these under control.

Thanks again!



Norman Johnson

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Re: Need help, poor spending habits and needing to make life changes
« Reply #8 on: January 04, 2013, 12:47:38 PM »
- $350-$425/Month in Heating Oil and Natural Gas for Primary Home
Are you living in an igloo?

I'll give you this if you are living in a northern climate in a big old house. We live in a little old house and before I did some major renovations and added insulation, I was paying $300 a month in January to heat 900sq ft. And I wasn't even making it nice inside... it was 20C on the main floor and probably 15C or less upstairs in the sleeping area!

But I can't let go the $7500+ a year on parties and gifts! I mean, the heat, yes you spend a lot, but at least it's for something tangible like not freezing to death! But parties...? All I have to say to that is can I come? ;)

Jack

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Re: Need help, poor spending habits and needing to make life changes
« Reply #9 on: January 04, 2013, 12:55:41 PM »
Most of the gas is for a truck and SUV (both V-8s), and I think my wife is doing quite a bit more driving than we should.  Most of this is cost is expensed pre-tax which is good, but still wasteful.  We will have to look at a more economical family vehicle.

Good, as long as you keep in mind that compact sedans (e.g. Honda Civics) count as family vehicles.

We will be reducing our cable TV plan, but of course the cable provider makes it very confusing and difficult to do this online, I think we can cut $100/mnth here

Quit being a wuss; you can cut $195/month. This is your new cable! (See also here and here.)

We have no house phone and just use our cell phones for personal/work, these are expensed mostly and needed for work.  We may will look into a Walmart plan or somethign to save some $

Fixed that for you. You have no excuse to pay more than $50/phone/month for cellular, because that's what a completely unlimited plan costs from an MVNO.

Our credit cards have high interest rates, so we're just going to pay them off and hopefully new ones don't get opened again

As Yoda said: "Do, or do not. There is no try." There is no freakin' "hopefully" either!

stuck2012

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Re: Need help, poor spending habits and needing to make life changes
« Reply #10 on: January 04, 2013, 01:46:10 PM »
"
Quit being a wuss; you can cut $195/month. This is your new cable! (See also here and here.)"

Do you actually do this?  I can see just doing streaming or something for some shows.  Wife says she needs BRAVO to see her reality shows.


Norman Johnson

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Re: Need help, poor spending habits and needing to make life changes
« Reply #11 on: January 04, 2013, 01:58:00 PM »
"
Quit being a wuss; you can cut $195/month. This is your new cable! (See also here and here.)"

Do you actually do this?  I can see just doing streaming or something for some shows.  Wife says she needs BRAVO to see her reality shows.

We just cut cable and watch everything online. You can check to see if her shows are available online, though she would probably have to wait a few days in order to see them if they are unless you are going to use torrents. Surely, if she wants to keep her reality shows, you can still cut some channels or threaten to switch and get a deal from your provider. I know it's not ripping the bandaid off and cutting it completely, but you might be able to dial the spending back without her threatning to leave you and preserve some maritial harmony. ;)

In my opinion though, I would leave her with her TV shows and try to plug some of the much bigger holes in your spending.

stuck2012

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Re: Need help, poor spending habits and needing to make life changes
« Reply #12 on: January 04, 2013, 01:59:48 PM »
"- $2200/Month on groceries and hour household items, eating out, entertainment, baby sitters, clothes for kids,weekly house cleaning (at least $1500/Month on groceries and eating out alone - not exactly sure how all this $is being spent)
break it down further and cut as necessary" - *** not sure either, likely paper plates and cups, paper towels to do everything, overpaid babysitters and family members to watch kids, eating out several times a week and ordering too much and wasting it, house cleaners texting and talking on phone instead of cleaning the house...you get the picture

"    Our credit cards have high interest rates, so we're just going to pay them off and hopefully new ones don't get opened again
As Yoda said: "Do, or do not. There is no try." There is no freakin' "hopefully" either!" - ***Wife goes behind my back and opens them up in her name, rings up the charges throughout the year then tells me at the end of the year about them and then I pay them off to avoid interest fees - recurring problem last 3-4 years....probably because there's no money left in the checking account to shop and party plan or xmas shop....


"But I can't let go the $7500+ a year on parties and gifts! I mean, the heat, yes you spend a lot, but at least it's for something tangible like not freezing to death! But parties...? All I have to say to that is can I come? ;)"  -  *** yeah, its unreal, baby showers, extravegant birthday theme parties for kids, firends and family birthday parties (when there over 30), re-doing babies rooms for family, bacjelorette parties and party buses for which we seem to foot the bill, and a lot of junk toys and unnecessary clothes and outfits for the kids that theyll never use, wear, or will quickly outgrow. pisses $ away


stuck2012

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Re: Need help, poor spending habits and needing to make life changes
« Reply #13 on: January 04, 2013, 02:04:10 PM »
If we sell our house and move to our vacation home temporarily immedialtley after, we couldsave ~30K after tax / year.  vacation home is a lot smaller than we're used to but would definatlye work short-term (or put an edition on and move there permantently).

gecko10x

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Re: Need help, poor spending habits and needing to make life changes
« Reply #14 on: January 04, 2013, 02:09:23 PM »
"
Quit being a wuss; you can cut $195/month. This is your new cable! (See also here and here.)"

Do you actually do this?  I can see just doing streaming or something for some shows.  Wife says she needs BRAVO to see her reality shows.

That would be a difficult adjustment, I'm sure. Do it gradually then- cut your channels in half, then to the lowest package available, then cut the cable bill and go Netflix + Hulu + broadcast. At that point you'll be under $20/mo.

Norman Johnson

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Re: Need help, poor spending habits and needing to make life changes
« Reply #15 on: January 04, 2013, 02:10:25 PM »
stuck2012 - After reading everything you have posted, I think the first thing you need to do is make sure your wife is on board with this. Otherwise, it sounds like you're trying to bail out a boat while your wife drills more holes in the bottom. I think you two need to sit down and talk about money and figure out what each of you wants/needs out of your finances. Once you know that, figuring out what to cut should be a lot easier if there is a "why we are cutting this" goal behind it. Good luck!

Another Reader

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Re: Need help, poor spending habits and needing to make life changes
« Reply #16 on: January 04, 2013, 02:23:58 PM »
In your shoes, I would sit down with the wife and lay everything out.  Find out what is making her so unhappy that she needs to fill her life with frivolous spending.  Was she a spoiled princess as a child?  What was her expectation when you guys got married?  Has something changed?  If you cannot get on the same page, you are going to end up needing a divorce attorney.  And divorce is VERY expensive.

stuck2012

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Re: Need help, poor spending habits and needing to make life changes
« Reply #17 on: January 04, 2013, 02:58:31 PM »
agreed. we have sat down a couple days ago and agreed on what we need to do, I think we are in good shape here.  We were unable to communicate well and agree in previous years and had actually seen a counselor....which kinda helped

root issues are me working too much and her with too much time on her hands and she feels like she wants a career and do something for herself and help contribute financially - we are working on this....hence my comments about her and I and some additional education / degrees to facilitate career changes, etc.  My job is a nightmare, but I make good $, but it takes its toll on my family and health, and ultimatley not worth the $ if we have no end-game and piss it all away.

eyePod

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Re: Need help, poor spending habits and needing to make life changes
« Reply #18 on: January 04, 2013, 04:09:48 PM »
"
Quit being a wuss; you can cut $195/month. This is your new cable! (See also here and here.)"

Do you actually do this?  I can see just doing streaming or something for some shows.  Wife says she needs BRAVO to see her reality shows.

Yucko.  When she starts watching Real Housewives she's going to want to act like a Real Housewife. I don't want to be blunt but I think your wife needs to do some soul searching on real goals.  She's spending time watching Bravo instead of investing in her future career (which although expensive, I can absolutely understand it if she's really excited about making a life change).

eyePod

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Re: Need help, poor spending habits and needing to make life changes
« Reply #19 on: January 04, 2013, 04:11:45 PM »
agreed. we have sat down a couple days ago and agreed on what we need to do, I think we are in good shape here.  We were unable to communicate well and agree in previous years and had actually seen a counselor....which kinda helped

root issues are me working too much and her with too much time on her hands and she feels like she wants a career and do something for herself and help contribute financially - we are working on this....hence my comments about her and I and some additional education / degrees to facilitate career changes, etc.  My job is a nightmare, but I make good $, but it takes its toll on my family and health, and ultimatley not worth the $ if we have no end-game and piss it all away.

Can she help you with your job?  I know you're working at home, but if you were both able to split the workload you could have bonding time and a common goal!

Jack

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Re: Need help, poor spending habits and needing to make life changes
« Reply #20 on: January 04, 2013, 08:24:42 PM »
Quote
Quit being a wuss; you can cut $195/month. This [broadcast TV] is your new cable! (See also here and here.)

Do you actually do this?  I can see just doing streaming or something for some shows.  Wife says she needs BRAVO to see her reality shows.

Yes, I canceled DirecTV about 4 months ago. Admittedly, I do have an $8/month Netflix subscription, and I'm looking into building a MythTV PVR and/or OpenELEC set-top box (but that's a one-time cost).

Quote
Quote
Quote
Our credit cards have high interest rates, so we're just going to pay them off and hopefully new ones don't get opened again

As Yoda said: "Do, or do not. There is no try." There is no freakin' "hopefully" either!"

Wife goes behind my back and opens them up in her name, rings up the charges throughout the year then tells me at the end of the year about them and then I pay them off to avoid interest fees - recurring problem last 3-4 years....probably because there's no money left in the checking account to shop and party plan or xmas shop....

Yikes! That's a kind of problem my advice can't help with...

mm1970

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Re: Need help, poor spending habits and needing to make life changes
« Reply #21 on: January 05, 2013, 11:51:23 AM »
"
Quit being a wuss; you can cut $195/month. This is your new cable! (See also here and here.)"

Do you actually do this?  I can see just doing streaming or something for some shows.  Wife says she needs BRAVO to see her reality shows.
We canceled cable this summer and losing Bravo and Top Chef was a bummer. I haven't found it on Netflix or Hulu.  Truly, I'm so busy these days that  I haven't looked. It's hard at first but gets easier.

Richard3

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Re: Need help, poor spending habits and needing to make life changes
« Reply #22 on: January 05, 2013, 12:50:32 PM »




Scary (no budget, no discipline):
- $900/Month in Fuel for Cars/SUVs/Trucks
- $350-$425/Month in Heating Oil and Natural Gas for Primary Home
- $225/Month Cable (TV and Internet, no Phone)
- $250/Month Cell Phone Bill
- ~$250/Month Electric Bill
- $500/Month Medical Insurance (Not a good plan, high deductible, no maternity coverage)
- ~$200/Month average additional monthly medical co-pays and bills
- ~$3000-5000/Year average home repairs/maintenance
- $500+/Year for pool maintenance (open/close, chemicals)
- $2500+ over past two years for a persian cat, pure-bred dog, and rabbits that we ended up giving away.
- $6000/Year paying off credit cards that were opened to buy who knows what, nothing significant to show for expenditures (more eating out, online purchases, etc)
~ $7500/Year on birthday parties, baby showers, christmas gifts (conservative estimate)
- $2200/Month on groceries and hour household items, eating out, entertainment, baby sitters, clothes for kids,weekly house cleaning (at least $1500/Month on groceries and eating out alone - not exactly sure how all this $is being spent)
- $XXX/Month - unaccounted for


 What should my wife do as far as getting a career and earnings to contribute to a financial plan? Should I just cash out a large chunk of my retirement account and buy a new house and only have a small mortgage remaining? Or, Should we just pack up and move to our vacation home (the town has good schools for our children and I can work from anywhere with a Internet connection) or is that too soon or drastic (Plus my wife doesn't want to move there as there's no where to shop close and doesn't want to move away from family w/o real good reason).

Please help!!!


It sounds like you have a pretty good handle on what needs to be done (spend a lot less). It sounds like your wife is not OK with this.


My inner hardass says move to the vacation home precisely BECAUSE there's nowhere to shop close and your wife deceitfully pissing away your hard work at a job you don't seem to like is a massive anchor on your progress. However, I'm single, so you might not want to take this advice :)


Some advice you do want to take.

Go back to a counselor. You're both not only not communicating clearly but there's deception and what sounds like resentment and passive aggression on your part (I don't know her side of the story but I do know that everyone always believes themselves to be in the right

If she wants to be productive then for God's sake let her be productive. Either employ her to do business tasks for you (and pay her in an allowance she can spend with no questions from you) or convince her that cutting your ridiculous household expenses is a valuable job or let her go back to university. Right now it sounds like she's spending money because she's bored / frustrated / sad.


I don't know what the right option is and nor does anyone else on this board. You don't need to be talking to us (although it will help to vent and with the technical details and encouragement), you need to be talking to your wife and most of all you need to be LISTENING to her.

travelbug

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Re: Need help, poor spending habits and needing to make life changes
« Reply #23 on: January 05, 2013, 05:43:10 PM »
I agree, with that sort of income you could knock over your working life in afew years.

Is your business sell-able?

I would agree tohave your wife work with you for afew hours a day, maybe to add some structure so her boredom doesn't run into buying superfluous stuff.

The one thing that stands out for me is that for 3-4 years running your wife has opened credit cards behind your back and spent $1000s of dollars behind your back.
Maybe a spending allowance would help? But that happening once would scare me, 3-4 years in a row is beyond scary. There is much more going on here with your wife but maybe showing her that you could have FI by getting on board would help?

I cannot fathom spending $7500+ on birthdays etc in one year, but to do that and also keep spending secretly is insane for your future FI together.

Good luck OP and I truly hope you can make the most of your great income and make your lives amazing by banding together as a family.

TomTX

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Re: Need help, poor spending habits and needing to make life changes
« Reply #24 on: January 05, 2013, 07:53:04 PM »
Um, wow.

No, you don't need a bigger, more expensive house to "save money"

Each house transaction pisses away 8-12% of the house value (with the pain notionally split between buyer and seller)

Let me say that again: 10% of the house value is pissed away in the transaction.

Let say you spend $450,000 to buy a house. Between realtors, lawyers, banks, inspectors, title company, house dressing and various fees, the seller only gets $405,00 (typically.)

Then you have moving expenses. And your wife wants new furniture. And a bigger TV would look great over there! And we need a mauve accent wall. And new flooring.

Then you sell your house for $250,000. The same realtors, lawyers, banks, inspectors, title company, house dressing and various fees show up again, and you end up with $225,000.

Right now, you need to focus on getting your expenses down. You have some savings, but you need to really get a handle on how you throw money around. Energy costs for the house are a pretty small fraction (yeah, address them - but that's second-tier.)

Suburban trucks and SUVs are a complete waste of money, 95+% of the time. Status symbols, not used functionally. They move people around on paved roads. Frequently, just one person.

You probably need a cheap commuter car, like a Hyundai Elantra (or a Kia Soul, whatever) - and your wife probably needs a minivan.  Unless she really is off-roading all the time, minivans beat SUVs in all performance categories other than "I WANNA SUV!" Better gas mileage and hauling capacity than SUVs. Easier to get people in and out. Easier to get stuff in and out. Safer (especially for rollovers), less expensive to buy, smoother ride since they're not built on a truck frame.

You don't need a pair of $50,000 overpriced trucks. And yes, full size SUVs are trucks. They just have a larger cabin instead of a bed.

"Oh, but I need to Haul Stuff in my Truck!!"

Sure. Make friends with the neighbor or your brother-in-law who still has a truck. Buy 'em a 6-pack when you use it. Or use the minivan after you take out the back seats. Or spend $75 a day to rent one for the 5-6 days a year you actually need one.

Noodle

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Re: Need help, poor spending habits and needing to make life changes
« Reply #25 on: January 06, 2013, 12:04:51 PM »
Other people have given some great financial advice. I'll hit the emotional/relationship side...it looks to me like you have some groundwork to do before you get to the "running around like your hair's on fire" financial management stage.

A lot of the bleeding is from areas that I assume your wife manages, since you are working so many hours. So you are asking a lot from her, in terms of emotion and energy, to make big changes. Change is really hard work, and being a stay-at-home mom of little kids is hard work, even though she clearly has some help in terms of cleaners and sitters. And some of the big things that you are looking at, like changing the housing situation, will probably largely fall on her shoulders. (Moving a tiny one-bedroom apartment wiped me out for a month...extrapolate that to moving a four-member household with (I assume) a lot of stuff--whew). It also sounds like improving the situation will probably mean saying "no" to friends and family a lot more than you have, and that's tough too.

I would encourage you to spend some time with your wife really fleshing out what you want your life to look like. All you have said here is very general things about financial independence, early retirement, providing for children. But what does that really mean? You being totally retired, or working part time, or starting a different small business with fewer demands? What do you see yourself doing with more free time? Do you want your kids to grow up with access to the diversity and cultural resources of a big city, or the freedom and outdoor access of living in the country? What does your wife dream of? Staying home till the kids go to school, or until they graduate from school? Is there a career or a calling she'd like to be able to pursue? It's a lot easier to say no to yourself and move towards goals if you know what they look like. The times in my life I had something I really wanted and could envision (a new car, a trip to Europe) the savings came a lot easier than the abstract financial needs (retirement/emergency fund/loan payoff). Plus, once you've figured out some of this, picking among the various routes to get you to financial freedom will get easier.

You can also start on some of the actions that don't require her participation (changing your car situation) to demonstrate your commitment, and when you talk about expenses you can talk about whether an expense was a 1 (totally worth it), 2 (kind of worth it), or 3 (not really worth it). Then try to dump the threes first, then twos, and then look at the 1s.  So maybe the premium sports package on cable that you never watch is a 3, the kids' programming they watch before dinner is a 2 (because they would be just as happy with DVDs or Netflix) but the Bravo programs that your wife talks about with her friends at the moms' coffee hour is a 1.

Good luck with it all!

stuck2012

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Re: Need help, poor spending habits and needing to make life changes
« Reply #26 on: January 07, 2013, 09:15:57 PM »
"Is there any way you can work less and spend more time with your family?  Time with family is much more valuable than money and I see a lot of people who work high stress, high paying jobs and then just end up spending that extra money because they get so tired/stressed from work.  It's a vicious cycle." -
Bingo.  We want to get spending under control so I do not have a need to make as much money and can work less or change careers.  Initially I think I was confused with providing for my family by generating $ versus spending time with family....the kids do grow fast...

Everyone has been providing excellent comments and we appreciate it.  Its been a couple years in progress, but my wife and I may be on the same page now, so its a matter of finalizing and executing our plan.  Thank you all!

prettymuchfi

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Re: Need help, poor spending habits and needing to make life changes
« Reply #27 on: January 09, 2013, 02:09:11 AM »
Congratulations on getting here, posting honestly and working through the feedback here. You're in a great position to move forward and capture your independence as a family!

I can relate to much of this and have another suggestion:

Come up with a realistic goal per month that makes visible progress

With so much money coming in, and the habits you all have as a family, it might be hard and unrewarding to "just cut costs everywhere". If instead you can think of this month "we'll replace a car with something more cost effective" or "pay off credit card #1", it will help focus. It also becomes a positive specific goal ("fix problem A") versus a negative general goal ("spend less money and be miserable") which may make it easier to meet. Also, you can mix up the type of goals: Some goals can be about finding money to pay for something. Others can be about behaviour changes (e.g. walking more).

Of course the challenge becomes to come up with set of realistic goals, putting them into the larger context and prioritizing them, but I bet you and your wife can get creative! Its always great to be making progress, and it creates a trail behind you that you can look back on and celebrate.

Good luck!

Cook for Good

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Re: Need help, poor spending habits and needing to make life changes
« Reply #28 on: January 10, 2013, 06:52:11 AM »
"$1500/Month on groceries and eating out alone - not exactly sure how all this $is being spent)"

This is an easy one to tackle, as several folks have mentioned. Sounds like you are on what the USDA calls the "liberal plan" and I call the extratrvagant plan. Check out the free recipes and menu plans at Cook for Good. Some folks save $9K a year on food alone, and a lot more on their medical costs. My Taster and I have even lost enough weight that we're "shopping our closets" again, wearing good clothes we outgrew years ago.
http://www.cookforgood.com/save-money/

eyePod

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Re: Need help, poor spending habits and needing to make life changes
« Reply #29 on: January 10, 2013, 08:46:42 AM »
"Is there any way you can work less and spend more time with your family?  Time with family is much more valuable than money and I see a lot of people who work high stress, high paying jobs and then just end up spending that extra money because they get so tired/stressed from work.  It's a vicious cycle." -
Bingo.  We want to get spending under control so I do not have a need to make as much money and can work less or change careers.  Initially I think I was confused with providing for my family by generating $ versus spending time with family....the kids do grow fast...

Everyone has been providing excellent comments and we appreciate it.  Its been a couple years in progress, but my wife and I may be on the same page now, so its a matter of finalizing and executing our plan.  Thank you all!

Not sure if you saw my question before but is there any chance that your wife can help you with your work? Not sure if her degree would help at all, but it'd be a great way for you guys to spend time together and work toward common goals.

stuck2012

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Re: Need help, poor spending habits and needing to make life changes
« Reply #30 on: January 10, 2013, 09:27:56 AM »
we have a budget for this year (although we are already having discussions about pulling from savings for parties/events/vacations b/c they will be over budget - an we're only 10- days in, oh boy) , credit cards have been paid off.  We're on the same page this time, but it will be a difficult adjustment.  Now we need to figure out the grocery/household spending and how to keep in our budget...

In response to the question about my wife helping with my business, it would not be a good fit given what i do and the specialized skillsets I would need.  Plus, she doesn't want to do it.

Norman Johnson

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Re: Need help, poor spending habits and needing to make life changes
« Reply #31 on: January 10, 2013, 09:36:12 AM »
Why not budget for the parties? That way you don't have to go into savings.

eyePod

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Re: Need help, poor spending habits and needing to make life changes
« Reply #32 on: January 10, 2013, 12:24:28 PM »
we have a budget for this year (although we are already having discussions about pulling from savings for parties/events/vacations b/c they will be over budget - an we're only 10- days in, oh boy) , credit cards have been paid off.  We're on the same page this time, but it will be a difficult adjustment.  Now we need to figure out the grocery/household spending and how to keep in our budget...

In response to the question about my wife helping with my business, it would not be a good fit given what i do and the specialized skillsets I would need.  Plus, she doesn't want to do it.

Then nevermind!  I was just trying to look for something out of the box that would give her the work she wants and give you some extra time.

Allie

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Re: Need help, poor spending habits and needing to make life changes
« Reply #33 on: January 12, 2013, 03:04:21 PM »
I read these forums all the time but rarely post anything.  Today I just can't help myself.  Excuse me if I ramble.  Being only moderately mustachian, it's hard to give any better advice about cutting your expenses than has already been offered. But, being a wife with young children to a DH who works long hours for a sizable paycheck, I may be able to offer some advice there...some of it may actually be kinda good. 

Personally, I look forward to the day when we are financially independent because the idea of staying home (I work too) and doing activities with my kids and DH is really appealing.  There are lots of things we do together now that are really awesome that we could do more of in the future if we didn't work full time.  One of the reasons I love MMMs blog is that he makes the "sacrifices" because he seems to genuinely love filling his his free time with interesting activities and his family. 

You haven't really discussed what your wife would get from making changes to her lifestyle so you could work less.  She stops doing things she enjoys, you work less.  If you want this to happen, you have to convince her you being around will enhance home life.  Try cultivating activities that don't involve money that you two can do together and both enjoy.  Decide where you want to live, not because it is affordable but because it makes both of you happy.  Fantasize about things you could do together with more time.  Without long term goals that excite her, she will likely continue to sabatoge this whole scheme. 

Finally, if she doesn't want to move to the vacation home she will find a way to kill it or you will end up truly miserable.  Moving to a small cabin away from family and friends to care for two young children while my husband worked shut in a room with a computer would probably drive me to drink.

Good luck! 

meadow lark

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Re: Need help, poor spending habits and needing to make life changes
« Reply #34 on: January 12, 2013, 03:57:00 PM »
Money is the symptom - not the problem.  You are not in a debt emergency, you are in a relationship emergency.  Focus on that.  Get into therapy, now.  You keep saying things are better, but it is pretty obvious you are angry at her, and she is angry at you.  You can not make her move somewhere!  She is not a child, she is your partner.
Financially, I would wait to make any big decisions.  As you continue reading and talking about things with your wife you will end up in a different place.   For instance, we 18 months ago we traded in our truck for a more efficient Honda, and were excited by our progress.  Then 3 months ago we sold the Honda and went down to 1 car.  It would havebeen cheaper to just gone to 1 car, but we weren't ready mentally.  And if you decide to sell your house, get it under contract before you start looking at new ones!  You do not need to own 3 houses!  And you can't sell a house your wife loves unless she agrees!  You will pay for that one for the rest of your marriage.

 

Wow, a phone plan for fifteen bucks!