Hello everyone!
I stumbled upon the MMM blog a couple weeks ago, and I've been devouring everything chronologically from the very first post. Right now I'm on September 12, 2011!
IntroductionI'm 29 and my husband is going to turn 37 in a couple weeks. We have no children yet, but we've been actively trying for a while. Meanwhile, we have two large dogs & two cats. Our only debt is our mortgage, which we recently refinanced to 15 years at 3%. We've been really passive/negligent about our finances, so we're lucky that we're in a stable position. I recently started getting more organized in figuring out where our money is and what our expenditures look like, because we were motivated to pay off our house as soon as possible. Now that I've been exposed to the idea of early retirement, I'm inspired to aggressively pursue that type of freedom. It would really be great to retire in 10 years. I'm trying to figure out if that's possible.
IncomeMy Income: $7,380/month Take-home
- This is a monthly average from the last ten months. Every January, I get a bunch of bonuses that vary from year to year that are averaged into the above number.
- This includes deductions for medical insurance ($76), dental insurance ($7), vision insurance ($9.52), taxes ($3,764.69), 401(k) ($769.04), & the company's employee stock purchase plan ($936.02)
- For the 401(k), my company matches 100% for the first 6%. I'm participating at 6%.
- For the employee stock purchase plan, we can contribute 10% of our salary to buy company stock. The company matches the employee contributions at a rate of 75%. Contributions are after tax (whatever that means), and I'm participating at 10%.
Husband's Income: $3,769/month Take-home
- This includes deductions for medical insurance, dental insurance, taxes, & 401(k).
- For the 401(k), his company matches 50% for the first 6%. He is participating at 11%.
Total Monthly Take-home Income: $11,149 average
Assets- Husband's 401(k): $75,078
- My 401(k): $78,294
- My Roth IRA: $25,247
- My company's stock: $84,686
- Cash sitting in checking/savings accounts: $54,397
Total Non-Property Assets: $317,702
Liabilities- Mortgage on our 2,610 sq ft home: $113,725 (15 year mortgage at 3%)
When we had our house appraised for the refinancing earlier this year, it was valued at about $200,000. The current Zillow estimate is $224,000.
ExpensesI only started tracking our spending a couple months ago. Since that means there are only 2 data points, it may not be representative of our typical spending. It's also difficult for me to ascertain our typical spending, because we had some major expenditures that are irregular. For example, we expanded our patio and built a pergola, replaced the carpet with hardwoods, took an international vacation where I was bitten by a monkey which resulted in large medical expenditures outside of insurance, etc. Obviously, we're not going to replace our flooring or get bitten by monkeys every year, so I'm not sure how to factor that in.
Mortgage/Escrow: $1,339/month
(Includes principal, interest, property tax, and home insurance)HOA: $20/month average
Household Goods: $32 avg of last 2 months
(Includes things like paper towels, cleaning products, mops, laundry detergent, etc.) Gas: $318 avg for last 2 months
(I live 7 miles from work, but my husband lives 35 miles from work. He's tried from day 1 of this job to find another job closer to our house with no luck. Also, our friends and his family live all over the DFW metroplex.)Tolls: $80 avg for last 2 months
Groceries: $309 avg for last 2 months
Restaurants: $187 avg for last 2 months
(Our food expenditure is ridiculous now that I look at it, especially considering that my company provides breakfast and lunch Mon-Thur for employees. This means that we're paying this kind of money just for my husbands meals and my dinners/weekend meals.)Electricity: $275 avg for last 3 months
(Our electricity bill can get as high as $350 during summer months and as low as $15 during winter. We live in TX.)Natural Gas: $25 avg for last 2 months
City Utilities: $197 avg for last 3 months
(This includes trash pickup, recycling, sewage, & water.)Phone: $90/month
Internet: $75.21/month
Netflix: $9/month
Car Insurance: $253/month
Clothing: $162 avg for last 2 months
(My husband bought a bunch of clothes for our vacation. I'm not sure what our typical clothing expenditure is like.)Haircuts: $60/month
(My husband gets 2 haircuts a month that cost $24 each. I get 1 haircut every 6 months at $72 each.)Toiletries: $19/month avg for last 2 months
(This includes things like shampoo/conditioner, soap, toothpaste, deodorant, makeup, etc.)Pet Related Expenses: $529 avg for last 2 months
(This includes $35/mo insurance for the dogs, other vet related expenses, food, medication, cat litter, etc. I don't think this is typical, I bought another litter box & one of our dogs got hurt in this time frame.)Entertainment: $112 avg for last 2 months
Some of our expenses like food & gas went up this year relative to previous years, because my father & his wife were staying with us for 9 months. He needed support while handling health issues. He's back home now. I anticipate that this will be something I should budget for in the future, but I won't know when he'll need this level of assistance again.
I didn't include travel related expenses, but we budget about $10k a year for traveling. I have family all over the world, and he has family all over the country. Also, experiencing other cultures is a passion of mine.
Other major expenses in the near future will include my husband's college education, because he is motivated to go back to school to get a degree. We believe this will help him apply his skills in other industries, so that he can have more flexibility in finding jobs (and not have a killer commute every day.)
Challenges in becoming a MustachianCars:We have a 2006 Nissan Altima that I bought before we started dating. We also have a 2011 Ford F150 and a 2008 Dodge Challenger. These are my husband's cars. I'm a woman and cannot understand the fascination with vehicles, but these cars seem to be meaningful to him (particularly the Challenger). He has nicknames for his cars. I sometimes find him sitting in the garage simply enjoying the sight of his car. I could care less about cars, in general, but I want to be sensitive to his passions. We could easily get rid of the Challenger, since it sits in the garage 90% of the time. However, I don't want to invite divorce, especially since all the cars are paid off. It was a major step when I convinced him to drive my Nissan for his commute, instead of driving the truck. I drive the truck now to work, but I'm looking into bikes.
Getting on the Same Page:On a similar note, my husband is generally less disciplined with spending than I am (and I have been rather relaxed). Whenever we talk about the future, I feel as though we have the same values, but it's been a challenge to get him to commit to achieving our goals in practice. When we go out to eat with family or friends, I'll suggest we share (knowing the typical portion sizes at American restaurants), and he'll agree ..... but then he'll order extra appetizers and sides to make-up for the perceived food losses. When we're out of something in the household, he'll drive to the grocery store or Wal-mart to get that one item instead of just adding it to our shopping list and waiting a few days until I do our weekly shopping. Instead of filling up on the way home (or trusting me to fill up on the way home), he'll come home, relax for a while, and then drive each vehicle separately to the gas station to fill up. This drives me crazy, but whenever I bring them up, he feels I'm nagging him about trivial little things. I'm not going to even go into the casual purchases, because I decided to just deal with that with siphoning some personal spending money to each of us ($100/mo each).
I have similar issues when trying to maintain relationships with my friends & colleagues, who enjoy dining at the best restaurants & socializing over cocktails. Fundamentally, I'm having a challenge preserving connections with people who have different financial values. I feel that my suggestions for alternate activities that are more frugal are met with disinterest and that I am perceived as a cheapskate. They're great people, and I want to keep them in my life. However, they don't derive the same pleasure from simple things as I do.
ConclusionsIn addition to any insight into working the numbers/budget for early retirement, I'd appreciate advice on how to live a full, Mustachian lifestyle without alienating anyone. I'm really happy I found this community and am excited to hear everyone's advice (even if it includes a few face punches!).