I have recently become a "Mustachian" and would love some input from more experienced savers. I am 31 and my husband is 32. We are both attorneys and live and work in Washington, DC. We have two children, almost 4 and almost 2. We will probably have one more kid in year or two. Although DC is a really expensive city, my husband has a job that he loves that only exists here. So, we're staying put for a while. We currently live in a small 2 bed/1 bath condo in the city. My husband walks 10 minutes to work and I take public transportion 15 minutes to work. My oldest is in free public preschool, and my little one is in daycare near my office. If/when we have the 3rd kid, we'll probably need to move b/c we're pretty much hitting the limit on space in the kids' bedroom. I've tried to convince my husband that bunk beds + a crib could work, but I think he's probably right that we'd be more comfortable if we at least have another 1/2 bath and one more bedroom at some point in the future. We will try to get something close-in though.
Now, to the question: is it a Mustachian decision to quit my job and stay at home with the kids? Is there something I need to do before doing so (e.g. save "x" dollars)? And the ever-present question: do I need to be face punched for even considering this?
Basically, I'm burnt out, bored, and not sure that this is what I want to be doing with my life. However, I have a very good salary and only work 35 hours a week (I've been part-time since my first was born) so I could probably sustain this for a little while longer if it makes a lot of sense to do so. At the very latest, I want to be able to quit once I have the third kid, though. My husband doesn't want to retire "early" but I'm hoping he will be in a position (both financially and psychologically) to retire at 57. If he works until then, he will also get a gov't pension of about 30% of his salary. So...oh wise Mustachians...what do you think? Can I quit? Or should I suck it up for a while longer and stop being such a complainypants about having to go to work? Here are the financials...I have been tracking this stuff on Mint for years, so it should be pretty accurate:
Current Yearly Income:
Husband: $115,731 (Monthly take-home: $5325) - with normal government raises, this should be at about $130,000 in 5 years and unless he changes jobs, will stop there
Me: $126,000 (Monthly take-home: $5915)
[Note that health insurance, health FSA ($1,000), childcare FSA ($5,000), and max 401k are withdrawn from husband's salary pre-tax, and max 401k and metro fare are withdrawn from my salary pre-tax].
Current Monthly Fixed expenses:
Mortgage/Taxes/Insurance: $1647
Condo fees: $300
Student Loans: $253
Car Insurance: $82
Life Insurance: $62 (2 term policies...husband for $1.1 million;it me for $600k. I have $300k provided by employer; I know we need to reduce husband's...I'm not sure how we came up with these random numbers but we got the insurance right after child #1 was born so I blame exhaustion)
Gym: $57 (husband)
Verizon Internet: $47 (no cable)
Netflix: $17
Sprint Cell Phone: $58 (husband's unlimited plan; mine is paid for by my employer)
Daycare: $2600 (for one kid! I know...it's crazy, but we haven't been able to get in anywhere else)
Charity: $300
Total: $5406
Current Monthly Variable expenses (average over past 12 months):
Food & Toiletries & Personal Products: avg $1400 (crazy amounts of eating out; this deserves a face punch, I know. We're working on getting better. Last month was $1,100 and this month is probably going to be about $1,000...we are both still buying lunch 4-5 days a week and that needs to stop)
Electric : avg $114 (water/trash/sewer included in condo fee; electricity use ranges between 600 and 1450 kwh per month...our HVAC Is old and in the winter our bills are much higher)
Gasoline: average $50 a month (this is just from driving vacations and occasional weekend errands)
Gifts: avg $250 per month in the past year for birthdays, weddings, and holidays
Cleaning Service: avg $250 (we already dropped this so no face punch needed)
Home Improvement/Maintenance: avg $30
Shopping : avg $275 (includes Target, Amazon, and clothing...this is another face punch b/c I have no idea where all this stuff is in our tiny apartment! What the hell are we buying? )
Travel: about $6300 total in the past year (3 trips to visit parents; 1 trip to visit my sibling; 1 trip for husband to see his brother graduate; we spent $4800 on airfare alone...I know...another face punch)
Baby Supplies/Kid Activities: avg $105 / month (includes diapers, wipes, kid activities, and a few trips to non-free museums)
Add'l Charitable donations: avg $50
Entertainment: avg $26 (occasional movie, baseball game, play, etc.)
Total: avg. $3075
Estimated Budget After Quitting:
Mortgage/Taxes/Insurance: $2000 (est. on future home)
Utilities: $250 (est. on future home)
Student Loans: $253
Car Insurance: $82
Life Insurance: $62
Gym: $57
Verizon Internet: $47
Netflix: $17
Cell Phones: $83 (husband just re-upped w/ Sprint, but I will get a basic Republic plan)
Charity: $300
Food & Toiletries & Personal Care Products: $850 (goal is for me to cook most of our meals, and husband can come home or pack lunch)
Gasoline: $50
Gifts: $150
Home Improvement/Maintenance: $150 (est. on future home)
Shopping/Clothing: $100
Baby Supplies/Kid Activities: $100 (includes diapers, wipes)
Entertainment: $25
Travel: $2500 a year (2 long driving trips back home; flight to somewhere else every other year)
Misc: $100
Emergency Fund: $500
Total: $5281/month
Without my salary, we will have an AGI low enough to qualify for a Roth IRA, so we'll each put $5,500 in those and enough in husband's 401k to get the 5% match plus a little bit more to get to 15% total in retirement savings (about what he's contributing now maxing out the 401k).
Liabilities: Amount - rate - description
Condo Mortgage: $290,350 - 3.75% interest - $1647 monthly payment w/ taxes & ins
Student Loans (consolidated federal loans, which we didn't pay off along with the others we paid off soon after we got our jobs b/c the interest rates are so low):
$15,330 - 3.5% interest - monthly payment $123 - pay off date June 2028
$12,710 - 1.625% interest - monthly payment $130 - pay off date June 2023
Assets:
Condo: Probably have $125,000 in equity ($20k more than we originally put down. We'd like to rent it when we move. It should rent for about $2400 a month, or $450 a month more than mortgage/condo fees, plus we'll get a few thousand in mortgage paid off each year, and probably some appreciation in value. In an ideal world, we'll sell the family house after the kids leave for college, move back into the condo for 2 years, and then sell it when my husband retires at 57 w/o having to pay taxes on the gain and then move somewhere cheap :)
My 401k: about $120,000 (no company match)
Husband's 401k: about $130,000 (5% match)
Online Savings Account: $120,000 (Intended for emergency fund + down payment & closing costs on next home; want to save an additional $18k before I quit, which will require me to work 6 more months)
Checking Account: $7,000
Vanguard Account (VTSMX): $11,000
529 Plan #1: about 18,500
529 Plan #2: about 8,600
Car: 2009 Toyota Camry Hybrid : perhaps $15,000 (probably not the best choice , but we bought it for cash at least. If we only have 3 kids, we'll drive it into the ground)
What do you think? Can I quit? If so, when?