Author Topic: Reader Case Study - I would like a report card  (Read 26963 times)

jprince7827

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Reader Case Study - I would like a report card
« on: February 01, 2014, 09:44:31 PM »
EDIT: Reworded some stuff, and formatted to fit template I saw after posting.

Hey guys, I've officially been doing the Mustachian thing for a year, since "The Ridiculously Simple Math behind Early Retirement"(paraphrased) article showed up on Hacker News and I clicked on it by accident.

Anyway, I've changed my ways quite a bit. I'll be the first to say that I am ridiculous. Feel free to ridicule my budget, I deserve it.

I don't consider myself worthy of being called Mustachian - I like to separate myself into a different group. I call it Low Mustachianism. Whereas High Mustachianism is marked by extremely low spending, whether or not you have a high income, Low Mustachianism is made up of clowns like me who make so much damned money that they can still save ridiculous amounts of money while living frivolously. I wonder though if I am on the right path, despite my clown-ness, and that's why I've come here after a year.

Income

Now, my income every month fluctuates.I run a consulting firm on the side that generates an additional 3k per month minimum. However, consulting being what it is, it can spike up every now and then.

My minimum income before taxes: ~9k (But sometimes can jump to 13k)

Current expenses

Anyway, enough preamble, here is the budget. I assume a month in this picture is 4 weeks.

Interest + Taxes on home   686
Utilities                           100
Food                                   400
Gym                                   50
Bus pass                           100
principal mortgage           500
hair cut                           30
hoa fees                           400
savings                           60
Misc. Allowance                   200
apple computer pmt           130
Rackspace/github/Netflix   38.39
Clothing                           100
maid                                   160
car insurance                   127
furniture payments           130
Dating fund                        400
total   ~3500

Now, the reason I mention 4 week months is because there are actually 13 of these in a year. Certain line items here don't come every 4 weeks but every month, so when you sum the line items that appear only monthly, I get a "free month of savings" out every year. There are 13 4-week increments in a year, but only 12 months. Hence:

extra yearly savings   2161.39

To 401k per month: ~1400(includes 4% company match)
to HSA per month: ~200

Assets
My 1BR (125k)
401(k) - About 23k right now
HSA - About 1.5k right now
Vanguard Traditional IRA - 3k
Total cash: Around 30k, but about 10k of that is scheduled to goto Uncle Sam very soon.
OptionsHouse stock account: 2 stocks, total value 2k (is a playground account)
LendingClub account: 1.3k, (got in when there were still people to lend to as a test, now I can't find anybody to lend to!)

Also have some stock options in my company - in four years they should be worth around 250-300k.

Liabilities
My mortgage 117,500
1 Girlfriend who doesn't appreciate mustachianism but is grudgingly coming around to admitting it works really well.

Anyway, due to my high contributions, I only pay about 1100 in taxes on the 5769 I make per month from my salary. This leaves around 4600 in after tax cash. Of the 3k I make per month, I pay about 40% in taxes because the Government hates small business owners. That means I get 1800.

After tax income is: 4600 + 1800 = 6400$

Now, given my budget is about 3500$, and of that 3500$, 60 is for savings and 500 is for principal on my mortgage(so it's equity and hence saved), I can say I REALLY spend around 3000/month.

This means 1-(3000/6400) = .54, I save about 54% of my income after taxes.

The remaining money has been stockpiling this year until I hit around 20k so that I have a backup fund. That's now complete, and I have decided to begin investing the rest in Total Stock Market Index Fund from Vanguard in the next few weeks. I only began working 1.5 years ago and only began saving seriously 1 year ago, so I only recently had this kind of cash lying around.

Specific Questions

I guess what I'm wondering is, am I doing okay?

I often struggle with the fact that I have a maid, and a car ins. payment(for a car my gf uses, I take the train. She needs it to get to nursing school), etc. I feel like I'm living very well out here in Chicago, and I get to go do all sorts of fun things with the 400$ we spend in a month, and the numbers(54% what the heck how!?) just don't seem real to me.

I just need to know I'm not going crazy here, because nobody else I talk to that I know even saves remotely like I do and they don't have any experience to really let me know how I'm doing. When I explain to them my internal struggle over this 54% number they laugh at me.

Thanks!
« Last Edit: February 02, 2014, 06:58:54 AM by jprince7827 »

lizzigee

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Re: Reader Case Study - I would like a report card
« Reply #1 on: February 01, 2014, 09:56:09 PM »
um, what the hell are you doing with your other $3000 per month?

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #2 on: February 01, 2014, 09:59:46 PM »
Good question, forgot to add that. I also need to add my stocks and stuff.

mxt0133

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Re: Reader Case Study - I would like a report card
« Reply #3 on: February 01, 2014, 10:26:50 PM »
Considering you have only been working 1.5 years ago and started saving seriously 1 year ago, I think most everyone on this forum can agree that you are doing great with that regard.  Congratulations!

I noticed that you have some apple and furniture payments, since you already have your emergency fund and are investing, just get rid of those payment and never get anything on credit again if you can avoid it.

You say your are trying to get your girlfriend to come around to be being more Mustachian, but that $400 dating fund is probably given her mixed signals.  I get it it's hard to be a hard core Mustachian when you are young, dating, and all your friends really can't relate. 

All I can recommend is to remind yourself why you are saving so much in the first place and if it's really worth it.  Once you answer that question, I think making the other small decisions to becoming a "high Mustachian" become much easier.

imustachemystash

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Re: Reader Case Study - I would like a report card
« Reply #4 on: February 01, 2014, 10:30:25 PM »
I'm a pretty optimistic person, so I am going to give you a B.  A 54% savings rate is really good.  However, I suggest you pay off your debts, cancel your maid, and decrease your dating fund to 300/month.  This should get you to a higher percentage.  Your money has more power to compound when you are young so don't waste it.  When you are ready get the book "Your Money or Your Life" to help you figure out the right balance for you.

mlipps

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Re: Reader Case Study - I would like a report card
« Reply #5 on: February 01, 2014, 10:42:47 PM »
I'm going to give you an F, but I stopped reading after the "Apple computer payment" and "Maid". 

stevesteve

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Re: Reader Case Study - I would like a report card
« Reply #6 on: February 01, 2014, 10:59:18 PM »
Mustachian Grade: D
Fiscal Responsibility Grade: A-

You clearly are fine with massive lifestyle inflation which came from your high income and you don't seem to want to retire particularly early.  At least not while spending what you currently spend.  I look at your situation and I see a man who should be FI in a few years but won't be.  There's nothing wrong with you as long as you're okay with that choice.

Nudelkopf

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Re: Reader Case Study - I would like a report card
« Reply #7 on: February 01, 2014, 11:49:43 PM »
Food                                   400
Gym                                   50
hair cut                           30
Misc. Allowance                   200
apple computer pmt           130
Clothing                           100
maid                                   160
furniture payments           130
Dating fund                        400
Are these numbers just for you, or do they include your girlfriend's expenses as well? If the former, then you can at least halve your food costs, pay off your computer & furniture (who borrows money for furniture??), then cut out the rest. Perhaps leave a little bit for clothing & dating/social funds. 

soccerluvof4

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Re: Reader Case Study - I would like a report card
« Reply #8 on: February 02, 2014, 05:14:52 AM »
Considering you have only been working 1.5 years ago and started saving seriously 1 year ago, I think most everyone on this forum can agree that you are doing great with that regard.  Congratulations!

I noticed that you have some apple and furniture payments, since you already have your emergency fund and are investing, just get rid of those payment and never get anything on credit again if you can avoid it.

You say your are trying to get your girlfriend to come around to be being more Mustachian, but that $400 dating fund is probably given her mixed signals.  I get it it's hard to be a hard core Mustachian when you are young, dating, and all your friends really can't relate. 

All I can recommend is to remind yourself why you are saving so much in the first place and if it's really worth it.  Once you answer that question, I think making the other small decisions to becoming a "high Mustachian" become much easier.

^ +1. furniture payments, apple computer payments , dating fund and really a maid? Come on! your doing great but sharpen your pencil a bit and you've got it down.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #9 on: February 02, 2014, 06:54:56 AM »
Wow, so many replies. To answer the general flow:

1. The apple and furniture payments are zero interest. I figured that money would be better spent on Vanguard shares since I don't have to pay it all up front. Specifically, the apple was expensed by my business.

2. As for the SEP - my accountant that I just hired this year mentioned something along these lines, and I am very excited about it. We're going to look into it this year to protect more of my profit.

3. I really enjoy my work and plan to stay in the field for about 10 years, because I want to hit CTO level before I retire(so I can say I've done it all). I am aware I could retire in 3-5 years but I wouldn't want to, I'm only 26, and I like building products from the ground up, and leading teams. It brings me great fulfillment, more than anything else in my life besides my girlfriend. I plan to continue consulting after retirement.

4. The Vanguard IRA is a traditional that my girlfriend's mom told me to chuck 3k in at the beginning of last year, since the previous year I'd only worked for half the year and hadn't made very much, so I could make contributions. There was also no 401k yet at my job then, so I threw 3k in. I can't throw any money in there any more since maxing the 401k out and I make too much.

5. Forgot to add my stock options in the company for which I work. They are going to be around 250-300k in a few years. It's not a small startup, it's a half billion dollar company. I'm pretty sure their projections are right, but I didnt want to include this initially as this is much "riskier money." It could be zero in four years for all I know!

6. My girlfriend is responsible for it not being 60 something percent. She almost completely lives with me(she spends 5/7 days here), so the food includes her, and the car insurance payment is just for her, and I got the maid so that I could convince her that mine was a good place to hang her hat. Call it making a nest. Oh yeah, I got rid of all my old college furniture to furnish that nest nicely, too.

If I didn't have a girlfriend, there would be no dating fund, and I would have already sold the car, and screw maids. The dating fund is a relic from the time before Mustachianism(the first six months of my working life), where I set up my 55k salary to have a 100$/week dating budget. I had a 3% savings rate back then but thought it was okay. Then this year I got a raise, started the consulting firm, and my income tripled, but you could say my lifestyle only "1.5ed" because I kept it under some control.

Unfortunately, she made it pretty clear to me that if I dropped the budget to 3 or 200 a week she probably wouldn't stick around, especially since I was now rolling in it. She thinks it's ridiculous, especially since she grew up in a family that lived off 30,000$/year her entire life, to "waste our 20s not doing all the exciting things Chicago has to offer when it impacts us so little"(paraphrased). And we do some pretty awesome things - wonderful dinners, concerts, shows, etc. Time of my life. I guess you could say she doesn't have the mindset for it yet, and she's a bad influence on me.

I know this sounds really really bad on her part, but I've been chipping away at her and since the move out of Chicago to Oak Park where everything is cheaper, we've been going out less and the last month I only spent like 75$/weekend. So I'm working on her. I would not consider her a "gold digger," as when we met, I had 300$ in my bank account, and no job, and I spent 70$ on the first date to take her to a nice restaurant to impress her.(We were in college.) She fell in love with me when I was poor and had nothing, I just think that she has trouble adjusting to the idea of living more frugally.
« Last Edit: February 02, 2014, 06:59:57 AM by jprince7827 »

Gray Matter

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Re: Reader Case Study - I would like a report card
« Reply #10 on: February 02, 2014, 07:13:12 AM »
Unfortunately, she made it pretty clear to me that if I dropped the budget to 3 or 200 a week she probably wouldn't stick around, especially since I was now rolling in it. She thinks it's ridiculous, especially since she grew up in a family that lived off 30,000$/year her entire life, to "waste our 20s not doing all the exciting things Chicago has to offer when it impacts us so little"(paraphrased). And we do some pretty awesome things - wonderful dinners, concerts, shows, etc. Time of my life. I guess you could say she doesn't have the mindset for it yet, and she's a bad influence on me.

To each their own, and I'm not fully Mustachian (yet) so I get it, but I have to say, this is a huge red relationship flag for me.  I hope you/she does not really mean that she would break up with you if you cut back the dating budget.  If she would honestly walk because of something like that, I think you might just be better of without her.  I can understand her not wanting to sit at home all the time, but there area all kinds of wonderful ways to have fun that don't cost a lot of money.

DocCyane

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Re: Reader Case Study - I would like a report card
« Reply #11 on: February 02, 2014, 07:16:53 AM »
I'm not going to pass judgment on your girlfriend because you know her best and you know yourself best. However, I will mention that the one thing that has kept me from being in a better financial position and retiring at my goal has been the women I've been serious with. (Gay person here, for clarity.)

My present sweetheart, with whom I intend to go the distance, is the closest to Mustachian that I have found and it has made life much easier. We have focused, joint goals rather than battling one another over who gets to spend on what.

When I read the stories of others, I often sense that their wives play a huge role in their success, not only as contributing earners but as a hard line defense against frivolous spending.

I encourage you to find the woman who values what you value, and is your true, equal partner.


aj_yooper

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Re: Reader Case Study - I would like a report card
« Reply #12 on: February 02, 2014, 07:21:20 AM »
It sounds like it would it be OK with you to be financially independent and still work.  Good times may or may not last, though.  If you fill your retirement/FU accounts fully as a young person, they will become awesome-sized over time, if managed properly.  This will give you a lot of options in the future.  I would trim the budget more and definitely look into the SEP even for last year, if that is possible. 

Although you and your SO started out in college lower income, it seems like you are now purchasing friendship/love by your expenses.  She needs to be responsible for her thing and you yours. 

Gray Matter

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Re: Reader Case Study - I would like a report card
« Reply #13 on: February 02, 2014, 08:13:59 AM »
I should clarify that it's not so much that your girlfriend wants to spend money on something you don't consider as important (my husband highly values travel, and because it's important to him, we have built it into our budget even if left to my own devices, I wouldn't travel as much.)  But it's the fact that she implied she would break up with you if you cut back on that--it sounds manipulative and is a red flag:  if she doesn't get her own way, she threatens to walk.  That's what I consider to be a big red flag.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #14 on: February 02, 2014, 09:17:06 AM »
The reason I have stuck it out with her is that there have been many weekends where we have overspent, and so I told her, "Now we've got to go three weeks without doing much, because we spent 300$ on this dinner/show/whatever." And she has agreed with that and done it without any complaint - growing up with just a mother working a low income job taught her how to do that. During those weekends we would go for walks in the park with the dogs, watch Netflix, and make large dinners at home. During the winter it's a bit tougher as the outside is extinguished by cold.

Though she has implied she doesn't want a do-nothing boyfriend, it would appear by experience that when we need to stay in for awhile and just enjoy each other's company, she's happy to do it. That's why I ignored the red flag, even though it is one. I think what concerns her more is the not doing anything fun than the not spending money, which is understandable. It's up to me to find filler events that are cheap on those weekends we can't do much.

Also she is starting to feel the winds of Mustachianism. She has watched my net worth skyrocket as her friends are having trouble summoning the money to buy houses, or go on ridiculous vacations(one goes to Disney World every year for no reason), and while she didn't believe at first, now she is talking about this dream she has of moving every 3 months to see the country in 4 years when she's paid off her nursing school debt and I'm a digital nomad, riding high on the money we've saved.

I've never heard her talk about that before, but she is starting to see it become a reality in front of her eyes and I think that will have an effect as she grows older. I see her as a kind of evolving investment - sure right now she doesn't quite understand the power of money, but in time, she will, and she'll become a powerful partner in life with her second income. I still remember the first day I explained what equity in the company meant - she explained it back to me as, "So, they're paying you less and giving you paper that isn't worth anything right now." Now, I think she is starting to get what it really means.

SwordGuy

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Re: Reader Case Study - I would like a report card
« Reply #15 on: February 02, 2014, 09:38:04 AM »
I agree with the red flag about the girlfriend.

And I agree with you that she may very well be "a keeper".   

MMM and his ideas are so radically different from mainstream culture that it really does take people awhile to both intellectually understand it and emotionally believe it.


Gray Matter

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Re: Reader Case Study - I would like a report card
« Reply #16 on: February 02, 2014, 10:49:01 AM »
It sounds like your girlfriend is into life experiences, and in her mind, that takes money.  Perhaps when she was growing up she heard a lot of "we can't have/do that because we can't afford it" and so in her mind those two are the same thing.  But it also sounds like she's willing to spend less after having spent more in order to stick to the budget, which is good.

Hopefully, over time MMM will become more appealing to her (sounds like it already is) and she will start to see how having substantial savings actually frees you up to have more life experiences.  And perhaps she is open to finding less expensive ways to have the life experiences she craves.

If she's already talking about seeing the country, she's got an incentive to make that happen financially.  Work with that.

Evie

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Re: Reader Case Study - I would like a report card
« Reply #17 on: February 02, 2014, 11:14:34 AM »
Don't buy clothes.  "Shop" your closet and make do with what you have and throw the $100 you save each month toward paying off those debts. 

Why are you getting your hair cut every four weeks? Learn to cut it yourself if you like it cut that often, or stretch to six weeks. I don't think you will notice the difference, and you will save money and time doing that.

Your gym sounds expensive--look around and see if there is a cheaper set up, or count how many times a month you actually go and if it is only four it may be cheaper to buy a day pass, or invest in some basic equipment and only go on the day pass once or twice a month.  Depends on how close your gym is and where you are, but living in LA and now a smaller town I could always find a $25/mo place.

I agree you need to reduce the dating fund. I think you an half that and be just fine.  Have her over to your house and watch netflix, etc.  You can buy a bottle of wine youself and order in thai (which for me is a splurge) and still come out ahead.  Go for a walk, take her hiking, go for a scenic drive (that isn't so far it costs more in gas than an altenative date).  Experiences don't have to cost anything.

Finally, how do you spend $300 on dinner?  It sounds like you are ordering apps, multiple courses, dessert, expensive wine by the bottle or multiple drinks.  Learn to be a lightweight: your health and your wallet will thank you for limiting yourself to a drink instead of three or four.  Either order dessert or the appetizers, but not both.  Better yet, start off with an appetizer you make at home first, then go to dinner, or make or pick up a cheaper  dessert to share at home.

The good news is your income is high and you have a lot of fluff to cut.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #18 on: February 02, 2014, 01:08:34 PM »
Don't buy clothes.  "Shop" your closet and make do with what you have and throw the $100 you save each month toward paying off those debts. 

Haha this only recently entered the budget. My girlfriend has been complaining I look homeless, to which I replied, "That means I'm safe on the train at night!" But she has a point. All of my clothes are pretty much college/t-shirts/workout clothes. She showed me how to shop at Marshall's, a place I never knew about, and so we do all our shopping there. You can get quite a lot for 100$, and I think over the next year I can cycle out my wardrobe and be done with the shift.

I'm on the fence about it too, though. I will think about rescinding it.

Quote

Why are you getting your hair cut every four weeks? Learn to cut it yourself if you like it cut that often, or stretch to six weeks. I don't think you will notice the difference, and you will save money and time doing that.


I tend to do it every six weeks, actually, I just budget for four. It's mostly because I'm lazy. I'm not sure I could cut it the way I do it(number 2 on the sides and finger length on top) - how do you learn to do that without screwing up?

Quote
Your gym sounds expensive--look around and see if there is a cheaper set up, or count how many times a month you actually go and if it is only four it may be cheaper to buy a day pass, or invest in some basic equipment and only go on the day pass once or twice a month.  Depends on how close your gym is and where you are, but living in LA and now a smaller town I could always find a $25/mo place.

It's actually one of the least expensive in the city. The one right next to my house is 75$/mo with a 390$ signup fee. I go 4-5 times a week, so I think it's worth having, and specifically I use their pool and running machines, two things I couldn't fit in my 1BR. I do know there is an Xsports farther out in the burbs, which is like 10$/mo, but I don't have a car to get to it and the public transportation outwards is crap. For awhile I quit my gym and got a bowflex in my apartment but it turned out to be too weak and I actually lost money. That thing is a piece of shit. Good thing I got it for 325 on Craigslist.


Quote

I agree you need to reduce the dating fund. I think you an half that and be just fine.  Have her over to your house and watch netflix, etc.  You can buy a bottle of wine youself and order in thai (which for me is a splurge) and still come out ahead.  Go for a walk, take her hiking, go for a scenic drive (that isn't so far it costs more in gas than an altenative date).  Experiences don't have to cost anything.


Good idea. I never thought about a scenic drive. Right now I think I've got her at 300, I will aim for 200 in the coming months. Gradual entry!

Quote

Finally, how do you spend $300 on dinner?  It sounds like you are ordering apps, multiple courses, dessert, expensive wine by the bottle or multiple drinks.  Learn to be a lightweight: your health and your wallet will thank you for limiting yourself to a drink instead of three or four.  Either order dessert or the appetizers, but not both.  Better yet, start off with an appetizer you make at home first, then go to dinner, or make or pick up a cheaper  dessert to share at home.

The good news is your income is high and you have a lot of fluff to cut.

Oh, it's easy to spend 300 on dinner in Chicago! Let's use my favorite, Mastro's Steakhouse:

Each entree is 75$ - that's 150$. We normally get the bone marrow appetizer because it's probably the most amazing thing on the planet. That's another 40$. Now you're at 200$. Throw in the wine, at 30 or so dollars and then a 50$ tip, plus valet or cab, another 10$ - and boom you can hit 300 pretty easily.

If I got nothing but water and steak, I could probably do it for 175, so you are right. I am just a glutton over there. I will try to work on that. Generally when we go out to eat we always get water, except when we go out to dinner, then we get wine...and Chicago has some terrible deals on drinks.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #19 on: February 02, 2014, 01:10:27 PM »
It sounds like your girlfriend is into life experiences, and in her mind, that takes money.  Perhaps when she was growing up she heard a lot of "we can't have/do that because we can't afford it" and so in her mind those two are the same thing.  But it also sounds like she's willing to spend less after having spent more in order to stick to the budget, which is good.

Hopefully, over time MMM will become more appealing to her (sounds like it already is) and she will start to see how having substantial savings actually frees you up to have more life experiences.  And perhaps she is open to finding less expensive ways to have the life experiences she craves.

If she's already talking about seeing the country, she's got an incentive to make that happen financially.  Work with that.

I think you've hit the nail right on the head. It felt like a red flag to me but also it felt like a red flag for a different reason than that she was shallow. I think you're right, she's afraid that if we act like we don't have money we'll get stuck in the same "fun hole" she did growing up, when that's not necessarily true if you are sufficiently creative. Also, yes, I think these ideas are so radical that most people blink blankly when you explain them the first few times. People still laugh at me when I tell them I'm retiring at some time between 32 and 35.

mlipps

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Re: Reader Case Study - I would like a report card
« Reply #20 on: February 02, 2014, 01:30:29 PM »
I've lived in Chicago for 6 years and have never once spent $300 on dinner. Find new restaurants, there are tons and tons and tons of nice, more affordable restaurants. My husband and I do $200/month for entertainment & usuaully that amounts to going to eat once/week for a cheaper ethnic or local place, for a total of $40, and maybe one nice place, for $60 or $70, plus maybe treating ourselves to ice cream or baked goods once during the month. I wouldn't spend $300 on a meal even for a major anniversary, except maybe to go to Next or Alinea as a once in a lifetime splurge.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #21 on: February 02, 2014, 02:20:30 PM »
mlipps,

Have any good recommendations for cheap but high end eating here? Would love to try those out.

iamlindoro

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Re: Reader Case Study - I would like a report card
« Reply #22 on: February 02, 2014, 02:29:53 PM »
Have any good recommendations for cheap but high end eating here? Would love to try those out.

What makes eating "high end," and in what way is that inherently better than spending $10-15 per person to get great food, which is ostensibly the point of the exercise?  I'm genuinely curious.  As a follow-on, why does every date/meal out have to be "high end?"  Do you find that you are happier because you ate high end?

Annamal

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Re: Reader Case Study - I would like a report card
« Reply #23 on: February 02, 2014, 02:33:07 PM »
I think the best thing you can do is focus in on controlling your own spending and on building great experiences for the both of you.

How about learning to really knock it out of the park when it comes to cooking? That way you can make for grand gestures and experiences that don't need to cost too much.

Ditto focusing on getting your house in order so you can reduce the use of the maid service.

Splendid

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Re: Reader Case Study - I would like a report card
« Reply #24 on: February 02, 2014, 02:47:44 PM »

Oh, it's easy to spend 300 on dinner in Chicago! Let's use my favorite, Mastro's Steakhouse:

Each entree is 75$ - that's 150$. We normally get the bone marrow appetizer because it's probably the most amazing thing on the planet. That's another 40$. Now you're at 200$. Throw in the wine, at 30 or so dollars and then a 50$ tip, plus valet or cab, another 10$ - and boom you can hit 300 pretty easily.

If I got nothing but water and steak, I could probably do it for 175, so you are right. I am just a glutton over there. I will try to work on that. Generally when we go out to eat we always get water, except when we go out to dinner, then we get wine...and Chicago has some terrible deals on drinks.

I just wanted to address the bone marrow appetizer. We get soup or marrow bones and roast them in the oven. Delicious, easy, and insanely cheap! I don't know how your steakhouse prepares them (if they add any fancy sauces), so they may not taste exactly the same. But they are spectacular. Why not try to replicate your fancy dinner at home?

EDIT: spelling

Peter

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Re: Reader Case Study - I would like a report card
« Reply #25 on: February 02, 2014, 02:52:06 PM »
I think it's fine that you have a girlfriend that likes to go out and do things and that costs some money, as long as you're enjoying yourselves!

Please tell me she is paying her half though. I'm getting the distinct impression that you are footing the entirety or majority of the bills...
« Last Edit: February 02, 2014, 02:53:47 PM by Peter »

mlipps

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Re: Reader Case Study - I would like a report card
« Reply #26 on: February 02, 2014, 03:36:26 PM »
mlipps,

Have any good recommendations for cheap but high end eating here? Would love to try those out.
My favorite place to look for a nice date is the Michelin Bib Gourmand awards. As far as truly cheap, I live in Rogers Park so my usual haunts probably aren't worth the drive, but Pilsen and Greektown should both have some great spots. To me, as long as the food and service are good, I could care less about ambiance etc

Weedy Acres

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Re: Reader Case Study - I would like a report card
« Reply #27 on: February 02, 2014, 03:54:06 PM »
Another red flag-viewer here.  She's threatening to leave if you downsize your dates?  Wow....

The other red flag I see that no one has mentioned, is that you seem to be supporting her.  You're providing groceries, a car, all the dates.  And you're paying for a maid to make her happy?  Is she not working?  Someone who lacks a work ethic is an even bigger red flag for me than someone who spends a lot.  And someone (like a SAHM) who isn't earning an income can contribute significantly to the household by cooking great meals, shopping frugally, and cleaning the house, for heaven's sake!

FWIW, I have a 7-figure net worth and I would NEVER spend $300 on dinner.  What a waste of money.  You guys need to both come to your senses on that. 

LeighinCT

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Re: Reader Case Study - I would like a report card
« Reply #28 on: February 02, 2014, 06:48:41 PM »
Here's what jumps out to me...It sounds a lot like you are filling a surrogate "daddy" role. You seem to be the one to tell her how money will be spent. For example, a splurge on dinner results in you telling her that it's time to tighten up the budget for a few weeks.
"...there have been many weekends where we have overspent, and so I told her, "Now we've got to go three weeks without doing much, because we spent 300$ on this dinner/show/whatever."

The key here is that YOU had to tell her. Did she suggest that you all tone it down a little for awhile or did she respond to your direction?

In the long run you are going to probably want a partner who can pick up where you leave off. It will eventually be a drag being the only one in the relationship who has an eye on the financial ball.

She may come to embrace some mustachian ways but will she continue to follow the path on her own if your relationship ends? What would happen if you stopped paying for the car and shared groceries? Would she be as interested?

iamlindoro

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Re: Reader Case Study - I would like a report card
« Reply #29 on: February 02, 2014, 07:03:32 PM »
FWIW, I have a 7-figure net worth and I would NEVER spend $300 on dinner.  What a waste of money.  You guys need to both come to your senses on that.

FWIW, Most people with a seven figure net worth wouldn't!  (Ref:  The Millionaire Next Door-- The truly rich in the country tend to be those who never spend over $200 on a suit in their lives, and never spent over $35 on a watch.  The #1 vehicle of american millionaires statistically is a Ford pickup.)
« Last Edit: February 02, 2014, 07:18:51 PM by iamlindoro »

FrugalSpendthrift

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Re: Reader Case Study - I would like a report card
« Reply #30 on: February 03, 2014, 08:11:40 AM »
mlipps,

Have any good recommendations for cheap but high end eating here? Would love to try those out.
You need to learn how to cook your own steak.  And always remember that wine will cost twice as much in a restaurant as it does in the liquor store.  Is it worth it, just to have someone else pull the cork out?

I am similar to you in that I have some mustachian habits and some very antimustachian habits, but I am slowly whittling down on my wastefulness as I discover it.

ljp555

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Re: Reader Case Study - I would like a report card
« Reply #31 on: February 03, 2014, 08:49:15 AM »
Just to play devil's advocate on the girlfriend: I read this less as girlfriend threatening to leave if OP doesn't spend $400/month but as girlfriend would feel neglected/unappreciated if the OP doesn't spend the money. If she knows he's making $9000+/month, $400 on fun doesn't sound like much to ask (from an average American, non-mustachian mentality). Since the OP clearly values "high-end" dinners and experiences, cutting back on those probably feels like he's cutting back on her.

As another higher income budding mustachian, one of my big take-aways from MMM is taking pleasure in low-cost activities even though I can afford more. I think if the OP finds ways to treat his girlfriend without a $300 dinner, she will come around.

lifejoy

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Re: Reader Case Study - I would like a report card
« Reply #32 on: February 03, 2014, 09:04:23 AM »
Just curious: what is she contributing to the relationship? Financially and otherwise? (Feel free to keep it PG heh)

rocksinmyhead

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Re: Reader Case Study - I would like a report card
« Reply #33 on: February 03, 2014, 09:08:07 AM »
mlipps,

Have any good recommendations for cheap but high end eating here? Would love to try those out.
You need to learn how to cook your own steak.  And always remember that wine will cost twice as much in a restaurant as it does in the liquor store.  Is it worth it, just to have someone else pull the cork out?

I am similar to you in that I have some mustachian habits and some very antimustachian habits, but I am slowly whittling down on my wastefulness as I discover it.

+1

steakhouses are one of the LAST restaurants I would ever choose to splurge on! I know some disagree (there were some comments here recently about it) but IMO, find an awesome local butcher (should be easy in Chicago) and you are golden. if I'm paying a crazy restaurant markup I want it to be because I'm paying for some extremely complex meal that I don't have the skill to cook myself. I guess if you don't have a grill it is slightly different, but I hear you can do a great job using a stove/oven as well.

CommonCents

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Re: Reader Case Study - I would like a report card
« Reply #34 on: February 03, 2014, 09:29:48 AM »
Your Challenge: Figure out fun and frugal ways to enjoy the city with your girlfriend.

Basically, she wants to have fun and she thinks you do this by spending money.  You need to figure out how to have cheap dates.  For example, here in Boston I could: watch Shakespeare in the park, dance at the Hatch Shell, watch the friday night flicks at the Hatch Shell, listen to concerts at the Hatch Shell, bike/rollerblade/walk along the esplanade....all for free!  So those are warm weather, but in the winter I tend to stay more near my house.  Play board games, rent a $1.20 redbox movie (look for codes for free ones), bake cookies, etc in the winter.

Sure a steakhouse is crazy expensive, but you should break up this tradition and reserve it for special once a year events (and please dear god, not Valentine's Day, which is the worst day possible for an enjoyable dinner out...).  Search out fun ethnic places - those usually tend to be cheaper.  A steakhouse is probably one of the most expensive places you can go!  And buy a cast iron pan and learn to cook steak at home.  At $75 a steak, you can ruin a steak many times while learning and still come out even.  Suggest the girlfriend pick up a few tabs (not every, but some) if she doesn't want to eat in...

rubybeth

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Re: Reader Case Study - I would like a report card
« Reply #35 on: February 03, 2014, 09:40:30 AM »
Yikes. I'd give the budget a C. Pay off those stupid debts for the computer and stuff, and never do that again. And now, for the big money suck... the girlfriend.

How long have you been dating her? It sounds like you are her free ride, sugar daddy. She's living with you, you feed her, have a maid service, seem to pay for everything, and she's threatened to leave if the dating budget dipped below $400/mo? Is this relationship really long-term material? Ultimatums generally don't work out in the long-term, so I'd try skipping the dates for a few months and see if she really walks. And drop the maid immediately. Two adults should be able to keep a 1-bedroom clean.

I know Chicago can be expensive, but why not do some cheaper activities for dates vs. going out to eat and spending $300? I've been to Chicago a couple times and felt bad about spending $30 on a meal for two! I'd rather go to one of the museums, the Frank Lloyd Wright stuff in the area, or just sit in a park or cafe with a big window and people-watch. In the summer, there are so many free concerts and events in the park! I could see splurging on concert tickets or theatre tickets in the winter, and I'd suggest getting season tickets to something you both enjoy.
« Last Edit: February 03, 2014, 11:46:13 AM by rubybeth »

Megatron

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Re: Reader Case Study - I would like a report card
« Reply #36 on: February 03, 2014, 09:41:12 AM »
Good luck to you, sir.
I somewhat "converted/still converting" my fiancee since the day I met her a few years ago. It's a long process and you are going to have arguments and ups and downs.

ShortInSeattle

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Re: Reader Case Study - I would like a report card
« Reply #37 on: February 03, 2014, 09:55:47 AM »
You asked for a grade and I'd give you a C+.

The Good: Healthy Savings, Reasonable Mortgage, Most Expenses are OK

The Problems:
1. Setting Yourself Up as the Breadwinner - You get a maid to impress your GF, you take her out for $300 dinners and maintain a car for her. You "tell her" how much you can spend on her and get into a debate about it.  There is nothing wrong with talking about your future lifestyle and seeing if you are compatible, but it sounds like you are 'grooming' a spouse who is comfortable being dependent on you.

Do you want to be the breadwinner? If so that is OK, just know that you are headed that way. What kind of a lifestyle will your GF want down the road? Kids? How many cars? What kind of house? Would she expect a big diamond ring? Start to talk about mutual expectations and see how compatible you are.

2. $300.00 dinners? I know we each have our things we like to splurge on, just know that most people would find that kind of a meal pretty outrageous, not a normal date night.

Neither of these things are fatal, now. But they do seem to indicate a certain pattern of thinking, which is about needing to spend money to have fun and impress women.

There is nothing wrong with spending some fun money, but do examine those assumptions, and good luck.

mjb

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Re: Reader Case Study - I would like a report card
« Reply #38 on: February 03, 2014, 10:00:18 AM »
Have any good recommendations for cheap but high end eating here? Would love to try those out.

One of the many reasons I moved to Chicago was because of its fantastic food culture, most of the best of which is really cheap.

I've eaten at Avec, Alinea, Longman and Eagle, Noma (in Copenhagen), etc. In terms of execution, concept, and consistency, I personally think Hot Doug's is the best restaurant in the city, if not the world.

But that's just me!

MissStache

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Re: Reader Case Study - I would like a report card
« Reply #39 on: February 03, 2014, 11:38:30 AM »
I'm going to be one of the few voices in here that thinks a $300 dinner is ok...maybe 2 or 3 times a year, though.   That is one of the few things we splurge on, and if I lived in Chicago you can be certain I would be taking advantage of the awesome food culture in the city.

But...we make over 100K/year between us, and we aren't in college anymore.  And pay off those debts first :)

I know you are making good money, but your girlfriend sure isn't.  College is a time when you are supposed to be frugal and starving and scraping by. 

The only thing that really upset me about your budget is your car.  Obviously there are other places to cut, but that one made me downright angry.  If she needs a car, she needs to find a way to pay for it.  Her car, her responsibility.

unpolloloco

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Re: Reader Case Study - I would like a report card
« Reply #40 on: February 03, 2014, 11:48:30 AM »
Think everyone's ignoring the big expense here: the apartment.  Is it actually cheaper to "own" it with $1500/month going towards it, or might it be cheaper to rent?  Don't know the market, but that sounds very expensive for what it is?

CommonCents

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Re: Reader Case Study - I would like a report card
« Reply #41 on: February 03, 2014, 12:06:58 PM »
I know you are making good money, but your girlfriend sure isn't.  College is a time when you are supposed to be frugal and starving and scraping by. 

The only thing that really upset me about your budget is your car.  Obviously there are other places to cut, but that one made me downright angry.  If she needs a car, she needs to find a way to pay for it.  Her car, her responsibility.

Errp.  I missed the car was for the girlfriend.  I was on the fence about whether I felt like she was oblivious or using you, but leaning towards oblivious/not planning.  This changes things for me.  You:
- keep a car for her (unknown money you could be investing)
- keep car insurance for her ($127/month)
- hired a maid for her ($160/month)
- have an entertainment budget for her ($400/month)
= $687/month! 

According to your budget, your line item for saving is $60/month, 10% of this.  This is backwards.  NONE of these things are appropriate for someone in school - college or grad.  Have you sat her down and showed her this?  I would just flat out tell her you are cutting back and you have a list of cheap entertainment ideas and you hope she'll come up with more.  If she would dump you over this, think carefully as to whether you would really want to be with someone who would do that.  Also - does she have a part-time job at all to pay for herself?

One caveat re maid - depending on how clean you keep the place, you may need to step it up here a bit yourself.  My husband's place was pretty bad before I started doing it all.  His friends commented on it negatively.  Do your friends comment, even in jokes?  Ask them.  Or is it just her?  If your friends agree you need to do better, then work on this.

dragoncar

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Re: Reader Case Study - I would like a report card
« Reply #42 on: February 03, 2014, 12:17:34 PM »
I think you are doing OK.  B minus.  I also consider myself a "low mustachian" in the way you describe, but my income is higher and my expenses are lower.  Edit: I also live in a high COL area, like to eat at fancy restaurants, and often pay for my GF.  So something isn't adding up, and I think it's as everyone and particularly CommonCents mentioned above regarding the true cost of the GF.

Just curious: what is she contributing to the relationship? Financially and otherwise? (Feel free to keep it PG heh)

This wasn't clear to me either -- do you pay for everything?  Does she treat you to a cheap restaurant and you treat to the expensive ones?  It sounds like the only reason you have a car is so that she can drive it.... unless you see marriage in the future, I feel like you are definitely sugar daddying it up.  Edit:  maybe you can clarify, because the way you describe it, it sounds like she feels entitled to the money you make.

Think everyone's ignoring the big expense here: the apartment.  Is it actually cheaper to "own" it with $1500/month going towards it, or might it be cheaper to rent?  Don't know the market, but that sounds very expensive for what it is?

I noticed this too.  Quickly running the numbers, it appears he is paying around 7% interest+taxes.  That sounds really high to me.

Other things that sound high:

$1500/year in car insurance is ridiculous.  That's like teenager driving a mustang level insurance.  Considering you take the train to work, this can really improve.

Maid - obviously, everyone mentioned this one.  You only have a 1 BR... it's not like you have a giant ranch and yet you spend $2k/year on this?  Do you plan to have a maid forever?  If not, why not just start cleaning up after yourself now?  I'm guessing this is a weekly affair, but you could drop it down to monthly.  Plus, I always thought the benefit of having your GF over is that she gets so fed up with the mess that she cleans it up for you :-P



OK final edit:  I don't know why you are using 4-weekly accounting.  There doesn't appear to be a particularly good reason for it, besides making everything more complicated.
« Last Edit: February 03, 2014, 12:22:30 PM by dragoncar »

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #43 on: February 03, 2014, 02:00:02 PM »
Have any good recommendations for cheap but high end eating here? Would love to try those out.

What makes eating "high end," and in what way is that inherently better than spending $10-15 per person to get great food, which is ostensibly the point of the exercise?  I'm genuinely curious.  As a follow-on, why does every date/meal out have to be "high end?"  Do you find that you are happier because you ate high end?

High end, specifically meant food of great quality AND taste, not deep fried processed stuff like you would get at a fast food place, which just tastes delicious but should be avoided at all cost.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #44 on: February 03, 2014, 02:01:46 PM »
mlipps,

Have any good recommendations for cheap but high end eating here? Would love to try those out.
My favorite place to look for a nice date is the Michelin Bib Gourmand awards. As far as truly cheap, I live in Rogers Park so my usual haunts probably aren't worth the drive, but Pilsen and Greektown should both have some great spots. To me, as long as the food and service are good, I could care less about ambiance etc

Oh yeah, my gf was mentioning Greektown the other day. Said something similarly. What are the Michelin Bib Gourmand awards? Do they come along often?

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #45 on: February 03, 2014, 02:06:41 PM »
Another red flag-viewer here.  She's threatening to leave if you downsize your dates?  Wow....

The other red flag I see that no one has mentioned, is that you seem to be supporting her.  You're providing groceries, a car, all the dates.  And you're paying for a maid to make her happy?  Is she not working?  Someone who lacks a work ethic is an even bigger red flag for me than someone who spends a lot.  And someone (like a SAHM) who isn't earning an income can contribute significantly to the household by cooking great meals, shopping frugally, and cleaning the house, for heaven's sake!

FWIW, I have a 7-figure net worth and I would NEVER spend $300 on dinner.  What a waste of money.  You guys need to both come to your senses on that.

She does work part-time, but she puts all that money towards her student loan debt. She's currently in nursing school, and recently(as in the last few weeks) she has been cooking a lot more, since a couple weeks ago she started the "stealth move in" process that she thinks I don't notice lol. Today she went grocery shopping and is preparing the meals for the week. I'm a bit surprised, i hope the trend continues. Thanks to her cooking last week, I didn't spend any money on lunch the entire week at work.

 And as for am I supporting her - absolutely yes I am supporting her to a great degree. She would have no problem with not having a maid if I actually cleaned up to her standards, but I have never been quite capable of meeting those. The maid is our compromise.

I agree with you 300$ is a pretty bad expense of money, and I do need to curb it. We haven't done that in about three months, so I think we're on a good track. Basically moving out of Chicago to Oak Park has cut us off from all those restaurants, and not having them right next door to us is really keeping the imagination at bay. For awhile there we were doing it like every other weekend!

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #46 on: February 03, 2014, 02:21:29 PM »
Yikes. I'd give the budget a C. Pay off those stupid debts for the computer and stuff, and never do that again. And now, for the big money suck... the girlfriend.

How long have you been dating her? It sounds like you are her free ride, sugar daddy. She's living with you, you feed her, have a maid service, seem to pay for everything, and she's threatened to leave if the dating budget dipped below $400/mo? Is this relationship really long-term material? Ultimatums generally don't work out in the long-term, so I'd try skipping the dates for a few months and see if she really walks. And drop the maid immediately. Two adults should be able to keep a 1-bedroom clean.

I know Chicago can be expensive, but why not do some cheaper activities for dates vs. going out to eat and spending $300? I've been to Chicago a couple times and felt bad about spending $30 on a meal for two! I'd rather go to one of the museums, the Frank Lloyd Wright stuff in the area, or just sit in a park or cafe with a big window and people-watch. In the summer, there are so many free concerts and events in the park! I could see splurging on concert tickets or theatre tickets in the winter, and I'd suggest getting season tickets to something you both enjoy.

It doesn't feel like I am a sugar daddy but when you look at the numbers on paper it definitely does appear that way. To that end, as I mentioned above, a bit tangentially, we haven't really done any huge dates in the past month.

I just shut it down after Xmas to see what would happen and I think the most we did was we went out to brunch New Years day with a couple that had spent the night with us, and I bought the meal for all four of us + 10$ towards the homeless(this place does Suspended Animation meals, where you buy a clone of your meal and it is later given to a homeless person. I always do this when I'm at this place, I feel like it's a bit selfish to have so much money and not buy someone a sandwich!)

After that, almost nothing for four weeks. Given she is now "stealth moving in" over the last two weeks I think she's adjusting to the new tone and it might in time reveal more about her motivations. I have a feeling her heart is in the right place, it's just like other posters have mentioned, it's because she feels not spending money on her equals neglect. I'm trying to show her that's not the case.

I think after reading this entire thread, I will continue the trend. I was trying to keep it at 75/weekend but I think I might just try to drop it down to zero as much as possible. Every weekend, try to come up with something free, and just see how far I get.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #47 on: February 03, 2014, 02:24:05 PM »
You asked for a grade and I'd give you a C+.

The Good: Healthy Savings, Reasonable Mortgage, Most Expenses are OK

The Problems:
1. Setting Yourself Up as the Breadwinner - You get a maid to impress your GF, you take her out for $300 dinners and maintain a car for her. You "tell her" how much you can spend on her and get into a debate about it.  There is nothing wrong with talking about your future lifestyle and seeing if you are compatible, but it sounds like you are 'grooming' a spouse who is comfortable being dependent on you.

Do you want to be the breadwinner? If so that is OK, just know that you are headed that way. What kind of a lifestyle will your GF want down the road? Kids? How many cars? What kind of house? Would she expect a big diamond ring? Start to talk about mutual expectations and see how compatible you are.

2. $300.00 dinners? I know we each have our things we like to splurge on, just know that most people would find that kind of a meal pretty outrageous, not a normal date night.

Neither of these things are fatal, now. But they do seem to indicate a certain pattern of thinking, which is about needing to spend money to have fun and impress women.

There is nothing wrong with spending some fun money, but do examine those assumptions, and good luck.

I do think you're right, I think part of the problem is that in my mind, there is a connection between spending and impressing women, so she isn't pushing against my natural motivations there. I've explained to her in the future that she can keep working if she wants but that very soon(in the next 5-7 years) I will be retiring, and that I'll be the stay at home parent. She seems okay with it but I don't think she is. I don't think she considers my investment income, though identical, to be the same as salary, and I wouldn't be surprised if that becomes a problem in the future.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #48 on: February 03, 2014, 02:26:10 PM »
I'm going to be one of the few voices in here that thinks a $300 dinner is ok...maybe 2 or 3 times a year, though.   That is one of the few things we splurge on, and if I lived in Chicago you can be certain I would be taking advantage of the awesome food culture in the city.

But...we make over 100K/year between us, and we aren't in college anymore.  And pay off those debts first :)

I know you are making good money, but your girlfriend sure isn't.  College is a time when you are supposed to be frugal and starving and scraping by. 

The only thing that really upset me about your budget is your car.  Obviously there are other places to cut, but that one made me downright angry.  If she needs a car, she needs to find a way to pay for it.  Her car, her responsibility.

Actually, not her car. Her car broke down, she used to have one. It cost too much to fix. I still had one and since I moved to Chicago and had converted to Bikes and Trains, I was about to sell it. Since I didn't need it and she couldn't afford a new one, I decided to keep it and stomach the repairs and insurance costs because I love her and having 50,000 in student loan debt and next to no income is not the time to be buying a new car. Her family is poor and couldn't really help her out there. It's a piece of crap but it will last another 100,000 miles because it's a tough little car.

jprince7827

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Re: Reader Case Study - I would like a report card
« Reply #49 on: February 03, 2014, 02:28:24 PM »
Think everyone's ignoring the big expense here: the apartment.  Is it actually cheaper to "own" it with $1500/month going towards it, or might it be cheaper to rent?  Don't know the market, but that sounds very expensive for what it is?

The apartment right next to mine is about 1300$/mo(it's a renter), and it's smaller and not a corner unit and has no balcony. Mine is a corner unit with a balcony and was recently renovated and the 1500/mo number is for a 15, not 30 year mortgage. I could probably rent the place out for 1400, but it comes with an underground heated parking spot so I could add that in for an additional 100/mo, because we're right next to the train station. So yeah, I think owning it is cheaper because at 1600/month, seeing 500 go into equity, it's essentially 1100/mo for what would be a 1400-1500 1BR in the heart of Oak Park.